Notes to Accounts of Nagreeka Exports Ltd.

Mar 31, 2018

1. CAPITAL COMMITMENTS:

Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. NIL (Net of advances) (Previous Year Rs. NIL Lacs ).

2. CORPORATE SOCIAL RESPONSIBILITY :

As per Section 135 of the Companies Act 2013, a corporate social responsibility (CSR) committee has been formed by the Company. The Company is working primarily in the field of woman empowerment and promoting women education and tribal education. The funds were primarily transferred to the trust for the said purpose. “Amount to be spent on CSR : Rs. NIL “Amount actually spent on CSR : Rs.1,55,700/-.

3. CONTINGENT LIABILITIES NOT PROVIDED FOR

i. Bills discounted with Banks Rs. 2911.85 Lacs (Previous Year Rs. 3426.52 lacs).

ii. Bank Guarantees of Rs. 206.38 Lacs (Previous Year Rs. 158.11 lacs) issued in favour of Custom, Central Excise & Other Government Authorities.

iii. Disputed Statutory Dues :-

a) The Income Tax Assessment of the Company have been completed up to Assessment Year 2015-2016. Disputed Income Tax Liabilities for which appeal is pending before different appellate authorities for Assessment Year 20052006, 2006-2007, 2012-2013, 2013-2014 & 2014-2015 are Rs. 24.23 Lacs. (Previous Year Rs. 24.23 Lacs)

b) Disputed Sales Tax liability for which appeal is pending before Sales Tax authorities relating to financial year from 2009-2010 & 2011-2012 Rs. 80.13 Lacs. (Previous Year Rs. 93.17 Lacs)

c) Disputed Central Service Tax liability for which appeal is pending before different Service Tax authorities relating to financial year 2010-2011 is Rs. 3.71 Lacs (Previous Year Rs. 3.71 Lacs)

d) Disputed Custom Duty Liabilities for which appeal is pending before CESTAT, Kolkata relating to financial year 2013 2014 is Rs. 389.32 Lacs (Previous Year Nil)

NOTE : Based on the decision of the Appellate authorities and the interpretations of the other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

4. SEGMENT INFORMATION

(i) Business Segment: The Company''s business activity primarily falls within a single business segment i.e. textiles business and hence there are no disclosures to be made under Ind AS -108, other than those already provided in the financial statements.

(ii) Geographical Segment: The Company operates in multiple geographical area and therefore the analysis of geographical segment is based on the areas in which customers of the Company are located.

5. RELATED PARTIES WITH WHOM TRANSACTION HAVE TAKEN PLACE DURING THE YEAR

a) Key Management personnel''s

Shri Sushil Patwari: Chairman Shri Sunil Patwari: Managing Director Shri Mahendra Patwari: Whole Time Director Shri Debrata Das Choudhary : Whole Time Director

Shri Kedar Nath Bansal : Chief Financial Officer

Shri J. Tiwari: Company Secretary

Relatives of Key Management Personnel''s & Others :

Patwari Properties Smt. Minakshi Patwari Smt. Anita Patwari Shri Pratyush Patwari

Enterprises Owned/Influenced by Key Management Personnel or theit relative :

Nagreeka Capital & Infrastructure Ltd.

6. In previous year there was a fire at Bleaching & dyeing unit situated at Kagal (Maharastra) during March, 2017. The surveyor has submitted interim survey report and assessed the final loss of stock. In regards to loss of Plant & Machinery and other assets, the same is under process.

7. FINANCIAL INSTRUMENTS

The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.6 to the financial statements.

Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date;

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the asset or liability.

The investments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosure are required):

Notes:

i) The short-term financial assets and liabilities are stated at amortized cost which is approximately equal to their fair value.

ii) Unquoted Investments are stated at amortized cost which is approximately equal to their fair value.

iii) There have been no transfers between level 1 and level 2 for the years ended March 31, 2018 and 2017.

8. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company''s Capital Management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

The Company monitors capital using gearing ratio, which is total debt divided by total capital plus debt.

9.FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The Company has exposure to the following risks from financial instruments.

i) Market Risk

ii) Liquidity Risk

iii) Credit Risk

Market risk:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates & prices such as interest rates, foreign currency exchange rates or in the price of market risk-sensitive financial instruments. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus the company’s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

a) Currency Risk:

The company is exposed to currency risk to the extent that there is a mismatch between the currencies in which Export sales, Import purchase, other expenses and borrowings in foreign currency are denominated and the functional currency of the company. The functional currency of the company is Indian Rupees (INR). The currencies in which these transactions are primarily denominated are Euro and USD.

At any point in time, the Company generally hedges its estimated foreign currency exposure in respect of its forecast sales over the following 12 to 18 months. The company uses forward exchange contracts to hedge its currency risk. Such contracts are generally designated as cash flow hedges.

The Company as per its risk management policy uses foreign exchange forward contract and cross currency forward contracts primarily to hedge foreign exchange. The Company does not use derivative financial instruments for trading or speculative purposes.

Liquidity risk:

Liquidity risk is the riks that Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.

The company has obtained fund and non-fund based working capital loans from various banks. The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

CREDIT RISK:

Credit risk is the of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company receivables from customers and investments in debt securities, cash and cash equivalents, mutual funds, bonds etc.

The carrying amount of financial assets represents the maximum credit exposure.

Trade & Other receivables:

In case of sales, for major part of the sales, customer credit risk is managed by requiring domestic and export customers to open Letters of Credit before transfer of ownership, therefore substantially eliminating the Company’s credit risk in this respect.

Based on prior experience and an assessment of the current economic environment, management believes that no provision is required for credit risk where credit is extended to customers.

Management believes that the unimpaired amounts that are past due by more than 6 months are still collectible in full based on historical payment behavior.

Loans to Others:

The credit worthiness of the counter party is evaluated by the management on an ongoing basis and is considered to be good.

Investment in mutual funds:

The investment in mutual funds, are entered into with credit worthy fund houses. The credit worthiness of these counter parties are evaluated by the management on an on-going basis and is considered to be good. The Company does not expect any losses from these counter parties.

Cash and Cash equivalents:

Credit risk from balances with banks is managed by the Company in accordance with the company’s policy. Investment of surplus funds are made in mainly in mutual funds with good returns and within approved credit ratings.

Unquoted Investments:

"The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.

NOTES:

1 To comply with the Companies (Accounting Standard) Rules, 2006, certain account balances have been regrouped as per the format prescribed under Division II of Schedule III to the Companies Act, 2013.

2 Financial liabilities and related transaction costs:

Borrowings and other financial liabilities which were recognized at historical cost under previous GAAP have been recognized at amortized cost under IND AS with the difference been adjusted to opening retained earnings. Under previous GAAP, transaction costs incurred in connection with borrowings were amortized equally over the tenure of the borrowings. Under IND AS, transaction costs are deducted from the initial recognition amount of the financial liability and charged over the tenure of borrowing using the effective interest method.

3 Financial assets at amortized cost:

Certain financial assets held on with an objective to collect contractual cash flows in the nature of principal and interest have been recognized at amortized cost on transition date as against historical cost under the previous GAAP with the difference been adjusted to the opening retained earnings.

4 Other comprehensive income:

Under IND AS, all items of income and expense recognized in the period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss and “other comprehensive income” includes measurements of defined benefit plans, foreign currency monetary item translation difference account, effective portion of gains and losses on cash flow hedging instruments and fair value gain or losses on FVTOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.

10 Advances, Trade Payable and Trade Receivables are subject to confirmation from respective parties and consequential reconciliation / adjustment arising there from, if any. The management, however, does not expect any material variation. Provisions, wherever considered necessary, have been made.

11. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES THAT ARE NOT MEASURED AT FAIR VALUE:

The management consider that the carrying amounts of financial assets and liabilities recognized in the financial statements approximate their fair value as on 31st March 2017 and 1st April 2016

12. DETAILS OF LOANS AND GUARANTEES GIVEN COVERED UNDER SECTION 186(4) OF THE COMPANIES ACT, 2013:

The Company has made investments in the shares of different companies and given loans and advances to different parties which are general in nature. The loans given are interest bearing which are not lower than the prevailing yield of related government security close to the tenure of the respective loans. Further, the company has not given any guarantee or provided any security.

The Previous Year’s Figures has been regrouped /rearranged whenever necessary to confirm to the current year presentation.

The financial statements are approved by the audit committee at its meeting held on 25th May,2018 and by the Board of Directors on 26th May, 2018.

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Mar 31, 2016

1. COMPANY OVERVIEW:

The Company was incorporated on 6th March, 1989 under the laws of republic of India and has its registered office at Kolkata, West Bengal. The company is engaged in manufacturing and export of cotton yarn and other various merchandise. The shares of the company are listed in National Stock Exchange. Company has set up 100% export oriented unit with the state of art, Plant with manufacturing capacity of 55440 spindles at Kolhapur in Maharashtra. The company has also set up yarn dying and cotton bleaching plant at Kagal Kolhapur. The Company was also awarded International standard Organization certificate for export performance. The company’s marketing network is spread over in various countries. The Company is also doing trading of cotton yarn and various commodities. The company is Merchant exporter also.

i) Rupee Term loan from Canara Bank - Kolkata, Oriental Bank of Commerce - Kolkata and State Bank of Patiala - Mumbai is secured by

(a) an equitable mortgage ranking pari-passu inter-se by deposit of title deeds of all the immovable properties of the company both present and future, relating to its spinning unit premises at Village : Yavluj, District : Kolhapur, Maharastra and

(b) by way of hypothecation ranking pari-passu inter-se of all movable properties of the company both present and future including movable machineries, spares, tools & accessories (save & except book debts) subject to prior charges created or to be created in favour of the Company’s Bankers, on its stock of Raw Materials, finished goods, consumable stores, book debts & such other movables as may be specifically permitted by the institutions in writing, to secure borrowings for working capital requirements and

(c) Personal guarantee of some of the Directors of the Company.

ii) Rupee Term loan from Canara Bank - Kolkata is secured by

(a) an equitable mortgage ranking exclusive charges inter-se by deposit of title deeds of all the immovable properties of the company both present and future, relating to its Dying & Bleaching unit premises at Village : Kagal, District : Kolhapur, Maharastra

(b) all the existing securities for other regular limits will be available as co-lateral security on pari-passu basis

iii) Working Capital Term Loan from Canara Bank, Overseas Branch, Kolkata is secured by way of :

(a) hypothecation of stock of Raw materials, Work-in-process, finished goods and book debts relating to spinning unit at Village : Yavluj, District : Kolhapur, Maharastra and stock-in-trade at trading unit Kolkata,

(b) Second charge on immovable properties of the company relating to above mentioned spinning unit, and

(c) Personal guarantee of some of the Directors of the Company.

i) Working Capital Loan from Canara Bank, Overseas Branch, Kolkata & Mumbai , Oriental Bank of Commerce, Overseas Branch, Kolkata, Allahabad Bank, Industrial Finance Branch, Kolkata and State Bank of Patiala - Commercial Branch,Mumbai are secured by way of :

(a) First charge by way of hypothecation of stock of Raw materials, Work-in-process, finished goods and book debts relating to spinning unit at Village : Yavluj, District : Kolhapur, Maharastra, Dying & Bleaching unit premises at Village : Kagal, District : Kolhapur, Maharastra and stock-in-trade at trading unit Kolkata & Mumbai, both present and future in a form and manner satisfactory to the bank, ranking paripasu with each other participating working capital banks.

(b) Second charge on all the fixed assets of the company, both present and future ranking paripassu with each other participating working capital banks.

(c) Personal guarantee of some of the Directors of the Company.

i) The Company has not received any information from its suppliers regarding registration under “The Micro, Small and Medium Enterprises Developement Act, 2006.” Hence, the information required to be given in accordance with Section 22 of the said Act, is not ascertainable. Hence, not disclosed.

i) Based on the information/documents available with the Company, there was an unpaid dividend amounting to Rs. 2,80,529/ - due relating to (2007-2008) and outstanding as on 31st March, 2015 which has been transferred to Investors Education and Protection Fund under Section 125 of the Companies Act, 2013.

2. CAPITAL COMMITMENTS: Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 289.79 Lacs (Net of advances) (Previous Year Rs. NIL ).

3. CORPORATE SOCIAL RESPONSIBILITY : As per Section 135 of the Companies Act 2013, a corporate social responsibility (CSR) committee has been formed by the Company. The Company is working primarily in the field of woman empowerment and promoting women education and tribal education. The funds were primarily transferred to the trust for the said purpose. Amount to be spent on CSR : Rs. 14,02,650/Amount actually spent on CSR : Rs. 15,03,000/-.

4. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

i. Bills discounted with Banks Rs. 2411.07 Lacs (Previous Year Rs. 2669.52 lacs).

ii. Bank Guarantees of Rs. 325.15 Lacs (Previous Year Rs. 325.15 lacs) issued in favour of Custom, Central Excise & Other Government Authorities.

iii. Disputed Statutory Dues :-

a) a) The Income Tax Assessment of the Company have been completed up to Assessment Year 2013-2014. Disputed Income Tax Liabilities for which appeal is pending before different appellate authorities for Assessment Year 2005-2006, 2006-2007, 2010-2011 & 2011-2012 are Rs. 332.85 Lacs

b) Disputed Sales Tax liability for which appeal is pending before Sales Tax authorities relating to financial year from 2009-2010 is Rs. 40.29 Lacs

c) Disputed Central Service Tax liability for which appeal is pending before different Service Tax authorities relating to financial year 2010-2011 is Rs. 3.71 Lacs

Based on the decision of the Appellate authorities and the interpretations of the other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

5. As per Accounting Standard 28 issued by the Institute of Chartered Accountants of India, the Company has assessed recoverable value of generating unit based on value in used method which has worked out to be much higher than corresponding book value of net assets thereby not warranting further exercise of arriving at their net selling price. This further confirms absence of exigency of making any provision for impairment of asset(s)

6 The Company has only one business segment i.e. Textiles and thus no further disclosure are required in accordance with Accounting Standard 17 notified by Companies (Accounting Standards) Rules, 2006 (As amended) of Companies Act, 2013.

7. The Previous Year figures has been re-grouped / re-arranged wherever necessary to conform to the current year presentation

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Mar 31, 2015

1. CAPITAL COMMITMENTS: Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. NIL (Net of advances) (Previous Year Rs. 160.19 Lacs ).

2. CORPORATE SOCIAL RESPONSIBILITY : As per Section 135 of the Companies Act 2013, a corporate social responsibility (CSR) committee has been formed by the Company. The Company is working primarily in the field of woman empowerment and promoting women education and tribal education. The funds were primarily transferred to the trust for the said purpose. Amount to be spent on CSR : Rs. 11,81,481/-, Amount actually spent on CSR : Rs. 15,03,000/-.

3. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

i. Bills discounted with Banks Rs. 2669.52 Lacs (Previous Year Rs. 7197.21 lacs).

ii. Bank Guarantees of Rs. 325.15 Lacs (Previous Year Rs. 305.55 lacs) issued in favour of Custom, Central Excise & Other Government Authorities.

iii. Disputed Statutory Dues :

a) The Income Tax Assessment of the Company have been completed up to Assessment Year 2013-2014. Disputed Income Tax Liabilities for which appeal is pending before different appellate authorities for Assessment Year 2000-2001, 2005-2006, 2006-2007, 2010-2011 & 2011-2012 are Rs. 344.84 Lacs.

b) Disputed Central Excise liability for which appeal is pending before different excise authorities relating to financial year from 2005-2006 is Rs. 27.13 Lacs.

c) Disputed Central Service Tax liability for which appeal is pending before different Service Tax authorities relating to financial year from 2004-2005, 2005-2006 & 2009-2010 is Rs. 15.15 Lacs.

Based on the decision of the Appellate authorities and the interpretations of the other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

4. As per Accounting Standard 28 issued by the institute of Chartered Accountants of India, the company has assessed recoverable value of generating unit based on value in used method which has worked out to be much higher than corresponding book value of net assets thereby not warranting further exercise of arriving at their net selling price. This further confirms absence of exigency of making any provision for impairment of asset(s)

5. The Company has only one business segment i.e. Textiles and thus no further disclosure are required in accordance with Accounting Standard 17 notified by Companies (Accounting Standards) Rules, 2006 (As amended) of the Companies Act, 1956.

6. The Previous Year figures has been re-grouped / re-arranged wherever necessary to conform to the current year presentation.

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Mar 31, 2014

1. COMPANY OVERVIEW:

The Company was incorporated on 6th March, 1989 under the laws of republic of India and has its registered office at Kolkata, West Bengal. The company is engaged in manufacturing and export of cotton yarn and other various merchandise. The shares of the company are listed in National Stock Exchange. Company has set up 100% export oriented unit with the state of art, Plant with manufacturing capacity of 55440 spindles at Kolhapur in Maharashtra. The company has also set up yarn dying and cotton bleaching plant at Kagal Kolhapur. The Company was also awarded International standard Organization certificate for export performance. The company''s marketing network is spread over in various countries. The Company is also doing trading of cotton yarn and various commodities. The company is Merchant exporter also.

2. i) Rupee Term loan from Canara Bank - Kolkata, Oriental Bank of Commerce - Kolkata and State Bank of Patiala - Mumbai is secured by

(a) an equitable mortgage ranking pari passu inter-se by deposit of title deeds of all the immovable properties of the company both present and future, relating to its spinning unit premises at Village : Yavluj, District : Kolhapur, Maharastra and

(b) by way of hypothecation ranking pari passu inter-se of all movable properties of the company both present and future including movable machineries, spares, tools & accessories (save & except book debts) subject to prior charges created or to be created in favour of the Company''s Bankers, on its stock of Raw Materials, finished goods, consumable stores, book debts & such other movables as may be specifically permitted by the institutions in writing, to secure borrowings for working capital requirements and

(c) Personal guarantee of some of the Directors of the Company.

ii) Working Capital Term Loan from Canara Bank, Overseas Branch, Kolkata is secured by way of :

(a) hypothecation of stock of Raw materials, Work-in-process, finished goods and book debts relating to spinning unit at Village : Yavluj, District : Kolhapur, Maharastra and stock-in-trade at trading unit Kolkata,

(b) Second charge on immovable properties of the company relating to above mentioned spinning unit, and

(c) Personal guarantee of some of the Directors of the Company.

iii) For the above loan a securitisation agreement entered in between the Company, AXIS Bank Limited and the above lenders.

iV) Rupee Term loan from Canara Bank - Kolkata is secured by

(a) an equitable mortgage ranking exclusive charges inter-se by deposit of title deeds of all the immovable properties of the company both present and future, relating to its Dying & Bleaching unit premises at Village : Kagla, District : Kolhapur, Maharastra

(b) all the excisting securities for other regular limits will be available as co-lateral secutiry on pari pasu basis

3. i) Working Capital Loan from Canara Bank, Overseas Branch, Kolkata & Mumbai , Oriental Bank of Commerce, Overseas Branch, Kolkata, Allahabad Bank, Industrial Finance Branch, Kolkata, State Bank of Patiala - Commercial Branch,Mumbai and ICICI Bank Limited, Kolkata are secured by way of :

(a) First charge by way of hypothecation of stock of Raw materials, Work-in-process, finished goods and book debts relating to spinning unit at Village : Yavluj, District : Kolhapur, Maharastra and stock-in-trade at trading unit Kolkata, both present and future in a form and manner satisfactory to the bank, ranking pari pasu with each other participating working capital banks.

(b) Second charge on all the fixed assets of the company, both present and future ranking pari pasu with each other participating working capital banks.

(c) Personal guarantee of some of the Directors of the Company.

4. CAPITAL COMMITMENTS:

Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 160.19 Lacs (Net of advances) (Previous Year Rs. 6.09 Lacs ).

5. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

i. Bills discounted with Banks Rs. 7197.21 Lacs (Previous Year Rs. 5403.55 lacs).

ii. Bank Guarantees of Rs. 305.55 Lacs (Previous Year Rs. 426.47 lacs) issued in favour of Custom, Central Excise & Other Government Authorities.

iii. Disputed Statutory Dues :-

a) The Income Tax Assessment of the Company have been completed up to Assessment Year 2011-2012. Disputed Income Tax Liabilities for which appeal is pending before different appellate authorities for Assessment Year 2000-2001, 2005-2006, 2006-2007 ,2008-2009, 2010-2011 & 2011-2012 are Rs. 445.99.

b) Disputed Central Excise liability for which appeal is pending before different excise authorities relating to financial year from 2005-2006 is Rs. 27.13 Lacs.

c) Disputed Central Service Tax liability for which appeal is pending before different Service Tax authorities relating to financial year from 2004-2005, 2005-2006 & 2009-2010 is Rs. 25.15 Lacs.

Based on the decision of the Appellate authorities and the interpretations of the other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

6. As per Accounting Standard 28 issued by the institute of Chartered Accountants of India, the company has assessed recoverable value of generating unit based on value in used method which has worked out to be much higher than corresponding book value of net assets thereby not warranting further exercise of arriving at their net selling price. This further confirms absence of exigency of making any provision for impairment of asset(s)

7. The Previous Year figures has been re-grouped / re-arranged wherever necessary to conform to the current year presentation

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Mar 31, 2013

1. COMPANY OVERVIEW :

The company was incorporated on 6th March, 1989 under the laws of republic of india and has its registered office at kolkata,West bengal. The company is engaged in manufacturing and export of cotton yarn and other various merchandise. The shares of the company are listed in National stock exchange and Bombay stock exchange. Company has set up 100% export oriented unit with the state of art, Plant with export capacity of 55440 spindles at Kolhapur in Maharashtra. The Company was also awarded International standard organization certificate for export performance. The Company''s marketing network is spread over in various countries. The Company also doing trading of cotton yarn and various commodities. The Company is merchant exporter also. The Company has taken up for setting of yarn deying and cotton bleaching plant at Kolhapur.

2. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

i. Bills discounted with Banks Rs. 5403.55 Lacs (Previous Year Rs. 4199.76 lacs).

ii. Bank Guarantees of Rs. 426.47 Lacs (Previous Year Rs. 371.37 lacs) issued in favour of Custom, Central Excise & Other Government Authorities. in Disputed Statutory Dues :-

a) The Income Tax Assessment of the Company have been completed up to Assessment Year 2010-2011. Disputed ''Income Tax Liabilities for which appeal is pending before different appellate authorities for Assessment Year 2000- 2001, 2005-2006, 2006-2007, 2008-2009 & 2010-2011 are Rs. 269.61.

b) Disputed Central Excise liability for which appeal is pending before different excise authorities relating to financial year from 2005-2006 is Rs. 27.13 Lacs.

c) Disputed Central Service Tax liability for which appeal is pending before different Service Tax authorities relating to financial year from 2004-2005, 2005-2006 & 2009-2010 is Rs. 25.15 Lacs.

Based on the decision of the Appellate authorities and the interpretations of the other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made,

3. As per Accounting Standard 28 issued by the institute of Chartered Accountants of India, the company has assessed recoverable value of generating unit based on value in used method which has worked out to be much higher than corresponding book value of net assets thereby not warranting further exercise of arriving at their net selling price. This further confirms absence of exigency of making any provision for impairment of asset(s).

4. The Company has only one business segment i.e. Textiles and thus no further disclosure are required in accordance with Accounting Standard 17 notified by companies ( Accounting Standards) Rules, 2006 ( As amended) of the Companies Act, 1956.

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Mar 31, 2012

1. COMPANY OVERVIEW :

The company was incorporated on 6th March, 1989 under the laws of republic of india and has its registered office at kolkata,West bengal. The company is engaged in manufacturing and export of cotton yarn and other various merchandise. The shares of the company are listed in National stock exchange and Bombay stock exchange. Company has set up 100% export oriented unit with the state of art, Plant with export capacity of 55440 spindles at Kolhapur in Maharashtra. The Company was also awarded International standard organization certificate for export performance. The Company's marketing network is spread over in various countries. The Company also doing trading in export of cotton yarn arid various commodities. The Company is merchant exporter also. The Company has taken up for setting of yarn deying and cotton bleaching plant at Kolhapur.

i) Rupee Term loan from Canara Bank - Kolkata, Oriental Bank of Commerce - Kolkata and State Bank of Patiala - Mumbai is secured by

(a) an equitable mortgage ranking pari passu inter-se by deposit of title deeds of all the immovable properties of the company both present and future, relating to its spinning unit premises at Village : Yavluj, District : Kolhapur, Maharastra and

(b) by way of hypothecation ranking pari passu inter-se of all movable properties of the company both present and future including movable machineries, spares, tools & accessories (save & except book debts) subject to prior charges created or to be created in favour of the Company's Bankers, on its stock of Raw Materials, finished goods, consumable stores, book debts & such other movables as may be specifically permitted by the institutions in writing, to secure borrowings for working capital requirements and

(c) Personal guarantee of some of the Directors of the Company.

iii) Working Capital Term Loan from Canara Bank, Overseas Branch, Kolkata is secured by way of :

(a) hypothecation of stock of Raw materials, Work-in-process, finished goods and book debts relating to spinning unit at Village : Yavluj, District : Kolhapur, Maharastra and stock-in-trade at trading unit Kolkata,

(b) Second charge on immovable properties of the company relating to above mentioned spinning unit, and

(c) Personal guarantee of some of the Directors of the Company.

i) Working Capital Loan from Canara Bank, Overseas Branch, Kolkata & Mumbai , Oriental Bank of Commerce, Overseas Branch, Kolkata, Allahabad Bank, Industrial Finance Branch, Kolkata, State Bank of Patiala - Commercial Branch,Mumbai and ICICI Bank Limited, Kolkata are secured by way of :

(a) First charge by way of hypothecation of stock of Raw materials, Work-in-process, finished goods and book debts relating to spinning unit at Village : Yavluj, District: Kolhapur, Maharastra and stock-in-trade at trading unit Kolkata, both present and future in a form and manner satisfactory to the bank, ranking pari pasu with each other participating working capital banks.

(b) Second charge on all the fixed assets of the company, both present and future ranking pari pasu with each other participating working capital banks.

(c) Personal guarantee of some of the Directors of the Company.

ii) Previous Year working Capital Loan includes working capital loan from ING Vysya Bank Limited, Overseas Branch, Mumbai was secured by way of:

(a) hypothecation of stock of raw materials, work in process, Finished goods, book debts relating to spinning unit at Village : Yavluj, District : Kolhapur, Maharastra and

(b) second charge on immovable Properties of the Company relating to above mentioned spinning unit and

(c) Personal guarantee of some of the Directors of the Company.

i) The Company Has not received any information its suppliers regarding registration under "The Micro, Small and Medium Enterprises Development Act, 2006 " Hence, the information required to be given in accordance section 12 of the said Act, is not ascertainable. Hence, not disclosed.

ii) The Company has also computed and made necessary provisions on account of leave encashment benefits based on acturial valuation as per accounting standard - 15 (Revised) "Employee Benefits" The total service eligibility as per the company's leave rules are estimated and provided in Ihe books as a revenue expenditure after making adjustment towards the benefit paid on this benefit obligation were carried out at 31st March 2012

2 CAPITAL COMMITMENTS :

Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 2948.91 Lacs (Net of advances) (Previous Year Rs. Nil Lacs).

3CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

i. Bills discounted with Banks Rs. 4199.76 Lacs (Previous Year Rs. 5918.49 lacs).

ii. Bank Guarantees of Rs. 371.37 Lacs (Previous Year Rs. 341.70 lacs) issued in favour of Custom, Central Excise & Other Government Authorities.

iii. Disputed Statutory Dues

a) The Income Tax Assessment of the Company have been completed up to Assessment Year 2009-2010. Disputed Income Tax Liabilities for which appeal is pending before different appellate authorities for Assessment Year 2000- 2001, 2005-2006, 2006-2007 & 2008-2009 are Rs. 328.78.

b) Disputed Central Excise liability for which appeal is pending before different excise authorities relating to financial year from 2005-2006 is Rs. 27.13 Lacs.

c) Disputed Central Service Tax liability for which appeal is pending before different Service Tax authorities relating to financial year from 2004-2005, 2005-2006 & 2009-2010 is Rs. 25.15 Lacs.

Based on the decision of the Appellate authorities and the interpretations of the other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

4. As per Accounting Standard 28 issued by the institute of Chartered Accountants of India, the company has assessed recoverable value of generating unit based on value in used method which has worked out to be much higher than corresponding book value of net assets thereby not warranting further exercise of arriving at their net selling price. This further confirms absence of exigency of making any provision for impairment of asset(s).

5. The financial statements for the year ended March 31,2011 had been prepared as per applicable, pre-revised schedule VI to the companies Act, 1956. Consequent to the notification of Revised schedule VI under the Companies Act. 1956, the financial statements for the year ended March 31,2012 are prepared as per revised Schedule VI. Accordingly the previous year figures have also been classified to confirm to this year classification. The adoption of revised Schedule VI for previous year figures does not impact recognition and measurement principle followed for preparation of financial statements.

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Mar 31, 2010

1. CAPITAL COMMITMENTS : Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. Nil (Net of advances) (Previous Year Rs. 185.00 Lacs).

2. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

i. Bills discounted with Banks Rs. 5484.31 Lacs (Previous Year Rs. 2060.47 lacs).

ii. Bank Guarantees of Rs. 144.70 lacs (Previous year Rs. 138.50 lacs) issued in favour of Custom, Central Excise &

Other Government Authorities. iii. Disputed Statutory Dues :-

a) The Income Tax Assessment of the Company have been completed up to Assessment Year 2007-2008. Disputed Income Tax Liabilities for which appeal is pending before different appellate authorities for Assessment Year 2000-2001 & 2006-2007 is Rs. 43.59 lacs.

b) Disputed Sales Tax Liability for which appeal is pending before Maharashtra Sales Tax Appellate Tribunal for Financial Year 1998-1999 is Rs. 7.01 lacs.

c) Disputed Central Excise liability for which appeal is pending before different excise authorities relating to financial year from 2005-2006 to 2008-2009 is Rs. 75.61 Lacs.

Based on the decision of the Appellate authorities and the interpretations of the other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

d) Disputed liability on account of custom duty, current fees and interest thereon Rs. 25.59 Lacs has not been provided for as the Company has not acknowledged the debts.

3. SECURED LOAN :

i. Rupee Term loan from Canara Bank - Kolkata, Oriental Bank of Commerce - Kolkata and State Bank of Patiala - Mumbai is secured by

(a) an equitable mortgage ranking pari passu inter-se by deposit of title deeds of all the immovable properties of the company both present and future, relating to its spinning unit premises at Village : Yavluj, District : Kolhapur, Maharastra and

(b) by way of hypothecation ranking pari passu inter-se of all movable properties of the company both present and future including movable machineries, spares, tools & accessories (save & except book debts) subject to prior charges created or to be created in favour of the Companys Bankers, on its stock of Raw Materials, finished goods, consumable stores, book debts & such other movables as may be specifically permitted by the institutions in writing, to secure borrowings for working capital requirements and

(c) personal guarantee of some of the Directors of the Company.

ii. Working Capital Term Loan from Canara Bank, Overseas Branch, Kolkata is secured by way of :

(a) hypothecation of stock of Raw materials, Work-in-process, finished goods and book debts relating to spinning unit at Village : Yavluj, District: Kolhapur, Maharastra and stock-in-trade at trading unit Kolkata,

(b) Second charge on immovable properties of the company relating to above mentioned spinning unit, and

(c) personal guarantee of some of the Directors of the Company.

iii. Working Capital Loan from Canara Bank, Overseas Branch, Kolkata and Mumbai and Oriental Bank of Commerce, Overseas Branch, Kolkata are secured by way of :

(a) hypothecation of stock of Raw materials, Work-in-process, finished goods and book debts relating to spinning unit at Village : Yavluj, District : Kolhapur, Maharastra and stock-in-trade at trading unit Kolkata,

(b) Second charge on immovable properties of the company relating to above mentioned spinning unit, and

(c) personal guarantee of some of the Directors of the Company.

iv. Working Capital Loan from ING Vysya Bank Limited, Overseas Branch, Mumbai is secured by way of:

(a) hypothecation of stock of raw materials, work in process, Finished goods, book debts relating to spinning unit at Village : Yavluj, District: Kolhapur, Maharastra and

(b) Second charge on immovable Properties of the Company relating to above mentioned spinning unit, and

(c) personal guarantee of some of the Directors of the Company.

v. For the above loan a securitisation agreement entered in between the Company, AXIS Bank Limited and the above lenders.

vi. Term Loans repayable within one year Rs. 606.96 lacs (previous year Rs. 160.00 lacs). vii. Working Capital Term Loan repayable withing one year Rs. Nil.

4. Sales is net of Foreign Exchange difference Debit (Net) Rs. 7.88 lacs (Previous year Debit Rs 0.13 lacs.)

5. a) Sundry creditors includes outstanding dues to SSI undertakings amounting to Rs. 4,74,153/- (Previous year Rs. 4,34,645/-) and no dues are outstanding for more than 30 days. b) The Company has not received any information from its suppliers regarding registration under "The Micro, Small and Medium Enterprises Development Act, 2006." Hence the information required to be given in accordance with section 22 of the said Act, is not ascertainable. Hence, not disclosed.

6. Based on the information/documents available with the Company, there was no amount due and outstanding as on 31st March, 2010 which is to be transferred to Investors Education and Protection Fund under Section 205C of the Companies Act, 1956.

7. As per Accounting Standard 28 issued by the Institute of Chartered Accountants of India, the company has assessed recoverable value of generating unit based on value in used method which has worked out to be much higher than corresponding book value of net assets thereby not warranting further exercise of arriving at their net selling price. This further confirms absence of exigency of making any provision for impairment of asset(s).

8. Derivative Instruments

In view of notification Number G.S.R 225 (E) dated 31st March, 2010 issued by Ministry of Company Affairs, the Company opted to adjust the exchange differences arising on reporting of long term foreign exchange monetary items. Pursuant to exercise of aforesaid option the Company has debited Rs. 154.44- Lacs to "Foreign currency monetary item Transaction difference Account" that will amortised over the exercise of the option but not beyond 31st March, 2011.

The Company has also computed and made necessary provisions on account of leave encashment benefits based on acturial valuation as per Accounting Standard - 15 (Revised) "Employee Benefits". The total service eligibility as per the Companys leave rules are estimated and provided in the books as a revenue expenditure after making adjustment towards the benefit paid on this benefit obligation were carried out at 31st March, 2010.

Note : 1) Cotton Yarn production includes 3,19,687 Kgs (Previous Year 5,42,973 Kgs) and Knitted Fabrics Production includes Nil Kgs (Previous year 76 kgs) inter department transfer. 2) Shortage of Raw Cotton during the year Nil MT (Previous year 6 MT) and Cotton Yarn Nil Kgs (Previous Year 103 kgs).

Note : a) There is no doubtful debts as on 31.03.2010 hence no provision is made.

b) There is no amounts written off or written back during the year in respect of debts due from or to related parties.

9. Previous year figures have been regrouped and/or rearranged wherever necessary.