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Notes to Accounts of JJ Exporters Ltd.

Mar 31, 2015

A) Working capital facilities with Indian Overseas Bank is secured by first charge on Current Assets of the Company.

b) As collateral security, Indian Overseas Bank has second pari passu charge on (i) Movable block assets of the company, (ii) Mortgage on Land and Building at Doddaballapur, Bangalore and (iii) Mortgage on Land and Building at Gangarampur, 24 Parganas (S), West Bengal.

c) Further, the working capital limits of Indian Overseas Bank is also secured by personal guarantee of two Directors of the company.

d) The said loan from Indian Overseas Bank are subject to confirmation and reconciliation, if any.

e) Rupee Term Loan with Industrial Development Bank of India Ltd (IDBI) has been secured as follows:

Purpose Description of property

Retail showroom

(i) Plant and machinery of Kolkata EOU on first Charge.

(ii) Entire movable property (excluding current assets) of retail showroom on first charge basis. (iii) Stock of Raw Material, WIP and Finished goods of all units on second charge Doddaballapur (i) First charge on Land and Building at Dodaballapur.

(ii) First charge on movable and immovable assets (except Stock) of J.J.Spectrum (unit of J J Exporter Ltd.) (iii) First charge on movable and immovable assets (except Stock) of EOU at Kolkata.

Kolkata EOU (i) Whole of movable properties (other than stock) of the company's unit situated at Gangarampur, EOU-I and EOU-II (ii) Land measuring 40,000 sq. feet together with buliding thereon. Plant and machinery on first charge (iii) Personal guarantee of a Director.

a) Terms of Repayment of Term Loans/ FITL From IDBI

The IDBI Bank Limited has approved One Time Settlement (OTS) of its dues on account of Term Loan and Funding Interest Term Loan, the repayment of which is as follows:

Rs.15 crore was to be paid by selling Dodaballapur unit by March, 2015, the remaining Term Loan of Rs. 57,662,750/- is to be repaid w.e.f. 1st April 2015 in 59 monthly installments of Rs. 965,000/- and one installment of Rs. 727,750/-.

The Funding Interest Term Loan of Rs. 67,732,163/- is to be repaid in 60 monthly installments w.e.f 1st April 2015.

b) The Working Capital Loans and Funding Interest Term Loan has been recalled by Indian Overseas Bank. Hence, the said loan is shown as Current Maturity of Long Term Borrowings and is included in Other Current Liabilities (Refer Note 5). However, the Company has approached the bank for One Time Settlement.

c) Terms of Repayment of Term Loans of Previous Year

Terms of Repayment of Funding Interest Term Loans From Banks:

A) IDBI Bank Limited

Funding Interest Term Loans Rs. 3,17,40,479/-.The interest on the Term loan is funded by the bank by way of FITL upto Rs. 7 Crores till 31st March, 2015. It was to be repaid in 60 monthly installment w.e.f 1st April 2015.

B) Indian Overseas Bank

Funding Interest Term Loans Rs. 99,78,469/-. The interest on the Working Capital Term loan is funded by the bank by way of FITL. It was to be repaid in 16 Quarterly installment w.e.f 1st April, 2016.

Terms of Repayment of Working Capital Term Loan from IOB:

The Bank had crystalised and converted part of the Packing Credit Facility to WCTL during the year. The said loan was repayable in 16 Quarterly Installments of Rs. 56.25 lacs each w.e.f 1st April, 2016.

Terms of Repayment of Term Loan from IDBI:

The Bank has restructured the terms of repayment of Term Loan as follows:

Rs. 20 crore was to be paid by selling Dodaballapur unit by March, 2015, the remaining Term Loan of Rs. 57,662,750/- was to be repaid w.e.f. 1st April 2015 in 59 monthly installments of Rs. 965,000/- and one installment of Rs. 727,750/-

1. In respect of the Equity Shares of Erstwhile J.J. Spectrum Silks Ltd. held by the company (hereinafter referred to as the transferee company), 1,303,675 shares have been issued by the transferee company in terms of scheme, to the board of trustees to have and to hold such shares in trust exclusively for the benefit of the transferee company and deal with the same as they deem fit.

The above shares have been valued at cost. The said shares, being long term in nature, no provision for diminution in value has been done in earlier years. However, as per prudence and in view of the Financial Position, the company has made a provision of Rs. 3,00,00,000/- towards diminution in the year 2013-14 which, according to the management, is appropriate.

2. In the opinion of Board of Directors, all the current assets, loans and advances have a value on realization in the ordinary course of business, at least equal to the amount at which they are stated and that all the known liabilities relating to the year have been provided for.

3. As the company's business activities falls mainly within a single primary business segment viz. Dealing in Textile Goods, so disclosure requirement of Accounting Standard 17 " Segment Reporting ", notified in the Section 133 of Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 has not been given.

4. Related Party Disclosure in accordance with Accounting Standard 18 notified in the Section 133 of Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

a) Where common control exist Relationship

i) Spin International Inc. Wholly Owned Subsidiary Company

ii) OOO JJ Home Wholly Owned Subsidiary Company

iii) JJ Creation SA Subsidiary Company (Ceased to be a Subsidiary Company during the year)

iv) Nupur Carpet Private Limited (Associate)

b) Key Managerial Personnel

i) Sri S.N. Jhunjhunwala Executive-Chairman

ii) Sri Rajiv Jhunjhunwala Vice-Chairman

v) Shri A.B. Chaturvedi Whole Time Director

c) Relative of key managerial personnel

i) Mrs. Kavita Jhunjhunwala Wife of Mr. Rajiv Jhunjhunwala, Vice-Chairman

Note : The Sale of Goods include Deemed Export Sale to Subsidiary Company amounting to Rs. NIL (Previous Year Rs. 1,355,634/-).

5. The Company has approached the banks for one Time Settlement of outstanding loans. Two of the banks have approved Company's One Time Settlement Proposal and have been accepted by the company. All necessary adjustment entries have been passed in the books of accounts where the company has accepted the One time settlement approval in totality and has been shown as Extraordinary Item.

6. The Net worth of the Company has substantially eroded and now the Company has initiated business and debt restructuring (Refer Note 7 above). In view of the ongoing restructuring, the accounts of the Company have been prepared on going concern basis.

7. As a matter of prudence no deferred tax assets after adjusting MAT liability has been recognised in the account in accordance with "Accounting Standard 22", as notified in the Section 133 of Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

8. Profit and Loss on sale of Investment includes Rs. 1486/- (Previous Year - Rs. NIL) on account of Security Transaction Tax paid on such transactions.

9. One of the subsidiary, OOO JJ HOME, had closed its business during the year 2013-14. As a consequence of that, debit balance due from above subsidiary amounting to Rs. 20,101,432 had been provided and a provision for diminution in value of investment was done amounting to Rs. 6,095,172, necessary approval is awaited from Reserve Bank of India.

10. Land measuring about 2.07 acre duly conveyed in the name of one of the unit of the Company by the State Government has been disputed by the original owner and the matter is subjudice.

11. In Respect Of 100% Export Oriented Units and as per the prevailing laws and guidelines, it is exempted from Customs and Central Excise Duties and levies. The Company has executed legal undertaking to pay the customs and central excise duties and liquidated damages, if any, in respect of capital goods, raw material, stores etc. procured duty free in the event of non- fulfillment of terms and conditions.

12. Loans and advances include Rs. 8,112/- ( Previous Year amounting to Rs. 374,736/-) balance lying with Central Excise department.

13. There is no amount to be credited to Investors Education & Protection Fund as on 31st March 2015.

14. Interest on term loan is net of TUFS subsidy amounting to Rs. 4,518,636/- (Previous Year Rs. 4,592,858/-).

15. a Claims against certain Derivative transactions entered with a Bank during 2007-2008 have not been acknowledged by the company. Claims of Rs. 7.86 crores (excluding Interest) against these transactions which were contested and not provided by the management. However, the same had been settled by the company for an amount of Rs. 4 crores, which had been reflected as an Exceptional item in 2013-14.

16. b Also, Claims of Rs. 14,597,401/- by the company against the bank, for which a provision had been made in the books, was treated as Bad Debts in Accounts in the year 2013-14.

17. The Company had closed down the operation in its units at Dodaballapur, Bangalore with effect from 01-04-2013 and had disposed of the assets thereon in the Previous year except Land and Building which is in the process of disposal.

18. The Disclosure required under Accounting Standard 15 " Employee Benefits " notified in the Section 133 of Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 are given below:

A DEFINED CONTRIBUTION PLANS

B DEFINED BENEFIT PLANS

GRATUITY PLAN

The estimation of rate escalation in salary considered in the actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors such as supply and demand in employment market. The above information as provided by the actuary.

19. Due to unfavourable market conditions and downturn in silk industry, one of the units at Gangarampur is no more viable to operate. So the company has declared temporary closure w.e.f. 01.12.2013.

20. One of the Subsidiary, namely, J J Creations SA had reduced its share capital by € 42,500 in the previous year. The Shares of the said subsidiary were disposed of by the Company during the year.

21. The company has regrouped and rearranged previous year figures to confirm the corresponding figures of this year.

Note:

a) Previous year's figures has been regrouped and rearranged wherever necessary.

b) The above cash flow has been prepared under "Indirect Method" as prescribed under Accounting Standard 3 notified in Section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014.

c) Cash & Cash Equivalents as at March 31, 2015 and March 31, 2014 exclude restricted Cash & Bank Balances. The restrictions are primarily on account of Bank Balances held as Margin Money Deposits against Guarantees and Unpaid Bills but includes restricted Bank Balance such as Unpaid Dividends.


Mar 31, 2014

1 Working capital facilities with Indian Overseas Bank and Federal Bank Ltd are secured by first charge on Current Assets of the Company on pari- passu basis. Further, Current assets of the company has also been charged to Citi Bank on pari- passu basis from whom there are no facilities availed as on date.

2 As collateral security, Indian Overseas Bank has second pari-passu charge with The Federal Bank Limited on (i) Movable block assets of the company, (ii) Mortgage on Land and Building at Doddaballapur, Bangalore and (iii) Mortgage on Land and Building at Gangarampur, 24 Parganas(S), West Bengal.

3 As collateral security, The Federal Bank Ltd. has second pari passu charge with IOB on (i) Movable block assets of the company, (ii)Mortgage on Land and Building at Doddaballapur, Bangalore, (iii) Mortgage on Land and Building at Gangarampur, 24 Parganas (S), West Bengal, (iv)Mortgage on Land & Building at 51/2, Hindustan Park, Kolkata and (v)Mortgage on flat at Santilla Apartment, Yelhanka, Bangalore. There is no first charge on this Flat.

Further, the working capital limits of Indian Overseas Bank and Federal Bank Ltd. are also secured by personal guarantee of two Directors of the company.

4 Terms of Repayment of Term Loans From IDBI:

The Bank has restructured the tems of repayment of Term Loan during the year as follows.

Rs. 200,000,000 to be paid by selling Dodaballapur unit by March 31st, 2015, the remaining Term Loan of Rs. 576,62,750/-will be repaid w.e.f 1st April 2015 in 59 monthly installments of Rs. 965,000/- and one installment of Rs. 727,750/-.

5 Terms of Repayment of Funding Interest Term Loans From Banks

A) IDBI Bank LTD.

Funding Interest Term Loans Rs. 3,17,40,479/-.The interest on the Term loan is funded by the bank by way of FITL upto Rs. 7 Crores till 31st March 2015. It shall be repaid in 60 monthly installment w.e.f. 1st April 2015.

B) Indian Overseas Bank

Funding Interest Term Loans Rs. 99,78,469/-.The interest on the Working Capital Term loan is funded by the bank by way of FITL. It shall be repaid in 16 Quarterly installment w.e.f. 1st April 2016.

6 Terms of Repayment of Working Capital Term Loan from IOB

The Bank has crystalised and converted part of the Packing Credit Facility to WCTL during the year. The said loan is repayable in 16 Quarterly Installments of Rs. 56.25 lacs each w.e.f. 1st April 2016.

7 Contingent Liabilities not provided for :

a) Letters of Guarantee 6,474,950 6,474,950

b) Income Tax pending in appeals for earlier years 95,423,694 58,608,571

c) Case pending in Labour Court 159,200 159,200

d) Sales tax claim under Appeal 69,972,650 440,255

(For this, management expects no liability)

8 In respect of the Equity Shares of Erstwhile J.J. Spectrum Silks Ltd. held by the company (hereinafter referred to as the transferee company), 1,303,675 shares which have been issued by the transferee company in terms of scheme, to the board of trustees to have and to hold such shares in trust exclusively for the benefit of the transferee company and deal with the same as they deem fit.

The above shares have been valued at cost. The said shares, being long term in nature, no provision for diminution in value has been done in earlier years. However, as per prudence and in view of current working, the company has made a provision of Rs. 3,00,00,000/- towards diminution during the year which, according to the management, is appropriate.

9 In the opinion of Board of Directors, all 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, and that all the known liabilities relating to the year have been provided for.

10 As the company''s business activities falls mainly within a single primary business segment viz. dealing in Textile Goods, so disclosure requirement of Accounting Standard 17 "Segment Reporting", notified in Companies (Accounting Standard) Rules, 2006 has not been given.

11 Disclosures regarding derivative instruments :

The company uses forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The use of these foreign contracts reduces the risk or cost to the company and the company does not use the foreign exchange contracts for trading or speculation purposes.

12 Related Party Disclosure in accordance with Accounting Standard 18 notified in the Companies (Accounting Standard) Rules, 2006

a) Where common control exist Relationship

i) Spin International Inc. Wholly Owned Subsidiary Company

ii) OOO JJ Home Wholly Owned Subsidiary Company

iii) JJ Creation SA Subsidiary Company

iv) Nupur Carpet Private Limited (Associate) Common Key Managerial Personnel

b) Key Managerial Personnel

i) Sri S.N.Jhunjhunwala Executive-Chairman

ii) Sri Rajiv Jhunjhunwala Executive Vice-Chairman

v) Shri A.B.Chaturvedi Whole Time Director

c) Relative of key managerial personnel

i) Mrs. Neha Jalan, Designing Consultant Daughter of Mr. Rajiv Jhunjhunwala, Vice-Chairman

ii) Mrs. Kavita Jhunjhunwala Wife of Mr. Rajiv Jhunjhunwala, Vice-Chairman

iii) Ms. Megha Jhunjhunwala Daughter of Mr. Rajiv Jhunjhunwala, Vice-Chairman 12 Profit & Loss on sale of Investment excludes Rs. NIL (Rs. 634/)- on account of Security Transaction Tax paid on such transactions.

13 One of the subsidiary, OOO JJ HOME, has closed its business during the year. As a consequence of that, debit balance due from above subsidiary amounting to Rs. 20,101,432 has been provided and a provision for diminution in value of investment done amounting to Rs. 6,095,172 for which necessary approval is being obtained from R.B.I.

14 In respect of 100% Export Oriented Units and as per the prevailing laws and guidelines, it is exempted from Customs and Central Excise Duties and levies. The Company has executed legal undertaking to pay the customs and central excise duties and liquidated damages, if any, in respect of capital goods, raw material, stores etc. procured duty free in the event of non- fulfillment of terms and conditions.

15 Interest include Rs. 31,088,678/- (Rs. 37,360,902/-) on Term Loan.

16 Loans and Advances include Rs. 374,736/- (Rs. 18,264/-) balance lying with Central Excise Department.

17 There is no amount to be credited to Investors Education & Protection Fund due as on 31st March, 2014.

18 Interest on Term Loan is Net of Rs. 4,592,858/- (Rs. 5,405,941/-) of TUFS Subsidy.

19 a Claims against certain Derivative transactions entered with a Bank during 2007-2008 was not acknowledged by the company. Claim of Rs. 7.86 crores (excluding Interest) against these transactions was contested and not provided by the management. However, the same has been settled by the company for an amount of Rs. 4 crore, which has been reflected as an Exceptional Item.

20 b Also, Claims of Rs. 14,597,401/- by the company against the bank, for which a provision had been made in the books, is now treated as Bad Debts in Accounts.

21 Exchange Gain/(Loss) amounting to Rs. NIL (Rs. 865,469/-) in respect of Forward Exchange Contracts for unexpired period will be recognised in subsequent period in accordance with Accounting Standard 11, notified in Companies (Accounting Standard) Rules, 2006.

22 The Company has closed down the operation of its units at Dodaballapur, Bangalore with effect from 01-04-2013 and has disposed off the assets thereon.

23 The company has initiated financial restructuring process, including proposal of one time settlement with banks. In view of the same, the accounts have been prepared as going concern.

24 The Disclosure required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standard) Rules 2006, are given below:

A DEFINED CONTRIBUTION PLANS B DEFINED BENEFIT PLANS

25 Due to unfavourable market conditions and downturn in silk industry, one of the units at Gangarampur is no more viable to operate. So the company has declared temporary closure w.e.f. 01.12.2013.

26 One of the subsidiary, namely, JJ Creations SA has reduced its share capital by € 42,500. As a result, the company''s investment in the said subsidiary has reduced by Rs. 1,037,062/-. Profit on such reduction amounting to Rs. 1,949,392/- is included in Profit on Sale of Long term Investment.

27 The company has regrouped and rearranged previous year figures to confirm the corresponding figures of this year.


Mar 31, 2013

1 In respect of the equity shares of Erstwhile J.J.Spectrum Silks Ltd. held by the company (hereinafter referred to as the transferee company), 1,303,675 shares which have been issued by the transferee company in terms of scheme, to the board of trustees to have and to hold such shares in trust exclusively for the benefit of the transferee company and deal with the same as they deem fit.

The above shares have been valued at cost. No provision for diminution in value has been done by the company in view of its long term nature.

2 In the opinion of board of directors, all 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 and that all the known liabilities relating to the year have been provided for.

3 As the company''s business activities falls mainly within a single primary business segment viz. Dealing in textile goods, so disclosure requirement of accounting standard 17 "Segment Reporting", notified in Companies (Accounting Standard) Rules, 2006 has not been given.

4 Disclosures regarding derivative instruments :

The company uses forward exchage contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The use of these foreign contracts reduces the risk or cost to the company and the company does not use the foreign exchange contracts for trading or speculation purposes.

5 Related Party Disclosure in accordance with Accounting Standard 18 notified in the Companies (Accounting Standard) Rules, 2006

a) Where common control exist Relationship

i) Spin International Inc. Wholly Owned Subsidiary Company

ii) OOO JJ Home Wholly Owned Subsidiary Company

iii) JJ Creation SA Subsidiary Company

iv) Nupur Carpet Private Limited Common Key Managerial Personnel

b) Key Managerial Personnel

i) Sri S.N.Jhunjhunwala Executive-Chairman

ii) Sri Rajiv Jhunjhunwala Executive Vice-Chairman

iii) Mrs. Laxmi Jhunjhunwala Director (Resigned with effect from 26/06/2012)

iv) Shri Arvind Kumar Thakur Whole Time Director & CFO (Resigned with effect from 01/06/2012)

v) Shri A.B.Chaturvedi Whole Time Director (Appointed with effect from 16/08/2012)

c) Relative of key managerial personnel

i) Mrs. Neha Jalan, Designing Consultant Daughter of Mr. Rajiv Jhunjhunwala, Vice-Chairman

ii) Mrs. Kavita Jhunjhunwala Wife of Mr. Rajiv Jhunjhunwala, Vice-Chairman

iii) Ms. Megha Jhunjhunwala Daughter of Mr. Rajiv Jhunjhunwala, Vice-Chairman

6 As a matter of prudence no deferred tax assets after adjusting MAT liability has been recognised in the account in accordance with "Accounting Standard 22", as prescribed by Companies Act, 1956

7 A) Loans & Advances in the nature of loans to subsidiaries (Interest Free)

8 Profit and Loss on sale of Investment excludes Rs. 634/- (Rs. 1,404/-) on account of security transaction tax paid on such transactions.

9 Land measuring about 2.07 acre duly conveyed in the name of one of the unit of the company by the State Government has been disputed by the original owner and the matter is sub-judice.

10 In Respect of 100% Export Oriented Units and as per the prevailing laws and guidelines, it is exempted from customs and central excise duties and levies.The Company has executed legal undertaking to pay the customs and central excise duties and liquidated damages, if any, in respect of capital goods, raw material, stores etc. procured duty free in the event of non- fulfilment of terms and conditions.

11 Interest include Rs. 37,360,902/-(Rs. 41,991,267/-) on term loan.

12 Loans and advances include Rs.18,264 (Rs. 47/-) balance lying with central excise department

13 There is no amount to be credited to Investors Education & Protection Fund due as on 31st March 2013.

14 Interest on term loan is net of Rs. 5,405,941 (Rs. 6,308,883/-) of TUFS subsidy.

15 Claims against certain Derivative transactions entered with the Bank during 2007-2008 have not been acknowledged by the company. Claims of Rs. 7.86 crores (excluding Interest) against these transactions which have been contested and not provided by the management, as the matter is subjudice. However, during the previous year, settlement was entered with one of the bank and amount paid Rs. 27,547,746/- is shown as exceptional item in the statement of profit & loss.

16 Exchange gain/(loss) amounting to Rs. 865,469 ( Rs. 3,090,383/-) in respect of forward exchange contracts for unexpired period to be recognised in subsequent period in accordance with Accounting Standard 11.

17 The Company has closed down its operation in its unit Dodaballapur, Banglore with effect from 01-04-2013 and is in the process of disposing its assets thereon.

18 In view of unfavourable market conditions and poor working results, company has approached its lending banks for restructuring of its debts which interalia will result in deferment of overdue interest and principal of the above debts which is under their active consideration.

19 The Disclosure required under Accounting Standard 15 "Employees Benefit" notified in the Companies (Accounting Standard) Rules 2006, are given below:

A DEFINED CONTRIBUTION PLANS

B DEFINED BENEFIT PLANS

GRATUITY PLAN

The employees gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on the actuarial valuaton using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

20 The company has regrouped and rearranged previous year figures to confirm the corresponding figures of this year.


Mar 31, 2012

A) As collateral security, Indian Overseas Bank has second pari passu charge on (i) Movable block assets of the company, (ii) Mortgage on Land and Building at Doddabailapur, Bangalore and (iii) Mortgage on Land and Building at Gangarampur, 24 Parganas (S), West Bengal.

b) As collateral security, The Federal Bank Ltd. has second pari passu charge on (i) Movable block assets of the company, (ii) Mortgage on Land and Building at Doddabailapur, Bangalore, (iii) Mortgage on Land and Building at Gangarampur, 24 Parganas (S), West Bengal, (iv) Mortgage on Land & Building at 51/2, Hindustan Park, Kolkata and (v) Mortgage on flat at Santilla Apartment, Yelhanka, Bangalore. Further, the working capital limits of The Federal Bank Ltd. are also secured by personal guarantee of three Directors of the company.

a) The company has not received information from vendors regarding the status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence no disclosures thereof for outstanding are made in this account.

1 Contingent Liabilities not provided for:

a) Letters of Guarantee 5,614,200 7,070,200

b) Income Tax pending in appeals for earlier years 58,608,571 151,091,809

c) Case pending in Labour Court 159,200 159,200

d) Sales tax claim under Appeal 124,119,951 1,666,677 (For this, management expects no liability)

2 In respect of the equity shares of Erstwhile J.J. Spectrum Silks Ltd. held by the company (hereinafter referred to as the transferee company), 1,303,675 shares have been issued by the transferee company in terms of scheme, to the board of trustees to have and to hold such shares in trust exclusively for the benefit of the transferee company and deal with the same as they think deems fit.

3 In the opinion of board of directors, all the current assets, loan and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and that all the known liabilities relating to the year have been provided for.

4 As the company's business activities fall mainly within a single primary business segment viz. Dealing in fabrics and accessories, so disclosure requirement of accounting standard 17 "Segment Reporting", notified in Companies (Accounting Standard ) Rules, 2006 has not been given.

5 Disclosures regarding derivative instruments :

The company uses forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The use of these foreign contracts reduces the risk or cost to the company and the company does not use the foreign exchange contracts for trading or speculation purposes.

6 As a matter of prudence no deferred tax assets after adjusting MAT liability has been recognized in the account in accordance with "Accounting Standard 22", as prescribed by Companies Act, 1956

7 Profit and Loss on sale of Investment excludes Rs 1,404/- (Rs1,845/-) on account of security transaction tax paid on such transactions.

8 Land measuring about 2.07 acre duly conveyed in the name of one of the unit of the company by the State Government has been disputed by the original owner and the matter is sub juice.

9 In Respect of 100% Export Oriented Units and as per the prevailing laws and guidelines, it is exempted from customs and central excise duties and levies. The Company has executed legal undertaking to pay the customs and central excise duties and liquidated damages, if any, in respect of capital goods, raw material, stores etc. procured duty free in the event of non- fulfillment of terms and conditions.

10 Interest include Rs 41,991,267/- (Rs 31,273,828/-) on term loan.

11 Loans and advances include Rs 47/- (Rs 47/-) balance lying with central excise department.

12 There is no amount to be credited to Investors Education & Protection Fund as on 31st March, 2012.

13 Interest on term loan is net of Rs 6,308,883/- (Rs 6,296,955/-) of TUFS subsidy.

14 Claims against certain Derivative transactions entered with the Bank during 2007-2008 have not been acknowledged by the company. Claims of Rs 7.86 crores (excluding Interest) against these transactions which have been contested and not provided by the management, as the matter is sub juiced. However, during the year, settlement has been entered with one of the bank and amount paid Rs 27,547,746/- is shown as exceptional item in the statement of profit & loss account.

15 Exchange gain/(loss) amounting to Rs 3,090,383/- (Rs 2,973,921/-) in respect of forward exchange contracts for unexpired period to be recognized in subsequent period in accordance with Accounting Standard 11.

16 The Disclosure required under Accounting Standard 15 "Employees Benefit" notified in the Companies (Accounting Standard) Rules 2006, are given below:

A DEFINED CONTRIBUTION PLANS

B DEFINED BENEFIT PLANS

GRATUITY PLAN

The employees gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on the actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The estimation of rate escalation in salary considered in the actuarial valuation, takes into account inflation , seniority, promotion and other relevant factors such as supply and demand in employment market. The above information as provides by the actuary.

17 Till the year ended 31st March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its Financial Statements. During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable and the same is being followed by the company. The Company has reclassified previous year figures to conform to this year's classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2010

1. Realisation on account of samples from foreign buyers have been credited to sample expenses account.

2. The Company has not received information from vendors regarding the status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this act have not been given.

3. In respect of the equity shares of erstwhile J. J. Spectrum Silk Ltd. held by the Company, 1,303,675 equity shares which have been issued by the transferee Company in terms of scheme, were allotted to the Board of Trustees to have and hold the same in Trust exclusively for the benefit of the Transferee Company and deal with the same as they think/deem fit.

4. In the opinion of Board of Directors, all the Current Assets, Loan and Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and that all the known liabilities relating to the year have been provided for.

5. Working Capital facilities with Indian Overseas Bank, City Bank NA and The Federal Bank Ltd. are secured by first charge on Current Assets of the Company on pari-passu basis.

As collateral security, Indian Overseas Bank has a second pari-passu charge on the Plant & Machinery of the Companys Dyeing Unit at Rajajinagar, Bangalore, Land and Building at Rajajinagar and Fixed Assets of J. J. Spectrum Silk.

As collateral security, The Federal Bank Ltd. has a second pari-passu charge on Plant & Machinery at Companys Dyeing Unit at Rajajinagar, Bangalore and Companys Land & Building at Rajajinagar, Bangalore.

6. As the Companys business activities fall mainly within a single primary business segment viz. dealing in fabrics and accessories, so disclosure requirement of Accounting Standard 17 " Segment Reporting", notified in Companies (Accounting Standard) Rules, 2006, has not been given.

7. Disclosures regarding Derivative Instruments

The Company uses forward exchage contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The use of these foreign exchange contracts reduces the risk or cost to the Company and the Company does not use the foreign exchange contracts for trading or speculation purposes.

8. As a matter of prudence no deferred tax assets after adjusting MAT liability has been recognised in the account in accordance with "Accounting Standard 22", as prescribed by Companies Act, 1956.

9. Comparative figures for the Previous Year have been regrouped/recasted wherever necessary and the same have been indicated in brackets.

10. Land measuring about 2.07 acre duly conveyed in the name of one of the unit of the Company by the State Government has been disputed by the original owner and the matter is subjudice.

11. In respect of 100% Export Oriented Units, as per the prevailing laws and guidelines, they are exempted from Customs and Central Excise Duties and Levies.The Company has executed legal undertaking to pay the Customs and Central Excise Duties and Liquidated Damages, if any, in respect of capital goods, raw material, stores etc. procured duty free in the event of non-fulfillment of the terms and conditions.

12. Interest includes Rs. 27,279,071/- (Rs. 24,599,508/-) on term loans.

13. Loans and Advances include Rs. 10,713/- (Rs. 27,804/-) balance lying with central excise department.

14. There is no amount to be credited to Investors Education & Protection Fund as on 31 st March, 2010.

15. Interest on Term Loan is net of Rs. 6,424,773/- (Rs. 7,072,105/-) of TUFS subsidy.

16 Certain Foreign Currency Derivative transactions of the Company with Citi Bank and ICICI Bank have been held contrary to law by a Statutory Authority. Hence the company has disputed these transactions with respective Banks and claimed refund of the paid amount Rs. 35,772,526/- under theses contracts. Accordingly, accounting entries were effected by the Company during the financial year ended 31.03.2009 for the said amount by showing the same as Claims Receivable from Banks, instead of debiting to Profit & Loss Account. In view of above, further claims made by these Banks for cancellation of said transactions amounting to Rs. 140,300,175/- (excluding interest) have also neither been accounted for nor acknowledged by the Company.

17. Certain Long Term Investments are strategic in nature and fall in value is temporary, hence it has not been provided in these accounts.

18. Exchange difference in respect of Forward Exchange Contract to be recognised in Profit & Loss Account is Rs. NIL (Rs. 1,770,466/-).

 
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