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Notes to Accounts of KPR Mill Ltd.

Mar 31, 2023

I. Contingent Liabilities

('' in Lakhs)

Particulars

31.03.2023

31.03.2022

(a) Claims against the Company not acknowledged as debts

(i) Income tax matters

10

3

(ii) Goods and service tax matters

460

-

(b) Bank guarantees in favour of parties

(i) Tamil Nadu Generation and Distribution Corporation [TANGEDCO]

164

164

(ii) Tamil Nadu Pollution Control Board

5

5

(iii) Tata Power Trading Company Limited

100

100

(iv) New Tirupur Area Water Development Corporation Limited

58

58

(v) Central Government Samarath Scheme

2

2

(c) Letter of Credit Facility in favour of Suppliers

(i) Foreign letter of credit

(ii) Inland Letter of Credit

2,205

967

6,919

103

(d) Discounted sales invoices

4,182

9,316

(e) Provident Fund:

Pursuant to the Supreme Court judgement dated February 28, 2019 on the inclusion of special allowances for contribution to provident

fund, the Company has been legally advised that there are interpretative challenges on the application

of the judgement

retrospectively. Based on the legal advice and in the absence of the reliable measurement of the provision for earlier periods, the

Company has not recorded a provision for the prior years.

Notes:

(i) Future cash outflows in respect of the above matters are determinable only on receipt of judgments / decisions pending at various

forums / authorities.

(ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in these standalone financial statements. The Company does not

expect the outcome of these proceedings to have a materially adverse effect on its financial position.

II. Commitments

('' in Lakhs)

Particulars

31.03.2023

31.03.2022

(a) Capital Commitments

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for.

3,127

4,323

(b) Other Commitments

(i) The Company has given Corporate guarantees to banks/ financial Institutions / Others on behalf of M/s Jahnvi Motor Private Limited, M/s K.P.R.Sugar Mill Limited and M/s KPR Sugar and Apparels Limited.

1,77,045

1,79,045

(ii) Export obligations against the import licenses taken for import of capital goods under the Export Promotion on Capital Goods Scheme and Advance Authorisation scheme for import

22,613

13,233

of raw materials. The duty implication involved is '' 3,769 Lakhs (Pr.Yr. '' 2,206 Lakhs)

Note: Disclosure under Section 186 (4) of the Companies Act, 2013:

Financial Risk Management

The Company has exposure to the following risks arising from financial instruments:

- Market risk (See A below)

- Credit risk (See B below)

- Liquidity risk (See C below)

Risk Management Framework

The Company’s corporate treasury function provides services to the business, co-ordinates access to domestic and International financial markets, monitors and manages the financial risk relating to the operation of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk), credit risk and liquidity risk.

The use of financial derivatives is governed by the Company’s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivatives financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Company''s board of directors oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company''s board of directors are assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

A. Market Risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Company''s income or the value of holding of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(i) Foreign currency risk

The Company’s sales and purchases activities expose it primarily to the financial risk of changes in foreign currency exchange rates. The Company enters into plain vanilla forward contracts to manage its exposure to foreign currency risk.

(b) The year-end unhedged foreign currency exposures are given below

Foreign currency denominated financial assets and liabilities (including firm commitments, if any) which expose the Company to currency risk are disclosed below. The amounts shown are those reported translated at the closing rate. Unhedged foreign currency risk exposure at the end of the reporting period has been expressed in Indian Rupees.

Sensitivity analysis:

Sensitivity analysis is carried out for floating rate borrowings as at March 31,2023. For every 1% increase in average interest rates, profit before tax would be impacted by loss of approximately '' 498 lakhs (Pr.Yr: '' 418 Lakhs). Similarly, for every 1% decrease in average interest rates there would be an equal and opposite impact on the profit before tax. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

The Company does not expect any change in interest rates on fixed rate borrowings and accordingly have not presented any sensitivities on such borrowings.

(iii) Price risk

The Company is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to uncertainties about the future market values of these investments. As at 31.03.2023, the investments in mutual funds amounts to '' 12,716 lakhs (Pr.Yr: '' 27,403 Lakhs).

As regards Company''s investments in unquoted equity instruments, the management contends that such investments do not expose the Company to price risks. In general, these securities are not held for trading purposes.

Sensitivity analysis:

For every 1% increase in price, profit before tax would be impacted by gain of approximately '' 127 lakhs (Pr.Yr: '' 274 Lakhs). Similarly, for every 1% decrease in price there would be an equal and opposite impact on the profit before tax.

B Credit risk management

Credit risk is the risk that the counterparty to a financial instrument will not meet its contractual obligations, leading to a financial loss. Credit risk primarily arises from the Company''s trade receivables, loans, investments, cash and cash equivalents, bank balances other than cash and cash equivalents and other financial assets.

The Company mitigates credit risk by strict receivable management procedures and policies. The Company has a dedicated independent team to review credit and monitor collection of receivables. In addition, the Company mitigates credit risk substantially through availment of credit insurance for both domestic and export buyers.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue. Further, the management believes that unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. The impairment loss at the reporting dates related to customers that have defaulted on their payments to the Company are not expected to be able to pay their outstanding dues, mainly due to economic circumstances.The concentration of credit risk is limited due to the customer base being large and unrelated. Further, the Company constantly evaluates the quality of trade receivables and provides impairment loss on financial assets (trade receivables) based on expected credit loss model.

Investments:

Investments of surplus funds are made only with approval of Board of Directors. This primarily include investments in equity instruments of an unlisted entity and mutual funds. The Company does not expect significant credit risks arising from these investments.

Cash and cash equivalents and Bank balances other than Cash and cash equivalents:

The Company held cash and cash equivalents and margin money deposits with credit worthy banks and financial institutions as at the reporting dates which has been measured on the 12-month expected loss basis. The credit worthiness of the banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.

Other financial assets:

Other financial assets primarily consists of Investment in wholly-owned subsidiary pending allotment, Interest accrued on bank deposits and other deposits and term deposit with Non-Banking Financial Companies. The Company does not expect any loss from non-performance by these counter-parties.

C Liquidity risk management

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

All current financial liabilities are repayable within one year. The contractual maturities of non-current financial liabilities are disclosed in note 18 and note 19.

40.5 Terms and conditions of transactions with related parties

Transactions with related parties are at arm''s length and all the outstanding balances are unsecured.

40.6 Transfer pricing

The Company has transactions with related parties. For the financial year ended 31.03.2022, the Company has obtained the Accountant’s report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act,1961 and has filed the same with the tax authorities. For the year ended 31.03.2023, the Company maintains documents as prescribed by the Income-tax Act, 1961 to prove that these transactions are at arm''s length and believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

After obtaining the approval from the Board of Directors on February 07, 2022, the buy-back of 22,36,000 equity Shares of ? 1/-each (representing 0.65% of the total number of paid up equity shares of the Company) from the shareholders of the Company on proportionate basis by way of tender offer route at a price of ? 805/- per share for an aggregate amount of ? 17,999.80 lakhs (9.53% of the paid up capital and free reserves) was initiated in accordance with the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018 (‘SEBI Buy-back Regulations’). The extinguishment of equity shares was completed on April 26, 2022.

42 Operating segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. All operating segments’ operating results are reviewed regularly by the Company''s Managing Director (MD) to make decisions about resources to be allocated to the segments and assess their performance.

The Company is engaged in only one business i.e. manufacturing and sale of textiles. The entity’s chief operating decision maker considers the Company as a whole to make decisions about resources to be allocated to the segment and assess its performance. Accordingly, the Company does not have multiple segments and these standalone financial statements are reflective of the information required by the Ind AS 108 for textiles.

44.3 Disclosure of Employee Benefits (Continued)Asset-liability matching strategies

The company has funded the liability with the insurance company. The entire investible assets are managed by the fund managers of the insurance company and the asset values as informed by the insurance company has been taken for valuation purpose. The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rates (in particular, the significant fall in interest rates, which should result in a increase in liability without a corresponding increase in the asset).

Expected contributions to the plan for the next annual reporting period

The expected benefits are based on the same assumptions as are used to measure Company’s defined benefit plan obligations as at 31.03.2023. The Company is expected to contribute '' 232 lakhs (Pr.Yr: '' 34 Lakhs) to defined benefit plan obligations funds for the year ending 31.03.2023.

48 Impairment assessment of KPR Exports PLC, Ethiopia

During the year ended 31.03.2022, the Company had performed an impairment assessment of investments made (including investments pending allotment), loans given, and trade receivables due from M/s KPR Exports PLC, Ethiopia, triggered due to changes in business environment as a result of ongoing civil unrest in Ethiopia and had recognized a provision for impairment towards carrying value of investments (including investments pending allotment), loans and trade receivables of INR 1,798 lakhs as at 31.03.2022. Such provision had been presented as part of ''Other expenses'' in the statement of profit and loss for the year ended 31.03.2022. Also refer note 5,6,7 and 33 to the standalone financial statements.

49 Events after reporting period :

The Board of Directors have recommended a final dividend of 200% ('' 2 per share of the face value of '' 1/- each) for the year 2022-23 subject to the approval of the shareholders in Annual General Meeting.

50 Other statutory information

a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

b) The Company does not have any transactions with companies struck off.

c) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

d) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

e) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company or

- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

f) No funds have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall

- directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Party or

- provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

g) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income-tax Act, 1961).

h) The Company has not have been declared as wilful defaulters by any bank or financial institution or government or any government authority.

i) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

j) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

k) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

Note: Invested funds in treasury funds = (Investment in margin money deposit, term deposit with Non-Banking Financial Companies and in deposits with original maturity of less than three months as at the beginning of respective year Investment in margin money deposit, term deposit with Non-Banking Financial Companies and in deposits with original maturity of less than three months as at the end of respective year) divided by 2.

Reason for change more than 25%: Decrease in ROI on treasury funds from 29.36% for the year ended 31.03.2022 to 4.16% in for the year ended 31.03.2023 is on account of decrease in income generated from treasury funds.

The notes from 1 to 51 are an integral part of these standalone financial statements.


Mar 31, 2022

1. Property, plant and equipment includes non-factory building given on lease with a gross carrying amount of ?11,831 lakhs as at 31.03.2022 (Pr.Yr. ?10,568 lakhs) and a net carrying amount of ?10,632 lakhs as at 31.03.2022 (Pr.Yr. ^9,577 lakhs).

2. Refer note 18 and 21 for assets given as securities for borrowings.

3. As per Ind - AS 20,"Accounting for Government Grants and Disclosure of Government Assistance", the Company has opted to present the grant related to assets as deduction from the carrying value of such specific assets. For year ended 31.03.2022, such amount deducted from property,plant and Equipment is ? 34 lakhs (Pr.Yr. ?545 lakhs)

Equity Shares

The Company has issued only one class of equity shares having a face value of ?1 per share. The holder of each equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

The Board declared and paid an interim dividend of Nil (? Nil per share of the face value of ?1 /-each) for the year 2021 -22 (Pr.Yr. ?3.75). (Face Value of ?5/-each)

The Board has recommended a final dividend of 15% (?0.15/- per share of the face value of? 1/- each) for the year 2021-22 (Pr.Yr,?0.75/- per share) subject to the approval of the shareholders in Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after settling the dues of preferential shareholders and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

Pursuant to the approval of the shareholders at the Annual General Meeting of the Company held on 09.09.2021, one equity share of? 5/- each fully paid up was sub-divided into five equity shares of? 1/- each fully paid up, with effect from the record date, i.e., 27.09.2021. Consequently, the basic, diluted earnings per share have been adjusted retrospectively for the year ended 31,03.2021 as presented in the Standalone Financial Statements of the Company on the basis of the new number of equity shares in accordance with the provisions of applicable IndAS.

As per the records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares as at the balance sheet date.

*Also refer note 16.3 on sub-division of one equity share of? 5/- each fully paid up into five equity shares of? 1/-each fully paid up.

For the period of five years immediately preceding the date at which the Balance Sheet is prepared:

(i) The Company has not issued any shares without payment being received in cash. Also refer note 16.3.

(ii) The Company has not issued any bonus shares.

(iii) The aggregate number of equity shares bought back by the Company is 65,55,784 of? 5/- each, fully paid up (Pr.Yr. 65,55,784 of? 5/-each, fully paid up). Also refer note 16.3.

(i) The Company has availed, in the earlier years, a term loan from IDBI Bank Limited in respect of which balance as at 31.03.2022 was Nil (Pr.Yr. ? 129 lakhs). As per the terms of the arrangement, the loan is repayable in 24 quarterly instalments commencing from September 2015. This term loan is secured by equitable mortgage on the land, factory and non-factory building constructed out of the loan and hypothecation of machineries purchased out of the loan.

(ii) The Company has availed, in the earlier years, a term loan from IDBI Bank Limited in respect of which balance as at 31.03.2022 was Nil (Pr.Yr. ? 32 lakhs). As per the terms of the arrangement, the loan is repayable in 24 quarterly instalments commencing from April 2016. This term loan is secured by hypothecation of machineries purchased out of the loan.

(iii) The Company has availed, in the earlier years, a term loan from Bank of Baroda in respect of which balance as at 31.03.2022 was Nil (Pr.Yr. ? 990 lakhs). As per the terms of the arrangement, the loan is repayable in 24 quarterly instalments commencing from June 201B. This term loan is secured by exclusive charge on fixed assets acquired out of this loan and first charge on land and building situated at SIPCOT, Perundhurai.

(iv) The Company has availed a term loan from Daimler Financial Services India Pvt Ltd in respect of which balance as at 31.03.2022 was ? 38 lakhs (Pr.Yr. ? Nil). The loan is repayable in 36 quarterly instalments commencing from December 2021. This term loan is secured by Vehicle purchased out of the loan.

Interest rate relating to term loans from banks/others are in the range of 8.75% to 10.45% per annum (Pr.Yr. 9.60% to 10.45%).

36. Disclosure with respect to Micro, Small and Medium Enterprises Development act, 2006

Disclosure of payable to vendors as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" ("MSMED Act, 2006”) is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on request made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the year or on balance brought forward from previous year.

For those financial assets and liabilities, which are not carried at its fair value, disclosure of fair value is not required as the carrying amounts approximates the fair values.

Capital Management

The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through optimisation of debt and equity balance.

The capital structure of the Company consists of net debt (borrowings as detailed in Notes 18 and 21 off set by cash and bank balances) and total equity of the Company.

The Company is not subject to any externally imposed capital requirements.

* Debt is defined as long-term borrowings, short-term borrowings and current maturities of long term borrowings as described in Notes 18 and 21. Cash and Bank balances include cash and cash equivalents and other bank balances as described in Notes 12 and 13.

Financial Risk Management

The Company has exposure to the following risks arising from financial instruments:

- Market risk (See A below)

- Credit risk (See B below)

- Liquidity risk (See C below)

Risk Management Framework

The Company’s corporate treasury function provides services to the business, co-ordinates access to domestic and International financial markets, monitors and manages the financial risk relating to the operation of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk), credit risk and liquidity risk.

The use of financial derivatives is governed by the Company''s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivatives financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Company does not enter into or trade financial instrument, including derivative financial instruments, for speculative purposes.

The Company''s board of directors oversees how management monitors compliance with the Company''s risk management policies and

procedures, and reviews the adequacy of the risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company''s board of directors are assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

A. Market Risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices will affect the Company''s income or the value of holding of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(i) Foreign currency risk

The Company''s sales and purchases activities expose it primarily to the financial risk of changes in foreign currency exchange rates. The Company enters into plain vanilla forward contracts to manage its exposure to foreign currency risk.

Details of hedged and unhedged foreign currency exposures

(a) Outstanding forward exchange contracts for hedging purposes as on 31.03.2022

Sensitivity analysis:

Sensitivity analysis is carried out for floating rate borrowings as at March 31,2022. For every 1% increase in average interest rates, profit before tax would be impacted by loss of approximately ? 418 lakhs (Pr.Yr: ?317 Lakhs). Similarly, for every 1% decrease in average interest rates there would be an equal and opposite impact on the profit before tax. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

The Company is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to uncertainties about the future market values of these investments. As at 31.03.2022, the investments in mutual funds amounts to ? 27,403 lakhs (Pr.Yr: ? 23,344 Lakhs).

As regards Company''s investments in unquoted equity securities, the management contends that such investments do not expose the Company to price risks. In general, these securities are not held for trading purposes,

Sensitivity analysis:

For every 1% increase in price, profit before tax would be impacted by gain of approximately ? 274 lakhs (Pr.Yr:? 233 Lakhs). Similarly, for every 1 % decrease in price there would be an equal and opposite impact on the profit before tax.

B Credit risk management

Credit risk is the risk that the counterparty to a financial instrument will not meet its contractual obligations, leading to a financial loss. Credit risk primarily arises from the Company''s trade receivables, loans, investments, cash and cash equivalents, other bank balances and other financial assets.

The Company mitigates credit risk by strict receivable management procedures and policies. The Company has a dedicated independent team to review credit and monitor collection of receivables. In addition, the Company mitigates credit risk substantially through availment of credit insurance for both domestic and export buyers.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue. Further, the management believes that unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. The impairment loss at the reporting dates related to customers that have defaulted on their payments to the Company are not expected to be able to pay their outstanding dues, mainly due to economic circumstances.

The concentration of credit risk is limited due to the customer base being large and unrelated. Further, the Company constantly evaluates the quality of trade receivable and provides allowance towards doubtful debts based on expected credit loss model.

Investments:

Investments of surplus funds are made only with approval of Board of Directors. This primarily include investments in equity instruments of an unlisted entity and mutual funds. The Company does not expect significant credit risks arising from these investments.

Cash and cash equivalents and Other bank balances :

The Company held cash and cash equivalents and margin money deposits with credit worthy banks and financial institutions as at the reporting dates which has been measured on the 12-month expected loss basis. The creditworthiness of the banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.

Otherfinancial assets:

Other financial assets primarily consists of Investment in wholly owned subsidiary pending allotment, Interest accrued on bank deposits and other deposits and term deposit with Non-Banking Finance Companies. The Company does not expect any loss from non-performance by these counter-parties.

C. Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

All current financial liabilities are repayable within one year. The contractual maturities of non current financial liabilities are disclosed in Note 18.

Related Party Disclosures

Disclosures under "Ind AS" 24 - Related Party Disclosure, as identified and disclosed by the Management and relied upon by the Auditors

39.4 Terms and conditions of transactions with related parties

Transactions with related parties are at arm''s length and all the outstanding balances are unsecured.

39.5 Transfer pricing

The Company has transactions with related parties. For the financial year ended 31.03.2020, the Company has obtained the Accountant’s report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and has filed the same with the tax authorities. For the year ended 31.03.2021, the Company maintains documents as prescribed by the Income-tax Act to prove that these transactions are at arm''s length and believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

Pursuant to the approval of the shareholders at the Annual General Meeting of the Company held on 09.09.2021, one equity share of ? 51-each fully paid up was sub-divided into five equity shares of ?1/- each fully paid up, with effect from the record date, i.e., 27.09.2021. Consequently, the basic and diluted earnings per share have been adjusted retrospectively for the year ended 31.03.2021 as presented in the Standalone Financial Statements of the Company on the basis of the new number of equity shares in accordance with the provisions of applicable Ind AS.

b. The Company does not have any potential equity shares. Accordingly basic and diluted earnings per share would remain the same.

41. Operating segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components, and for which discrete financial information is available. All operating segments’ operating results are reviewed regularly by the Company''s Managing Director (MD) to make decisions about resources to be allocated to the segments and assess their performance.

The Company is engaged in only one business i.e. manufacturing and sale of textiles. The entity''s chief operating decision maker considers the Company as a whole to make decisions about resources to be allocated to the segment and assess its performance. Accordingly, the Company does not have multiple segments and these standalone financial statements are reflective of the information required by the Ind AS 108 for textiles.

42 Operating Lease Disclosure

42.1 As Lessee:

The Company has taken factory premises, office spaces, plant and equipment and vehicles on cancellable operating leases. The leases are for varied periods which are classified as short-term leases under Ind AS 116. The Company has incurred ? 3,092 lakhs (Pr.Yr: T 3,094 Lakhs) for the year ended 31.03.2022 towards expenses relating to short-term leases. The total cash outflow for leases is T3.092 lakhs (Pr.Yr: T 3,094Lakhs) for the year ended 31.03.2022, including cash outflow of short-term leases.

42.2 As Lessor:

The Company has given certain non-factory building on cancellable operating leases and has earned rental income of ? 2,947 lakhs (Pr.Yr: ? 2,826 Lakhs) for the year ended 31.03.2022. Since the aforesaid leases are short-term in nature, there are no lease payments receivable after one year as at 31.03.2022. The expected amount of minimum lease payments to be received within one year is ? 2,947 lakhs (Pr.Yr:? 2,826 Lakhs).

43.2 Defined Benefit Plan - Gratuity

The Company provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan’) covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Company. The Company''s obligation towards Gratuity is a defined benefit plan and the details of actuarial valuation as at the year-end are given below:

43.3 Disclosure of Employee Benefits (Continued)Asset-liability matching strategies

The company has funded the liability with the insurance company. The entire investible assets are managed by the fund managers of the insurance company and the asset values as informed by the insurance company has been taken for valuation purpose. The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rates (in particular, the significant fall in interest rates, which should result in a increase in liability without a corresponding increase in the asset).

Expected contributions to the plan forthe next annual reporting period

The expected benefits are based on the same assumptions as are used to measure Company’s defined benefit plan obligations as at 31.03.2022. The Company is expected to contribute T 34 lakhs (Pr.Vr: ? 195 Lakhs) to defined benefit plan obligations funds forthe year ending 31.03.2022.

47 Impairment assessment of KPR Exports PLC, Ethiopia

During the year ended 31.03.2022, the Company has performed an impairment assessment of investments made (including investments pending allotment), loans given, and trade receivables due from KPR Exports PLC, Ethiopia, triggered due to changes in business environment as a result of ongoing civil unrest in Ethiopia and has recognized a provision for impairment towards carrying value of investments (including investments pending allotment), loans and trade receivables of INR 1,798 lakhs as at 31.03.2022. Such provision has been presented as part of ''Other expenses'' in the statement of profit and loss for the year ended 31.03.2022. Also refer note 32 to the standalone financial statements.

48 Events after reporting period:

The Board of Directors has recommended a final dividend of 15% (?0.15 per share of the face value of ? 1/- each) for the year 2021-22 subject to the approval of the shareholders in Annual General Meeting.

49 Other statutory information

a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries”) by or on behalf ofthe Company or

- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

b) No funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall

- directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf ofthe Funding Party or

- provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

c) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

d) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

e) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

f) The Company has no transactions with struck off companies during the year.

g) The Company has not been declared as wilful defaulters by any bank or financial institution or government or any government authority.

h) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

Note: Invested funds in treasury funds = (Investment in margin money deposit, term deposit with Non-Banking Finance Companies and in deposits with original maturity of less than three months as at the beginning of respective year Investment in margin money deposit, term deposit with Non-Banking Finance Companies and in deposits with original maturity of less than three months as at the end of respective year) divided by 2.

The notes from 1 to 50 are an integral part of these standalone financial statements.


Mar 31, 2021

1. The Company''s lease arrangements comprise of leasehold land which have been used for construction of manufacturing facilities. The total cash outflow towards leased land is Nil for the year ended 31.03.2021 (Pr.Yr. ? 219 lakhs).

2. Property, plant and equipment includes non-factory building given on lease with a gross carrying amount of ? 10,568 lakhs as at 31.03.2021 (Pr.Yr. ? 10,321 lakhs) and a net carrying amount of ? 9,577 lakhs as at 31.03.2021 (Pr.Yr. ? 9,505 lakhs).

3. Refer note 18 and 21 for assets given as securities for borrowings.

4. As per Ind - AS 20,"Accounting for Government Grants and Disclosure of Government Assistance", the Company has opted to present the grant related to assets as deduction from the carrying value of such specfic assets. For financial year 2020-21 such amount deducted from property, plant and Equipment is ? 545 lakhs (Pr.Yr. Nil)

Equity Shares

The Company has issued only one class of equity shares having a face value of ? 5 per share. The holder of each equity share is to one entitled vote per share. The Company declares and pays dividends in Indian rupees.

The Board declared and paid an interim dividend of 75% (? 3.75/- per share of the face value of? 5/- each) for the year 2020-21 (Pr.Vr. ? 3.75).

The Board has recommended a final dividend of 15% (? 0.75/- per share of the face value of ? 5/- each) for the year 2020-21 (Pr.Yr. ? 0.75/- per share) subject to the approval of the shareholders in Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after settling the dues of preferential shareholders and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

i) The Company has availed a term loan from IDBI Bank Limited in respect of which balance as at 31.03.2021 was ? 129 Lakhs (Pr.Yr. ? 692 lakhs). The loan is repayable in 24 quarterly instalments commencing from September 2015. This term loan is secured by equitable mortgage on the land, factory and non-factory building constructed out of the loan and hypothecation of machineries purchased out of the loan.

ii) The Company has availed a term loan from IDBI Bank Limited in respect of which balance as at 31.03.2021 was ? 32 lakhs (Pr.Yr. ? 112 lakhs). The loan is repayable in 24 quarterly instalments commencing from April 2016. This term loan is secured by hypothecation of machineries purchased out of the loan.

iii) The Company has availed a term loan from Bank of Baroda in respect of which balance as at 31.03.2021 was ? 990 Lakhs (Pr.Yr. ?3,991 lakhs). The loan is repayable in 24 quarterly instalments commencing from |une 2018. This term loan is secured by exclusive charge on fixed assets acquired out of this loan and first charge on land and building situated at SIPC0T, Perundhurai.

iv) The Company has availed an external commercial borrowing loan from Citi Bank NA New jersey, USA in respect of which balance as at 31.03.2021 was ? Nil (Pr.Yr ? 2,507 lakhs). This term loan is secured by first pari passu charge on present and future stocks and book debts and second pari passu charge on present and future fixed assets. Interest rate relating to this term loan is Libor 0.60% p.a.

Interest rate relating to term loans from banks are in the range of 9.60% to 10.45% per annum (Pr.Yr. 8.80% to 10.45%).

i) Loans for working capital and packing credit are secured by pari passu first charge on the current assets of the Company and pari passu second charge on entire block of assets of the Company.

ii) The Company has not defaulted in its repayments of the loans and interest during the year.

iii) Interest rate relating to working capital loans are in the range of 785% to 8.65% per annum (Pr.Yr. 8.20% to 9.20%). Interest rates relating to packing credit are in the range of 1.50% to 5.35% per annum (Pr.Yr. 3.50% to 5.95%).

The recipients utilise the guarantee for availing term loan and working capital facility from banks/ financial institutions/ others.

36 Disclosure with respect to Micro, Small and Medium Enterprises Development act, 2006

Disclosure of payable to vendors as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" ("MSMED Act, 2006") is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on request made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the year or on balance brought forward from previous year.

* Debt is defined as long-term borrowings, short-term borrowings and current maturities of longterm borrowings as described in Notes 18, 21 and 23. Cash and Bank balances include cash and cash equivalents and other bank balances as described in Notes 12 and 13.

Financial Risk Management

The Company has exposure to the following risks arising from financial instruments:

- Market risk (See A below)

- Credit risk (See B below)

- Liquidity risk (See C below)

Risk Management Framework

The Company''s corporate treasury function provides services to the business, co-ordinates access to domestic and International financial markets, monitors and manages the financial risk relating to the operation of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk), credit risk and liquidity risk

The use of financial derivatives is governed by the Company''s policies approved by the board of directors, which provide written principles on foreign exchange risk interest rate risk, credit risk, the use of financial derivatives and non-derivatives financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Company does not enter into or trade financial instrument, including derivative financial instruments, for speculative purposes.

The Company''s board of directors oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company''s board of directors are assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

A. Market Risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices will affect the Company''s income or the value of holding of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(i) Foreign currency risk

The Company''s sales and purchases activities expose it primarily to the financial risk of changes in foreign currency exchange rates. The Company enters into plain vanilla forward contracts to manage its exposure to foreign currency risk.

Sensitivity analysis:

Sensitivity analysis is carried out for floating rate borrowings as at March 31,2021. For every 1% increase in average interest rates, profit before tax would be impacted by loss of approximately ? 317 lakhs (Pr.Yr: ? 472 Lakhs). Similarly, for every 1% decrease in average interest rates there would be an equal and opposite impact on the profit before tax. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

(iii) Price risk

The Company is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to uncertainties about the future market values of these investments. As at 31.03.2021, the investments in mutual funds amounts to ? 23,344 lakhs (Pr.Yr: ? 701 Lakhs).

As regards Company''s investments in unquoted equity securities, the management contends that such investments do not expose the Company to price risks. In general, these securities are not held for trading purposes.

Sensitivity analysis:

For every 1% increase in price, profit before tax would be impacted by gain of approximately? 233 lakhs (Pr.Yr: ? 7 Lakhs). Similarly, for every 1% decrease in price there would be an equal and opposite impact on the profit before tax.

B. Credit risk management

Credit risk is the risk that the counterparty to a financial instrument will not meet its contractual obligations, leading to a financial loss. Credit risk primarily arises from the Company''s trade receivables, loans, investments, cash and cash equivalents, other bank balances and other financial assets.

The Company mitigates credit risk by strict receivable management procedures and policies. The Company has a dedicated independent team to review credit and monitor collection of receivables. In addition, the Company mitigates credit risk substantially through availment of credit insurance for both domestic and export buyers.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue. Further, the management believes that unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. The impairment loss at the reporting dates related to customers that have defaulted on their payments to the Company are not expected to be able to pay their outstanding dues, mainly due to economic circumstances.

The concentration of credit risk is limited due to the customer base being large and unrelated. Further, the Company constantly evaluates the quality of trade receivable and provides allowance towards doubtful debts based on expected credit loss model.

Investments:

Investments of surplus funds are made only with approval of Board of Directors. This primarily include investments in equity instruments of an unlisted entity and mutual funds. The Company does not expect significant credit risks arising from these investments.

Cash and cash equivalents and Other bank balances:

The Company held cash and cash equivalents and margin money deposits with credit worthy banks and financial institutions as at the reporting dates which has been measured on the 12-month expected loss basis. The credit worthiness of the banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.

Other financial assets:

Other financial assets primarily consists of Investment in wholly owned subsidiary pending allotment. Interest accrued on bank deposits and other deposits and term deposit with Non-Banking Finance Companies. The Company does not expect any loss from non-performance by these counter-parties.

C Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

All cuirent financial liabilities are repayable within one year. The contractual maturities of non current financial liabilities are disclosed in Note 18.

39.5 Transfer pricing

The Company has transactions with related parties. For the financial year ended 31.03.2020, the Company has obtained the Accountant''s report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and has filed the same with the tax authorities. For the year ended 31.03.2021, the Company maintains documents as prescribed by the Income-tax Act to prove that these transactions are at arm''s length and believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

During the previous year, the Company bought back 37,50,784 fully paid-up equity shares of face value? 5/- each through "Tender Route" process at a price of ? 702/- per equity share.

b. The Company does not have any potential equity shares. Accordingly basic and diluted earnings per share would remain the same.

41 Operating segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. All operating segments'' operating results are reviewed regularly by the Company''s Managing Director (MD) to make decisions about resources to be allocated to the segments and assess their performance.

The Company is engaged in only one business i.e. manufacturing and sale of textiles. The entity''s chief operating decision maker considers the Company as a whole to make decisions about resources to be allocated to the segment and assess its performance. Accordingly, the Company does not have multiple segments and these standalone financial statements are reflective of the information required by the Ind AS 108 for textiles.

43.3 Disclosure of Employee Benefits (Continued)

Asset-liability matching strategies

The company has funded the liability with the insurance company. The entire investible assets are managed by the fund managers of the insurance company and the asset values as informed by the insurance company has been taken for valuation purpose. The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rates (in particular, the significant fall in interest rates, which should result in a increase in liability without a corresponding increase in the asset).

47. Impact of COVID-19

In March 2020, the World Health Organisation declared COVID-19 to be a pandemic. The Company has adopted measures to curb the spread of infection in order to protea the health of its employees and ensure business continuity with minimal disruption.

The Company has considered internal and external information while finalizing various estimates in relation to its standalone financial statements captions upto the date of approval of the standalone financial statements by the Board of Direaors. The aaual impaa of the global health pandemic may be different from that which has been estimated, as the COVID-19 situation evolves in India and globally. The Company will continue to closely monitor any material changes to future economic conditions.

48. Conversion of Loan to Investment

Pursuant to Board resolution dated 03.02.2020, the Company has initiated steps towards conversion of the outstanding balance loan of ? 1,170 lakhs provided to its wholly owned subsidiary KPR Exports PLC, Ethiopia into investment in equity shares of the subsidiary. As at the balance sheet date, the Company is in the process of completing the required legal, secretarial and regulatory formalities with resped to the aforesaid conversion. Pending completion of the aforesaid formalities, the said balance has been classified as Investment in wholly owned subsidiary pending allotment under Other non-current financial assets.

49. Stock In Trade

During the previous year, owing to the prevailing market conditions which led to significant decline in the price of cotton and considering management''s intention to hold a portion of its inventory as stock-in-trade, the Company had measured the said inventory at lower of cost and net realizable value. Consequent to the above, the amount of write-down charged to the standalone statement of profit and loss for the year ended 31.03.2020 was? 4,347 lakhs.

50. Events after reporting period:

The Board of Directors has recommended a final dividend of 15% (? 075/- per share of the face value of ? 5/- each) for the year 2020-21 subject to the approval of the shareholders in Annual General Meeting.

The notes from 1 to 50 are an integral part of these standalone financial statements.


Mar 31, 2018

1. CORPORATE INFORMATION

K.P.R. Mill Limited is one of the largest vertically integrated apparel manufacturing Companies in India. The Company produces Yarn, Knitted Fabric, Readymade Garments and Wind power. It has state-of-the-art production facilities in the State of Tamil Nadu, India.

The Company’s shares are listed in BSE LTD (BSE) and National Stock Exchange of India Ltd (NSE).

2. BASIS OF PREPARATION A STATEMENT OF COMPLIANCE

These standalone financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) to comply with the requirements prescribed under section 133 of the Companies Act, 2013 (“the Act”) read with the Companies (Indian Accounting Standards) Rules, as amended from time to time.

These standalone financial statements for the year ended March 31,2018 (including comparatives) are authorised by the Board on April 30,2018.

Details of the Company’s accounting policies are included in Note 3.

B FUNCTIONAL AND PRESENTATION CURRENCY

These standalone financial statements are presented in Indian Rupees (INR), which is also the Company’s functional currency. All financial information has been rounded-off to the nearest lakhs, unless otherwise indicated.

C BASIS OF MEASUREMENT

These standalone financial statements have been prepared on a historical cost basis and on an accrual basis, except for the following items:

i. Derivative financial instruments measured at fair value through profit and loss;

ii. Certain financial assets and liabilities measured at fair value (refer accounting policy on financial instruments) and

iii. Net defined (asset) / liability measured at fair value & plan assets less present value of obligations.

D USE OF ESTIMATES AND JUDGEMENT

In preparing these standalone financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Assumptions and estimation uncertainties:

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is mentioned below. Actual results may be different from these estimates.

(i) Recognition of deferred tax assets:

The extent to which deferred tax assets can be recognized is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry-forwards can be utilized. In addition, careful judgment is exercised in assessing the impact of any legal or economic limits or uncertainties in various tax issues, (also refer Note 18)

(ii) Impairment of non-financial assets:

In assessing impairment, management has estimated economic use of assets, the recoverable amount of each asset or cash- generating units based on expected future cash flows and use an interest rate to discount them. Estimation of uncertainty relates to assumptions about future operating cash flows and determination of a suitable discount rate, (also refer Note 3)

(iii) Useful lives of depreciable assets:

Management reviews its estimate of useful lives of depreciable assets at each reporting date, based on expected utility of assets. Uncertainties in these estimates relate to technological obsolescence that may change utility of assets (also refer Note 3).

(iv) Inventories:

Management has carefully estimated the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by market-driven changes (also refer Note 3).

(v) Defined benefit obligation (DBO):

The actuarial valuation of the DBO is based on a number of critical underlying management’s assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salaiy increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses (also refer Note 41)

(vi) Recognition and measurement of provisions and contingencies:

Key assumptions about the likelihood and magnitude of an outflow of resources (also refer Note 33).

(vii) Impairment of financial assets - refer Note 3

E MEASUREMENT OF FAIR VALUES

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. The inputs used to measure the fair value of assets or a liability fall into different levels of the fair value hierarchy. Accordingly, the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the low level input that is significant to the entire measurement.

Management uses various valuation techniques to determine fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management based on its assumptions on observable data as far as possible but where it not available, the management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date (also refer Note 36). The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

F CURRENT AND NON-CURRENT CLASSIFICATION

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current

During the previous year, the Company had specified bank notes and other denomination notes. As defined in the MCA notification G.S.R. 308 (E) dated March 30, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December 30,2016, the denomination wise SBNs and other notes as per the notification is given below:

3.1 Term/Rights to Shares Equity Shares

The Company has issued only one class of equity shares having a face value of Rs. 5 per share. The holder of each equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

The Board of Directors has recommended a final dividend of Rs. 0.75/- per share for the year 2017-18 (Pr. Yr. Rs. 0.75/- per share) subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after settling the dues of preferential shareholders and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

Information about the company’s exposure to interest rate and liquidity risks is included in Note 36

4.1 i) The Company has availed a term loan from IDBI Bank Limited in respect of which balance as at 31.03.2018 was Rs. 1,537 lakhs. The loan is repayable in 24 quarterly installments commencing from September 2015. This term loan is secured by equitable mortgage on the land, factoiy and hostel building constructed outofthe loan and hypothecation of machineries purchased outofthe loan.

ii) The Company has availed a term loan from IDBI Bank Limited in respect of which balance as at 31.03.2018 was Rs. 274 lakhs. The loan is repayable in 24 quarterly installments commencing from April 2016. This term loan is secured by hypothecation of machineries purchased out of the loan.

iii) The Company has availed a term loan from Bank of Baroda in respect of which balance as at 31.03.2018 was Rs. 9,990 lakhs. The loan is repayable in 24 quarterly installments commencing from June 2018. This term loan is secured by exclusive charge on fixed assets acquired out of this loan and first charge on land and building situated at SIPCOT, Perundhurai.

4.2 Interest rate relating to term loans from banks are in the range of 8.60% to 11.25% per annum.

4.3 The Company has not defaulted in the repayment of principal and interest during the year.

5.1 i) Loans for working capital and packing credit are secured by pari passu first charge on the current assets of the Company and pari passu second chaige on entire block of assets of the Company.

ii) The Company has not defaulted in its repayments of the loans and interest during the year.

iii) Interest rate relating to working capital loans are in the range of 7.30% to 11.85% per annum. Interest rates relating to USD packing credit are in the range of 1.80% to 2.15% per annum and interest rates relating to INR packing credit are in the range of 4.40% to 6.60% per annum.

6. Disclosure with respect to Micro, Small and Medium Enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated August 28,2008 which recommends that the Micro, Small and Medium Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number in accordance with the Micro, Small and Medium Development Act, 2006. In this regard, the Company had circulated letters to suppliers about their coverage under the said Act. Since there was no response from suppliers, necessary disclosures as required under section 22 of the Micro, Small and Medium Development Act, 2006 have not been made in these standalone financial statements. Further, in view of the Management, the impact of interest, if any that may be payable in accordance with the provisions of this Act is not expected to be material. The Company has not received any claim for interest from any such supplier as at the balance sheet date.

7. Corporate Social Responsibility Expenditure

The gross amount required to be spent by the Company during the year towards Corporate Social Responsibility (CSR) as per the provision of section 135 of the Companies Act, 2013 amounts to Rs. 482 Lakhs (Pr. Yr. Rs. 392 Lakhs). Amount spent during the year on CSR activities (included in Note 30 of the Statement of Profit or Loss) as under:

8. Financial Instalments Accounting Classification and Fair Values:

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.

For those financial assets and liabilities, which are not carried at its fair value, disclosure of fair value is not required as the carrying amounts approximates the fair values.

Capital Management

The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through optimisation of debt and equity balance.

The capital structure of the Company consists of net debt (borrowings as detailed in Notes V, 19 and 21 offset by cash and bank balances) and total equity of the Company.

The Company is not subject to any externally imposed capital requirements.

The Company’s net debt to equity ratio as at March 31,2018 was as follows

* Debt is defined as long-term borrowings, short-term borrowings and current maturities of long term borrowings as described in Notes 17,19 and 21. Cash and Bank balances include cash and cash equivalents and other bank balances as described in Notes 11 and 12.

Financial Risk Management Risk Management Framework

The Company’s corporate treasury function provides services to the business, co-ordinates access to domestic and International financial markets, monitors and manages the financial risk relating to the operation of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk), credit risk and liquidity risk.

The use of financial derivatives is governed by the Company’s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivatives financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Company does not enter into or trade financial instrument, including derivative financial instruments, for speculative purposes.

A Market Risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of holding of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(i) Foreign Currency Risk

The Company’s sales and purchases activities expose it primarily to the financial risk of changes in foreign currency exchange rates. The Company enters into plain vanilla forward contracts to manage its exposure to foreign currency risk.

Sensitivity Analysis:

Sensitivity analysis is carried out for un-hedged foreign exchange risk as at March 31,2018. For every \% strengthening of Indian Rupees against all relevant uncovered foreign currency transactions profit before tax would be impacted by loss of approximately Rs. 64 lakhs. Similarly, for eveiy 1% weakening of Indian Rupee against these transactions, there would be an equal and opposite impact on the profit before tax.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates.

Sensitivity Analysis:

Sensitivity analysis is carried out for floating rate borrowings as at March 31,2018. For every 1% increase in average interest rates, profit before tax would be impacted by loss of approximately Rs. 30 lakhs. Similarly, for every 1% decrease in average interest rates, there would be an equal and opposite impact on the profit before tax. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

The Company does not expect any change in interest rates on fixed rate borrowings and accordingly have not presented any sensitivities on such borrowings.

Equity Price Risk

Equity price risk is related to the change in market reference price of the investments in equity securities. The Company’s investments are predominantly towards unquoted equity securities in subsidiary companies. The management contends that such investments do not expose the Company to equity price risks. In general, these securities are not held for trading purposes.

B Credit Risk Management

Credit risk is the risk that the counter party will not meet its obligations under customer contract, leading to a financial loss. Credit risk primarily arises from the Company’s trade receivables.

Trade Receivables:

The Company mitigates credit risk by strict receivable management, procedures and policies. The Company has a dedicated independent team to review credit and monitor collection of receivables. In addition, the Company mitigates credit risk substantially through availment of credit insurance for both domestic and export buyers.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue. Further, the management believes that unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. The impairment loss at the reporting dates related to customers that have defaulted on their payments to the Company are not expected to be able to pay their outstanding dues, mainly due to economic circumstances.

The concentration of credit risk is limited due to the customer base being large and unrelated. Further, the Company constantly evaluates the quality of trade receivable and provides allowance towards doubtful debts based on expected credit loss model.

Cash and Cash Equivalents:

The Company held cash and cash equivalents with credit worthy banks and financial institutions as at the reporting dates which has been measured on the 12-month expected loss basis. The credit worthiness of the banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.

C Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reseives, banking facilities and reseive borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

All current financial liabilities are repayable within one year. The contractual maturities of non current financial liabilities are disclosed in Note 17.

9. Related Party Disclosures

Disclosures under “Ind AS” 24 - Related Party Disclosure, as identified and disclosed by the Management and relied upon by the Auditors.

10. Earnings Per Share (EPS)

a. The Calculation of Weighted Average Number of Equity Shares for the purpose of basic and diluted Earnings per Share is as follows:

During the previous year Company bought back 14,70,000 shares of fully paid-up equity shares of the face value of t 51- each through ‘Tender Route” process at a price of t 660 per equity share, (refer Note 46)

b. The Company does not have any potential equity shares. Accordingly basic and diluted earnings per share would remain the same.

11. Geographical information on revenue and assets:

11.1 Revenue from sale of products and services by Geographic Location of Customers

11.2 Geographic Location of Assets

12. Operating Lease Disclosure

The Company has taken office space on lease for a period of 9 years with option to renew and with escalation in rent once in three years with lock-in period of three years. Lease rent for the year ended 31st March 2018 amounted to 157 Lakhs (Pr. Yr. Rs. 57 Lakhs).

13. Events after reporting period:

a) During the period, after obtaining the approval of the Board of Directors in its meeting held on 22.02.2018, the Buyback of 13,35,000 Equity shares of Rs. SI- (Representing 1.81% of the total number of paid up equity shares of the Company) from the shareholders of the Company on proportionate basis by way of tender offer route at a price of Rs. 810/- per share for an aggregate amount of Rs. 10,814 Lakhs was initiated in accordance with the provisions of the Companies Act, 2013 and SEBI Buyback of Securities Regulations, 1998. The same was completed on 13.04.2018

b) The Board of Directors has recommended a Final Dividend of 15% (Rs.0.75/- per share of the face value of Rs. 5/- each) for the year 2017 18 subject to the approval of the Shareholders in Annual General Meeting.

14. Buyback

14,70,000 Equity Shares of Rs. 5/- each (Representing 1.95% of the total number of paid up equity shares of the Company) was bought back on 13.02.2017 from the shareholders of the Company on proportionate basis through tender offer at a price of Rs. 660/- per share for an aggregate amount of Rs. 9,702 Lakhs in accordance with the provisions of the Companies Act, 2013 and the SEBI (buyback of Securities) Regulations, 1998.

15. Prior Year Comparatives:

The previous year standalone financial statements have been audited by a firm other than B S R & Co. LLP. Prior year figures have been reclassified wherever necessary to conform current year’s classification.

The notes from 1 to 47 are an integral part of these standalone financial statements.


Mar 31, 2017

1 CORPORATE INFORMATION

K.P.R. Mill Limited is one of the largest vertically integrated apparel manufacturing Companies in India. The Company produces Yarn, Knitted Fabric, Readymade Garments and Wind power. It has state-of-the-art production facilities in the State of Tamil Nadu, India.

The Company’s shares are listed in BSE LTD (BSE) and National Stock Exchange of India Ltd (NSE).

Standards issued but not yet effective In March 2017 the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules,2017notifying amendments to Ind AS 1, ’Statement of Cash Rows’ and Ind AS 102, ‘share-based payment1. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7 ‘Statement of Cash Rows’and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable from 1 April,2017

Amendments to Ind AS 107

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statement to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flow and non- cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance sheet for liabilities arising from financing activities to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

2 SIGNIFICANT ACCOUNTING POLICIES

A) BASIS OF PREPARATION AND PRESENTATION

STATEMENT OF COMPLIANCE:

i) The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Companies (Indian Accounting Standards) Amendment Rules, 2016.

(ii) For all periods up to and including the year ended 31 March 2016, the Company prepared and presented its financial statements in accordance with Accounting Standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (“Indian GAAP”). These financial statements for the year ended 31 March 2017 are the first financial statements the Company has prepared in accordance with Ind AS. Reconciliation and description of the effect of the transition from Indian GAAP to Ind AS is given in Note 4.

BASIS OF PREPARATION AND MEASUREMENT:

The financial statements have been prepared on the historical cost basis, except for certain financial instruments which are measured at fair values at the end of each reporting period.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

The financial statements have been prepared on a historical cost basis, except for certain financial assets measured at fair value at the end of the reporting period (refer accounting policy regarding fair value measurement).

The financial statements are presented in INR and all values are rounded to the nearest lakhs, except when otherwise indicated.

B) BASIS OF MEASUREMENT

The financial statements have been prepared on a historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS.

i. Derivative financial instruments;

ii. Certain financial assets and liabilities measured at fair value (refer accounting policy on financial instruments) and

iii. Defined benefit and other long-term employee benefits.

C) USE OF ESTIMATES AND IUDGEMENT

The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

3 EXPLANATION OF TRANSITION TO IND AS

The Company’s financial statements for the year ended 31 March, 2017 are the first annual financial statement prepared by the company in order to comply with Ind AS. The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1,2015 as the transition date. The transition was carried out from previous GAAP (based on the AS framework) to Ind AS. The effect of adopting Ind As has been summarized in the reconciliations provided below.

Ind AS 101 generally requires foil retrospective application of the standards in force at the first reporting date. However, Ind AS 101 allows certain exemptions in the application of particular Standards to prior periods in order to assist companies with the transition process.

Reconciliations

The Accounting policies as stated above in note 3 have been applied in preparing the financial statements for the year ended 31 March, 2017 the financial statement for the year ending 31 March, 2016 and the preparation of an opening Ind AS statement of financial position as at 1 April, 2015. In Preparing its opening Ind AS balance sheet and Statement of Profit and Loss for the year ended 31 March, 2016, the company has adjusted amounts reported in financial statements prepared in accordance with previous GAAP.

An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance is set out in the following tables.

i. Explanation of material adjustments to statement of cash flows for the year ended 31” March, 2016

The transition from previous GAAP to Ind AS has no material impact on the Statement of Cash Hows except bank overdraft which has been considered as part of cash & cash equivalent.

4.1 Term / Rights to Shares Equity Shares

The Company has issued only one class of equity shares having a face value of Rs. 5 per share. The holder of each equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

During the year, the amount of per share interim dividend paid to equity shareholders was Rs. Nil (31st March 2016: Rs. 9 per share) and per share final dividend recommended for distribution to equity shareholder is Rs. 0.75 per share (31st March 2016: Rs.1 per share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after settling the dues of preferential and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

5.1 Term Loans from banks are secured by pari-passu first charge on fixed assets and second charge on current assets of the Company.

5.2 i) Loan amounting to Rs. 354 Lakhs (Pr. Yr. Rs. 436 Lakhs) is repayable in 18 quarterly installments.

ii) Loan amounting to Rs. 1,874 Lakhs (Pr. Yr. Rs. 2,099 Lakhs) is repayable in 21 quarterly installments.

iii) Loan amounting to Rs. 6,717 Lakhs (Pr. Yr. Rs. 15,806 Lakhs) is repayable in 8 quarterly installments.

iv) Loan amounting to Rs. 9,387 Lakhs (Pr. Yr. Rs. Nil) is repayable in 24 quaterly installments.

5.3 Interest rate relating to term loans from banks is in the range of 9.65% to 11.25%.(Pr. Yr. 10.75 % to 11.25%)

5.4 The Company has not defaulted in the repayment of principal and interest during the year.

5.5 For the current maturities of long-term borrowings, refer Note 20 Other Financial Liabilities.

6 Disclosure with respect to Micro, Small and Medium Enterprises

In accordance with the Notification No: G.S.R.679 (E) dated 04.09.2015 issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined under the Micro, Small and Medium Development Act, 2006. The Company circulated for the information of its suppliers about their coverage under the said Aa. Since there is no response from supplier, no disclosures have been made in these financial Statements. However, in the considered view of the management and as relied upon by the auditors, impact of interest, if any that may be payable in accordance with the provisions of this Act is not expected to be material.

7. Corporate Social Responsibility Expenditure

The gross amount required to be spent by the Company during the year towards Corporate Social Responsibility (CSR) as per the provision of section 135 of the Companies Act, 2013 amounts to Rs. 392.24 Lakhs (Pr.Yr. Rs. 340.50 Lakhs). Amount spent during the year on CSR activities (included in note 31 of the Statement of Profit & Loss) as under:

8. Financial Instruments Capital Management

The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through optimisation of debt and equity balance.

The capital structure of the Company consists of net debt (borrowings as detailed in notes 16, 18 and 20 off set by cash and bank balances) and total equity of the Company.

The Company is not subject to any externally imposed capital requirements.

Financial Risk Management objectives

The Company’s corporate treasury function provides services to the business, co-ordinates access to domestic and International financial markets, monitors and manages the financial risk relating to the operation of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk), credit risk and liquidity risk. The use of financial derivatives is governed by the Company’s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non derivatives financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Company does not enter into or trade financial instrument, including derivative financial instruments, for speculative purposes

Market Risk

The Company’s activities expose it primarily to the financial risk of changes in foreign currency exchange rates. The Company enters into plain vennila forward contracts to manage its exposure to foreign currency risk including:

9 Related Party Disclosures

Disclosures under “Ind AS” 24- Related Party Disclosure, as identified and disclosed by the Management and relied upon by the Auditors:

Note: Figures in bracket relates to the previous year

i.) Forward foreign exchange contracts to hedge the exchange rate risk arising on imports and exports.

ii.) The Company covering its currency billing under forward cover and hence sensitivity analysis is not required.

Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed through plain vennila forward foreign exchange contracts.

Equity Risk

There is no material equity risk relating to the Company’s equity investments which are detailed in note 5 “Investments”. The Company’s equity investments majorly comprises of strategic investments rather than trading purposes.

Interest Risk

The Company borrow funds from banks is only at fixed rates, the rates are reviewed every year by the bank There is no material interest risk relating to the Company’s financial liabilities.

Credit Risk Management

Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to the Company. The Company’s domestic & export receivables are covered under credit insurance.

Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate receives, banking facilities and receive borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

All current financial liabilities are repayable within one year. The contractual maturities of non current liabilities are disclosed in note no. 16.

10 Segment Reporting

The Company is mainly engaged in the business of manufacturing of textiles consisting of yam, fabrics and garments. Considering the nature of business and financial reporting of the Company, the Company operates in only one business segment, viz., textiles. The Company operates in Domestic and Export segments geographically. The disclosures relating to secondary geographical segment is as follows:

11 Operating Lease Disclosure

The Company has taken Office space on lease for a period of 9 years with option to renew and with escalation in rent once in three years with lock-in period of three years. Lease rent for the year ended 31st March, 2017 amounted to Rs. 64 Lakhs (Pr.tt Rs. 62 Lakhs).

12 The previous year figures have been regrouped / reclassified wherever necessary to conform to current year’s classification.


Mar 31, 2016

1 CORPORATE INFORMATION

K.P.R. Mill Limited is one of the largest vertically integrated apparel manufacturing Companies in India. The Company produces Yarn, Knitted Fabric, Readymade Garments and Wind power. It has state- of-the-art production facilities in the State of Tamil Nadu, India.

The Company''s shares are listed in BSE Ltd., (BSE) and The National Stock Exchange India Ltd., (NSE).

2 Disclosure with respect to Micro, Small and Medium Enterprises

In accordance with the Notification No: (G.S.R.679 (E), dated 04.09.2015) issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined under the Micro, Small and Medium Development Act, 2006. The Company circulated for the information of its suppliers about their coverage under the said Act. Since there is no response from supplier, no disclosures have been made in these Financial Statements. However, in the considered view of the management and as relied upon by the auditors, impact of interest, if any that may be payable in accordance with the provisions of this Act is not expected to be material.

3 Related Party Disclosures

Disclosures under Accounting Standard 18 - Related Party Disclosure, as identified and disclosed by the management and relied upon by the Auditors:

3.1 Name of related parties and nature of relationships

Key Management Personnel Sri K.P. Ramasamy

Sri. KPD Sigamani

Sri. P. Nataraj

Sri. C.R. Anandakrishnan

Sri. E.K. Sakthivel

Relatives of Key Managerial Personnel Smt. D. Geetha (Daughter of Sri. KPD Sigamani)

Enterprises owned by Key Management Personnel / Directors or their relatives

M/s. K.P.R. Developers Limited

M/s. K P R Cements Private Limited

M/s. K P R Holdings Private Limited

M/s. K P R Agro Farms Private Limited

M/s. K P R Charities

Subsidiary Companies M/s. Quantum KNITS PVT. LIMITED

M/s K.P.R. Sugar Mill Limited

M/s Jahnvi Motor Private Limited

M/s Galaxy Knits Limited

4 Segment Reporting

The Company is mainly engaged in the business of manufacturing of textiles consisting of yarn, fabrics and garments. Considering the nature of business and financial reporting of the Company, the Company operates in only one business segment, viz., textiles. The Company operates in Domestic and Export segments geographically. The disclosures relating to secondary geographical segment is as follows:

5 Operating Lease Disclosure

The Company has taken Office space on lease for a period of 9 years with option to renew and with escalation in rent once in three years with lock-in period of three years. Lease rent for the year ended 31st March 2016 amounted to Rs.62 Lakhs (Pr. Yr. Rs.55 Lakhs).

6 Captive consumption of windmill power

The power cost is net value of captively consumed units.

7 The previous year figures have been regrouped / reclassified wherever necessary to conform to current year''s classification.


Mar 31, 2015

1 CORPORATE INFORMATION

K.P.R. Mill Limited along with its wholly-owned subsidiary Quantum KNITS PVT. LIMITED is one of the largest vertically integrated apparel manufacturing Companies in India. The Company produces Yarn, Knitted Fabric, Readymade Garments and Windpower. It has state-of-the-art production facilities in the State of Tamil Nadu, India.

The Company's shares are listed in Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

2. SHARE CAPITAL

2.1 Pursuant to the approval of Shareholders at the Annual General Meeting held on 25.08.2010, the Company allotted 15,00,000 7% redeemable cumulative Non-convertible Preference shares to K.P.R Developers Limited for consideration other than cash.

2.2 Term / Rights to Shares

Equity Shares:

The Company has issued only one class of equity shares having a face value of Rs. 10 per share. The holder of each equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

During the year, the amount of per share interim dividend paid to equity shareholders was Rs. 4 (31st March 2014: Rs. 4) and per share final dividend recommended for distribution to equity shareholder is Rs. 5 (31st March 2014: Rs. 3).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after settling the dues of preferential and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

Preference Shares:

7% Redeemable Cumulative Non-Convertible Preference Shares are redeemable at par within a period of 10 years from the date of issue, as may be decided by the Board.

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

3.1 The Company is in receipt of a demand of Rs. 82 Lakhs (Pr. Yr. Rs. 82 Lakhs) from the Indian Bank towards prepayment charges. The same has been contested in writ filed before the High Court of Judicature at Madras which has restrained Indian Bank from applying proceeds of TUF subsidy towards its demand for prepayment charges. The case is pending disposal.

3.2 The Company has issued Bank Guarantee amounting to Rs. 164 Lakhs (Pr. Yr. Rs. 164 Lakhs) in favour of TANGEDCO, Bank Guarantee amounting to Rs. 10 Lakhs (Pr. Yr. Rs. 5 Lakhs) in favour of Tamilnadu Pollution Control Board, Bank Guarantee amounting to Rs. 698 Lakhs (Pr. Yr. Rs. Nil) in favour of Suryadev Alloys and Power Pvt Ltd, Bank Guarantee amounting to Rs. 67 Lakhs (Pr. Yr. Rs. Nil) in favour of A.R.S. Energy Private Limited, Bank Guarantee amounting to Rs. 160 Lakhs (Pr. Yr. Rs. Nil) in favour of A.R.S. Metal Private Limited and Bank Guarantee amounting to Rs. 25 Lakhs (Pr. Yr. Rs. Nil) in favour of New Tirupur Area water Development Corporation Ltd. The Company has issued Corporate Guarantees amounting to Rs. 18,290 Lakhs (Pr Yr. Rs. 15,665 Lakhs) towards working capital facilities availed by the wholly owned subsidiaries from banks.

3.3 The Company has an Export obligation of Rs. 6,187 Lakhs (Pr. Yr. Rs. 5,101 Lakhs) to be completed upto 2020-21. The duty implication involved is Rs. 1,031 Lakhs (Pr. Yr. Rs. 836 Lakhs).

3.4 At the request of the Company, the Bankers have extended Foreign Letter of Credit facility for Rs. 773 Lakhs (Pr. Yr. Rs. 36 Lakhs) and Inland Letter of Credit facility for Rs. 16 Lakhs (Pr. Yr. Rs. 873) in favour of suppliers.

3.5 The Company has discounted sales invoices amounting to Rs. 7,358 Lakhs (Pr. Yr. Rs. 4,089 Lakhs) with banks as at the balance sheet date.

3.6 The disputed Income Tax demands pending in appeals as at the balance sheet date is Rs. 3,230 Lakhs (Pr. Yr. Rs. 2,345 Lakhs). The disputed Central Excise duty demands pending in appeals as at the balance sheet date is Rs. 4 Lakhs (Pr. Yr. Rs. 6 Lakhs). The disputed Service Tax demands pending in appeals as at the balance sheet date is Rs. 28 Lakhs (Pr. Yr. Rs. 28 Lakhs).

3.7 Estimated amount of contracts on capital account remaining to be executed (net of advances) aggregate to Rs. 1,232 Lakhs (Pr. Yr. Rs. Nil).

4. Disclosure with respect to Micro, Small and Medium Enterprises

In accordance with the Notification No: GSR 719 (E) dated 16.11.2007 issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined under the Micro, Small and Medium Development Act, 2006. The Company circulated for the information of its suppliers about their coverage under the said Act. Since there is no response from supplier, no disclosures have been made in these Financial Statements. However, in the considered view of the management and as relied upon by the auditors, impact of interest, if any that may be payable in accordance with the provisions of this Act is not expected to be material.

5. Related Party Disclosures

Disclosures under Accounting Standard 18 - Related Party Disclosure, as identified and disclosed by the management and relied upon by the Auditors:

5.1 Name of related parties and nature of relationships

Sri K.P.Ramasamy

Sri KPD Sigamani Key Management Personnel Sri P.Nataraj

Sri C.R.Anandakrishnan

Sri E.K.Sakthivel (Daughter's Husband of Sri. KPD Sigamani) Relatives of Key Managerial Personnel Smt D.Geetha (Daughter of Sri. KPD Sigamani)

M/s K.P.R. Developers Limited

M/s K P R Cements Private Limited

Enterprises owned by key M/s K P R Holdings Private Limited management personnel Directors or their relatives M/s K P R Agro Farms Private Limited

M/s K.P.R. Charities

M/s Quantum KNITS PVT. LIMITED Subsidiary Company M/s K.P.R.Sugar Mill Limited

M/s Jahnvi Motor Private Limited

M/s Galaxy Knits Limited

6. Segment Reporting

The Company is mainly engaged in the business of manufacturing of textiles consisting of yarn, fabrics and garments. Considering the nature of business and financial reporting of the Company, the Company operates in only one business segment, viz., textiles. The Company operates in Domestic and Export segments geographically. The disclosures relating to secondary geographical segment is as follows:

7. Operating Lease Disclosure

The Company has taken Office space on lease for a period of 9 years with option to renew and with escalation in rent once in three years with lock-in period of three years. Lease rent for the year ended 31st March 2015 amounted to Rs. 55 Lakhs.

8. Captive consumption of windmill power: The power cost is net value of captively consumed units.

9. The previous year figures have been regrouped / reclassified wherever necessary to conform to current year's classification.


Mar 31, 2013

1. COMPANY OVERVIEW

K.P.R. Mill Limited along with its wholly-owned subsidiary Quantum Knits Pvt. Limited is one of the largest vertically integrated apparel manufacturing Companies in India. The Company produces Yarn, Knitted Fabric, Readymade Garments and Windpower. It has state- of-the-art production facilities in the State of Tamil Nadu, India.

The Company''s shares are listed in Bombay Stock Exchange (BSE) and in National Stock Exchange (NSE).

2 Contingent Liabilities and Commitments (to the extent not provided for).

2.1) The Company is in receipt of a demand of Rs. 82 Lakhs (Pr. Yr. Rs. 82 Lakhs) from the Indian Bank towards prepayment charges. The same has been contested in writ filed before the High Court of Judicature at Madras which has restrained Indian Bank from applying proceeds of TUF subsidy towards its demand for prepayment charges. The case is pending disposal.

2.2) The Company has issued Bank Guarantee amounting to Rs. Nil (Pr. Yr. Rs. 27 Lakhs) in favour of EPCG and Bank Guarantee amounting to Rs. 5 Lakhs (Pr.Yr. Rs. 5 Lakhs) in favour of Tamilnadu Pollution Control Board and Bank Guarantee amounting to Rs. 164 Lakhs (Pr.Yr. Nil) in favour TANGEDCO. The Company issued Corporate Guarantee amounting to Rs. 15,000 Lakhs (Pr Yr. Rs. 11,500 Lakhs) towards working capital facility of the wholly owned subsidiary.

2.3) The Company has an Export obligation of Rs. 5,013 Lakhs (Pr. Yr. Rs. 60,180 Lakhs) to be completed upto 2020-21. The duty implication involved is Rs. 627 Lakhs (Pr. Yr. Rs. 7523 Lakhs).

2.4) At the request of the Company the Bankers have established Foreign Letter of Credits Rs. 3,708 Lakhs (Pr. Yr. Rs. 110 Lakhs) in favour of suppliers.

2.5) The Company has discounted sale bills amounting to Rs. 7,156 Lakhs (Pr. Yr. Rs. 2,209 Lakhs) with banks.

2.6) Income Tax pending appeals, aggregate Tax Disputed Rs. 2,049 Lakhs (Pr. Yr. Rs. 82 Lakhs). Central Excise pending appeals, aggregate Duty Disputed Rs. 6 Lakhs (Pr. Yr. Rs. 6 Lakhs). Service Tax pending appeals, Tax disputed Rs. 28 Lakhs (Pr. Yr. Rs. 28 Lakhs).

2.7) Estimated amount of contracts on capital account remaining to be executed (net of advances) aggregate to Rs. 55 Lakhs (Pr. Yr. Rs. 786 Lakhs).

3 MICRO, SMALL AND MEDIUM ENTERPRISES

In accordance with the Notification No: GSR 719 (E) dated 16.11.2007 issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined under the Micro, Small and Medium Development Act, 2006. The Company circulated for the information from its suppliers about their coverage under the said Act. Since there is no response from supplier, no disclosures have been made in these Financial Statements. However, in the considered view of the management and as relied upon by the auditors, impact of interest, if any that may be payable in accordance with the provisions of this Act is not expected to be material.

4 RELATED PARTY DISCLOSURES

In accordance with Accounting Standard 18 - "Related Party Disclosure", the company has compiled the required information as detailed below, as identified and disclosed by the management and relied upon by the Auditors:

4.1 Name of related parties and nature of relationship where control exists are as under

Key Management Personnel Sri K.P.Ramasamy

Sri KPD Sigamani

Sri P.Nataraj

Sri C.R.Anandakrishnan

Relatives of Key Managerial Personnel Sri E.K.Sakthivel (Daughter''s Husband of Sri.KPD Sigamani)

Smt D.Geetha (Daughter of Sri.KPD Sigamani)

Enterprises owned or significantly influenced by key management personnel/Directors or their relatives

M/s K.P.RDevelopers Limited

M/s K P R Cements Private Limited

M/s K P R Holdings Private Limited

M/s K P R Agro Farms Private Limited

M/s K P R Charities

Subsidiary company M/s Quantum Knits Pvt. Limited

M/s K.P.RSugar Mill Limited

M/s |ahnvi Motor Private Limited

M/s Galaxy Knits Limited

5 Segment Reporting

The Company is mainly engaged in the business of manufacturing of textiles consisting of yarn, fabrics and garments. Considering the nature of business and financial reporting of the Company, the Company has only one business segment viz; textile as reportable segment. The Company operates in Domestic and Export segments geographically. The disclosure relating to secondary segment is as given below:

6 Operating Lease Commitments

During the year, the Company has taken Office space on lease for a period of 9 years with option to renew and with escalation in rent once in three years with lock-in period of three years. Lease rent for the year ended 31st March, 2013, amounted to Rs. 32 Lakhs.

7 The Promoters had leased out the land to the Company. During March 2009 the Company has entered into an agreement with the Promoters, whereby the Company has an option to purchase those Lands as and when required, within the period of ten years from the date of the lease agreement.

8 Captive consumption of windmill power: The power cost is net value of captively consumed units.

9 The Company exercised the option provided by The Government of India, Ministry of Corporate Affairs vide Notification No.G.S.R.913 (E) dated December 29, 2011, amending the Companies (Accounting Standard) Rules, 2006 in respect of the exchange differences arising on long-term foreign currency monetary items. The unamortized net exchange difference on account of the above is a Net gain of Rs. 104 Lakhs as at 31st March, 2013. (Previous Year Ended 31st March, 2012. Net loss Rs. 837 Lakhs).

10 Previous Year''s Figures

The previous year''s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2012

1. COMPANY OVERVIEW

K.P.R. Mill Limited along with its wholly-owned subsidiary Quantum Knits Pvt. Limited is one of the largest vertically integrated apparel manufacturing Companies in India. The Company produces Yarn, Knitted Fabric, Readymade Garments and Windpower. It has state- of-the-art production facilities in the State of Tamil Nadu, India.

The Company's shares are listed in Bombay Stock Exchange (BSE) and in National Stock Exchange (NSE).

2 CONTINGENT LIABILITIES NOT PROVIDED FOR IN THE ACCOUNTS

2.1) The Company is in receipt of a demand of Rs.82 Lakhs (Pr.Yr. Rs.82 Lakhs) from the Indian Bank towards prepayment charges. The same has been contested in writ filed before the High Court of Judicature at Madras which has restrained Indian Bank from applying proceeds of TUF subsidy towards its demand for prepayment charges. The case is pending disposal.

2.2) The Company has issued Bank Guarantee amounting to Rs. 27 Lakhs (Pr.Yr. Rs.80 Lakhs) in favour of EPCG and Bank Guarantee amounting to Rs.5 Lakhs (Pr.Yr. Rs.5 Lakhs) in favour of Tamilnadu Pollution Control Board. The Company issued Corporate Guarantee amounting to Rs.11,500 Lakhs (Pr Yr. Rs.6,000 Lakhs) towards working capital facility of the wholly owned subsidiary.

2.3) The Company has an Export obligation of Rs.60,180 Lakhs (Pr.Yr. Rs. 76,672 Lakhs) to be completed upto 2019-20. The duty implication involved is Rs.523 Lakhs (Pr.Yr. Rs. 9,584 Lakhs).

2.4) At the request of the Company the Bankers have established Foreign Letter of Credit - Rs. 110 Lakhs (Pr.Yr.Rs.6,845 Lakhs) in favour of suppliers.

2.5) The Company has discounted sale bills amounting to Rs.2,209 Lakhs (Pr.Yr. Rs.923 Lakhs) with banks.

2.6) Income Tax pending appeals, aggregate Tax Disputed Rs. 82 Lakhs (Pr.Yr.Rs.89 Lakhs). Central Excise pending appeals, aggregate Duty Disputed Rs.6 Lakhs (Pr.Yr.Rs 6 Lakhs). Service tax pending appeals, Tax disputed Rs. 28 Lakhs (Pr.Yr.Rs 28 Lakhs).

2.7) Estimated amount of contracts on capital account remaining to be executed (net of advances) aggregate to Rs 786 Lakhs (Pr.Yr. Rs.12,203 Lakhs).

3 MICRO, SMALL AND MEDIUM ENTERPRISES

In accordance with the Notification No: GSR 719 (E) dated 16.11.2007 issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined under the Micro, Small and Medium Development Act, 2006. The Company circulated for the information from its suppliers about their coverage under the said Act. Since there is no response from supplier, no disclosures have been made in these Financial Statements. However, in the considered view of the management and as relied upon by the auditors, impact of interest, if any that may be payable in accordance with the provisions of this Act is not expected to be material.

4 PROVISION FOR LIABILITIES

In the view of the Management, the provisions created for the Liabilities are adequate.

5 RELATED PARTY DISCLOSURES

In accordance with Accounting Standard 18 - "Related Party Disclosure", the company has compiled the required information as detailed below, as identified and disclosed by the management and relied upon by the Auditors:

6 The Promoters had leased out the land to the Company. During March 2009 the Company has entered into an agreement with the Promoters, whereby the Company has an option to purchase those Lands as and when required, within the period of ten years from the date of the lease agreement.

In the absence of detailed information regarding plan assets which is funded with Life Insurance Corporation of India, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed. The details of experience adjustments arising on account of plan assets and liabilities as required by paragraph 120(n)(ii) of AS 15 (Revised) on "Employee Benefits" are not readily available in the valuation report and hence, are not furnished.

The estimate of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotions and other relevant factors including supply and demand in the employment market.

7 Captive consumption of wind power: The power cost is net value of captively consumed units.

8 The Company exercised the option provided by The Government of India, Ministry of Corporate Affairs vide Notification No.G.S.R.913 (E) dated December 29, 2011, amending the Companies (Accounting Standard) Rules, 2006 in respect of the exchange differences arising on long-term foreign currency monetary items. The unamortized net exchange difference on account of the above is a Net Loss of Rs 837 Lakhs as at March 31, 2012. (Previous Year Ended 31.03.2011 Net Gain / (Loss) - Nil). The profit for the year is overstated to this extent due to change in accounting policy.

9 Disclosure as per Clause 32 of the Listing Agreements

There are no loans and advances in the nature of loans given to associates and others and investment in shares of the Company by such parties.

10 Details of hedged and unhedged foreign currency exposures

11 Previous Year's Figures

These financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act 1956. The previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2011

1. SHARE CAPITAL

(i) Share Capital

(a) 1,29,51,000 Equity shares of Rs.10 each issued on 06.10.2006 pursuant to High Court order dated 19.08.2006 approving the Scheme of amalgamation of K P R Mill Private Limited and K P R Spinning Mill Private Limited with K P R Mill Limited (formerly known as K P R Cotton Mills Private Limited)

(b) 72,651 Equity shares of Rs.10 each issued on 15.02.2006 for take over of business of K P R Knits

(c) 1,58, 85,396 Equity shares issued on 01.03.2007 as fully paid up bonusshares by Capitalization of Securities PremiumAccount.

(d) Pursuant to the approval of share holders at the Extra-ordinary General Meeting held on 01.03.2007, the Company made an Initial Public Offer and on 20.08.2007 issued and allotted 59,12,100 Equity shares of Rs. 10/-each at a premium of Rs. 215/- per share aggregating to Rs. 13,302.23 Lakhs. Consequent to above, the paid up equity share capital has increased by Rs. 591.21 Lakhs

(e) Pursuant to the approval of share holders at the Annual General Meeting held on 25.08.2010, the Company allotted 7% redeemable cumulative non convertible preference shares to K.P.R Developers Ltd as a consideration other than cash.

2. SECURITY PROVIDED TO THE BANKS, FINANCIAL INSTITUTIONS

For Working capital limits, the first charge has been given to the respective lenders by way of hypothecation of inventories and book debts. The second charge on current assets has been given on pari- passu basis to Banks for Term loan lent by them.

For Term Loans, the first charge on fixed assets is given to the respective Banks. The second charge on fixed assets has been given to

working capital lending banks on pari-passu basis. Term Loan repayable within one year Rs. 7,544.52 Lakhs (Pr.Yr. Rs.7,351.36 Lakhs). The term loans guaranteed by the Chairman and Managing Directors aggregate to Rs. 355.42 Lakhs (Pr.Yr.Rs.711.42 Lakhs)

3. CONTINGENT LIABILITIES NOT PROVIDED FOR IN THE ACCOUNTS

a. The Company is in receipt of a demand of Rs.81.50 Lakhs (Pr.Yr. Rs.81.50 Lakhs) from the Indian Bank towards prepayment charges. The same has been contested in writ filed before the High Court of Judicature at madras which has restrained Indian Bank from applying proceeds of TUF subsidy towards its demand for prepayment charges. The case is pending disposal.

b. The Company has issued Bank Guarantee amounting to Rs. 79.59Lakhs (Pr.Yr. Rs.145.59 Lakhs) in favour of EPCG and Bank Guarantee amounting to Rs.5.00 Lakhs (Pr.Yr. Rs.5.00 Lakhs) in favourof Tamilnadu pollution Control Board and Bank Guarantee amounting to Rs.148.50 Lakhs (P.Yr. NIL) in favour of Madras Aluminium Company Ltd. The Company issued Corporate Guarantee amounting to Rs.6,000.00 Lakhs (Pr Yr. Rs.3,000.00 Lakhs) towards working capital facility of the wholly owned subsidiary.

c. The Company has an Export obligation of Rs. 76,672.42 Lakhs (Pr.Yr. Rs. 41,611.47 Lakhs) to be completed upto 2017- 18.The duty implication involved is Rs.9,584.05 Lakhs (Pr.Yr. Rs. 5,150.93 Lakhs).

d. At the request of the Company the Bankers have established Letter of Credits in favour of the suppliers of the Company as under:

Foreign Letter of Credits - Rs. 6,844.75 Lakhs (Pr.Yr. Rs.9.22 Lakhs)

e. The Company has discounted sale bills amounting to Rs.922.51 Lakhs(Pr.Yr. Rs.1,160.89 Lakhs) with banks.

f. The Company has obtained a stay order at High Court of Madras restraining TNEB from Collection of tax under Tamilnadu Tax on Consumption and Sale of Electricity Act, in respect of maximum demand charges. The estimated Contingent liability will be Rs.74.09 Lakhs (Pr.Yr. Rs.47.88 Lakhs)

g. Income Tax pending appeals, aggregate Tax Disputed Rs. 88.69 Lakhs (Pr.Yr.Rs.146.40 Lakhs). Central Excise pending appeals, aggregate Duty Disputed Rs.5.97 Lakhs (Pr.Yr.Rs.5.97 Lakhs). Service tax pending appeals, Tax disputed Rs. 27.51 Lakhs (Pr.Yr. Rs.28.01 Lakhs).

i. Estimated Amount of contracts on capital account remaining to be executed (net of advances) aggregate to Rs. 12,203.08 Lakhs (Pr.Yr. Rs. 18,977.08 Lakhs).

4. Deferred Tax

In accordance with the Accounting Standard 22, "Accounting for

Taxes on Income", the Company has credited during the current year a sum of Rs.1, 152.55 Lakhs (Pr. Yr. debited Rs.1, 382.72 Lakhs) as deferred tax charge. Details of deferred tax liability/(Asset) are: -

5. Micro, Small and Medium Enterprises

In accordance with the Notification No: GSR 719 (E) dated 16.11.2007 issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined under the Micro, Small and Medium Development Act, 2006. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is not readily available, no disclosures have been made in these Financial Statements. However, in the considered view of the management and as relied upon by the auditors, impact of interest, if any that may be payable in accordance with the provisions of this Act is not expected to be material.

6. Provision for liabilities

In the view of the Management, the provisions created for the Liabilities are adequate.

7. Related Party disclosures

In accordance with Accounting Standard 18 - "Related Party Disclosure", the company has compiled the required information as detailed below, as identified and disclosed by the management and relied upon by the Auditors:

A. Name of related parties and nature of relationship where control exists are as under

Key Management Personnel

Sri KP.Ramasamy

Sri KPD. Sigamani

Sri P.Nataraj

Sri C.R.Ananda Krishnan

Relatives of Key Managerial Personnel

Sri E.K. Sakthivel (Daughters Husband of Sri. KPD. Sigamani)

Smt. D. Geetha (Daughter of Sri. KPD. Sigamani)

Enterprises owned or significantly influenced by key management personnel/Directors or their relatives

M/s K.P.R. Developers Limited

Subsidiary Company

Quantum Knits Pvt. Limited

8. Segment Reporting

The Company is mainly engaged in the business of manufacturing of textiles consisting of yarn, fabrics and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile as reportable segment. The Company operates in Domestic and Export segments geographically. The sales for both is separately given, but due to the nature of business the assets/liabilities and expenses for these activities cannot be bifurcated separately.

9. The Promoters had leased out the land to the Company. During March 2009 the Company has entered into an agreement with the Promoters, whereby the Company has an option to purchase those Lands as and when required, within the period of lease agreement.

10. Captive consumption of windmill power

The power cost is net of value of captively consumed units.

In the absence of detailed information regarding Plan assets which is funded with Life Insurance Corporation of India, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed. The details of experience adjustments arising on account of plan assets and liabilities as required by paragraph 120(n)(ii) of AS 15 (Revised) on "Employee Benefits" are not readily available in the valuation report and hence, are not furnished.

The estimate of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotions and other relevant factors including supply and demand in the employment market. The above information is certified by actuary.

11. Previous Years Figures

The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2010

1. SHARE CAPITAL

(i) Share Capital

a) 1,29,51,000 Equity shares of Rs. 10 each issued on 6.10.2006 pursuant to High Court order dated 19.08.2006 approving the Scheme of amalgamation of K P R Mill Private Limited and K P R Spinning Mill Private Limited with K P R Mill Limited (formerly known as K P R Cotton Mills Private Limited)

b) 72,651 Equity shares of Rs. 10 each issued on 15.02.2006 for take over of business of K P R Knits

c) 1,58,85,396 Equity shares issued on 01.03.2007 as fully paid up bonus shares by Capitalization of Securities Premium Account.

d) Pursuant to the approval of share holders at the Extra-ordinary General Meeting held on 01-03-2007 the Company made an Initial Public Offer and on 20-08-2007 issued and allotted 59,12,100 Equity shares of Rs. 10 each at a premium of Rs. 215 per share aggregating to Rs. 13,302.23 Lakhs. Consequent to above, the paid up equity share capital has increased by Rs. 591.21 Lakhs

(ii) Utilization of Initial Public Offer (IPO) Funds upto March 31, 2010

Proceeds from issue of shares 13,302.23 13,302.23

Less:- Issue Expenses 1,218.66 1,218.66

Net IPO Proceeds 12,083.57 12,083.57

Less:- Utilization of Funds 4,980.84 4,575.72

Unutilized IPO Funds 7,102.73 7,507.85

Unutilized IPO Funds Rs. 7102.73 Lakhs (Pr. Yr. Rs. 7,50785 Lakhs) has been used for reducing overdrafts as an interim measure pending deployment towards Objects of Issue. The unutilized Funds will be utilised for expansion of compact spinning as approved in the EGM dated 30.03.10.

2. Security provided to the Banks, Financial Institutions

For Working capital limits, the first charge has been given to the respective lenders by way of hypothecation of inventories and book debts. The second charge on current assets has been given on pari-passu basis to Banks for Term loan lent by them. The working capital facilities guaranteed by the Chairman and Managing Directors aggregate to Rs. Nil (Pr. Yr. Rs. 106.57 Lakhs).

For Term Loans, the first charge on fixed assets is given to the respective Banks. The second charge on fixed assets has been given to working capital lending banks on pari-passu basis. Term Loan repayable within one year Rs. 7351.36 Lakhs (Pr. Yr. Rs. 7552.40 Lakhs). The term loans guaranteed by the Chairman and Managing Directors aggregate to Rs. 711.42 Lakhs (Pr. Yr. Rs. 1,059.42 Lakhs)

3. Contingent Liabilities not provided for in the accounts

a. The Company is in receipt of a demand of Rs. 81.50 Lakhs (Pr. Yr. Rs. 81.50 Lakhs) from the Indian Bank towards prepayment charges. The same has been contested in writ filed before the High Court of judicature at Madras which has restrained Indian Bank from applying proceeds of TUF subsidy towards its demand for prepayment charges. The case is pending disposal.

b. The Company has issued Bank Guarantee amounting to Rs. 145.59 Lakhs (Pr. Yr. Rs. 254.45 Lakhs) in favour of EPCG and Bank Guarantee amounting to Rs. NIL (Pr. Yr Rs. 78.34 Lakhs) in favour of Bombay Stock Exchange, Bank Guarantee amounting to Rs. 5 Lakhs (Pr. Yr. Rs. 5.00 Lakhs) in favour of Tamilnadu Pollution Control Board and Bank Guarantee amounting to Rs. Nil (Pr. Yr. Rs. 80.53 Lakhs) in favour of Tamilnadu Electricity Board. The Company issued Corporate Guarantee amounting to Rs. 3,000.00 Lakhs towards Working Capital facility of the wholly owned subsidiary.

c The Company has an Export obligation of Rs. 41,611.47 Lakhs (Pr. Yr. Rs. 59,589.57 Lakhs) to be completed upto 2017-18.The duty implication involved is Rs. 5,150.93 Lakhs (Pr. Yr. Rs. 7369.82 Lakhs).

d. At the request of the Company the Bankers have established Letter of Credits in favour of the suppliers of the Company as under : Foreign Letter of Credits - Rs. 9.22 Lakhs (Pr. Yr. Rs. 324.31 Lakhs)

e. The Company has discounted sale bills amounting to Rs. 1,160.89 Lakhs (Pr.Yr.Rs. 2,11733 Lakhs) with banks.

f. The Company has obtained a stay order at High Court of Madras restraining TNEB from Collection of tax under Tamilnadu Tax on Consumption and Sale of Electricity Act, in respect of maximum demand charges. The estimated Contingent liability will be Rs. 4788 Lakhs (Pr. Yr. Rs. 22.62 Lakhs)

g. Income Tax pending appeals, aggregate Tax Disputed Rs. 146.40 Lakhs (Pr. Yr. Rs. 178.01 Lakhs). Central Excise pending appeals, aggregate Duty Disputed Rs. 5.97 Lakhs (Pr. Yr. Rs. 5.97 Lakhs). Service tax pending appeals,Tax disputed Rs. 28.01 Lakhs (Pr. Yr. Rs. 2751 Lakhs).

h. Estimated Amount of contracts on capital account remaining to be executed (net of advances) aggregate to Rs. 18,97708 Lakhs (Pr.Yr.Rs. 41.62 Lakhs).

4. Deferred Tax

In accordance with the Accounting Standard 22, "Accounting for Taxes on Income", the Company has debited during the current year a sum of Rs.l, 382.72 Lakhs as deferred tax charge. Details of deferred tax liability/(Asset) are: -

Depreciation 3,95735 2,306.08 6,263.43

Others - (923.36) (923.36)

Net Deferred 3,95735 1,382.72 5,340.07

Tax Liability

5. Payment to Auditors

Audit fees 5.00 5.00 Tax Audit and Tax Matters

Expenses (incl. Service Tax) 0.90 0.28

Total 5.90 5.28

6. Micro, Small and Medium Industries

In accordance with the Notification No: GSR 719 (E) dated 16.11.2007 issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined under the Micro, Small and Medium Development Act, 2006. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is not readily available, no disclosures have been made in these Rnancial Statements. However, in the considered view of the management and as relied upon by the auditors, impact of interest, if any that may be payable in accordance with the provisions of this Act is not expected to be material.

7. Provision for liabilities

In the view of the Management, the provisions created for the Liabilities are adequate.

8. Segment Reporting

The Company is mainly engaged in the business of manufacturing of textiles consisting of yarn, fabrics and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile as reportable segment. The Company operates in Domestic and Export segments geographically. The sales for both is separately given, but due to the nature of business the assets/liabilities and expenses for these activities cannot be bifurcated separately.

9. The Promoters had leased out the land to the Company. During March 2009 the Company has entered into an agreement with the Promoters, whereby the Company has an option to purchase those Lands as and when required, within the period of lease agreement.

10. Captive consumption of windmill power

The power cost is net of value of captively consumed units.

11. Provision for income tax has been computed on the basis of Minimum Alternate Tax (MAT) in accordance with Section 115JB of the income tax Act, 1961. Considering the future profitability and taxable positions in the subsequent years, the company has recognised MAT Credit Entitlement" of Rs. 1,510.01 Lakhs as an asset by crediting to the Profit and Loss Account of Rs. 676.85 Lakhs and included under Loans and Advances in accordance with the guidance note on "Accounting for credit available in respect of Minimum Alternate Tax under Income Tax Act, 1961".

12. Confirmation of Balances

Balance in Debtors, Creditors, Advances and Deposit accounts are to be confirmed / reconciled.

13. Disclosures required under revised Accounting Standard 15 are as follows: a) Defined Contribution Plan

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