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Notes to Accounts of E-Land Apparel Ltd.

Mar 31, 2015

1. Segment Reporting:-

The Company is engaged in the manufacture of garments, which is the primary business segment, based on the nature of product manufactured and sold. The Company has only one reportable business segment, which is manufacture and selling of garments.

Secondary segments for the Company are geographic, namely domestic and exports. The entire business assets of Company are situated in India.

2. Operating Lease

The Company has entered into operating lease arrangements for premises. Lease rental expenses for the year ended 31 March, 2015 was Rs 510.31 Lacs (31 March 2014 Rs 474.39 Lacs). The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets are:-

3. Dues to Micro and Small Enterprises as per MSMED Act, 2006

Information required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors. There are no delays in payment to micro, small and medium enterprises in current year as well as in the previous year.

4. As required under Schedule V of the Companies Act, 2013, the Company has filed an application with the Central Government for approval of managerial remuneration paid to three Whole Time Directors and is in the process of filing revised application with the Central Government for one of the Whole Time Director. Pending receipt of such approval, the remuneration paid is held in trust by the said directors.

5. The Company has incurred losses during the current year and the accumulated losses of the Company at the close of the period exceed its paid up capital and reserves. The Management is currently implementing a plan to increase turnover, improve profitability and financial position of the Company and has assessed that it will be able to meet its funding requirements at least for the next 12 months based on its cash flow projections. The Company is therefore being viewed as a going concern and the financial statements have been prepared under the going concern assumption.

6. During the year ended March 31, 2014, Company had entered into a tripartite agreement with E-Land Asia Holdings Pte Ltd, its holding Company and Mr. Murarilal Agarwal, Mr. Ravindra Agarwal and Mr. Vishwambharlal Bhoot (Old Promoters) whereby the loan outstanding towards the Old Promoters (Rs 1,702.07 lacs) had been directly paid by the holding Company (Rs 1,150.63 lacs) on behalf of the Company. Accordingly the balance of Rs 551.44 lacs was written back in the previous year. Further the Company has made an application under the applicable provisions of the Foreign Exchange Management Act and the rules and regulations there under for regularising the transaction.

7. Transfe r Pricin g regulations for computing the Income and Expenditure from International Transactions between 'Associated Enterprise' on arms length basis are applicable to the Company. These regulations, interalia, require the maintenance of documents and information, including furnishing a report from an accountant within the due date of filing the Return of Income with the Income Tax Authorities. For the year ended on March 31, 2015, the Company is in the process of undertaking a study to comply with the said transfer pricing regulations. Management is of the opinion that international transactions undertaken during the year with related parties are on arm's length basis & in compliance with the transfer pricing legislation prevailing as on date of financial statements.

8. In the previous year, the Company had transferred its D-1 unit at Tarapur to E-Land Fashion India Pvt Ltd under a slump sale agreement for a consideration of Rs 4,649 lacs and the related profit on sale was credited to the statement of profit and loss in the previous year. The results of discontinuing operations (D-1 Tarapur unit) included in the financial statements are as follows:

The numbers for the year ended March 31, 2014 include those relating to the D-1 unit and hence the current year numbers are not strictly comparable with previous year. Simultaneously, the Company entered into a Business Continuation Agreement ('BCA') with E-land Fashion India Private Limited ('Eland India'). As per the agreement, the Company is conducting the Fabric Business of D-1 Unit Tarapur for and on behalf of Eland India for facilitating smooth transition of Fabric Business of D-1 Unit Tarapur to Eland India. Pending certain statutory registrations, the sales, purchases, receipts/payments made by the Company in the capacity of an agent of Eland India have been excluded from the financial statements of the Company.

9. Effective April 1, 2014 the Company has revised the useful life of certain fixed assets based on Schedule II to the Companies Act, 2013 for the purpose of providing depreciation on fixed assets. Accordingly the carrying amount of the assets as on April 1, 2014 has been depreciated over the remaining revised useful life of fixed assets. Consequently, an amount of Rs. 33.18 Lacs (net of refund Rs. Nil) representing the carrying amount of the assets revised useful life as Nil, has been charged to opening reserves as on April 1, 2014 pursuant to the Companies Act, 2013.

10. Tax expense of earlier year includes Rs. 2,623.96 lacs of deferred tax recognised on unabsorbed depreciation which has been reversed in the current year as there is no virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.

11. Previous year figures were audited by a firm of Chartered Accountants other than S R B C & CO LLP. Figures for the previous year have been regrouped where necessary to conform to current year's classification.


Mar 31, 2014

1. A) CORPORATE INFORMATION

The Mudra Lifestyle Limited ("the Company") is a listed public limited company incorporated in 1997. The company is primarily engaged in the business of manufacturing of textiles consisting of fabric and garment.

Note 2 Contingent Liabilities and Commitments (to the extent not provided for) (Rs. In Lacs)

Particulars 31.03.2014 31.03.2013

(A) Contingent Liabilities

Claims against the company not acknowledged as debts

i) Works Contract Tax 250.22 250.22

ii) Penalty levied by Director General of Foreign Trade -- 6.50

iii) Others 145.07 119.23

iv) Bank Guarantee 231.11 -

Total (A) 626.40 375.95

(B) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 421.29 427.70

Total (B) 421.29 427.70

Total (A B) 1,047.69 803.65

(i) The company has imported machinery and raw material under the Export Promotion Guarantee Corporation Scheme of Central Government. Under the said scheme the company has availed the benefit of payment of import duty at subsidized rates which is dependent upon fulfillment of export obligation.

(ii) Refer Note -11 (i) Fixed Assets of Financial for additional contingent liabilities

(iii) Refer Note -4(iv)- Interest Recompense

Note 3 Related Parties Disclosure:

A) Name of Related Parties and Description of relationship:

Key Management Personnel Relationship

Mr. Yangweon Yoo Managing Director

Mr. Eung Kyun Shin Chairman and Whole Time Director (Resigned w.e.f. 31st March 2014)

Mr. Jung Ho Hong Whole Time Director

Mr. Kwang Hyuck Choi Whole Time Director

B) Ultimate Holding Company : E Land World Co. Ltd.

C) Holding Company : E-Land Asia Holdings Pte Ltd

D) Fellow Subsidiary Company

E Land Accessaries Trading (Shanghai) Co. Ltd.

E Land Fashion China Holdings Ltd.

Thanh Cong Textile Garment Investment Trading Joint Stock Company

E Land Vietnam Co. Ltd.

E Land Fashion India Private Ltd.

JEWOO Manufacturing Co. Ltd.

Wish Hongkong Ltd

E) Entities Under Common Control

E Land Fashion (Shanghai) Co. Ltd

Bright Light Garment Mfg Co. Ltd

E Land International Fashion Co. Ltd.

E Land Retail Ltd

E.Land International Fashion (Shanghai) Co., Ltd

Elphis Lanka Ltd.

Wish Fashion (Shanghai) Co.Ltd

Eland Japan Inc

WHOAU Holdings Inc.

Wish Trading (Shanghai) Co. Ltd.

Wish Trading Co. Ltd

Note 4 Segment Reporting:-

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabric and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile products as reportable segment. The Company operates in Local & Export segments geographically of which the export sales is Rs. 10,390.34 Lacs (P.Y. Rs 4,356.55 Lacs) & Local Sales is Rs. 22,073.16 Lacs (P.Y. Rs. 8,525.34 Lacs). However due to the integrated nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.

Note 5 Lease

The Company has entered into operating lease arrangements for fixed assets and premises. The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets are:-

Note 6

Necessary disclosures of the details pertaining to the discontinuing operations in respect of the D1 unit as required under the Accounting Standard - 24 ''Discontinuing Operations'' (AS-24) are as under:

The Company has entered into a Business Transfer Agreement with its fellow subsidiary M/s. E-Land Fashion India Pvt. Ltd. ("E-Land India") for transfer of D-1 Unit (located at Tarapur, Thane) of its Fabric Business, by way of slump sale, on a going concern basis, w.e.f. 29th March 2014, for a total consideration of Rs. 4,649 Lacs.

The Company has obtained necessary approvals of the Board of Directors and of Shareholders through postal ballot.

The Company has identified total assets amounting to Rs. 41,279.86 Lacs and total liabilities amounting to Rs. 38,466.41 Lacs as on 29th March 2014 pertaining to D1 unit. The profit amounting to Rs. 7,462.45 Lacs arising on sale of D1 Unit has been credited to the Statement of Profit and Loss.

The Company is unable to determine the income, and expenses clearly attributable to the discontinued operations. Accordingly, the Company is unable to disclose separately the profit/(loss) from the continuing and discontinuing operations, tax expense of the discontinuing operations and profit/(loss) from the discontinuing operations (after tax).

Note 7

Balances of Sundry Debtors, Sundry Creditors, Loans and Advances, other Current Assets and Liabilities, Payable and Receivable are subject to confirmation and reconciliation.

Note 8

The Company has received approval for appointment and remuneration of 3 foreign directors and awaiting for the approval 1 director from the Central Government.

Note 9

As per section 92 and 92F of the Income Tax Act, 1961, the Company has policy to maintain the documents and other information as required by the Transfer Pricing Legislations. The international transactions with Associated Enterprises (AE''s) are at arm''s length price as per the independent accountants report for the year ended 31 March, 2013. The management is of the opinion that the international transactions are at arm''s length and that the aforesaid legislation will not have any impact on these financial statements, particularly on the amount of tax expense and on the provision for taxation.

Note 10

The Company has regrouped/ reclassified the previous period figures in accordance with the requirements applicable in the current year. The previous period figures are not comparable since the previous period figures are for 6 Months and current year figures are for 12 Months.


Mar 31, 2013

Note 1 Segment Reporting:-

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabric and garments.Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile products as reportable segment. The Company operates in Local & Export segments geographically of which the export sales is Rs. 4356.55 Lacs (P.Y. Rs 9,357.01 Lacs) & Local Sales is Rs. 8276.66 Lacs (P.Y. Rs. 21,535.29 Lacs). However due to the integrated nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.

Note 2 Lease

The Company has entered into operating lease arrangements for fixed assets and premises. The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets are:-

Note 3 The Company is investigating the matter of misappropriation of fund of the company in earlier year and has made appropriate provisions for the same in the books.

Note 4 The Company has filed requisite applications to the Central Government along with the Condonation of delay in terms of the provisions of Section 269 read with Schedule XIII of the Companies Act, 1956 to seek approval for the appointment & remuneration of the 4 foreign national Directors. The Company is still awaiting for the approval from the Central Government.

Note 5 Search and seizure operations were carried out by the Income tax authorities on 12 August 2009 at the premises of Mudra Lifestyle Limited.Pursuant to the same, the tax officer re-opened the assessment for tax year 2003-04 to 2009-10 and determined the tax demand of Rs 21.40 crores. Aggrieved by the same, the Company had filed an appeal with the CIT(A) against the above assessment orders.The appeal is pending for disposal before the CIT(A). Further, the Company had filed a rectification application and pursuant to the same, the tax officer rectified the mistakes in the assessment order and issued a revised tax demand of Rs 11.12 crores.Further, MLL has deposited tax demand of Rs 5.56 crores with income tax authorities under protest.The tax officer has agreed to keep the balance tax demand of Rs 5.56 crores in abeyance till March 2013 or disposal of appeal whichever is earlier. Further, penalty proceedings u/s 271(1)(c) of the Income Tax Act,1961 (''Act'') have been initiated for tax year 2003-04 to 2009-10.However, the same has been kept in abeyance until disposal of appeal before the CIT(A). Further, the tax officer had levied penalty of Rs 2.89 crores u/s 271AAA of the Act for tax year 2009-10 , MLL has deposited Rs. 30 lacs under protest. However, MLL has filed an appeal before the CIT(A) against the said penalty order and is pending for disposal before the CIT(A).

Note 6 The Company has regrouped/ reclassified the previous period figures in accordance with the requirements applicable in the current period. The previous period figures are not comparable since the previous period was for 18 Month and current period figures is for 6 Months.


Sep 30, 2012

1. A) CORPORATE INFORMATION

The Mudra Lifestyle Limited ("the Company"), is a listed public limited company incorporated in 1997. The company is primarily engaged in the business of manufacturing of textiles consisting of fabric and garment.

(i) Terms/ rights attached to Ordinary Shares :-

The company has only one class of share capital namely Ordinary Shares having par value of Rs.10 per share. Each holder of Ordinary Shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. In the event of liquidation of the company, the holders of Ordinary Shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Ordinary Shares held by the shareholders.

(i) Restructuring :

During the financial year under consideration, due to factors affecting economies at macro-economic level and industry downturn and substantial working capital erosion, the Company started facing liquidity crunch and it was not able to fulfill some of its repayment obligations. In order to overcome debt repayment obligations, The Company has made a reference to the Corporate Debt Restructuring (CDR) cell for restructuring of the debts of the Company through CDR Mechanism. The final restructuring package was approved by CDR empowered group on June 01, 2012. The Master Restructuring Agreement has also been signed with the lenders participating in the CDR package (''CDR Lenders'') on September 24, 2012. Some of the salient features of the CDR package are as follows:

Entire principal outstanding as on cutt off date viz October 01, 2011 to be restructured;

Conversion of irregular portion of working capital loan into Working Capital Term Loan (WCTL)

Conversion of interest on Term Loans, WCTL and Working Capital Facilities for first 12 months (i. e from the cut-off date) into Long term loan;

Extension of repayment tenure of term loans, WCTL for a tenure of 10 years from COD -i.e. till 30th September, 2021.

Overall reduction in interest rates on term loans, WCTL and working capital;

Infusion of promoters contribution to support restructuring package amounting Rs.171.00 Crores.

Creation of security in favor of CDR lenders in order to secure the debt obligations of the Company under the CDR Package.

(ii) Nature of Security of Secured Loans:

(a) All existing term loans, SBI corporate loan, Working Capital Term Loan, FITL, and Working Capital facilities to be secured by first charge on pari passu basis on Fixes Assets and Current Assets. Creation of security in favor of CDR lenders as per Corporate Debt Restructuring (CDR) package is under process.

(b) Vehicle Loans are Secured by hypothecation of specified vehicles against which the finance is obtained.

(iii) Terms of repayment of term loan and other loans are as below:

a) Term Loan under TUFF Scheme - Repayment of these loans has commenced from 31st December,2011 In Quarterly Installment as Follows:-

FY12H1-0.1%, FY12 (H2)-0.2%, FY13-0.2%, FY14-1.75%, FY15-3%, FY16-9%, FY17-10%, FY18-16%, FY19-17%, FY20-18%, FY21-18% & FY22 (H1)-6.75%

b) Other Term Loan & WCTL - Repayment of these loans is commencing from June,2013 In Quarterly Installment as Follows:-

FY14-1.75%, FY15-3%, FY16-9%, FY17-10%, FY18-16%, FY19-17%, FY20-18%, FY21-18% & FY22 (H1)-7.25%

c) FITL on TUFS Loans to be paid with in 6 quarters from COD i.e. till 31.03.2013, FITL on SBI corporate loan, IDBI & SIDBI TL facilities, Axis MTM Forex, WCTL & on WC facility to be repaid in 8 equal quarterly installments beginning 30th Septemeber,2014

(Rs. In Lacs)

Note 2 Contingent Liabilities and Commitments (To The Extent Not Provided For)

Particulars 30.09.2012 31.03.2011

(A) Contingent Liabilities

a) Claims against the company not acknowledged as debts

i. Income Tax Act , 1961(1) 289.47 10.96

ii. Works Contract Tax 250.22 187.55

iii. Penalty levied by Director General of Foreign Trade 6.50 5.00

iv. Others 77.71 -

Total (A) 623.90 203.51

(B) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 59.19 276.54

Total (B) 59.19 276.54

Total (A B) 683.09 480.05

(i) The company has imported machinery and raw material under the Export Promotion Guarantee Corporation Scheme of Central Government. Under the said scheme the company has availed the benefit of payment of import duty at subsidized rates which is dependent upon fulfillment of export obligation of Rs. 436.12 Crores, out of which the company has already effected exports of Rs.260.78 Crores thereby the company has pending export obligation of Rs.175.34 Crores which is required to be fulfilled up to 31.3.2018.

B) Ultimate Holding Company

E Land World Co. Ltd.

C) Holding Company

E Land Asia Holdings Pte Ltd (w.e.f. 30th December 2011)

E Land Fashion China Holdings Ltd. (till 30th December 2011)

D) Fellow Subsidiary Company

E Land Fashion (Shanghai) Co. Ltd E Land Retail Ltd WHOAU Holdings Inc.

Elphis Lanka Ltd.

E Land International Fashion Co. Ltd.

JEWOO Manufacturing Co. Ltd.

Wish trading Co. Ltd E Land Fashion India Pvt. Ltd.

Note 3 Segment Reporting:-

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabric and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile products as reportable segment. The Company operates in Local & Export segments geographically of which the export sales is Rs. 9,357.01 Lacs (P.Y. Rs 6,809.02 Lacs) & Local Sales is Rs. 21,535.29 Lacs (P.Y. Rs. 35093.52 Lacs). However due to the integrated nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.

Note 4 Search and seizure operations were carried out by the Income tax authorities on 12 August 2009 at the premises of Mudra Lifestyle Limited. Pursuant to the same, the tax officer re-opened the assessment for tax year 2003-04 to 2009-10 and determined the tax demand of Rs 21.40 crores.Aggrieved by the same, MLL had filed an appeal with the CIT(A) against the above assessment orders. The appeal is pending for disposal before the CIT(A). Further, MLL had filed a rectification application and pursuant to the same, the tax officer rectified the mistakes in the assessment order and issued a revised tax demand of Rs 11.20 crores. Further, MLL has deposited tax demand of Rs 5.6 crores with income tax authorities under protest. The tax officer has agreed to keep the balance tax demand of Rs 5.6 crores in abeyance till December 2012 or disposal of appeal whichever is earlier. Further, penalty proceedings u/s 271(1)(c) of the Income Tax Act,1961 (''Act'') have been initiated for tax year 2003-04 to 2009-10. However, the same has been kept in abeyance until disposal of appeal before the CIT(A). Further, the tax officer had levied penalty of Rs 2.89 crores u/s 271AAA of the Act for tax year 2009-10. However, MLL has filed an appeal before the CIT(A) against the said penalty order and is pending for disposal before the CIT(A)

Note 5 Lease

The Company has entered into operating lease arrangements for fixed assets and premises. The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets are:-

Note 6 During the year ended September 30, 2012 the Revised Schedule VI notified under the Companies Act 1956, has become applicable for preparation and presentation of financial statement. The preparation of financial statements based on the Revised Schedule VI does not impact the recognition and measurement principles followed for preparation of the financial statements. However, it has significant impact on the presentation and disclosures made in the financial statements. The Company has regrouped/ reclassified the previous year figures in accordance with the requirements applicable in the current year. Since the Company has extended its Financial Year from 12 Month to 18 Month. The previous year figures are not comparable.


Mar 31, 2011

A. Segmental Reporting:

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabric and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile products as reportable segment.

The Company operates in Local & Export segments geographically of which the export sales have amounted to Rs 6,809.02Lacs (P.Y. 3,242.49) & Local Sales have amounted to Rs 35093.52 (P.Y. 32,645.06). However due to the integrated nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.

b. Related Parties Disclosure:

1. Name of Related Parties and Description of relationship: Key Management Personnel:-

Sr. no. Name of Person Relationship

A. Key Management Personnel

1 Shri Murarilal Agarwal Chairman & Managing Director

2 Shri Ravindra Agarwal Joint Managing Director

3 Shri Vishwambharlal Bhoot Executive Director*

4 Eung Kyun Shin Additional Director**

B. Associates

1 E Land Fashion China Holdings Limited Foreign Promoter Company ***

I. Contingent Liability Rs. in Lacs

Particulars 2011 2010

A. Claim against the company not acknowledge as debt

i. Income Tax Act, 1961() 10.96 373.83

ii. Works Contract Tax 187.55 -

iii. Penalty levied by Director General of Foreign Trade 5.00 -

iv. Custom duty on pending export obligation against 11.09 - import of Raw Materials and Machinery

Note:

1) During the year the company has made payment of Rs 107.66 Lac to Income Tax Authorities under protest and without any receipt of any demand or notices from the Income Tax Authorities. Since the payments have been made under protest no provision of Income Tax is made forthe same.

2 The company has imported machinery and raw material under the Export Promotion Guarantee Corporation Scheme of Central Government. Under the said scheme the company has availed the benefit of payment of import duty at subsidized rates which is dependent upon fulfillment of export obligation of Rs. 436.12 Crores, out of which the company has already effected exports of Rs. 167.21 Crores thereby the company has pending export obligation of Rs. 268.91 Crores which is required to be fulfilled up to 31.3.2018.

k. The Company has not made any payment of dividend in Foreign Currency.

I. Secured Loans: i) Term Loans:

Secured by first charge on all fixed assets of the company except specific assets and second charge on current assets and personal guarantee of promoter directors.

ii) Working Capital Loans:

Secured by hypothecation of current assets and second charge on fixed assets of the company and personal guarantee of promoter directors.

iii) Vehicle Loans:

The vehicle loans from banks and others are secured by hypothecation of specified vehicles against which the finance is obtained.

iv) Loan against Fixed Deposit:

The Loan against fixed deposit is secured against security of concerned fixed deposits.

m. Managerial Remuneration

b) During the financial year ended 31st March 2011, the company had inadequate profits. The total remuneration and perquisites paid were Rs 24.96 Lac, the same is in due accordance with Schedule XIII of Company Act 1956 i.e. within Rs. 4 Lacs per month allowed there under.

p. The names of the Micro, Small and Medium Enterprises suppliers defined under "The Micro Small and Medium Enterprises Development Act 2006" could not be identified, as the necessary evidence is not in the possession of the Company.

q. During the previous year fire had occurred at factory unit located at Daman. In the said fire raw material worth Rs.300 Lac had been lost and damage to the machinery worth Rs 199.86Lac has been identified and a claim with the insurer was filed.

r. In the opinion of the Management, the Current Assets, Loans & Advances are approximately of the value stated and are realizable in the ordinary course of business. The provisions for all known liabilities are adequate.

s. During the year, the company implemented processing and garmenting project of phase 2 of mega expansion project.

t. Confirmation letters have been sent by the Company in respect of balances reflected under Sundry Debtors, Sundry Creditors and Loans and Advances. The balance under these heads have been shown as per books of accounts and are subject to reconciliation and adjustment, if any.

u. Figures of previous years have been regrouped, rearranged wherever necessary.

v. Figures in bracket indicate previous year figures.

w. Previous year figures have been audited by a firm other than Churiwala & Co.


Mar 31, 2010

A. Segmental Reporting:

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabric and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile products as reportable segment.

The Company operates in Local & Export segments geographically of which the export sales have amounted to Rs. 3242.49 lacs. But due to the nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.

b. Related Parties Disclosure:

1. Name of Related Parties and Description of relationship:

Key Management Personnel:-

Sr. No. Name of Person Relationship

1 ShriMurarilalAgarwal CHAIRMAN & MANAGING DIRECTOR

2 ShriRavindraAgarwal . JOINT MANAGING DIRECTOR

3 Shri VJshwambharlal Bhoot DIRECTOR

Relatives of Key Management Personnel

Sr.No. Name of Person Relationship

1 Shri Prakash Agarwal SON OF DIRECTOR (Since died)

D. Security Provided for Secured Loans

i) Term Loans from Banks are secured by first charge on all fixed assets of the company except specific assets and second charge on current assets and personal guarantee of promoter directors.

ii) Working Capital loans from banks are secured by hypothecation of current assets and second charge on fixed assets of the company and personal guarantee of promoter directors.

iii) The vehicle loans from banks and others are secured by hypothecation of specified vehicles against which the finance is obtained.

G. The company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments. The confirmations of the creditors/debtors are awaited.

H. During the year income-tax search was conducted at the business establishment of the company including the residence of the directors on 12/8/2009. A confession from the directors of the company for disclosing an additional sum of Rs. 2.558 Lacs was forcibly obtained by the income tax authorities which is being agitated now. According to the Management, the said disclosure of undisclosed income is bad in law as no incriminating document was found during the search nor the alleged undisclosed stock was found. Therefore, on the impugned disclosure the tax provision of Rs. 362.87 is shown at on income of Rs. 2,558 Lacs by way of contingent liability. The Management is of the view that the impugned liability will not arise in the hands of the company.

I. As approved by the shareholders of Ihe Company in the Extra-Ordinary General meeting held on 18th January 2008 the Board of Directors resolved to allot 30 lacs wan-ants to the promoter directors. Each share warrant entitled Ihe holder to subscribe for and be allotted 1 equity share of Rs.10 each fully paid up at an issue price of Rs.120 per share including premium of Rs. 110 per share. These Warrants were convertible (at the sole option of the warrant holder) at any time, in one or more tranches, within a period of 18 months from 1st February 2008 to 30th June 2009. for which they had made a payment of Rs.12 per Share Warrant at the time of issue of warrants, which represents 10% of the total exercise price. Amount received from the allotees in accordance with the resolutions referred above, was included under Monies pending allotment. The promoters did not exercise their option to convert the warrants into equity shares, as a result the money receipt for the warrants have been forfeited and transferred to the Capital Reserve of Rs. 3.60 Crores.

Note: Production varies according lo product mix and design.

Fabric consumption includes 205.26 Lacs mtrs of Rs. 122.97 Crores outsourced from outsiders in grey cloth form.

(Previous year 154.38 Lacs mtrs. of Rs. 90.54 Crores)

J. The company had to carry out second trail run for its Tarapur project to achieve the desired efficiency and quality in production, hence, actual commercial production started on 30th Sept. 2009 and accordingly trial run period was extended up to 30th September 2009. Trial run expenses pertaining to raw materials and other manufacturing and overheads were capitalised as per detail given below.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Figures of previous years have been regrouped /rearranged wherever necessary. Figures in bracket indicate previousyearfigures.

 
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