Notes to Accounts of Fairdeal Filaments Ltd.

Mar 31, 2018

a) Statement of compliance:

The Financial Statements have been prepared in accordance with the Indian Accounting Standards (‘Ind AS’) notified under the Companies(lndian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards)(Amendment) Rules, 2016.

Upto the year ended 31st March, 2016, the Company prepared its financial statements in accordance with the requirements of previous GAAP prescribed under Section 133 of the Companies Act, 2013 (‘the Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014.These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is 1st April, 2016. The transition from Previous GAAP to Ind AS has been accounted for in accordance with Ind AS 101 “First Time Adoption of Indian Accounting Standards”.

In accordance with Ind As 101 “First time adoption of Indian Accounting Standard”, the Company has presented a reconciliation from the presentation of financial statements under “Previous GAAP” to Ind AS of total equity as at April 1, 2016 and March 31, 2017, total comprehensive income and cash flowforthe yearended March 31, 2017.

b) Basis of preparation and presentation offinancial statements:

The financial statements are prepared and presented under the historical cost basis except for the following which have been measured at Fair Value amount:

- Certain financial assets and liabilities.

- Assets held for sale - Measured at Fair Value less cost to sell.

- Defined Benefit Plans - Plan Assets.

- Equity settled share-based payments.

The financial statements of the Company have been prepared to comply with the Indian Accounting Standards (‘Ind AS’), including the rules notified underthe relevant provisions ofthe CompaniesAct, 2013.

Upto the year ended March 31, 2017, the financial statements had been prepared under the historical cost convention on an accrual basis and in accordance with Generally Accepted Accounting Principles including the Accounting Standards specified under Section 133 ofthe Act, read with Rule 7 ofthe Companies (Accounts) Rules, 2014.

The Company’s financial statements are presented in Indian Rupees (?), which is also its functional currency.

These financial statements are the Company’s first Ind AS financial statements.

1.1 The Interest subsidy claim amounting to Rs. 209.50 Lacs was submitted to Ministry of Textile through bank out of which amount of Rs. 88.14 Lacs has been provided in the books of accounts is pending to be received. Considering the prolonged process and resultant uncertainty, the company had discontinued accounting for further accrual of interest subsidy claim under TUF, following conservatism. However, during the reporting year, the company has provided forthe amount of Rs.32.14 Lacs considering the same being received afterthe balance sheet date.

1.2 Others Includes Loans and Advances given to employees amounting to 14.05 Lacs (Previous Year 13.35 Lacs) valued at the actual amountof outflow.

2.1 The Board of Directors have recommended dividend of Rs. 1.25 per fully paid up equity share of Rs. 10/- each, aggregating to Rs. 75.63 lacs and tax on dividend of Rs. 15.40 lacs for the financial year 2017-18, which is based on relevant share capital as on March 31, 2018.Dividend declared by the company after the reporting period and tax on proposed dividend is not recognized as liability at the end of the reporting period in accordance with para 13 of Ind As 10.

3.1 Security Details of Secured Loan

a. Secured by Hypothecation of raw materials, stock-in-process, finished goods, books debts, plant and machinery and equitable mortgage of factory land and building situated at Block no. 298, Plot no. 2, Block no. 76, Plot no. 2 at Village: Karanj, Taluka: Mandvi, Dist.: Surat and Block no. 141, Plot no. 3, Block no. 146, Plot no. 3/A& 13, Block no. 149, Plot no. 12/A & 12/B at Village: Mota Borasara, Taluka: Mangrol, Dist. Surat. Facility further secured by equitable mortgage of open Industrial land situated at Plot no.: Composite unit-1, Fairdeal Textile Park, Village: Mahuvej, Taluka: Mangrol, Dist.: Surat and office premises situated at eastern side of third floor, Dawer Chambers, Ring Road, Surat and hypothecation of Wind mill situated at Village: Suthari, Taluka: Abdasa, Dist: Kutch.

b. Secured against hypothecation of Vehicles

* Refer Note no .16 for Current maturities of Long Term Debt

4.1 Security details for secured Loan

Secured by Hypothecation of raw materials, stock-in-process, finished goods, books debts, plant and machinery and equitable mortgage of factory land and building situated at Block no. 298, Plot no. 2, Block no. 76, Plot no. 2 at Village: Karanj, Taluka: Mandvi, Dist.: Surat and Block no. 141, Plot no. 3, Block no. 146, Plot no. 3/A & 13, Block no. 149, Plot no. 12/A & 12/B at Village: Mota Borasara, Taluka: Mangrol, Dist. Surat. Facility further secured by equitable mortgage of open Industrial land situated at Plot no.: Composite unit-1, Fairdeal Textile Park, Village: Mahuvej, Taluka: Mangrol, Dist.: Surat and office premises situated at eastern side of third floor, Dawer Chambers, Ring Road, Surat and hypothecation ofWind mill situated at Village: Suthari, Taluka: Abdasa, Dist: Kutch.

5.1 The Liability as on 31st March, 2016 does not exceed the amount already provided for, hence no provision is made in the year ended on 31st March, 2016.

6.1 Profit/Loss on Translation of monetary Items are recognized in Profit and Loss account in accordance with para 13.8.1 oflndAs-21

7.1 GRATUITY

The employee gratuity fund is managed by “ Life Insurance Corporation of India” & SBI Life Insurance Company Ltd.The Presentvalue ofobligation is determined based on actuarial valuation. The liability is fully funded.

8. REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND

Remittances by the company in foreign currencies for dividends (including amount credited to Non-Resident External Accounts):

9 Sale /Purchase includes inter-divisional transfer is Nil (Previous Year-Nil).

10 There are no dues (Previous Year - Nil) from the companies or firms where Directors are Directors/Partners.

11 Previous year figures have been regrouped/reclassified wherever necessary to correspond with the Current year’s Classification/ disclosure.

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Mar 31, 2014

2 Security details for secured loan

a. Secured by hypothecation of raw materials, stock-in-process, finished goods, book-debts, plant and machinery and equitable mortgage of factory, land and building situated at Village : Karanj, Taluka : Mandvi Dist.: Surat and Village : Mota Borasara, Taluka : Mangrol, Dist.:Surat. Facility is further secured b> equitable mortgage of office premises third floor, Dawer Chambers, Ring Road, Surat and Hypothecation of Windmill situated at Village: Suthari, Taluka: Abdasa, Dist.: Kutch

b. Secured against hypothecation of Car

c. Secured against hypothecation of vehicle

3 Security details for secured loan

Secured by hypothecation of raw materials, stock-in-process, finished goods, book-debts, plant and machinery and equitable mortgage of factory, land and building situated at Village : Karanj, Taluka : Mandvi, Dist.: Surat and Village : Mota Borasara, Taluka : Mangrol, Dist.:Surat. Facility is further secured by equitable mortgage of office premises third floor, Dawer Chambers, Ring Road, Surat and Hypothecation of Windmill.

4 CONTINGENT LIABILITIES AND COMMITMENTS

I) Contingent Liabilities

Guarantees

a) Counter guarantees given to banks 2.27 2.27

b) Bank Guarantee provided to DGFT to secure texturising 6.11 6.11 under EPCG Scheme

Others

a) Custom Duty on Capital Goods or Raw Material Imported 20.53 25.70 under Advance Licence/ EPCG Scheme, against which export obligation is to be fulfilled

5. Sale/Purchase includes inter-divisional transfer is Nil (Previous Year-Nil)

6. There are no dues (Previous Year - Nil) from the companies or firms where Directors are Directors/Partners.

7. Previous year figures have been regrouped/reclassified wherever necessary to correspond with the Current year''s Classification/disclosure.

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Mar 31, 2013

1.1 Gratuity:

The employee gratuity fund is managed by "Life Insurance Corporation of India". The Present value of obligation is determined based on actuarial valuation. The liability is fully funded.

PARTICULARS AS at AS at 31-Mar-13 31-Mar-12 (Rs. in Lacs)

2 CONTINGENT LIABILITIES AND COMMITMENTS

I) Contingent Liabilities

Guarantees

a) Counter guarantees given to banks 2.27 3.50

b) Guarantee given to Bank of Baroda on behalf of Shahlon - 31.76 Industrial Infrastructure Pvt. Ltd. (Given on 10.05.2006)

c) Bank Guarantee provided to DGFT to secure text rising 6.11 6.11 under EPCG Scheme

Others

a) Custom Duty on Capital Goods or Raw Material Imported 25.70 2.89 under Advance Licence/ EPCG Scheme, against which export obligation is to be fulfilled

b) Disputed Income Tax liability to the extent not recognised - 3.76 as debt

3 Sales/Purchase includes inter-divisional transfer is Nil (Previous Year-53.99 Lacs)

4 There are no dues (P.Y. - Rs Nil) from the companies or Firms where Directors are Directors/Partners.

5 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/disclosure.

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Mar 31, 2012

1.1 Security details for secured loan

a. Secured by hypothecation of raw materials, stock-in-process, finished goods, book-debts, plant and machinery and equitable mortgage of factory, land and building situated at Village Karanj, Taluka; Mandvi, Dist.: Suratand Village Mota Borasara, Taluka : Mangrol, Dist.:Surat. Facility is further secured by equitable mortgage of office premises third Floor, Dawer Chambers, Ring Road, Suratand Hypothecation of Windmill situated at Village: Suthari, Taluka: Abdasa, Dist.: Kutch

b. Secured against hypothecation of Car

c. Secured against hypothecation of vehicle

* Refer Note 7 for Current maturities of Long-term debt

2.1 Secunty deta.lsfor secured loan

Secured by hypothecation of raw materials, stock-in-process, finished goods, book-debts, plant and machinery and equitable mortgage of factory, land and building situated at Village Karanj, Taluka; Mandvi, Dist.: Suratand Village MotaBorasara,Taluka: Mangrol, Dist.:Surat. Facility is further secured by equitable mortgage of office premises third Floor, Dawer Chambers, Ring Road, Surat and Hypothecation of Windmill situated at Village : Suthari, Taluka :Abdasa, Dist.: Kutch

3.1 None of the parties grouped under Trade Payables have declared themselves under the Micro, Small and Medium Enterprises Development Act, 2006. The above information 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.

4 SEGMENT DISCLOSURE: (Rs. in Lacs)

The company has identified only one Segment Viz. "TEXTILES" as per Accounting Standard 17 of ICAI and has not identified any geographical segment, where risk and returns are materially different. Commission income credited is also identified to be relating to textile segment exclusively. Wind Power Generation is intended only for captive consumption.

5 CONTINGENT LIABILITIES AND COMMITMENTS

I) Contingent Liabilities Guarantees

a) Counter guarantees given to banks 3.50 3.50

b) Guarantee given to Bank of Baroda on behalf of Shahlon 31.76 67.59 Industrial Infrastructure Pvt. Ltd. (Given on 10.05.2006)

c) Bank Guarantee provided to DGFT to secure texturising 6.11 5.73 under EPCG Scheme

Others

a) Custom Duty on Capital Goods or Raw Material Imported 2.89 0.00 under Advance Licence/ EPCG Scheme, against which export obligation is to be fulfilled

b) Disputed Income Tax liability to the extent not recognised 3.76 3.76 as debt

6 Sales/Purchase includes inter-divisional transfer of Rs. 53.99 lacs (Previous Year- Rs. NIL).

7 There are no dues (P.Y. - Rs. Nil) from the Companies or Firms where Directors are Directors / Partners.

8 The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped /reclassified wherever necessary to correspond with the current year's classification/ disclosure.

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Mar 31, 2010

(1) Contingent Liabilities : (Rs. in Lacs)

Particulars 2009-10 2008-09

a. Counter guaranties given to banks 3.50 3.50

b. Guarantee given to Bank of Baroda on behalf of Shahlon Industrial Infrastructure Pvt. Ltd. 102.92 138.30 (given on 10.05.2006)

c. Bank Guarantee provided to DGFT to secure 5.73 5.73 texturising machine under EPCG Scheme

(2) Earning in foreign exchange F.O.B. values of exports Rs. 88.75 Lacs (Pre. Year. Rs. Nil)

(3) Secured loans include loans of Rs. 242.68 Lacs (Pre. year 269.31 lacs) repayable / redeemable within one year.

(4) Sales/Purchase include inter-divisional transfers of Rs. Nil (Pre. year Nil lacs)

(5) The Company has identified only one segment Viz. TEXTILES, and commission income credited is also identified to be relating to textile segment exclusively. Wind Power Generation is intended only for captive consumption.

(6) There are no dues (P.Y. Nil) from the Companies or Firms where Directors are Directors / Partners.

(7) The company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard as per Schedule VI of the Companies Act, 1956 have not be provided.

(8) Part-IV of Schedule VI to the Companies Act, 1956 as per Annexure A.

(9) There is no diluted equity share of the company hence Earning Per Share (EPS) is as per Part IV stated above.

(10) Confirmations to the extent received from debtors have been reconciled.

(11) Previous years figures have been regrouped / recast wherever considered necessary.