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Notes to Accounts of Garden Silk Mills Ltd.

Mar 31, 2015

1.1 Rights, Preferences and Restrictions attached to Shares Equity Shares:

The Company has one class of shares referred to as equity shares having a par value of Rs. 10 each. Each shareholder is entitled to one vote per share held. The dividend as and when proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting. In the event of liquidation, Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The Company had two class of shares referred to as Equity Shares and Optionally Convertible Cumulative Preference Shares (OCCPS) at the begining of the year. During the year, the OCCPs, have been converted in to equity shares as referred in note 2.2 above.

"OCCPS holder had the option to apply for and obtain allotment, from time to time, not later than 18 (eighteen) months from the date of allotment of OCCPS, of such number of fully paid-up equity shares of the face value of Rs. 10 each ("Equity Shares") against conversion ofthe OCCPS in such manner and on such price, terms and conditions as determined by the Board, such that the total issue size ofthe preferential allotment does not exceed an aggregate value ofRs. 7.00 crores (including, premium if any, on such Equity Shares), in accordance with the provisions of Chapter VII ofthe SEBI (ICDR) Regulations or other provisions ofthe law as may be prevailing at that time.

2.1 During the financial year 2013-14, the Company had issued and allotted 0.001% Optionally Convertible Cumulative Preference Shares (OCCPS) of Rs. 10 each aggregating to Rs. 7.00 crores in accordance with the SEBI (ICDR) Regulations, 2009, as amended, in favour of Promoters on preferential basis as part of the arrangement with the lenders to realign debts repayment schedules.

As per the terms of issue and in accordance with the provisions of SEBI (ICDR) Regulation, 2009, consequent to the rights of conversion exercised by the OCCPS holders, the Board of Directors of the Company at its meeting held on 18th March 2015 allotted 1949860 equity shares ofRs. 10/- each at a premium of Rs. 25.90 per share in favour of Praful Amichand Shah, Partner of M/s. Isha Enterprises, the promoter and/or promoter group of the Company.

3.1 Note on Secured Long-Term Borrowings:

a) Term Loans from Banks and Financial Institutions are secured by first mortgage on pari passu basis on all immovable properties (except those specifically excluded by lenders, of Rupee Term Loans as per Note (b) below), both present and future and first charge by way of hypothecation of all movables (except book debts) both present and future subject to prior charges created/to be created in favor of Bankers for working capital borrowings.

b) Of the Rupee Term Loans from banks:

i) Loans from Bank of India to the extent of Rs. 212.50 Lacs (Previous year Rs. 250.00 Lacs) are secured by hypothecation of specific machinery of Fully Drawn Yarn (FDY) Project at Jolwa.

ii) Loans from Bank of India to the extent of Rs. 1012.61 Lacs (Previous yearRs. 1191.11 Lacs) are secured by hypothecation of specific Building and machinery ofTexturising plant and Draw Twisting plant at Jolwa.

iii) Term loans from ICICI Bank, Kotak Mahindra Prime Limited and Axis Bank Ltd aggregating to Rs. 107.69 Lacs (Previous yearRs. 116.03 Lacs) under vehicle finance scheme are secured by an exclusive charge by way of hypothecation of specific vehicles purchased under the arrangements.

iv) Housing Loan ofRs. 565.14 Lacs (Previous yearRs. 643.21 Lacs) from ICICI Bank is secured by hypothecation of residential flat at Mumbai.

v) Loans from Corporation Bank to the extent ofRs. 3094.00 Lacs (Previous YearRs. 3640.00 Lacs) are secured by hypothecation of movable fixed assets of Specific Continuous Polymerisation Project at Jolwa.

vi) Loan from Union Bank of India to the extent ofRs. 4461.40 Lacs (Previous YearRs. 5248.90 Lacs) is secured by hypothecation of specific machinery of Coal Based Thermal Power Project at Jolwa.

c) As on the Balance Sheet date, part of the payment of interest for the quarter January-March, 2015, aggregating to Rs. 777.33 Lacs (Previous YearRs. 1371.77 Lacs) to various lender banks were unpaid.

4.1 The Company has unabsorbed depreciation and carried forward losses under Tax laws. In absence of virtual certanty of sufficient future taxable income,net deferred tax assets have not been recognised considering prudence in accordance with Accounting Standard (AS) 22 "Acounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

5.1 The Company has entered into a Long Term Advance Payment and Supply Agreement (ASPA) with one of its export customers (Refer Note 30(i)&(ii)). Under the ASPA, the Company has received Long Term Advances against Exports to the tune of USD 66.48 Million which will be adjusted against exports to that Customer over 10 years.

6.1 Cash Credit facilities are part of Working Capital facilities availed from Consortium of Banks and are secured with hypothecation by way of first pari passu charge on all company''s current assets and by way of second pari passu charge on immovable and all movable properties (excluding current assets) of the Company. Rate of Interest on Cash Credit facilities ranged between 11.50% to 12.00%

6.2 Buyers'' Credit is secured by Letter Of Comfort (LOC) / Undertaking (LOU) forming part of Working Capital facilities issued by the banks. Rate of Interest on Buyers'' Credit facility is 3M Libor 41 bps above the Libor at the relevant time.

7.1 During the year, the Central Government vide its letter dated 31st July, 2014, granted its approval for payment of total remuneration @ Rs. 1,46,91,000 (Rupees One Crore Forty-six Lacs Ninety-one Thousand only) per annum to Shri Praful A. Shah for the period from 01/09/2013 to 31/03/2014. Further the Company has already tiled an application with the Central Government seeking their approval for the remaining tenure i.e. from 01/04/2014 to 31/08/2016. The approval of Central Government for the said period is awaited. However, the actual remuneration paid to Shri Praful A. Shah during the year 2014-15 is in accordance with the provisions of Part II Section II of Schedule V to the Companies Act, 2013. The arrears if any, would be paid on receipt of approval of Central Government.

7.2 Employee Benefits as per AS 15:

Brief description : The type of detined benetit plans is as follows Gratuity:

The employee gratuity fund is managed by "Garden Silk Mills - Employees Gratuity Fund". The present value of obligation is determined based on actuarial valuation. The liability is fully funded.

Leave Encashment:

The present value of obligation for Leave encashment is determined based on actuarial valuation and is unfunded.

Note 8 : Earnings per share (EPS)

Earning Per Share (EPS) computed in accordance with Accounting Standard 20 " Earning per Share" as notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014

8.1 Basic earnings per share is calculated by dividing the net profit / (loss) for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit / (loss) for the year attributable to equity shareholders and the weighted average numbers of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares (i.e. Optionally convertible Cumulative Preference shares)

Since, resultant EPS due to dilution decreased net loss per share as compared to basic earning per share, both basic and diluted EPS are considered at basic earnings.

Nature of relationships Names of related parties

Subsidiary Companies :

GAIA International FZE

Garden Exim Pte Ltd

Group Company :

SuratTextile Mills Limited

Key Management Personnel :

Shri Praful A. Shah

Shri Sanjay S. Shah

Shri Alok P. Shah

Shri Suhail P. Shah

Relatives of Key management personnel and their enterprises where transactions have taken place.

Smt. Shilpa P. Shah

Smt. Sujata V. Parsai

Shri V. K. Parsai

Shri Parthiv S. Shah

Armorax Business Centre Pvt. Ltd.

ComoTextile Pvt. Ltd.

SorrentoTextile Pvt. Ltd.

Amalfi Textile Pvt. Ltd.

Note 9: Contingent Liabilities and Commitments 1 Contingent Liabilities

(i) Disputed liabilities for Excise Duty not acknowledged as debts Rs. 18987.14 Lacs (Previous YearRs. 50264.32 Lacs).

(ii) Disputed liabilities for Gujarat Sales Tax not acknowledged as debts Rs. 70.51 Lacs (Previous YearRs. 70.51 Lacs).

(iii) Counter-guarantees to Banks against guarantees issued to third parties Rs. 23.75 Lacs (Previous yearRs. 24.02 Lacs)

(iv) Foreign bills Discounted with Banks Rs. 4361.81 Lacs (Previous YearRs. 2902.43 Lacs )

(v) Unpaid dividend on 0.001% Optionally Convertible Cumulative Preference shares(now converted into equity shares) not acknowledged as debts Rs. 0.01 Lacs (Previous year Nil)

Note 10 :

The Company has only one reportable segment viz. ''Textiles'' as per Accounting Standard (AS) 17 of The Institute of Chartered Accountants of India (ICAI).

Note 11 :

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


Mar 31, 2014

1.1 During the year, the Central Government granted its approval for payment of remuneration to Shri Suhail P. Shah for an aggregate amount of Rs. 1,43,51,960/- per annum for a period of 3 years with effect from 01/12/2012 to 30/11/2015. Further the Company has already filed an application with the Central Government seeking their approval for payment of remuneration to Shri Praful A. Shah as approved by shareholders for the period from 1st September, 2013 to 31st August, 2016. However, the actual remuneration paid to Shri Praful A. Shah during the year 2013-14 is in accordance with the provisions of Part II Section II of Schedule V to the Companies Act, 2013. The arrears if any, would be paid on receipt of approval of Central Government.

1.2 Employee Benefits as per AS 15:

Brief description :The type of defined benefit plans is as follows:

Gratuity:

The employee gratuity fund is managed by "Garden Silk Mills - Employees Gratuity Fund". The present value of obligation is determined based on actuarial valuation. The liability is fully funded.

Leave Encashment:

The present value of obligation for Leave encashment is determined based on actuarial valuation and is unfunded.

2.1 Share warrants issued during the year (Refer Note: 4.1 ) being priced at fair value, are not considered as dilutive and hence they are ignored in the computation of diluted earning per share.

Note 3 : Related Party Disclosures

As per Accounting Standard 18, the disclosures of transactions with the Related Parties are as given below: (i) List of related parties with whom transactions have taken place and relationships:

Sr. No. RelationshipsName of Related Party

1 Group Company SuratTextile Mills Limited

2 Key Management Personnel Shri Praful A. Shah

Smt. Shilpa P. Shah*

Shri Sanjay S. Shah

Shri Alok R Shah

Shri Suhail R Shah

3 Relatives of Key management personnel

Smt. Shilpa P. Shah and their enterprises where transactions Smt. Sujata V. Parsai have taken place. Shri V. K. Parsai

Armorax Business Centre Pvt. Ltd. ComoTextile Pvt. Ltd. Sorrento Textile Pvt. Ltd. Amalfi Textile Pvt. Ltd. _Tissue Textile (India) Pvt. Ltd._

* Resigned as member of the Board w.e.f 1st May, 2012.

Note 33 : Contingent Liabilities and Commitments

1. Contingent Liabilities

(i) Disputed liabilities for Excise Duty not acknowledged as debts Rs. 50264.32 Lacs (Previous Year Rs. 41796.84 Lacs),

ii) Disputed liabilities for Gujarat Sales Tax not acknowledged as debtsRs. 70.51 Lacs (Previous YearRs. 70.51 Lacs),

(iii) Counter-guarantees to Banks against guarantees issued to third partiesRs. 24.02 Lacs (Previous yearRs. 61.75 Lacs),

(iv) Foreign bills Discounted with Banks Rs. 2902.43 Lacs (Previous Year Rs. 5545.04 Lacs).

2. Commitments

Estimated amount of contracts pending on Capital Account and not provided for Rs.Nil (Previous Year Rs.Nil)

Note 4: The Company has only one reportable segment viz. Textiles''as per Accounting Standard (AS) 17 of The Institute of Chartered Accountants of India (ICAI).

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


Mar 31, 2013

1.1 In view of the inadequacy of profits during the year 2012-13, the remuneration paid to the Whole time Director Shri Suhai P. Shah is subject to the approval of the Central Government as required in accordance with the provisions of Schedule XIII of the Companies Act, 1956. The Central Government had granted its approval for payment of remuneration in case of Shri Suhail P. Shah upto 30th November, 2012. The Company has already filed an application with the Central Government seeking their approval for payment of remuneration to him for the period from 1st December, 2012 to 30th November, 2015.

1.2 Employee Benefits as per AS 15:

Brief description: The type of defined benefit plans is as follows Gratuity:

The employee gratuity fund is managed by "Garden Silk Mills - Employees Gratuity Fund". The present value of obligation is determined based on actuarial valuation. The liability is fully funded.

Leave Encashment:

The present value of obligation for Leave encashment is determined based on actuarial valuation and is unfunded.

2.1 Foreign Currency Exposure

The Company uses plain forward contracts for hedging purpose. Foreign currency Loans / ECB which are covered by full currency and interest rate swap. All the contracts are for hedging purpose only and not for any speculative purpose.

3.1 Share warrants issued during the year (Refer Note: 4.1) being priced at fair value, are not considered as dilutive and hence they are ignored in the computation of diluted earning per share.

Note 4 : Contingent Liabilities and Commitments

1. Contingent Liabilities

(i) Disputed liabilities for Excise Duty not acknowledged as debts Rs.41796.85 Lacs (Previous YearRs. 11818.33 Lacs).

(ii) Disputed liabilities for Gujarat Sales Tax not acknowledged as debts Rs.70.51 Lacs (Previous Year Rs.70.51 Lacs).

(iii) Customs duty on Capital Goods and Raw Materials imported under Advance License/EPCG Scheme, against which export obligation is to be fulfilled isRs. Nil (Previous year Rs.3083.07 Lacs).

(iv) Counter-guarantees to Banks against guarantees issued to third parties Rs.61.75 Lacs (Previous year Rs.61.75 Lacs)

(v) Foreign bills Discounted with BanksRs.5545.04 Lacs (PreviousYearRs.10250.56 Lacs)

2. Commitments

Estimated amount of contracts pending on Capital Accountand not provided forRs. Nil (Previous Year Rs.2912.98 Lacs).

Note 5:

The Company has only one reportable segment viz. Textiles''as per Accounting Standard (AS) 17 ofThe Institute of Chartered Accountants of India (ICAI).

Note 6:

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


Mar 31, 2012

(A) The rights attached to equity shares of the Company:

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10 each. The holder of equity shares are entitled to one vote pre share. The dividend as and when declared is subject to the approval of the shareholders at the Annual General Meeting.

1.1 Note on Secured Long Term Borrowings:

a) Term Loans from Banks and Financial Institutions are secured by first mortgage on pari passu basis on all immovable properties (except those specifically excluded by lenders, of Rupee Term Loans as per Note (b) below), both present and future and first charge by way of hypothecation of all movables (except book debts) both present and future subject to prior charges created/to be created in favour of Bankers for working capital borrowings.

b) Of the Rupee Term Loans from banks:

i) Loans from Bank of India to the extent of Rs. 250.00 Lacs (Previous year Rs. 500.38 Lacs) are secured by hypothecation of specific machinery of Fully Drawn Yarn (FDY) Project at Jolwa.

ii) Loans from Bank of India to the extent of Rs. 1101.11 Lacs (Previous year Rs. 1763.73 Lacs) are secured by hypothecation of specific Building and machinery of Texturising plant and Draw Twisting plant at Jolwa.

iii) Term loans from ICICI Bank, Kotak Mahindra Prime Limited and Axis Bank Ltd aggregating to Rs. 162.59 Lacs (Previous year Rs. 210.63 Lacs) under vehicle finance scheme are secured by an exclusive charge by way of hypothecation of specific vehicles purchased under the arrangements.

iv) Housing Loan of Rs. 775.58 Lacs (Previous year Rs. 831.89 Lacs) from ICICI Bank is secured by hypothecation of residential flat at Mumbai.

v) Loans from Corporation Bank to the extent of Rs. 3639.99 Lacs (Previous Year Rs. 3639.99 Lacs) are secured by hypothecation of movable fixed assets of Specific Continuous Polymerisation Project at Jolwa.

vi) Loan from Union Bank of India to the extent of Rs. 5233.63 Lacs (Previous Year Rs. 4720.22 Lacs) is secured by hypothecation of specific machinery of Coal Based Thermal Power Project at Jolwa.

c) Of the Foreign Currency Loans from banks, Loans to the extent of Rs. 1216.88 Lacs (Previous year Rs. 1820.33 Lacs) from Landesbank Baden-Wurttemberg, are secured by hypothecation of specific imported machinery of Direct Spinning Project at Jolwa.

d) During the year, the Company has entered into an arrangement with lenders to realign its principal debt repayment schedule and has secured the consent of lenders to spread its term loan repayment over a period of 8 years, after a moratorium of 2 years.

2.1 Cash Credit facilities are part of Working Capital facilities availed from Consortium of Banks and are secured by hypothecation by way of first pari passu charge on all its current assets and by way of second pari passu charge on immovable and all movable properties (excluding current assets) of the Company. Rate of Interest on Cash Credit facilities ranged between 10.75% to 11.00%

2.2 Buyers' Credit is secured by Letter Of Comfort (LOC) / Undertaking (LOU) which is a part of Working Capital facilities issued by the banks. Rate of Interest on Buyers' Credit facility is ranging between 145-330 bps above Libor.

3.1 The Company had recognised liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on 31st March, 2011 of Rs. 1456.43 Lacs as per the estimated pattern of dispatches. On the analogy, provision for such liability, works out to be Rs. 1625.63 Lacs as on 31st March, 2012. Resultantly, differential provision of Rs. 167.00 Lacs has been recognised in the Profit and Loss Account.

Notes:

1. Buildings include Rs. 40.59 Lacs (Previous Year Rs. 40.59 Lacs) being cost of shares relating to ownership flat in a Co-Operative Society.

2. Factory Building and Plant & Machineries include borrowing costs capitalised during the year aggregating to Rs. 2047.28 Lacs (Previous Year Rs. 1488.80 Lacs).

3. Plant & Machineries include foreign currency fluctuation capitalised during the year aggregating to Rs. 637.63 Lacs (Previous Year Rs. Nil) in accordance with para 46A of Accounting Standards 11 relating to'The effects of changes in Foreign Exchange Rates'.

4.1 In view of the inadequacy of profits during the year 2011-12, the remuneration paid to Managing / Wholetime Directors is subject to the approval of Central Government as required in accordance with the provisions of Schedule XIII of the Companies Act, 1956. The Company has already filed the necessary Application with the Central Government seeking their approval for payment of remuneration to Managing / Wholetime Directors for the year 2011-12.

4.2 Employee Benefits as per AS 15:

Brief description : The type of defined benefit plans is as follows Gratuity :

The employee gratuity fund is managed by "Garden Silk Mills - Employees Gratuity Fund". The present value of obligation is determined based on actuarial valuation. The liability is fully funded.

Leave Encashment:

The present value of obligation for Leave encashment is determined based on actuarial valuation and is unfunded.

4.3 Foreign Currency Exposure

The Company uses plain forward contracts for hedging purpose except for foreign currency Loans / ECB which are covered by full currency & interest rate swap. All the contracts are for hedging purpose only and not for any speculative purpose.

Note : Figures in bracket represents Previous Year's amount.

Note 5 : Contingent Liabilities and Commitments

1 Contingent Liabilities

(i) Disputed liabilities for Excise Duty not acknowledged as debts Rs. 11818.33 Lacs (Previous Year Rs. 11587.90 Lacs).

(ii) Disputed liabilities for Gujarat Sales Tax not acknowledged as debts Rs. 70.51 Lacs (Previous Year Rs. 70.51 Lacs).

(iii) Customs duty on Capital Goods and Raw Materials imported under Advance License /EPCG Scheme, against which export obligation is to be fulfilled is Rs. 3083.07 Lacs (Previous year Rs. 2443.25 Lacs).

(iv) Counter-guarantees to Banks against guarantees issued to third parties Rs. 61.75 Lacs (Previous year Rs. 61.75 Lacs)

(v) Foreign bills Discounted with Banks Rs. 10250.56 (Previous Year Rs. Nil)

2 Commitments

Estimated amount of contracts pending on Capital Account and not provided for Rs. 2912.98 Lacs (Previous Year Rs. 6678.80 Lacs). Note 33 :

The Company has not made any remittance in foreign currencies on account of dividends during the year. The Company has remitted appropriate amount to the bank accounts in India of non-resident shareholders who have provided Indian bank mandate.

Note 6 :

The Company has only one reportable segment viz. 'Textiles' as per Accounting Standard (AS) 17 of The Institute of Chartered Accountants of India (ICAI).

Note 7 :

The financial statements for the year ended 31st March, 2011 were prepared as per the then applicable, erstwhile Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31st March, 2012 are prepared as per the Revised Schedule VI. This has significantly impacted the disclosure and presentation made in the financial statements. Accordingly, the previous year figures have also been reclassified to conform to current year's classification. The adoption of Revised Schedule VI for the previous year figures does not impact recognition and measurement principles followed in preparation of the financial statements.


Mar 31, 2011

1. The Previous year's figures have been regrouped / reclassified wherever necessary to make them comparable with the current year's figures.

2. As at the balance sheet date, the Company is Contingently liable in respect of the followings.:

(i) Disputed liabilities for Excise Duty not acknowledged as debts Rs. 11587.90 Lacs. (Previous Year Rs. 11696.54 Lacs).

(ii) Disputed liabilities for Gujarat Sales Tax & Central Sales Tax not acknowledged as debts Rs. 70.51 Lacs (Previous year Rs. 70.51 Lacs)

(iii) Customs Duty on Capital Goods and Raw Materials imported under Advance Licence / EPCG Scheme, against which export obligation is to be fulfilled is Rs. 2443.25 Lacs (Previous year Rs. 4277.30 Lacs)

(iv) Counter-guarantees to Banks against guarantees issued to third parties Rs. 61.75 Lacs (Previous year Rs. 61.75 Lacs)

3. As at the balance sheet date, estimated amount of contracts pending on Capital Account and not provided for Rs. 6678.80 Lacs (Previous Year Rs. 18759.49 Lacs).

4. Micro and Medium scale business entities:

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2011. This information as required to be disclosed under the 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.

5. Advance recoverable in cash or in kind or for value to be received includes amount due from partnership firms in which the Company is a partner Rs. 220.23 Lacs (Previous Year Rs. 230.21 Lacs).

6. In view of the recent performance of Surat Textile Mills Limited (STML), the financial position of STML is expected to significantly improve. Therefore the decline in value of investments by the Company in STML is considered to be temporary.

7. Foreign Currency Exposure

The Company uses plain forward contracts for hedging purpose except for foreign currency Loans / ECB which are covered by full currency and interest rate swap. All the contracts are for hedging purpose only and not for any speculative purpose.

8. Related parties disclosures:

As per Accounting Standard 18, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

(i) List of related parties with whom transactions have taken place and the relationships:

Sr. No. Relationship Name of the Related Party

1 Associate Company Surat Textile Mills Limited

2 Partnership firms Aloysha Investments Saska Investments

3 Key Managerial Personnel Mr.Praful A.Shah

Mrs.Shilpa P.Shah

Mr.Sanjay S.Shah

Mr.Alok P.Shah

Mr.Suhail P.shah

4 Relatives of Key managerial Mrs.Sujata V.Parsai personnel and their enterprises where Mr.V. K.Parsai transactions have taken place Armorax Business Center Pvt. Ltd. Como Textile Pvt. Ltd. Sorronto Textile Pvt. Ltd.

Amalfi Textile Pvt. Ltd.

Tissue Textile (India) Pvt. Ltd.

Vareli Fabrics Pvt. Ltd.

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

9. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as at 31st March, 2011.

10. Employee Benefits as per AS 15:

Brief description: The type of defined benefit plans is as follows

Gratuity:

The employee gratuity fund is managed by "Garden Silk Mills - Employees Gratuity Fund". The present value of obligation is determined based on actuarial valuation. The liability is fully funded.

Leave Encashment:

The present value of obligation for Leave encashment is determined based on actuarial valuation and is unfunded.

Superannuation:

The present value of obligation for Superannuation is determined based on actual liability method and is unfunded.

11. (c) The Company has not made any remittances in foreign currencies on account of dividends during the year.

The Company has remitted appropriate amount to the bank accounts in India of non-resident shareholders who have provided Indian bank mandate.

12. The Company has identifed only one segment viz. 'Textiles' as per Accounting Standard 17 of ICAI, and has not identifed any geographical segment, where risks and returns are materially different.


Mar 31, 2010

1. The Previous years figures have been regrouped / reclassified wherever necessary to make them comparable with the current years figures. Due to the change in the Companys Financial Year from 30th June to 31 st March, the figures for the current year ended 31st March, 2010 are not strictly comparable with the corresponding previous year as the previous year period pertains to 9 months.

2. As at the balance sheet date, the Company is Contingently liable in respect of the followings:

(i) Disputed liabilities for Excise Duty not acknowledged as debts Rs. 11,696.54 Lacs. (Previous Year Rs.133.64 Lacs).

(ii) Disputed liabilities for Gujarat Sales Tax & Central Sales Tax not acknowledged as debts Rs.70.51 Lacs (Previous year Rs.74.33 Lacs)

(iii) Customs Duty on Capital Goods and Raw Materials imported under Advance Licence / EPCG Scheme, against which export obligation is to be fulfilled is Rs.4,277.30 Lacs (Previous Year Rs.5,218.36 Lacs)

(iv) Counter-guarantees to Banks against guarantees issued to third parties Rs.61.75 Lacs (Previous Year Rs.61.75 Lacs)

3. As at the balance sheet date, estimated amount of contracts pending on Capital Account and not provided for Rs.18,759.49 Lacs (Previous Year Rs.2,464.33 Lacs).

4. Micro and Medium scale business entities:

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. This information as required to be disclosed under the 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.

5. During the previous year ended 31st March, 2009, 72337 Sq. Mtrs. of land at village Vareli.Taluka Palsana, Dist. Surat was converted in to stock-in-trade at the book value out of the fixed assets, as the Company intends to develop the property.

6. Advance recoverable in cash or in kind or for value to be received includes amount due from partnership firms in which the Company is a partner Rs. 230.21 Lacs (Previous Year Rs. 230.24 Lacs).

7. Foreign Currency Exposure

The Company uses plain forward contracts for hedging purpose except for foreign currency Loans / ECB which are covered by full currency and interest rate swap. All the contracts are for hedging purpose only and not for any speculative purpose.

8. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as at 31st March, 2010.

13. Employee Benefits as per AS 15:

Brief description: The type of defined benefit plans is as follows:

Gratuity:

The employee gratuity fund is managed by "Garden Silk Mills - Employees Gratuity Fund". The present value of obligation is determined based on actuarial valuation. The liability is fully funded.

Leave Encashment:

The present value of obligation for Leave encashment is determined based on actuarial valuation and is unfunded.

Superannuation:

The present value of obligation for Superannuation is determined based on actual liability method and is unfunded.

9. The Company has identified only one segment viz. Textiles as per Accounting Standard 17 of ICAI, and has not identified any geographical segment, where risks and returns are materially different.

10. Additional information pursuant to Part IV of Schedule VI to the Companies Act,1956 is as per Annexure A.

 
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