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Notes to Accounts of KPR Mill Ltd.

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