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Notes to Accounts of GTN Industries Ltd.

Mar 31, 2016

1. During the year, the Company had announced a Voluntary Retirement Scheme - 2015 (‘Scheme’) for its personnel at Medak and Doubling Units in terms of which the Company has paid an amount of Rs. 941.99 lacs which has been disclosed as an exceptional item.

2. a) In the opinion of the Management, assets other than Fixed Assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary.

b) Certain balances in Trade Payables, Other Current Liabilities, Trade Receivables and Loans and advances are subject to confirmations, reconciliation and adjustments. In the opinion of the Management, adjustments, if any, on such confirmations/reconciliations will not have material impact on the loss for the year.

3. Contingent Liabilities and commitments (to the extent not provided for):

4. Contingent Liabilities

5. Disputed Drawback and Excise Duty - Rs.18.69 lacs (Previous Year Rs. 19.36 lacs).

6. Disputed Income Tax Interest up to the date of demand - Rs. 38.92 lacs (Previous Year Rs. 38.92 lacs)

7. Cross Subsidy Charges - Rs. 122.08 lacs (Previous Year Rs. Nil)

8. Disputed Other dues (Gram Panchayat Tax, FSA charges, Non-agricultural Tax, Sewerage Cess etc.): Rs.164.52 lacs (Previous Year Rs. 177.06 lacs).

9. Commitments

10. Estimated amount of contracts remaining to be executed on capital account and are not provided for: Rs. 91.34 lacs (Previous Year Rs. 91.34 lacs); net of advances of Rs. 8.99 lacs (Previous Year Rs. 8.99 lacs).

11. Arrears of Preference Dividend, including Dividend Distribution Tax, Rs. 30.83 lacs (Previous Year Rs. 99.91 lacs).

12. The Company’s pending litigations comprise of claims against the Company and proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.

13. Employee Benefit Plans

The following table set out the status of the gratuity plan as required under AS 15:

*The Company has entered into a Group Gratuity Scheme with Life Insurance Corporation of India (’LIC’) and the plan assets of the Company are being maintained by LIC.

With respect to compensated absences (leave entitlements), liability recognized in the balance sheet as on March 31, 2016 is Rs 21.65 lacs (Previous Year Rs.21.21 lacs).

14. In terms of Accounting Standard 17, the Company operates materially only in one business segment viz., yarn and has its production facilities and all other assets located in India. Sales to external customers comprise export sales of Rs. 10552.04 lacs (Previous Year Rs. 22122.67 lacs) and local sales of Rs. 17243.64 lacs. (Previous Year Rs. 17031.52 lacs).

15. The Company had revalued its Land and Building as on March 31, 2015 based on the valuation made by an independent firm of valuers. Accordingly, the original costs of the above assets as on March 31, 2015 have been revalued on market value / replacement cost basis using standard indices after considering the obsolescence and age of individual assets.

16. The revalued amounts, net of withdrawals, of Rs. 7640.55 lakhs for Land and Buildings and Rs. 1061.72 lakhs for Plant & Machinery and Electrical Installations (Previous Year Rs. 7640.55 lakhs and Rs. 1335.33 lakhs, respectively) remain substituted for the historical cost in the gross block of fixed assets.

17. During the previous year, pursuant to the Shareholders’ approval and in accordance with the Business Transfer Agreement dated 16th July, 2013, entered into between the Company and GTN Engineering (India) Limited, an associate, (‘transferee’), the Company had completed the process of hive-off of its Yarn Processing Unit located at Shadnagar, Telanagana and Knitting Unit located at Medak, Telangana (jointly referred to as ‘units’) as a going concern on “slump sale” basis on 4th September, 2014 for a consideration of Rs. 3050 lacs resulting into a profit of Rs. 99.04 lacs. The sale consideration was received in the following manner:

18. Pursuant to the hive-off, the bank accounts / facilities, agreements, licenses and certain immovable properties of the Units are in the process of being transferred in the name of the Transferee. Further, the Company is in the process of getting the charges modified / released in respect of secured loans transferred.

19. The figures of the previous year include the income and expenditure of the Units up to 3rd September, 2014 and thus, the figures of the current year are not comparable with those of the previous year.

20. Previous year’s figures have been regrouped and rearranged wherever necessary so as to conform to the current year’s presentation.


Mar 31, 2015

GTN Industries Limited has its Registered Office at Chitkul village, Patancheru Mandal, Medak Dist., Telangana. It is engaged in the business of Spinning, Doubling, Processing and Knitting of Yarn. As more fully explained in Note 26B(1) below, the Company has sold its Yarn Processing and Knitting Unit during the year on a "slump sale" basis. The Company at present has its production facilities in the state(s) of Telangana and Maharashtra.

B. Other Notes

1. Pursuant to the Shareholders' approval and in accordance with the Business Transfer Agreement dated 16th July, 2013, entered into between the Company and GTN Engineering (India) Limited, an associate, ('transferee'), the Company has completed the process of hive-off of its Yarn Processing Unit located at Shadnagar, Telangana and Knitting Unit located at Medak, Telangana State (jointly referred to as 'units') as a going concern on "slump sale" basis on 4th September, 2014 for a consideration of Rs. 3050 lakhs resulting into a profit of Rs. 99.04 lakhs. The sale consideration has been received in the following manner:

a) The hive-off has resulted in transfer of current assets and liabilities pertaining to the units as at 4th September, 2014, to the Transferee, detailed breakup whereof is being furnished hereinbelow:

b) Pursuant to the hive-off, the bank accounts / facilities, agreements, licenses and certain immovable properties of the Units are in the process of being transferred in the name of the Transferee. Further, the Company is in the process of getting the charges modified / released in respect of secured loans transferred.

c) In view of the hive-off, the figures of the current year are not comparable with those of the previous year.

2. a) In the opinion of the Management, assets other than Fixed Assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary.

b) Certain balances in Trade Payables, Other Current Liabilities, Trade Receivables and Loans and advances are subject to confirmations, reconciliation and adjustments. In the opinion of the Management, adjustments, if any, on such confirmations/ reconciliations will not have material impact on the Loss for the year.

3. a) Contingent Liabilities and commitments (to the extent not provided for):

i) Contingent Liabilities

* Disputed Drawback and Excise Duty: Rs.19.36 lacs (Previous Year Rs. 19.36 lacs).

* Disputed Income Tax Interest Rs. 38.92 lacs (Previous Year Rs. 38.92 lacs).

* Disputed Other dues (Gram Panchayat Tax, FSA charges, Non-agricultural Tax, Sewerage Cess etc.) : Rs.177.06 lacs (Previous Year Rs. 117.18 lacs).

ii) Commitments

* Estimated amount of contracts remaining to be executed on capital account and are not provided for: Rs. 91.34 lacs (Previous Year Rs. 233.51 lacs); net of advances of Rs. 12.82 lacs (Previous Year Rs. 29.24 lacs).

* Arrears of Preference Dividend, including Dividend Distribution Tax, Rs. 99.91 lacs (Previous Year Rs. 16.56 lacs)

b) The Company's pending litigations comprise of claims against the Company and proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.

4. The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not enter into any such instruments for trading or speculative purposes.

i) The following are the contracts entered into by the Company and outstanding at the year end:

As a matter of prudence, the Company does not recognize mark to market foreign exchange gain on derivative contracts entered into to hedge the foreign currency risk of future transactions and outstanding as at the year end.

5.The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

6. Disclosure in respect of related parties pursuant to Accounting Standard 18:

(A) List of related parties:

Related parties with whom the Company entered into transactions during the year:

i) ASSOCIATES Purav Trading Limited

GTN Engineering (India) Limited

JEL Finance & Investment Limited

M/s.Patcot Co.

M/s. Perfect Cotton Co.

M/s. Standard Cotton Corporation

ii) KEY MANAGEMENT PERSONNEL AND ENTERPRISES (HAVING COMMON KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES)

Key Management Personnel

Shri M.K. Patodia - Chairman & Managing Director

Shri C.R. Gang-Chief Financial Officer

Shri P. Prabhakara Rao-Company Secretary

Relatives of Key Management Personnel and their entities

Smt. Bimla Devi Chowdhary-Sister of Shri M.K. Patodia Smt. Sharada Devi Chowdhary-Sister of Shri M.K. Patodia

7. No amounts in respect of related parties have been written off /written back during the year.

8. Figures in bracket represent previous year's figures.

9. Related parties are as identified by the management and relied upon by the auditors.

10. Employee Benefit Plans

The following table set out the status of the gratuity plan as required under AS 15:

11. In terms of Accounting Standard 17, the Company operates materially only in one business segment viz., yarn and has its production facilities and all other assets located in India. Sales to external customers comprise export sales of Rs. 22122.67 lacs (Previous Year Rs. 34914.16 lacs) and local sales of Rs. 17031.52 lacs. (Previous Year Rs. 19782.84 lacs).

12. a) Certain Land, Buildings, Plant & Machinery and Electrical Installations were revalued as on 31st March, 1993 on the basis of reports of approved valuer on market value /replacement cost basis using standard indices after considering the obsolescence and age of individual assets.

b) The Company has again revalued its Land and Buildings as on March 31, 2015 based on the valuation made by an independent firms of consulting engineers and Government approved valuers. Accordingly, the original costs of the above assets as on 31st March, 2015 have been restated on market value / replacement cost basis using standard indices after considering the obsolescence and age of individual assets. The resultant increase in net book value arising on revaluation amounting to Rs. 4478.02 lakhs has been transferred to Revaluation Reserve Account during the year ended 31st March, 2015.

c) The revalued amounts, net of withdrawals, of Rs. 8511.58 lacs for Land and Buildings and Rs. 1335.33 lacs for Plant & Machinery and Electrical Installations (Previous Year Rs. 422.08 lacs and Rs. 1423.27 lacs, respectively) remain substituted for the historical cost in the gross block of fixed assets.

13. Loans & Advances in the nature of loans to employees (disclosure pursuant to clause 32 of the listing agreement):

Note: Figures in the brackets represent previous year's figures.

14. Previous year's figures have been regrouped and rearranged wherever necessary so as to conform to the current year's presentation.


Mar 31, 2013

GTN Industries Limited has ils Registered Office al Chilkul Village, Palancheru Mandal, Medak DisLrict, Andhra Pradesh. It is engaged in the business of Spinning, Doubling, Processing and Knitting of Yarn. It has production facilities in the stale of Andhra Pradesh and Maharashtra.

1) a) In the opinion of the Management, assets other than Fixed assets and Non-current investments have a value

on realization in the ordinary course of business al least equai to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary. b) Certain balances in Trade Payables, Trade Receivables and Short Term Loans and advances are subject to confirmations, reconciliation and adjustments. In the opinion o! the Management, adjustments, if any, on such confirmations/reconciliations will not have material impact on the Loss for the year.

2) CDR-Cell vide its letler dated 28lh March, 2013 communicated the approval of Rework Package for Restructuring of Debt stipulating the Cut-Off Date (COD) as July 1, 2012. As per the Package, the lenders are to be compen- sated by way of upfronl payment of Rs. 296 lakhs on account of Net Present Value (NPV) of sacrifice. Pending approval and implementation of the Package, there were delays in repayrnenl of dues to Banks and Financial Inslilulions during the relevant period.

3) Exceptional Items comprise of:

i) Rs, 296 lacs being NPV of sacrifice for the entire repayment period of term loans covered by ''Rework

Package'' approved under CDR System. ii) Rs. 453 lacs towards provision /payment of Fuel Surcharge Adjustment (FSA) imposed by Central Power

Distribution Company of A.R Limited for earlier years,

4) The Company has recognized deferred tax asset on the basis of export/local sale orders on hand resulting in adequate future profits. Thus, management is virtually certain that sufficient future taxable income would be available against which brought forward business losses and unabsorbed deprecialion would be setoff.

5) a) Contingenl Liabilities and commitments (to the extent not provided for):

i) Contingent Liabilities

Disputed Drawback and Excise Duty (including interest up to the date of demand): Rs.22,04 lacs (Previous Year Rs. 22.04 lacs). Others: Rs.103 lacs (Previous Year Rs. 105.32 lacs). ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and are not provided lor: Rs. 305.11 lacs (Previous Year Rs. 241.51 lacs); net of advances of Rs. 27.83 lacs (Previous Year Rs. 21.47 lacs). b) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transaclions. The Company does not enter into any such instruments for trading or speculative purposes. i) The foilowing are the contracts entered into by the Company and outstanding al the year end:

6) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year-end together with interest paid/payable as required under the said Act have not been given.

7) Disclosure in respect of related parties pursuant to Accounting Standard 16: A) LIST OF RELATED PARTIES:

Related parlies with whom Company entered into Iransactions during the year: i) Associates

Perfect Knitters Limited

Imperial Garments Limited

Purav Trading Limited

GTN Engineering (India) Limited ii) Key Management Personnel and Enterprises

(Having Common Key Management Personnel or their relatives)

Key Management Personnel

Shri M.K, Patodia - Chairman & Managing Director

Enterprises / Entities having common Key Management Personnel

Patcot Company

Perfect Collon Co.

Standard Cotton Corporation Mi) Relatives of Key Management Personnel and their entities

Smt, Bimla Devi Chowdhary - Sisler

Sml. Sharada Devi Chowdhary-Sister

8) In terms of Accounting Standard 17, the Company operates materially only in one business segment viz., yarn and has its production facilities and all other assets located in India. Sales to external cuslomers comprise export sales ol Rs. 23501.47 lacs (Previous Year Rs, 21767,61 lacs) and local sales of Rs. 17754.19 lacs(Previous Year Rs. 14948.07 lacs).

9) a) Certain Land, Buildings, Plant & Machinery and Electrical Installations were revalued as on 31H March 1993

on the basis of reports of approved valuer on market value / replacement cost basis using standard indices after considering the obsolescence and age of individual assets,

b) The revalued amounts (net of withdrawals) remaining substituted for the historical cost in the gross block of fixed assets are;

10) Previous year''s figures have been regrouped and rearranged wherever necessary so as to conform to the current year''s presentation.


Mar 31, 2012

A) The Company has only one class of shares referred to as Equity Shares having a par value of Rs.10. Each holder of Equity Shares is entitled to one vote per share. In the event of liquidation of the Company, the holder of Equity Shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential and other payables exist currently. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

b) The Company has been sanctioned Debt Restructuring Scheme by CDR-EG. As per the Scheme promoters have pledged 6677100 Equity Shares to lenders with Voting Rights which is equivalent to 51% of their shareholding.

1) a) In the opinion of the Board, all the assets other than Non-current assets have a value on realisation in'the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet: The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary.

b) Balances-in Trade Payables, Trade Receivables and Short Term Loans and Advances are subject to confirmations, reconciliation and adjustments. In the opinion of the Management, adjustments, if any, on such confirmations/reconciliations will not have material impact on the Loss for the year.

2) a) Contingent Liabilities and commitments (to the extent not provided for): -

i) Contingent Liabilities :

- Disputed Drawback and Excise Duty (excluding interest): Rs.22.04 lacs (Previous Year Rs. 22.04 lacs)

- Disputed Income Tax Matters Rs. 353.14 lacs (Previous Year Rs. 441.25 lacs)

- Others: Rs.105.32 lacs (Previous Year Rs. 88.39 lacs).

ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and are not provided for: Rs. 241.51 lacs (Previous Year Rs. 525.08 lacs); net of advances of Rs. 21.47 lacs (Previous Year Rs. 188.70 lacs),

b) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not enter into any such instruments for trading or speculative purposes.

3) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year-end together with interest paid/ payable as required under the said Act has not been given.

4) Disclosure in respect of Related Parties persuant to Accounting Standard 18:

(A) UST OF RELATED PARTIES:

Related parties with whom company entered into transactions during the year:

(i) Associates

Perfect Knitters Limited Imperial Garments Limited Purav Trading Limited

(ii) Key Management Personnel and Enterprises {Having Common Key Management Personnel or their Relatives)

Key Management Personnel

Shri M.K.Patodia-Chairman & Managing Director

Enterprises / Entities having common Key Management Personnel

Patcot Company Perfect Cotton Co.

Standard Cotton Corporation

iii) Relatives of Key Management Personnel and their entities

Smt. Bimla Devi Chowdhary-Sister Smt. Sharada Devi Chowdhary-Sister Madanlal Purusottam Das (HUF)

With respect to compensated absences (leave entitlements), liability recognised in the Balance Sheet as on March 31, 2012 is Rs 25.51 lacs (Previous Year Rs.42.68 lacs).

5) In terms of Accounting Standard 17, the Company operates materially only in one business segment viz., yarn and has its production facilities and all other assets located in India. Sales to external customers comprise export sales of Rs. 21767.61 lacs (Previous Year Rs. 23957.97 lacs) and local saterof Rs. 14948.07 lacs (Previous Year Rs. 15681.69 lacs).

6) a) Certain Land, Buildings, Plant & Maeftnary and Electrical Installations were revalued as on 31st March 1993 on the basis of reports of Tppmwiwl valuer on market value / replacement cost basis using standard indices after considering the obeotoimnoe and age of individual assets.

7) The Company was using pre revised Schedule VI to the Companies Act, 1956 for the preparation and presentation of its financial statements upto the year ended 31st March, 2011. During the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account and are not provided for: Rs. 525.08 lacs (Previous Year Rs. 418.32 lacs); net of advances of Rs. 188.70 lacs (Previous Year Rs. 59.68 lacs).

2. Contingent Liabilities not provided for in respect of:-

Disputed demands for taxes, duties and other claims not acknowledged as debts:

Duty Drawback and Excise Duty : Rs.22.04 lacs (excluding interest) (Previous Year Rs. 18.69 lacs). Income Tax Rs. 441.25 lacs (Previous Year Rs.88.11 lacs)- Others: Rs.88.39 lacs (Previous Year Rs. 47.61 lacs).

3. a) Account of certain creditors, debtors and advances given are subject to confirmation and reconciliation/adjustment, if any. However, in the opinion of management, there would not be any material impact on the financial statements.

b) In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary.

4. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/ payable as required under the said Act have not been given.

5. EMPLOYEE BENEFIT PLANS

The following table set out the status of the gratuity plan as required under AS 15:

6. (a) Foreign Exchange difference (Net) credited to Profit and Loss Account Rs. 95.34 lacs (Previous Year: Rs. 497.63 lacs).

(b) In accordance with the concept of prudence, the Company has not recognized mark to market foreign exchange gain of Rs 57.85 lacs (Previous Year NIL) on derivative contracts entered into to hedge the foreign currency risk of future transactions and outstanding as at the Balance Sheet date.

(c) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not enter into any such instruments for trading or speculative purposes.The following are the contracts entered into by the Company and outstanding at the year end:

7. a) Interest charges for the year in Schedule 16 include Rs. 216.14 lacs related to earlier periods.

b) Interest on Others in Schedule -16 is net of interest income of Rs 53.05 lacs (Previous Year Rs. 44.72 lacs); tax deducted at source thereon Rs. 3.70 lacs; (Previous Year Rs. 4.31 lacs).

8. In terms of Accounting Standard 17, the Company operates materially only in one business Segment viz., Yarn and has its production facilities and all other assets located in India. Sales to external customers comprise export sales of Rs. 23957.96 lacs (Previous Year Rs. 15577.62 lacs) and local sale of Rs. 15681.69 lacs (Previous Year Rs. 10623.09 lacs).

9. The Company has been advised that it is eligible to set off lower of business loss / Unabsorbed depreciation even though adjusted with General Reserves in an earlier year. However, the Company has provided MAT tax liability of Rs.375 lacs without considering such adjustment and accordingly taken MAT tax credit.

10. Disclosure in respect of related parties pursuant to Accounting Standard 18: (A) List of related parties:

Related parties with whom company entered into transactions during the year:

i) ASSOCIATES

Perfect Knitters Limited Imperial Garments Limited GTN Engineering (India) Limited JEL Finance & Investment Limited Purav Trading Limited

ii) KEY MANAGEMENT PERSONNEL AND ENTERPRISES (HAVING COMMON KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES)

Key Management Personnel

Shri M.K. Patodia - Chairman & Managing Director

Enterprises / Entities having common Key Management Personnel Patcot co., Perfect Cotton Company Relatives of Key Management Personnel and their entities

Late Shri R.K. Patodia - Brother Smt. Bimla Devi Chowdhary - Sister Smt. Sharada Devi Chowdhary - Sister Madanlal Purusottam Das (HUF) Rajendra Patodia (HUF) Mahendra Patodia(HUF)

11. No commission is payable to any of the Directors of the Company, hence the Computation of Net Profit U/s. 198 / 349 of the Companies Act, 1956 is not disclosed.

12. Previous years figures have been regrouped and rearranged wherever necessary so as to conform to the current years presentation.


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and are not provided for: Rs. 418.32 lacs (Previous Year Rs. 300.35 lacs); net of advances of Rs. 59.68 lacs (Previous Year Rs. 41.97 lacs).

2. The Company is eligible for deferment of sales tax payable in respect of its Yam Processing Unit w.e.f. 20.08.1996 to 19.08.2010 for a period of 14 years, upper limit being Rs. 2233.82 lacs. The each years liability is repayable after 14 years from the year of availment of the benefit. The Company has deferred sales tax liability of Rs. 965.72 lacs upto 31.03.2010 (Previous Year Rs. 881.56 lacs).

3. Contingent Liabilities not provided for in respect of:

Disputed demands for taxes, duties and other claims not acknowledged as debts:

Duty Drawback: Rs. 18.69 lacs (including penalty of Rs. 3 lacs but excluding interest, if any)(Previous Year Rs. 18.69 lacs) Others: Rs.47.61 lacs (Previous Year Rs. 40.87 lacs).

4. The Company has been sanctioned Debt Restructuring Scheme by CDR - EG, which inter-alia, provides for interest rate reduction, lower working capital margins, re-schedulement of term loans, funding of Rs.2150 lacs by way of term loan for Capex, WCTL and Corporate loan. After close of the year, the promoters have brought in Rs.750 lacs by subscribing 60 lacs Equity Shares of Rs.10/- each with a premium of Rs.2.50 per share after obtaining necessary approvals from the Shareholders and SEBI. Most of the terms and conditions of the Scheme have been complied with.

5. Exceptional item represents Debit of Rs. 229.92 lacs towards VRS charges written off (PreviousYear-CreditofRs.297.89lacson account of power refund received/receivable from Maharashtra State Electricity Distribution Company Limited (MSEDCL) for Regulatory Liability Charges (RLC) collected in earlier years and debit of Rs. 74.26 lacs towards VRS charges written oft).

6. a) Account of certain creditors, debtors and advances given are subject to confirmation and reconciliation/adjustment, if any. However, in the opinion of management, there would not be any material impact oh the financial statements.

b) In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary.

7. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

8. EMPLOYEE BENEFIT PLANS

The following table set out the status of the gratuity plan as required under AS 15:

10.(a) Foreign Exchange difference (Net)credited to Profit and Loss Account Rs.497.63 lacs (Previous Year:Debit Rs. 760.83 lacs).

12.(a)Certain Land,Buildings,Plant &Machinery and Electrical Installati -ons were revalued as on 31 sl March,1993 onthe basis of reportsof approved valuer on market value /replacement cost basis usingstandard indices after consideringthe obsolescence and age of individual assets.

13.Interest on others in Schedule -17 is net of interest income of Rs.44.72 lacs (PreviousYear Rs.52,40 lacs);tax deducted atsource thereon Rs.4.31 lacs (PreviousYear Rs.8.66 lacs).

14. Interms of Accounting Standard 17,the Companyoperates materially only in one Business Segment viz.,Yarn and has its productionfacilities and all other assets located in India.Sales to external customers comprise export sales of Rs.15577.62 lacs (Previous Year Rs.12214.61 lacs)and local sales of Rs.10623.09 lacs (Previous Year Rs.7154.35 lacs).

18.Disclosure in respect of related parties pursuant to Accounting Standard 18:

A)List of related parties:

Related parties with whom Company entered into transactions during the year:I

i)ASSOCIATES

Perfect Knitters Limited Imperial Garments Limited

ii)KBY MANAGEMENT PERSONNEL AND ENTERPRISES (HAVING COMMON KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES) Key Management Personnel Shri M.K.Patodia -Chairman &Managing Director Shri M.Venkatesh -Director (Operations)(up to 28.05.2009) Enterprises /Entitles having common Key Management Personnel M.B.Credit Private Limited PatcotCo., Relatives of Key Management Personnel and.their entities Shri R.K.Patodia -Brother Smt.Simla Devi Chowdhary (Sister) Smt.Sharada Devi Chowdhary (Sister) Madanlal Purusottam Das (HUF) Rajendra Patodia (HUF) Mahendra Patodia (HUF)

21. In view of losses,no commission is payable to Managing Director and accordingly the Computation of Net Profit U/s.1 98 /349 of the Companies Act,1 956 for the payment of commission has not been furnished.

23. Previous years figures have been regrouped and rearranged wherever necessary so as to conform to the current years presentation.

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