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Notes to Accounts of Indo Count Industries Ltd.

Mar 31, 2016

1. CAPITAL WORK IN PROGRESS

Capital work in progress does not include capital advances Rs. 886.75 lac (previous year Rs. 884.53 lac).

2. Exceptional items represents recompense amount paid in respect of financial restructuring package as approved by Empowered Group of Corporate Debt Restructuring (CDR) on July 1, 2008. The company is out of CDR mechanism.

3. Related Party Disclosure:

Related party disclosures as required by AS - 18 "Related Party Disclosures" are given below:-

A. Relationship

i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and Managing Director

2. Shri R. N. Gupta - Joint Managing Director

3. Shri K.K. Lalpuria - Executive Director

4. Shri Kamal Mitra - Director (Works]

ii) Relatives of key management personnel

1. Smt. G.D.Jain

2. Smt. Shikha Jain

3. Smt. Neha Singhvi

4. Shri Mohit Jain

iii) Parties where control exists

A. Subsidiary

1. Pranavaditya Spinning Mills Ltd.

2. Indo Count Global Inc. (USA]

B. Associates

1. Margo Finance Ltd.

2. Unic Consultants

3. A.K.Jain HUF

4. It is managements opinion that since the company is exclusively engaged in the activity of manufacture of textile products which are governed by the same set of risks and returns. The same are considered to constitute a single reportable segment in the context of Accounting Standard on "Segment Reporting" issued by the Institute of Chartered Accountants of India.

5. Figures for the previous year have been regrouped / rearranged wherever considered necessary.

6. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.

7. Figures have been rounded off to the nearest Rs. lac.


Mar 31, 2015

1 SHARE CAPITAL

Terms / rights attached to equity shares

(i) The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share, The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Di- rectors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Com- pany, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. (i) The Shareholders of the Company in their Extra Ordinary General Meeting held on 17-11-2012 accorded their approval for issue

and allotment of 11,00,000 equity shares of Rs. 10/- each on preferential basis to promoter group companies. The allotment has been made on 10-04-2014.

(ii) The Shareholders of the Company in their Extra Ordinary General Meeting held on 11-09-2013 accorded their approval for issue and allotment of 28,98,300 equity share warrants at Rs. 17.25 each (including premium of Rs. 7.25 each) on preferential basis to promoter group . The Company alloted 28,98,300 equity shares at a premium of Rs. Rs. 7.25 each on 20-12-2014 and shall be subject to a lock-in period as specified under Regulation 78 of Chapter VII of the SEBI ICDR Regulations, 2009.

3. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

A. Contingent Liabilities

Rs. in lac

Particulars As at As at 31.05.2015 31.03.2014

i) Amount outstanding in respect of export 3,328.93 4,999.82 bills discounted under Export Letters of Credit (Since realised Rs. 1,427.53 lac, previous year Rs. 3,300.88 lac)

ii) Bank Guarantees * 699.74 427.59

iii) Claims against the company not acknowledged as debts against which payments made Rs. 34.22 180.96 384.80 lac (previous year Rs. 34.22 lac)

iv) CSR Expenses 76.84 -

v) Corporate guarantee given to a bank for 5,312.50 3,597.09 securing financial assistance to: - Foreign Subsidiary

*(a) The Company has given bank guarantee for Rs. 0.42 lac to DGFT on behalf of Pranavaditya Spinning Mills Limited, subsidiary company for duty free import of machines.

(b) In terms of EPCG Licence issued, the company has undertaken an export obligation for Rs. 42,042.03 lac, which is to be fulfilled over a period of 8 years. The company has completed the export obligation to the extent of Rs. 40,756.98 lac till the year end, of which licenses of Rs. 36,102.25 lac redeemed by the DGFT and the application for redemption of license submitted for Rs. 4,654.73 lac. The balance export obligation for Rs. 1,285.22 lac is to be fulfilled over a period of 8 years.

(c) In terms of advance license obtained for import of raw materials the company has undertaken an export obligation for USD 12.156 Mn. which is to be fulfilled over a period of 2 years. The company has completed the obligation to the extent of USD 11.942 Mn. The license redeemed by the DGFT amounting to USD 3.537 Mn. and application for redemption of license submitted for USD 8.405 Mn. The balance obligation of USD 0.214 Mn. is to be fulfilled over a period of 1 year.

(d) Under the package scheme of incentives of Government of Maharashtra for Mega Projects , the company is eligible for VAT and Electricity duty refund benefits for its home textiles and consumer durable goods divisions. However, if it contravenes any of the conditions of the scheme or eligibility certificate or certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon.

(e) No provision has been made in the accounts towards electricity duty on electricity generated for captive use during the period 01-04-2000 to 30-04-2005 amounting to Rs. 292.07 lac (previous year Rs. 292.07 lac) excluding interest, as the company has won the case against MSEDCL vide order number 2204 of 2007 dated 07-11-2009 of the Hon'ble High Court of Jurisdiction at Bombay whereby it was decided that no such duty is payable. MSEDCL has taken up this matter before Supreme Court with condonation of delay and matter is yet to be heard. As the matter is subjudice, the management feels that no provision is necessary.

b Commitments

Rs. in lac

Particulars As at As at 31.05.2015 31.03.2014

a) Estimated amount of contracts (net of advances) remaining to be executed on capital 3,181.27 2,066.10 account and not provided for

b) Letter of credits opened for which the 453.72 1,715.55 material has not yet been shipped

4. Based on reference of Union Bank Of India, the Lead Bank, a financial restructuing package was approved by Empowered Group of Corporate Debt Restructuring (CDR-EG) on July 01, 2008 being the COD of CDR.

The CDR-EG approved the exit of the Company from CDR Mechanism w.e.f. April 01, 2014 in their meeting held on March 26, 2015. Therein, the CDR-EG has accepted total recompense amount of Rs. 2,446.23 lac (net of concessions) as certified by the Concurrent Auditor appointed by the CDR lenders vide their certificate dated February 21, 2015 for nine lenders. In addition, for two lenders, Company settled their dues in January 2015 by paying ' 128.13 lac.

The Company has paid recompense amount (net of concessions agreed by the lenders) shown under Exceptional items. Consequently, the Company is out of CDR mechanism.

5. Related Party Disclosure:

Related party disclosures as required by AS - 18 "Related Party Disclosures" are given below:-

A. Relationship

i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and Managing Director

2. Shri R. N. Gupta - Joint Managing Director

3. Shri K. R. Lalpuria - Executive Director

4. Shri Kamal Mitra - Director (Works)

ii) Relatives of key management personnel

1. Smt. G.D. Jain

2. Smt. Shikha Jain

3. Smt. Neha Singhvi

4. Shri Mohit Jain

iii) Parties where control exists

A. Subsidiary

1. Pranavaditya Spinning Mills Ltd.

2. Indo Count Global Inc. ( USA)

B. Associates

1. Margo Finance Ltd.

2. Unic Consultants

3. A.K. Jain HUF

6. Effective 1st April, 2014, the company has revised its estimated useful life of fixed assets, wherever appropriate, on the basis of useful life specified in Schedule II of the Companies Act, 2013. The carrying amount as on 1st April, 2014 is depreciated over the revised remaining useful life. As a result of these changes, the depreciation charged for the period ended 31st March, 2015 is lower by Rs. 434.93 lac and the effect relating to the period prior to 1st April, 2014 is Rs. 88.52 lac (net of deferred tax asset of Rs. 42.52 lac) which has been adjusted against opening balance of retained earnings.

7. The Company has not recovered Rs. 158.54 lac (net of Rs. 30.00 lac) for the year 2013-14 from M/S Unic Consultants agaist excess commission disallowed by the Company Law Board vide their order dated 13th August, 2014. The Company has made fresh application on 23rd March, 2015 for review of their earlier order for allowability of the excess amount paid. Out of current year's commission, the Company has retained the above excess amount, pending review by Ministry of Corporate Affairs.

8. Figures for the previous year have been regrouped / rearranged wherever considered necessary.

9. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.

10. Figures have been rounded off to the nearest Rs. in lac.


Mar 31, 2014

1.Terms / rights attached to equity shares

(i) The Company has only one class of equity shares having a par value of Rs 10/- per share. Each holder of equity shares is entitled to one vote per share, The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts: The distribution will be in proportion to the number of equity shares held by the shareholders.

2. (i) The Shareholders of the Company in their Extra Ordinary General Meeting held on 17-11-2012 accorded their approval for issue and allotment of 11,00,000 equity shares of Rs 10/- each on preferential basis to promoter group companies. However, allotment will be made on receipt of approval for the same from Stock Exchanges. Pending approval, the amount has been reflected under Share Application Money Pending Allotment.

(ii) The Shareholders of the Company in their Extra Ordinary General Meeting held on 11-09-2013 accorded their approval for issue and allotment of 28,98,300 equity share warrants ot Rs 17.25 each (including premium of Rs 7.25 each) on preferential basis to promoter group . However, allotment will be made on receipt of approval for the same from Stock Exchanges. Pending approval, the amount has been reflected under Warrant Application Money Pending Allotment.

3.a) Based on reference of Union Bank of India, the Lead Bank, a financial restructuring package was approved by Empowered Group of Corporate Debt Restructuring (CDR-EG).

While the company had given effect of the restructuring package in its books of account, banks have continued to raise demand notices for interest payment at the rate of interest charged prior to the sanction of restructuring package.

The company has taken up the matter with the banks and accordingly the resultant difference in interest (which is still under reconciliation / determination) between the demand notice received from banks and as per company''s books of account, has not been provided, as the liability is not payable.

b) Secured inter se on pari-passu basis by way of mortgage of all immovable properties and hypothecation of all movable properties (save and except stocks and book debts and moveables of electronic division) both present and future. Loans (including current maturities of long term debts) of Rs 11,736.29 lac (previous year Rs 15,764.11 lac) are additionally secured by personal guarantee of the Managing Director. The term loans are further secured by way of first charge on the existing fixed assets of a Indian Subsidiary Company.

c) Secured against third charge on the fixed assets of the company. Loans (including current maturities of long term debts) of Rs 1,802.99 lac (previous year Rs 2,434.72 lac) are additionally secured by personal guarantee of the Managing Director. The demand term loans are further secured by way of second charge on the existing fixed assets of a Indian Subsidiary Company.

4. DEFERRED TAX ASSETS

As required under Accounting standard (AS-22), ''Accounting for taxes on income'' issued by the Institute of Chartered Accountants of India, the Company is required to account for deferred taxation while preparing its accounts.

5. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

A. Contingent Liabilities [Rs in lac] Particulars As at 31.03.2014 As at 31.03.2013 i) Amount outstanding in respect of export bills discounted under Export Letters of Credit (Since realised Rs 3,300.88 lac, previous year Rs 6,100.46 lac) 4,999.82 7,469.84 ii) Bank Guarantees * 427.59 368.25 iii) Claims against the company not acknowledged as debts 333.53 12.38 iv) Corporate guarantee given to a bank for securing financial assistance to subsidiary company - Indian Subsidiary - 200.00 - Foreign Subsidiary 3,597.09 -

(a) Includes bank guarantee given by the company for Rs 4.11 lac to DGFT on behalf of Pranavaditya Spinning Mills Limited, subsidiary company for duty free import of machines.

(b) In terms of EPCG Licence issued, the company has undertaken an export obligation for Rs 39,174.43 lac, which is to be fulfilled over a period of 8 years. The company has completed the obligation to the extent of Rs 30,246.54 lac and license redeemed by the DGFT. The export obligation for Rs 8,927.89 lac is to be fulfilled over a period of 8 years.

(c) In terms of advance license obtained for import of raw materials the company has undertaken an export obligation for USD 12.37 Mn. which is to be fulfilled over a period of 2 years.The company has completed the obligation to the extent of USD 9.13 Mn. and license redeemed by the DGFT. The balance obligation of USD 3.24 Mn. is to be fulfilled over a period of 1 year.

(d) Under the package scheme of incentives of Government of Maharashtra for Mega Projects , the company is eligible for VAT and Electricity duty refund benefits for its home textiles and consumer durable goods divisions. However, if it contravenes any of the conditions of the scheme or eligibility certificate or certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon.

(e) No provision has been made in the accounts towards electricity duty on electricity generated for captive use during the period 01-04-2000 to 30-04-2005 amounting to Rs 292.07 lac (previous year Rs 292.07 lac) excluding interest, as the company has won the case against MSEDCL vide order number 2204 of 2007 dated 07-11-2009 of the Hon''ble High Court of Jurisdiction at Bombay whereby it was decided that no such duty is payable. MSEDCL has taken up this matter before Supreme Court with condonation of delay and matter is yet to be heard. As the matter is subjudice, the management feels that no provision is necessary.


Mar 31, 2013

1. FORWARD CONTRACTS

a) The company has outstanding foreign currency related derivative contracts in the form of options for helping its business related exposure which are not speculative in nature. The contracts have long dated tenor with multiple contigent / uncertain events. As such ascertainment of fair value of these contracts is not feasible. However , banks estimate the total mark to market (MTM) of all outstanding contracts at approx. loss of Rs.Nil as at 31-03-2013, ( previous year loss of Rs.2,409 lac). The management is of the opinion that the determination and crystalisation of liability is dependant upon the outcome of uncertain future events or actions, not wholly within the control of the Company. As adoption of AS-30 is presently not mandatory, the estimated MTM loss of Rs.Nil for the year ended 31-03-2013 (previous year loss of Rs.2,409 lac) has not been provided.

b) Outstanding derivatives instruments as at 31-03-2013 entered by the Company :-

2. Related Party Disclosure:

Related party disclosures as required by AS - 18 "Realted Party Disclosures" are given below:- A. Relationship

i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and Managing Director

2. Shri R. N. Gupta - Joint Managing Director

3. Shri K.K. Lalpuria - Execitive Director

4. Shri Kamal Mitra - Director (Works) ii) Relatives of key management personnel

1. Smt. G.D. Jain

2. Smt. Shika Jain

3. Ms. Neha Singhvi

4. Shri Mohit Jain

iii) Parties where control exists A. Subsidiary

1. Pranavaditya Spinning Mills Ltd.

2. Indo Count Global Inc. ( USA) B Associates

1. Margo Finance Ltd.

2. Indocount Securities Ltd.

3. Rini Investment and Finance Pvt. Ltd.

4. Sky Rise Properties Pvt. Ltd.

5. Unic Consultants

6. Yarntex Exports Ltd.

7. A.K. Jain HUF

3. Figures for the previous year have been regrouped / rearranged wherever considered necessary.

4. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amout at which they are stated, if realised in the ordinary course of business and provision for all known liabilities has been adequetly made in the accounts.

5. Figures have been rounded off to the nearest rupee in lac


Mar 31, 2012

A) Based on reference of Union Bank of India, the Lead Bank, a financial restructuring package was approved by Empowered Group of Corporate Debt Restructuring (CDR-EG).

While the company had given effect of the restructuring package in its books of account, banks have continued to raise demand notices for interest payment at the rate of interest charged prior to the sanction of restructuring package.

The company has taken up the matter with the banks and accordingly the resultant difference in interest (which is still under reconciliation / determination) between the demand notice received from banks and as per company's books of account, has not been provided, as the liability is not payable.

b) Secured inter se on pari-passu basis by way of mortgage of all immovable properties and hypothecation of all movable properties (save and except stocks and book debts and moveables of electronic division) both present and future. Loans (including current maturities of long term debts) of Rs. 18,339.53 lacs (previous year Rs. 20,745.38 lacs) are additionally secured by personal guarantee of the Managing Director.

c) Secured against third charge on the fixed assets of the company. Loans (including current maturities of long term debts) of Rs. 2,793.25 lacs (previous year Rs. 3,185.97 lacs) are additionally secured by personal guarantee of the Managing Director.

d) Secured against hypothecation of Vehicles acquired under Auto Loan Schemes.

e) The term loans are further secured by way of first / second charge on the existing fixed assets of a subsidiary company. Further, the company has pledged 72,16,512 equity shares held by it in a subsidiary company, as per CDR stipulation. However, the company has complied all the stipulations of CDR terms and the pledged shares are yet to be released.

In terms of master restructuring agreement dated 30-03-2009, if the company commits a default in payment or repayment of three consecutive installment of principal amounts of the facilities or interest thereon or any combination thereof, then, the lenders shall have the right to convert, at their option, the whole of the outstanding amount of the facilities and /or 20% of rupee equivalent of the defaulted amount into fully paid-up equity shares of the company, at par, in the manner specified in a notice in writing to be given by the lenders to the company prior to the date on which the conversion is to take effect, which date shall be specified in the said notice.

Secured by hypothecation of Raw materials, Semi finished goods, Finished goods, Stores and Spares, Goods in transit and Book Debts of Spinning and Home textile divisions, and further secured by second charge on Fixed Assets both present and future and personally guaranteed by the Managing Director.

1. TRADE PAYABLES

(a) The names of small scale industrial undertakings to whom the company owes any sum together with interest and outstanding for more than thirty days: Saikrupa Industries

Payments against supplies from small-scale industries are made in accordance with agreed terms. Besides, there are no claims from the parties for interest on overdue payments.

(b) The company has not received any intimation from other suppliers regarding their status under the Micro, Small and Medium Enterprises Development 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.

(c) Includes amount payable to a subsidiary Rs. 0.04 lac(previous year Rs. 0.04 lac ).

Includes

a) * (i) 10 shares of Rs. 50/-each of Arcadia Premises Co-operative Society Ltd.

b) # One vehicle costing Rs. 38.45 lac, is in the name of the Managing Director as a nominee of the Company.

c) The company revalued its land, buildings and plant & machinery (except for electronics division and 2 D.G. sets of spinning division ) as on 01 -10- 2008 based on the valuation made by an approved valuer. Accordingly, the original cost of such assets resulted in gross increase in the value of assets over their original cost by Rs. 15,092.28 lac , increase in depreciation upto 31-03-2012 on revaluation by Rs. 3,500.17 lac and thereby net revaluation reserve as at 31-03-2012 is Rs. 11,592.11 lac.

d) Revaluation of 2 D.G. sets of spinning division was carried out on 01 -04-2009 by an approved valuer.The revaluation resulted in a gross increase in the value of assets over their original cost by Rs. 1,238.07 lac. increase in depreciation up to 31 -03-2012 on revaluation by Rs. 309.40 lac and thereby net revaluation reserve as at 31-03-2012 is Rs. 928.67 lac.

2. CAPITAL WORK IN PROGRESS

Capital work in progress does not include capital advances Rs. 54.10 lac (previous period Rs. 13.15 lac).

3. DEFERRED TAX ASSETS

As required under Accounting Standard (AS-22), 'Accounting for taxes on income' issued by the Institute of Chartered Accounts of India, the Company is required to account for deferred taxation while preparing its accounts. The details of deferred tax assets / liabilities are as under:

Includes balance in current account with The Kolhapur Urban Co-operative Bank Ltd. Rs. 4.82 lac (previous year Rs. 0.88 lac ) maximum amount outstanding anytime during the year Rs. 5.49 lac (previous year Rs. 4.06 lac) and The Shamrao Vittal Co-operative Bank Rs. 2.83 lac (previous year Rs. 2.08 lac) , maximum amount outstanding anytime during the year Rs. 3.63 lac (previous year Rs. 3.95 lac)

** Includes receipts for Rs. 0.01 lac ( previous year Rs. 0.01 lac ) lodged with Sales Tax Department

4. CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for)

(a) Contingent Liabilities

Particulars [Rs. in lac]

As at 31-03-2012 As at 31-03-2011

i) Amount outstanding in respect of export bills 3,328.23 4,103.98 discounted under Export Letters of Credit (Since realised Rs. 3,152 lac, previous year Rs. 2,901.56 lac)

ii) Bank Guarantees * 697.04 673.92

iii) Claims against the company not acknowledged as debts 12.38 11.10

iv) Income Tax / Custom duty demands disputed in appeals - 21.13

v) Corporate guarantee given to a bank for securing financial assistance to subsidiary company 200.00 100.00

* The Company has given bank guarantee for Rs. 4.11 lac to DGFT on behalf of Pranavaditya Spinning Mills Limited, subsidiary company for duty free import of machines.

(b) In terms of EPCG Licence issued, the company has undertaken an export obligation for Rs. 30,510.02 lac, which is to be fulfilled over a period of 8 years. The company has completed the obligation to the extent of Rs. 26,857.99 lac and necessary application for redemption of license against which obligation is completed has been made to DGFT.

(c) In terms of advance license obtained for import of raw cotton the company has undertaken an export obligation for Rs. 1,702.62 lac which is to be fulfilled over a period of 2 years. The company has completed the obligation to the extent of Rs. 1,669.33 lac

(d) Under the package scheme of incentives of Government of Maharashtra for Mega Projects , the company is eligible for VAT and Electricity duty refund benefits for its home textiles and consumer durable goods divisions However, if it contravenes any of the conditions of the scheme or eligibility certificate or certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon

(e) Commitments

* Includes tax deducted at source Rs. 0.35 lac ( previous year Rs. 1.01 lac) Includes tax deducted at source Rs. 2.08 lac, ( previous year Rs. 2.79 lac)

(a) Includes operating lease:

i. The company has entered into lease arrangements , for renting specified machinery at a rent of Rs. 2.23 lac per month for a period of 120 months and are renewable at the option of the lessee after the end of the term.

* Includes purchased from a subsidiary company Rs. 549.39 lac (previous year Rs. 526.31 lac)

5. EMPLOYEE BENEFITS EXPENSE

* Includes a sum of Rs. 96.54 lac paid to Managing Director and Executive Director as per sanction of shareholder It exceeds by Rs. 48.54 lac as per Schedule XIII of Companies Act 1956 due to inadequacy of profit. The company is the process of applying to Company Law Board / shareholders for approval of the excess remuneration paid .

6. OTHER EXPENSES

(b) Includes payment to auditors

7. FORWARD CONTRACTS

a) The company has outstanding foreign currency related derivative contracts in the form of options for helping its business related exposure which are not speculative in nature. The contracts have long dated tenor with multiple contigent / uncertain events. As such ascertainment of fair value of these contracts is not feasible. However, banks estimate the total mark to market (MTM) of all outstanding contracts at approx. Rs. 2,409 lacs as at 31-03- 2012, (previous year Rs. 607 lac). The management is of the opinion that the determination and crystalisation of liability is dependant upon the outcome of uncertain future events or actions, not wholly within the control of the Company. As adoption of AS-30 is presently not mandatory, the estimated MTM loss of Rs. 2,409 lac for the year ended 31 -03-2012 (previous year Rs. 607 lac) has not been provided.

b) Outstanding derivatives instruments as at 31 -03-2012 entered by the Company :-

8. RELATED PARTY DISCLOSURES:

Related party disclosures as required by AS -18 "Related Party Disclosures" are given below: - A. Relationship

(i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and Managing Director

2. Shri R. N. Gupta - Joint Managing Director

3. Shri K. K. Lalpuria - Executive Director

4. Shri Kamal Mitra - Director (Works) (ii) Relatives of key management personnel

1. Smt.G. D.Jain

2. Smt.Shikha Jain

3. Ms. NehaJain

4. Shri MohitJain

(iii) Parties where control exists A. Subsidiary

1. Pranavaditya Spinning Mills Ltd.

2. Indocount Global Inc. (USA)

B. Associates

1. Margo Finance Ltd.

2. Indocount Securities Ltd.

3. Rini Investment and Finance Pvt. Ltd.

4. Sky Rise Properties Pvt. Ltd.

5. Unic Consultants

6. Yarntex Exports Ltd.

7. A. K. Jain

10. Figures for the previous year have been regrouped / rearranged wherever considered necessary.

11. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities has been adequetly made in the accounts.

12. Figures have been rounded off to the nearest rupees in lac.

13. Additional Information (Pursuant to the provisions of Part II and Part IV of Schedule VI to the Companies Act 1956 a) The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O.301 ( E) dated 8th February,2011 issued under Section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profit and loss account. The Company being an 'export oriented company' in entitled to the exemption. Accordingly, disclosures mandated by paragraph 3(i)(a), 3(ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.


Mar 31, 2011

As at As at 31-03-2011 31-03-2010 (Rs. in (Rs. in lac) lac)

1. Contingent liabilities not provided for in respect of -

(i) Amount outstanding in respect of export bills discounted 4,103.98 2,641.38 under Export Letters of Credit (Since realized Rs. 2,901.56 lac, previous year Rs. 1,401.71 lac)

(ii) Bank Guarantees * 673.92 389.79

(iii) Claims not acknowledged as 11.10 10.78 debts

(iv) Income tax/Custom Duty demands 21.13 30.69 disputed in appeals

(v) Corporate guarantee given to a 100.00 100.00 bank for securing financial a ssistance to subsidiary Company.

* The Company has given bank guarantee for Rs. 4.11 lac to DGFT on behalf of Pranavaditya Spinning Mills Limited, Subsidiary Company for duty free import of Machines.

2. (b) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development 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.

3 (a) In terms of EPCG Licence issued, the Company has undertaken an export obligation for Rs. 378.12 lac, which is to be fulfilled over a period of 8 years. The Company has already completed this obligation and necessary application for redemption of license is being made to DGFT.

(b) In terms of advance license obtained for import of raw cotton the Company has undertaken an export obligation for Rs. 1,702.62 lac which is to be fulfilled over a period of 2 years.

4. Under the package scheme of incentives of Government of Maharashtra for Mega Projects, the Company is eligible for VAT and Electricity duty refund benefits for its home textiles and consumer durable goods divisions. However, if it contravenes any of the conditions of the scheme or eligibility certificate or certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon.

5. Shareholders of the Company in their extra ordinary general meeting held on 26-03-2011 accorded their approval for allotment of 25,00,000 - 4% Non Cumulative Preference shares of Rs. 10/- each on Preferential basis to promoter group companies. However allotment will be made on receipt of approval for the same from various authorities. Pending approval, the amount received has been reflected under Share Application Money pending allotment.

6. The 10 % Privately Placed Secured Redeemable Non-Convertible Debentures are redeemable in 36 quarterly Installments beginning from 30-06-2009.

7. Based on reference of Union Bank of India, the Lead Bank, a financial restructuring package was approved by Empowered Group of Corporate Debt Restructuring (CDR-EG).

While the Company had given effect of the restructuring package in its books of accounts, banks have continued to raise demand notices for interest payment at the rate of interest charged prior to the sanction of restructuring package.

The Company has taken up the matter with the banks and accordingly the resultant difference in interest (which is still under reconciliation /determination) between the demand notice received from banks and as per Company's books of account, has not been provided, as the liability is not payable.

8. (a) In respect of various term loan / working capital

facilities availed by the Company, the lenders have first/second / third pari passu charge on fixed assets of the Company.

(b) The term loans are to be further secured by way of first / second charge on the existing fixed assets of Pranavaditya Spinning Mills Ltd., subject however to necessary approvals.

Pending creation of permanent security, the Company has pledged 72,16,512 equity shares held by it in Pranavaditya Spinning Mills Ltd., as per CDR stipulation.

9. In terms of master restructuring agreement dated 30-03-2009, if the Company commits a default in payment or repayment of three consecutive installment of principal amounts of the facilities or interest thereon or any combination thereof, then, the lenders shall have the right to convert, at their option, the whole of the outstanding amount of the facilities and /or 20% of rupee equivalent of the defaulted amount into fully paid-up equity shares of the Company, at par, in the manner specified in a notice in writing to be given by the lenders to the Company prior to the date on which the conversion is to take effect, which date shall be specified in the said notice.

10. (a) The Company revalued its land, buildings and

plant & machinery (except for electronics division and 2 D. G. sets of spinning division ) as on 01- 10-2008 based on the valuation made by an approved valuer. Accordingly, the original cost of such assets resulted in gross increase in the value of assets over their original cost by Rs. 15,092.28 lac, increase in depreciation upto the date of revaluation by Rs. 504.49 lac, and thereby net increase in replacement cost by Rs. 14,587.79 lac. The net increase in the value of such land, building and plant & machinery had been credited to revaluation reserve account.

(b) Revaluation of 2 D. G sets of spinning division was carried out on 01-04-2009 by an approved valuer.The revaluation resulted in a gross increase in the value of assets over their original cost by Rs. 1,238.07 lac, Increase in depreciation upto 31 -03-2009 by Rs. 65.37 lac and thereby net increase in replacement cost by Rs. 1,172.70 Lac which has been taken as increase in the value of plant & machinery as on 01-04-2009 by creating a revaluation reserve to that extent.

11. In the opinion of the management, the current assets, loans and advances are expected to realize at least the amount at which they are stated, if realized in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.

12 v) Actuarial assumptions 1994-96 (duly modified) Gratuity & Leave encashment Valuation method Projected Unit Credit Method Mortality Table (LIC) 1994-96 (ultimate) Discount rate (per annum) 8% Rate of Increase in Salaries 4%

The estimates of rate of future salary increase takes account of inflation, seniority, promotion and other relevant factors on long term basis. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of liability. The above information is certified by the actuary.

13. (a) The Company has outstanding foreign currency related derivative contracts in the form of options for hedging its business related exposure which are not speculative in nature. The contracts have long dated tenor with multiple contingent/ uncertain events. As such ascertainment of fair value of these contracts is not feasible. However, banks estimate the total mark to market (MTM) of all outstanding contracts at approx Rs. 607 lac as at 31 -03-2011 (Previous year Rs. 1,619 lac). The management is of the opinion that the determination and crystallization of liability is dependent upon the outcome of uncertain future events or actions, not wholly within the control of the Company. As adoption of AS-30 is presently not mandatory, the estimated MTM loss of Rs. 607 lac for the year ended 31-03-2011 (previous year Rs. 1,619 lac) has not been provided.

14. Operating Lease:

(a) As Lessor:

i. The Company has entered into lease arrangements, for renting specified machinery at a rent of Rs. 1.68 lac per month for a period of 120 months and are renewable at the option of the lessee after the end of the term.

15. Related party disclosures:

Related party disclosures as required by AS - 18 "Related party disclosures" are given below: -

A. Relationship

(i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and managing Director

2. Shri R.N. Gupta - Joint managing Director

3. Shri K. R. Lalpuria - Executive Director (w.e.f-11.11.2010)

4. Shri Kamal Mitra - Director (Works)

(ii) Relatives of key management personnel

1. Smt. G. D. Jain

2. Smt. Shikha Jain

3. Miss Neha Jain

4. Shri Mohit Jain

(iii) Parties where control exists

A. Subsidiary

1. Pranavaditya Spinning Mills Ltd.

B. Associates

1. Margo Finance Ltd. (Formerly Indocount Finance Ltd.)

2. Indocount Securities Ltd.

3. Rini Investment & Finance Pvt. Ltd.

4. Sky Rise Properties Pvt. Ltd.

5. Unic Consultants

6. Yarntex Exports Ltd.

16. Previous years figures have been regrouped and / or rearranged wherever considered necessary.

17. Figures have been rounded off to the nearest rupees in lac.

18. b) Computation of net profit for calculation of managerial remuneration U/s. 349 of the Companies Act, 1956 has not been enumerated since no commission is paid / payable to the managing Director.

19. a) Sundry debtors include debts due from the subsidiary Company Rs. 86.26 lac (Previous year Rs. Nil)

b) Sundry creditors include amount due to the subsidiary Company Rs. 86.73 lac (Previous year Rs. 56.61 lac)

20. The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O.301 (E) dated 8th February, 2011 issued under Section 211 (3) of the Companies Act,1956 has exempted certain classes of companies from disclosing certain information in their profit and loss account.The Company being an 'export oriented Company' is entitled to the exemption. Accordingly.disclosures mandated by paragraph 3(i)(a), 3(ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.


Mar 31, 2010

As at 31-03-2010 As at 31-03-2009 (Rs. in lac) (Rs. in lac)

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) -- 52.30

2. Contingent liabilities not provided for in respect of -

(i) Amount outstanding in respect of export bills discounted under Export Letters of Credit (Since realized Rs.1,401.71 lac, previous year Rs. 1,128.56 lac) 2,641.38 2,457.48

(ii) Bank Guarantees 389.79 213.03

(iii) Claims not acknowledged as debts 10.78 12.35

(iv) Income tax/Custom Duty demands disputed in appeals 30.69 58.31

(v) Export obligation against import of capital goods under EPCG Scheme NIL 19,367.77

(vi) Corporate guarantee given to a bank for securing financial assistance to subsidiary Company. 100.00 NIL

3. (a) The names of small scale industrial undertakings to whom the Company owes any sum together with interest and outstanding for more than thirty days: Saikrupa Industries 2.33 2.33

Payments against supplies from small-scale industries are made in accordance with agreed terms. Besides, there are no claims from the parties for interest on overdue payments.

(b) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development 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.

4. (a) In terms of EPCG Licence issued, the Company has undertaken an export obligation for Rs. 32,820.19 lac, which is to be fulfilled over a period of 8 years.

(b) In terms of advance licence obtained for import of raw cotton the Company has undertaken an export obligation for Rs.24.00 lac which is to be fulfilled upto 01 -05-2009. The Company has already completed this obligation and necessary application for redemption of license is being made to DGFT.

5. Under the package scheme of incentives of Government of Maharashtra for Mega Projects , the Company is eligible for VAT and Electricity duty refund benefits for its home textiles and consumer durable goods divisions. However, if it contravenes any of the conditions of the scheme or eligibility certificate or certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon.

6. The shareholders of the Company in their extra ordinary general meeting held on 25.03.2010 accorded their approval for allotment of 2166667 equity shares of Rs.10/- each at a premium of Rs.5/- per share on preferential basis to promoter group companies. However, allotment will be made on receipt of approval for the same from NSE. Pending approval, the amount received has been reflected under Share Application Money pending allotment.

7. The 10% (Previous year 8.50%) Privately Placed Secured Redeemable Non-Convertible Debentures are redeemable in 36 quarterly installments beginning from 30-06-2009.

8. In respect of Rupee Term Loan of Rs. 750 lac availed from SICOM Ltd. (SICOM) under Technology Upgradation Fund Scheme (TUFS) SICOM has stipulated that the Company shall not declare any dividend unless it has paid to SICOM installments of interest and principal amount and SICOM shall have the right to restrain the Company from declaring any equity dividend more than 15% or the average of dividend paid in three preceding years, whichever is higher.

9. Based on reference of Union Bank of India, the Lead Bank, a financial restructuring package was approved by Empowered Group of Corporate Debt Restructuring (CDR-EG).

While the Company had given effect of the restructuring package in its books of accounts, banks are continuing to raise demand notices for interest payment at the rate of interest charged prior to the sanction of restructuring package.

The Company has taken up the matter with the banks and accordingly the resultant difference in interest (which is still under reconciliation /determination) between the demand notice received from banks and as per Companys books of account, has not been provided, as the liability is not payable.

10. (a) In respect of various term loan / working capital facilities availed by the Company, the lenders have first/ second / third pari passu charge on fixed assets of the Company.

(b) The term loans are to be further secured by way of first / second charge on the existing fixed assets of Pranavaditya Spinning Mills Ltd., subject however to necessary approvals.

Pending creation of permanent security, the Company has pledged 72,16,512 equity shares held by it in Pranavaditya Spinning Mills Ltd., as per CDR stipulation.

11. In terms of master restructuring agreement dated 30-03-2009, if the Company commits a default in payment or repayment of three consecutive installment of principal amounts of the facilities or interest thereon or any combination thereof, then, the lenders shall have the right to convert, at their option, the whole of the outstanding amount of the facilities and /or 20% of rupee equivalent of the defaulted amount into fully paid-up equity shares of the Company, at par, in the manner specified in a notice in writing to be given by the lenders to the Company prior to the date on which the conversion is to take effect, which date shall be specified in the said notice.

12. (a) The Company revalued its land, buildings and plant and machinery (except for electronics division and 2

D.G. sets of spinning division) as on 01-10-2008 based on the valuation made by an approved valuer.

Accordingly, the original cost of such assets resulted in gross increase in the value of assets over their original cost by Rs. 15,092.28 lac, increase in depreciation upto the date of revaluation by Rs.504.49 lac and thereby net increase in replacement cost by Rs. 14,587.79 lac. The net increase in the value of such land, building and plant and machinery had been credited to revaluation reserve account.

(b) Revaluation of 2 D.G. sets of spinning division was carried out on 01-04-2009 by an approved valuer.The revaluation resulted in a gross increase in the value of assets over their original cost by Rs.1,238 lac. increase in depreciation up to 31-03-2010 by Rs 65.37 lac and thereby net increase in replacement cost by Rs.1,172.70 lac which has been taken as increase in the value of plant and machinery as on 01.04.2009 by creating a revaluation reserve to that extent.

13. In the opinion of the management, the current assets, loans and advances are expected to realize at least the amount at which they are stated, if realized in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.

14. Deferred tax assets has been recognized . The management is of the opinion that there will be sufficient profit in future against which the deferred tax asset will be fully realized.

15. (a) The Company has outstanding foreign currency related derivative contracts in the form of options for hedging its business related exposure which are not speculative in nature. The contracts have long dated tenor with multiple contingent/ uncertain events. As such ascertainment of fair value of these contracts is not feasible. However, banks estimate the total mark to market (MTM) of all outstanding contracts at approx Rs.1,619 lac as at 31-03-2010 ( Previous year Rs.4,835 lac).The management is of the opinion that the determination and crystallization of liability is dependent upon the outcome of uncertain future events or actions, not wholly within the control of the Company. As adoption of AS-30 is presently not mandatory, the estimated MTM loss of Rs.1,619 lac for the year ended 31-03-2010 (previous year Rs. 4,835 lac) has not been provided.

16. Operating Lease:

(a) As Lessor:

i. The Company has entered into lease arrangements , for renting specified machinery at a rent of Rs.75,000/- per month for a period of 120 months and are renewable at the option of the lessee after the end of the term.

17. Related Party Disclosures

Related party disclosures as required by AS - 18 "Related party disclosures" are given below: - A. Relationship

(i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and Managing Director

2. Shri R. N. Gupta - Joint Managing Director

3. Shri D. M. Pradhan - Director (Marketing) ( upto 30.06.2009)

4. Shri Kamal Mitra - Director (Works) (ii) Relatives of key management personnel

1. Smt. G.D. Jain

2. Smt. Shikha Jain

3. Miss Neha Jain

4. Shri Mohit Jain

(iii) Parties where control exists

1. Margo Finance Ltd. (Formerly Indocount Finance Ltd.)

2. Indocount Securities Ltd.

3. Rini Investment and Finance Pvt. Ltd.

4. Pranavaditya Spinning Mills Ltd.

5. Skyrise Properties Pvt. Ltd.

6. Unic Consultants

7. Yarntex Exports Ltd.

18. Previous years figures have been regrouped and / or rearranged wherever considered necessary.

19. Figures have been rounded off to the nearest lac rupees.

20. a) Sundry debtors include debts due from the subsidiary Company Rs. Nil (Previous year Rs. 65.38 lac) b) Sundry creditors include amount due to the subsidiary Company Rs. 56.61 lac (Previous year Rs. Nil)

 
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