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Notes to Accounts of Monte Carlo Fashions Ltd.

Mar 31, 2016

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made where there is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where reliable estimate of the obligation cannot be made. q) Cash and cash equivalents

Cash and cash equivalents comprise cash and deposit with banks. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

(e) Details of shares issued pursuant to contract without payment being received in cash, allotted as fully paid up by way of bonus issues and bought back during the last 5 years

(i) The Company issued 8,715,000 bonus equity shares in the year 2011-2012 in the ratio of 1:1. There has been no buy-back of shares in the current year and preceding five years.

(ii) The Company had issued 8,665,000 equity shares pursuant to demerger scheme approved by Hon''ble High Court of Punjab and Haryana during the year ended 31 March 2012.

Collateral security:

Second pari-passu charge on current assets of the Company (present and future) along with other working capital consortium member bank.

2 Security in respect of term loan facility availed through State Bank of Patiala:

Primary security:

Hypothecation charge on first pari-passu basis with other term lenders on all the factories plant & machinery including the proposed machines and equitable mortgage of factories land and building situated at Ludhiana. Personal guarantee:

Shri. Jawahar Lal Oswal Shri. Kamal Oswal Shri. Dinesh Oswal

3 Security in respect of term loan facility availed through Allahabad Bank:

Primary security :

First pari-passu charge on the fixed assets of the company.

Collateral security:

Second pari - passu charge on the current assets of the company.

Personal guarantee:

Shri. Jawahar Lal Oswal Shri. Kamal Oswal Shri. Dinesh Oswal

4 Security in respect of term loan facility availed through Indian Bank:

Primary security:

1) Fixed assets to be acquired out of bank loan including land and building estimated at Rs. 1,338,600,000. For creation of equitable mortgage on the land to be acquired, 3 month time is permitted and pari-passu charge to be created with Term lenders as at point no. 2 below.

2) 1st charge on fixed assets of the Company both present and future on pari-passu basis with the existing term loan lenders.

Collateral security:

2nd pari-passu charge on current assets of the company both present and future. 1st charge being with the banks meeting working capital requirements of the Company.

Personal guarantee:

Shri. Jawahar Lal Oswal Shri. Kamal Oswal Shri. Dinesh Oswal (b) Terms of repayment

Repayment terms of the loans are as follows:

(i) Term loan from State Bank of Patiala amounting to Rs. 232,621,400 (previous year Rs. 232,621,400) [(sanctioned amount Rs. 498,500,000)] carrying interest rate of 0.65% above one year marginal cost of lending rate (MCLR), is repayable in 32 quarterly installments of Rs. 15,578,125 each commencing from 30 June 2016 and last installment of Rs. 15,578,125 would be due for repayment on 31 March 2024.

(ii) Term loan from State Bank of Patiala amounting to Rs. 4,967,288 (previous year Rs. 14,903,278) repayment of which commenced from 1 April 2011 carrying interest rate of 1% over base rate, is repayable in 2 quarterly installments first Rs. 2,484,000 and second quarterly installment of Rs. 2,483,288 would be due for repayment on 30 September 2016.

(iii) Term loan from Allahabad Bank amounting to Rs. Nil (previous year Rs. 2,023,863) repayment of which commenced from 1 April 2011 carrying interest rate of 1.5% over base rate, has been re-paid during the current financial year

(iv) Term loan from Indian Bank amounting to Rs. 449,759,242 (previous year Rs. 646,049,242) repayment of which commenced from 30 September 2013 carrying interest rate of 1.5% over base rate, is repayable in 6 quarterly installments of Rs. 65,430,000 each, last quarterly installment of Rs. 57,179,242 would be due for repayment on 31 March 2018.

Details of rate of interest, terms of repayment and security for working capital borrowings from banks:

Working capital borrowings from State Bank of Patiala is carrying interest rate of 0.75% over base rate.

Working capital borrowings from State Bank of India is carrying interest rate of 1.25% over base rate.

Working capital borrowings from Allahabad Bank is carrying interest rate of 0.80% over base rate.

Terms of repayment:

Working capital borrowings are repayable on demand.

Security in respect of working capital borrowings availed through consortium arrangement of Allahabad Bank, State Bank of Patiala and State Bank of India Primary security:

First pari-passu charge on the all current assets of the Company (present and future).

Collateral security:

Second pari-passu charge on the Company''s entire present and future block of assets of the Company including equitable mortgage of factory land held in the name of the Company.

(1) Plot No. 231, measuring 4,880 sq. yards at Industrial Area A, Ludhiana. (Sale deed no. 2640 dated 20 September 1956)

(2) Plot No. 232, measuring 4,095 sq. yards at Industrial Area A, Ludhiana (Sale deed no. 2135 dated 07 September 1964)

(3) Land measuring 14,278 sq. yards at Sherpur Kalan, GT Road, Ludhiana (Sale deed no. 14397 dated 13 October 2011)

(4) Part of Plot No. 172 bearing M.C. No. B-XXIII-66/1 in Industrial Area-A, Ludhiana measuring 117.50 sq. yards (Sale deed no. 14721 dated 14 January 1986)

(5) Part of Plot No. 172 bearing M.C. No. B-XXII I-66/1 in Industrial Area-A, Ludhiana measuring 117.50 sq. yards (Sale deed no. 15516 dated 27 January 1986)

(6) Part of Plot No. 172 bearing M.C. No. B-XXIII-66/1 in Industrial Area-A, Ludhiana measuring 125 sq. yards (Sale deed no. 14722 dated 14 January 1986)

(7) Part of Plot No. 172 bearing M.C. No. B-XXIII-66/1 in Industrial Area-A, Ludhiana measuring 125 sq. yards (Sale deed no. 15517 dated 27 January 1986)

Personal guarantee Shri. Jawahar Lal Oswal Shri. Kamal Oswal Shri. Dinesh Oswal

Details of rate of interest, terms of repayment and security for Overdraft borrowings from banks:

Overdraft borrowings from Yes Bank is carrying interest rate of 0.40% over fixed deposit rate.

Primary security:

First pari-passu charge created on fixed deposits with Yes Bank.

Notes :

(1) The discount rate is based on the prevailing market yield of Indian Government bonds as at the balance sheet date for the estimated terms of obligations.

(2) The expected return is based on the expectation of the average long term rate of return on investments of the fund during the estimated terms of obligations.

(3) The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

(4) Plan assets mainly comprise funds managed by the insurer i.e. Life insurance corporation of India

(5) The Company makes annual contributions to the Life insurance corporation of India (''LIC'') of an amount advised by the LIC.

5 The Company is primarily engaged in the business of manufacturing/trading of textile garments. Accordingly, the entire operations of the Company are governed by the same set of risk and rewards and thus, it operates in a single primary segment. The Company is mainly operating in India which is considered to be the only reportable geographical segment. The disclosures as per the Accounting Standards (AS) 17 on Segment Reporting are not applicable to the Company.

6 Earnings per share

The calculation of Earnings Per Share (EPS) as disclosed in the Statement of Profit and Loss has been made in accordance with Accounting Standard (AS)-20 on “Earning Per Share”.

7 Leases

The Company has taken a number of office and factory facilities under operating leases. The lease rent expenses recognized during the year amounts to '' 113,254,806 (previous year Rs. 86,533,723). Expected future minimum lease payments under non-cancellable operating leases are as follows:

8 In accordance with the provisions of section 135 of the Companies Act 2013, the Board of Directors of the Company had constituted a Corporate Social Responsibility (CSR) Committee. In terms with the provisions of the said Act, the Company was to spend a sum of approx. Rs. 16,136,024 (previous year Rs. 15,162,060 approx.) towards CSR activities during the year ended 31 March 2016. The details of amount actually spent by the Company are:

9 Previous year figures have been regrouped/resisted, wherever considered necessary to make them comparable with those of the current year.


Mar 31, 2015

1. (All amounts in Rs. unless stated otherwise)

As at As at 31 March 2015 31 March 2014

Contingent liabilities

(i) Contingent liabilities:

(a) Claims against the Company not acknowledged as debt

Indirect tax litigations - As against these litigations, the Company has 502,759 502,759

deposited Rs. 230,998 (previous year Rs. 230,998) under protest. The Company is contesting these claims at various levels.

(b) Other money for which the Company is contingently liable 3,150,000

(ii) Capital commitments - Estimated amount of contracts remaining to be 46,007,228 70,663,743

executed on capital account and not provided for (net of advances and deposits)

2. The information required by paragraph 5 of general instructions for preparation of the statement of profit and loss as per revised schedule III of Companies Act, 2013

3. The Company is primarily engaged in the business of manufacturing/trading of textile garments. Accordingly, the entire operations of the Company are governed by the same set of risk and rewards and thus, it operates in a single primary segment. The Company is mainly operating in India which is considered to be the only reportable geographical segment. The disclosures as per the Accounting Standards (AS) 17 on Segment Reporting are not applicable to the Company.

4. As per the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm's length prices of transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the 'Study') to confirm that the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company's transactions are at arm's length and that the results of the proposed study will not have any impact on the financial statements and that they do not expect any transfer pricing adjustments.

5. The Company completed its Initial Public Offering (IPO) pursuant to which 5,433,016 equity shares of the Company of Rs. 10 each were allotted at a price of Rs. 645 per equity share through an offer for sale by the selling shareholders. This being an offer for sale, the IPO proceeds have been received by the selling shareholders and hence requirements to disclose utilisation of proceeds from IPO does not apply to the Company. The equity shares of the Company were listed on the National Stock Exchange Limited (NSE) and Bombay Stock Exchange of India Limited (BSE) on 19 December 2014.

6. In accordance with the provisions of section 135 of the Companies Act 2013, the Board of Directors of the Company had constituted a Corporate Social Responsibility (CSR) Committee. In terms with the provisions of the said Act, the Company was to spend a sum of Rs.15,162,060 towards CSR activities during the year ended 31 March 2015. The CSR Committee has been examining and evaluating suitable proposals for deployment of funds towards CSR initiatives. Pending examination and evaluation of such proposal, no amounts have been incurred on CSR initiative during the year. The management expects finalization of the proposals in due course.

7. Previous year figures have been regrouped/recasted, wherever considered necessary to make them comparable with those of the current year.

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