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Notes to Accounts of Himatsingka Seide Ltd.

Mar 31, 2016

NOTE 1. - EXPENDITURE TOWARDS CORPORATE SOCIAL RESPONSIBILITY

The Company has devised the CSR policy as required under section 135 of the Companies Act, 2013 and the relevant rules made thereunder. Gross amount required to be spent by the Company during the year: Rs. 150 Lakhs. (Previous year: Rs. 89.83 Lakhs) Amount spent during the year for purposes other than construction/acquisition of any asset was Rs.77 Lakhs (Previous year: Rs. 1 Lakh) and balance to be paid as at March 31,2016 on such activities was Rs. Nil. (Previous year Rs. Nil)

NOTE 2. - SEGMENT REPORTING

Since the Company prepares consolidated financial statements, segment information has not been provided in these standalone financial statements.

NOTE 3. - There is no amount due and outstanding as at Balance sheet date to be credited to the Investor Education and Protection Fund.

NOTE 4. - DETAILS OF DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURES

1. Forward covers

a) The Company has designated certain highly probable forecasted foreign currency transactions and certain forward contracts to sell and buy foreign currency as hedged items and hedging instruments respectively, in a Cash Flow Hedge to hedge the foreign exchange risk arising out of fluctuations between the India rupee and foreign currency. The exchange fluctuations arising from marking to market of the hedging instruments, to the extent relatable to the hedge being effective has been recognised in a Hedge reserve account in the Balance sheet. Accordingly, exchange fluctuations gains amounting to Rs. 1,329.49 Lakhs as at March 31, 2016 (Previous year: Rs. 934.83 Lakhs) have been recognized in the Hedge Reserve account. These exchange differences will be considered in Statement of Profit and Loss as and when the forecasted transactions occur.

2. Interest rate swap

The Company has entered into an interest rate swap for hedging its cash flows arising from the floating interest rate exposure on borrowings in foreign currency of USD 8,000,000, which has a mark to market loss of Rs.65.62 Lakhs (previous year: Rs.55.19 Lakhs), taken to hedge reserve being an effective hedge.

NOTE 5. NOTES RELATING TO CASH FLOW STATEMENT

i) Cash and cash equivalents include balances with scheduled banks on dividend account not available for use by the Company: Rs.22.81 Lakhs (Previous year: Rs.12.71 Lakhs)

ii) Interest paid includes Rs.146.35 Lakhs (Previous year: Nil) , interest capitalised to capital work in progress as borrowing cost.

iii) Cash and cash equivalents comprises of:

NOTE 6. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2015

1 There is no movement in the shares outstanding from the prior year to the current year.

2 Details of the rights, preferences and restrictions attaching to each class of shares :

The Company has only one class of equity share, having a par value of Rs.5/-. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amount. However, as on date no such preferential amount exist. The distribution will be in proportion to number of equity shares held by the shareholders.

3 RELATED PARTY DISCLOSURES

Nature of relationship Names of the related parties

Wholly owned subsidiaries Himatsingka Wovens Private Limited (WOS) (HWPL) Himatsingka America, Inc. (Hima) Divatex Home Fashion, Inc. (Divatex) DWI Holdings, Inc. (DWI) Himatsingka Singapore Pte Ltd (HSPL) Giuseppe Bellora S.p.A. (GB)

Other subsidiaries (OS) Twill & Oxford LLC (T&O) GBT SrL

Key management personnel (KMP) A.K. Himatsingka (AKH) - Vice Chairman

D.K. Himatsingka (DKH) - Managing Director Aditya Himatsingka (ADH) - Executive Director Jayashree Poddar (JP) - Executive Director Shrikant Himatsingka (SKH) - Executive Director Dilip J. Thakkar - Chairman Rajiv Khaitan - Independent Director Dr.K.R.S Murthy - Independent Director Berjis M Desai - Independent Director Pradeep K.P - Chief Financial officer Ashok Sharma - Company Secretary

Relatives of key management Amitabh Himatsingka personnel (Relatives) Rajshree Himatsingka Ranjana Himatsingka Supriya Himatsingka Priyadarshini Himatsingka Akanksha Himatsingka

Enterprises owned or Bihar Mercantile Union Limited (BMU) significantly influenced by KMP, directors or their relatives (Referred as "Enterprises") Credit Himatsingka Private Limited (CHPL)

Khaitan & Co LLP D.K. Himatsingka HUF Satin Reed America, Inc. (SR)

4 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

As at As at 31.03.2015 31.03.2014 Rs. in lakhs Rs. in lakh (a) Contingent liabilities

(i) Claims against the Company not acknowledged as debts

Taxation matters#

Income tax 464.79 536.72

Excise duty 374.38 341.80

Others 35.25 35.25

(ii) Corporate guarantee given towards credit facilities on behalf of subsidiaries

Financial institutions 12,531.50 100.00

Banks 7,711.62 18,428.67

others 401.55 384.90

(iii) Bill discounted 5,985.10 -

* The above amounts have been arrived at based on the notice of demand or the Assessment Orders, as the case may be, and the Company is contesting these claims with the respective authorities. Outflows including interest and other consequential payments, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company's rights for future appeals before the judiciary. No reimbursements are expected.

(b) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances)*

Tangible assets 83.30 647.29

* Does not include value of materials to be supplied to the ongoing civil work.

5 There is no amount due and outstanding as at Balance sheet date to be credited to the Investor Education and Protection Fund.

6 DETAILS ON DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURES

1. Forward covers

(a) The Company has designated certain highly probable forecasted foreign currency denominated sales transactions and certain forward contracts to sell foreign currency as hedged items and hedging instruments respectively, in a Cash Flow Hedge to hedge the foreign exchange risk arising out of fluctuations between the India rupee and foreign currency. The exchange fluctuations arising from marking to market of the hedging instruments, to the extent relatable to the hedge being effective has been recognised in a Hedge reserve account in the Balance sheet. Accordingly, exchange fluctuations gains amounting to Rs. 934.83 lakhs as at March 31, 2015 (Previous year : Rs. 805.81 lakhs) have been recognized in the Hedge Reserve account. These exchange differences will be considered in Statement of Profit and Loss as and when the forecasted transactions occur.

2. Interest rate swap

The Company has entered into an interest rate swap for hedging its cash flows arising the floating interest rate exposure on borrowings in foreign currency of USD 8,000,000, which has a mark to market loss of Rs.55.19 lakhs (previous year: Rs.14.69 lakhs), taken to hedge reserve being an effective hedge.

3. During the previous year, the Company had designated certain Pre-shipment credit 'PCFC' which was taken in foreign currency (US dollars) against confirmed sales orders in hand considered as firm commitments as hedged items and hedging instruments respectively, in a Fair value Hedge to hedge the foreign exchange risk arising from fluctuations in the exchange rate of Indian rupee and the US dollar between the contract acceptance and fulfillment dates. The exchange loss (net) on restatement of hedging instruments to the extent hedge is considered effective amounting to Rs. 49.50 lakhs had been accounted as 'Mark-to-Market of fair value derivatives' under 'Other current liabilities' in the financial statements.

7 In the previous year, the Company made an application for capital and revenue subsidy under the 'mega project' of the 'Suvarna Vasthra Neethi Scheme 2008-13 for its investments in the Bed Linen and Co-generation Power Plants. Based on the application, the amount eligible and specified in the scheme for subsidy pertaining to power consumption was accrued as receivable.

8 In the previous year, the Company invested an amount of Rs.1,189.00 lakhs in its subsidiary Giuseppe Bellora S.p.A towards funding of certain one time restructuring costs on account of a change in business model. This amount was written off as an exceptional item.

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


Mar 31, 2014

NOTE 1A - EMPLOYEE BENEFITS

In accordance with applicable Indian laws, the Company provides for gratuity, a defi ned benefit retirement plan (Gratuity plan). The Gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to a fund managed by the Insurer (ICICI Prudential Life Insurance). Under this plan, the settlement obligation remains with the Company, although the Employees Gratuity Trust administers the plan and determines the contribution premium required to be paid by the Company.

Defined contribution plans

The Company makes Provident fund, Superannuation Fund and Employee State Insurance contributions to defi ned contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specifi ed percentage of the payroll costs to fund the benefits. The contributions payable to these plans by the Company are at rates specifi ed in the rules of the schemes. The Company recognized the following contributions in the Statement of Profit and loss.

NOTE 2 - SEGMENT REPORTING

Since the Company prepares consolidated financial statements, segment information has not been provided in these unconsolidated financial statements.

As at As at 31.03.2014 31.03.2013 Rs. in lakhs Rs. in lakhs

NOTE 30 - CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) Contingent liabilities

Claims against the Company not acknowledged as debts Taxation matters#

Income tax 536.72 465.77

Excise duty 341.80 341.80

Value added tax - 140.20

Service tax - 4.28

Others 35.25 35.25

Corporate guarantee given towards credit facilities on behalf of subsidiaries

Financial institutions 100.00 221.21

Banks 18,428.67 18,988.98

Others 384.90 173.93

Bill discounted - -

# The above amounts have been arrived at based on the notice of demand or the Assessment Orders, as the case may be, and the Company is contesting these claims with the respective authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company''s rights for future appeals before the judiciary. No reimbursements are expected.

NOTE 3 - There is no amount due and outstanding as at Balance sheet date to be credited to the Investor Education and Protection Fund.

NOTE 4 - Details of Forward covers, Options and Derivative transactions

1. Forward covers

(a) The Company has designated certain highly probable forecasted US dollar denominated sales transactions and certain forward contracts to sell US dollars as hedged items and hedging instruments respectively, in a Cash Flow Hedge to hedge the foreign exchange risk arising out of fluctuations between the India rupee and the US dollar. The exchange fluctuations arising from marking to market of the hedging instruments, to the extent relatable to the hedge being effective has been recognised in a Hedge reserve account in the Balance Sheet. Accordingly exchange fluctuations gains amounting to Rs. 805.81 lakhs as at March 31, 2014 (Previous year : Rs.327.09 lakhs) have been recognized in the Hedge Reserve account. These exchange differences will be considered in Statement of Profit and Loss as and when the forecasted transactions occur.

2. Interest rate swap

The Company has entered into an interest rate swap for hedging its cash flows arising the fl oating interest rate exposure on borrowings in foreign currency of USD 8,000,000, which has a mark to market loss of Rs.14.69 lakhs (previous year: Rs.117.08 lakhs), taken to hedge reserve being an effective hedge.

3. During the year, the Company has designated certain Pre-shipment credit ''PCFC'' which is taken in foreign currency (US dollars) against confirmed sales orders in hand considered as firm commitments as hedged items and hedging instruments respectively, in a Fair value Hedge to hedge the foreign exchange risk arising from fluctuations in the exchange rate of Indian rupee and the US dollar between the contract acceptance and fulfi llment dates. The exchange loss (net) on restatement of hedging instruments to the extent hedge is considered effective amounting to Rs.49.50 lakhs has been accounted as Rs.Mark-to-Market of fair value derivatives'' under Rs.Other current liabilities'' in the financial statements.

NOTE 5 - NOTES RELATING TO CASH FLOW STATEMENT

(i) The cash flow statement has been prepared under the "Indirect Method" as set out in the Companies (Accounting Standards) Rules, 2006.

(ii) Cash and cash equivalents include balances with scheduled banks on dividend account not available for use by the Company: Rs.20.98 lakhs (Previous year: Rs.24.02 lakhs)

NOTE 6 - Previous year''s figures have been regrouped / reclassifi ed wherever necessary to correspond with the current year''s classifi -cation / disclosure.


Mar 31, 2013

NOTE 1 – SeGMeNT RePoRTING

Since the Company prepares consolidated fnancial statements, segment information has not been provided in these unconsolidated fnancial statements.

As at As at 31.03.2013 31.03.2012 Rs. in lakhs Rs. in lakhs

NoTe 2 –

CoNTINGeNT LIAbILITIeS ANd CoMMITMeNTS

(To THe exTeNT NoT PRovIded FoR)

Contingent liabilities

Claims against the Company not acknowledged as debts Taxation matters# Income tax 465.77 465.77

Excise duty 341.80 341.80

Value added tax 140.20 140.20

Service tax 4.28 54.84

Others 35.25 35.25

Corporate guarantee given towards credit facilities on behalf of subsidiaries Financial institutions 221.21 342.42

Banks 18,988.98 20,278.92

Others 173.93 163.00

Bill discounted 8.26

# The above amounts have been arrived at based on the notice of demand or the Assessment Orders, as the case may be, and the Company is contesting these claims with the respective authorities. Outfows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company''s rights for future appeals before the judiciary. No reimbursements are expected.

NoTe 3 – The Company had in the prior year commenced the activity of improving operating and reporting process through an implementation of an ERP system. The below mentioned costs have been identifed to be relating to the implementation process and have accordingly been capitalized as part of the asset / capital work in progress:

NoTe 4 – There is no amount due and outstanding as at Balance sheet date to be credited to the Investor Education and Protection Fund.

NoTe 5 – Exceptional items represent the impact of the transactions arising against a derivative contract designated as fair value through proft and loss. On August 9, 2012, the liability on account of this contract crystallised at Rs. 1,554 lakhs which has been fully settled.

NoTe 5 – NoTeS ReLATING To CASH FLoW STATeMeNT

i) The cash fow statement has been prepared under the "Indirect Method" as set out in the Companies (Accounting

Standards) Rules, 2006. ii) Cash and cash equivalents include balances with scheduled banks on dividend account not available for use by the

Company: Rs. 24.02 lakhs (Previous year: Rs. 29.23 lakhs). iii) Interest paid is inclusive of and purchase of fxed assets excludes, interest capitalised: Rs. Nil (Previous year: Rs. 2.96 lakhs). iv) Cash and cash equivalents comprises of:

NoTe 7 – Other income includes, Rs. 294.29 lakhs on account of reversal of impairment loss recognised in respect of the spun yarn unit in the earlier years, in view of adequate increase in value in use arising out of cash fows from alternate use of assets from the current year.

NoTe 8 – Previous year''s fgures have been regrouped / reclassifed wherever necessary to correspond with the current year''s classifcation / disclosure.


Mar 31, 2012

1) Change in Accounting Policy:

The Company is exposed to currency fluctuations risk of firm commitments and highly probable transactions and follows a risk management policy of hedging this risk through a combination of forward contracts, options and other derivative contracts ("hedging instruments"). During the year, with effect from April 1, 2011, the Company has adopted the principles of derivative and hedge accounting specified under Accounting Standard 30 (AS 30), "Financial Instruments: Recognition and Measurement", to the extent they have not been dealt with and do not conflict with the accounting standards as notified under Section 211 (3C) of the Companies Act, 1956. On the date of application of the principles of AS 30 by the Company, all the outstanding derivative contracts were designated to be either at fair value through profit and loss or as cash flow hedges.

The gains or losses on designated hedging instruments that qualify as effective cash flow hedges are recorded in 'Hedge Reserve' account at each period end, and are transferred to the Statement of Profit and Loss in the same period during which the hedged transaction affects the Statement of Profit and Loss, or recognized directly into the Statement of Profit and Loss to the extent such hedges are considered ineffective. When a forecasted transaction is no longer expected to occur, the gains or losses that were previously recognized in the 'Hedge Reserve' are transferred to the Statement of Profit and Loss immediately. The effectiveness of the hedge is tested by the Company at each period end.

The changes in fair values of instruments designated at fair value through profit and loss are adjusted in the Statement of Profit and Loss.

Prior to the adoption of the principles under AS 30, foreign hedging instruments were marked to market as at the Balance Sheet date and provision for losses, if any, were dealt with in the Statement of Profit and Loss, except where there was any significant uncertainty. Unrealised gains, if any, on such derivatives were not recognised in the Statement of Profit and Loss.

The impact of change in policy is as follows:

i) The loss on fair valuation of a derivative contract as at April 1, 2011, amounting to Rs. 1,973.44 lakhs has been adjusted to the opening balance of reserves, in accordance with the transitional provisions under AS 30. In respect of such derivative contract, a loss of Rs. 159.92 lakhs has been recognized in the Statement of Profit and Loss for the year ended March 31, 2012 as a movement in the fair value during the year and has been disclosed as an exceptional item (Refer Note 37). In view of significant uncertainty regarding the exchange rates on maturity of contract and consequential liability, if any, under this contract, the mark to market loss on this contract was not recongised in the previous years.

ii) The fair valuation loss amounting to Rs. 171.44 lakhs with regard to the derivative contracts designated as cash flow hedges, being effective as at March 31, 2012, has been recognized in Hedging Reserve account, to be transferred to the Statement of Profit and loss on the occurrence of the highly probable sale.

NOTE 2 - The Revised Schedule VI has become effective from 1 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.

NOTE 3 - NOTES RELATING TO CASH FLOW STATEMENT

i) The cash flow statement has been prepared under the "Indirect Method" as set out in the Companies (Accounting Standards) Rules, 2006.

ii) Cash and cash equivalents include balances with scheduled banks on dividend account not available for use by the Company: Rs. 29.23 lakhs (Previous year: Rs. 42.50 lakhs).

iii) Interest paid is inclusive of and purchase of fixed assets excludes, interest capitalised: Rs. 2.96 lakhs (Previous year: Rs. 3.50 lakhs).


Mar 31, 2011

1 Contingent liabilities

i) Contingent liabilities not provided for:

31.03.2011 31.03.2010 Rs. in lakhs Rs. in lakhs

Income tax 4,918.81 1,938.99

Entry tax - 10.00

Excise duty 265.40 275.12

Customs duty - 20.15

Value added tax 140.20 140.20

Claims against the company not acknowledged as debts 27.96 -

2 Details of Forward covers, Options and Derivative transactions

3) Derivative contracts

The Company is exposed to currency fluctuations on foreign currency assets and cash flows denominated in foreign currency. The Company follows a policy of covering the risks arising out of foreign exchange fluctuations through a combination of forward contracts and options.

One of the foreign exchange derivative contract has a duration of 60 months, to sell US Dollars on a monthly basis at fixed rate subject to certain conditions. The contract also obligates the Company to pay a notional amount of Swiss Franc and receive notional amount of Rupees based on the Swiss Franc to US Dollar exchange rates during a specified monitoring period in the year 2012. There is significant uncertainty regarding the exchange rates that may be prevalent at that time and consequently the liability if any, under the contract. Due to this uncertainty, as in the previous year, no provision has been made in the financial statements as at 31 March 2011.

The marked to market valuation, as indicated by the bank, is a loss of Rs.1957.34 lakhs (Previous year: Rs.1136.68 lakhs) as on March 31, 2011.

4 1) Defined benefit plans:

In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan). The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to a fund managed by the Insurer (ICICI Prudential Life Insurance). Under this plan, the settlement obligation remains with the Company, although the Employees Gratuity Trust administers the plan and determines the contribution premium required to be paid by the Company.

Note:

1. Salary escalation considered takes into account the inflation, seniority, promotion and other relevant factors

2. The information on composition of the plan assets held by the funds managed by the insurer is not provided since the same is not available.

5 During 2003-04, the Khata in respect of one of the Company's properties was merged with those of other adjacent properties to facilitate better utilisation of the property by joint construction and entitlement of proportionate undivided share of the amalgamated property.

6 There is no amount due and outstanding as at Balance sheet date to be credited to the Investor Education and Protection Fund.

7 Notes relating to cash flow statement

(a) The cash flow statement has been prepared under the "Indirect Method" asset out in the Companies (Accounting Standards) Rules, 2006.

(b) Cash and cash equivalents include balances with scheduled banks on dividend account not available for use by the Company: Rs.42.48 lakhs (Previous year: Rs.51.10 lakhs).

(c ) Cash and cash equivalents include restricted cash being security deposit with bank against ECGC premium: Rs.2.50 lakhs (Previous year: Rs.2.50 lakhs).

(d) Interest paid is inclusive of and purchase of fixed assets excludes, interest capitalised: Rs.3.50 lakhs (Previous year: Rs.277.19 lakhs).

8 Pursuant to shareholders' approval in the Annual General Meeting held on September 26, 2007, the Company has on October 9, 2007, allotted 5,800,000 warrants to promoters/ promoter group, at an issue price of Rs.130/- convertible into equity shares at the same price within 18 months from the date of issue. The Company has allotted 256,000 equity shares each on November 28, 2007, January 2, January 31 and March 7, 2008 on conversion of equivalent number of warrants out of the above.

The promoters / promoter group, have not exercised by April 08, 2009 as required in accordance with the terms of the issue, the option to convert the remaining 4,776,000 warrants issued on a preferential basis, into equivalent number of equity shares. The validity of the said warrants, therefore, has lapsed and the application money of Rs.620.88 lakhs paid on 4,776,000 lapsed warrants has been forfeited and transferred to capital reserve.

9 The Company is primarily in the business of 'Home Textiles', consequently no segmental disclosures have been made.

10 Related party disclosures

Relationship Names of the related parties

Wholly owned Himatsingka Wovens DWI Holdings, Inc. subsidiaries Private Limited

Himatsingka America Inc.

Other Himatsingka Singapore Giuseppe Bellora subsidiaries pte ltd S.p.A.

Twill & Oxford LLC GBT SrL

Divatex Home Fashions, Inc.

Key management A.K. Himatsingka personnel - Vice Chairman (Referred D K. Himatsingka as KMP ) - Managing Director Aditya Himatsingka - Executive Director Shrikant Himatsingka - Executive Director

Relatives of Amitabh Himatsingka Supriya Himatsingka KMP (Referred as Relatives ) Rajshree Himatsingka Priyadarshini Himatsingka Ranjana Himatsingka Akanksha Himatsingka

Enterprises owned or Bihar Mercantile signifcantly Union Limited D.K.Himatsingka infuenced by HUF KMP, Directors " Satin Reed (America) Credit Himatsingka or their Inc Private Limited relatives (Referred Khaitan & Co as Relative enterprises")

11 Previous year figures have been regrouped/recast, wherever necessary.

 
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