Notes to Accounts of Pasari Spinning Mills Ltd.

Mar 31, 2015

1. The Company was incorporated on 25th November' 1991, vide CIN: L85110KA1991PLC012537, to carry on the business of Textile , Spinning, Weaving, Dying and Printing factories, conventional or modern using cotton, silk, wool, polyester fiber.

2. The Company has discontinued its production operations from the financial year 2010-11. The Company has no intention to continue the production operations henceforth and has decided to lease out the Factory premises. The Company has not made any sales during the current year.

3. During the year, the company involved in buying and

selling of shares of other companies through share market which is not the main objects of the business of the Company for which it was incorporated.

4. Claims against the Company not acknowledged as debts:

The Company purchased Cotton from the Cotton Corporation of India and paid an advance for the same but Cotton Corporation supplied poor quality of material due to which, the Company has raised a demand Rs,180 for the price difference which was litigated by Cotton Corporation and the matter is under arbitration.

5. The Loans and Advances of Rs.50,38,879/- paid to cotton suppliers is in dispute pertaining to earlier years.

6. During the year, the Company has given an amount of Rs. 30,34,000/- and M/s. Pasari Exports Limited has paid certain expenses for Rs. 4,62,889/- on behalf of M/s. Pasari Spinning Mills Limited. The transactions have been covered under related parties and M/s. Pasari Exports Limited holds more than 50% of the shareholding of M/s. Pasari Spinning Mills.

7. The Company has taken interest free unsecured loans from M/s. Pasari Exports Limited a company under the same management and the amount outstanding as on the date of reporting is Rs 2,10,46,553/- which has been classified under Current and Non-current in the financials based on the nature of the transactions.

8. In the absence of details received from suppliers, no

disclosures have been made under the provisions of Micro, Small and Medium Enterprises Development Act, 2006.

9. The Commercial Tax Authorities have raised a demand

including interest and penalty thereon for an amount of Rs,1,80,16,068/- payable in 5 installments of six months each as per the payment schedule prescribed in the order. The Company has not paid any of the said installments as demanded and went in appeal with Hon'ble BIFR for setting off the same. The matter is pertaining to earlier years which is pending for 8 years.

10. No provision has been made in the accounts for Employee Benefits as per AS-15 issued by the Institute of Chartered Accountants of India (ICAI).

11. No provision has been made in the accounts towards depletion in the market value of Investment. This matter is pertaining to earlier years.

12. The Company has received notice from CESCOM for an amount of Rs,28,43,845/- as back billing for which no provision is created in the Books, since the Company is disputing the same with the CESCOM authorities. This matter is pertaining to earlier years.

13. Licensed, Installed Capacity & Production:

Company has stopped its production and all the Plant and machinery are sold by the company.

14. Managerial Remuneration:

a. Remuneration paid to the Whole time Director according to Schedule V of the Companies Act, 2013 is as follows:

b. No employee was in receipt of remuneration beyond the limits prescribed under section 134 of the Companies Act, 2013.

15. Auditor's Remuneration:

Auditor's remuneration

includes: 2014-15 2013-14

a. As Auditors Rs, 50,000/- Rs, 50,000/-

16. Related Party Transaction:

a) Name : Pasari Exports Ltd

b) Name : TKR Textiles Pvt Ltd

Description of Relationship : Two of the Directors of the Company are also the Directors of TKR Textiles Pvt. Ltd

17. Deferred Taxation:

In accordance with Accounting Standard-22, "Accounting for Taxes on income" and the pronouncement issued by the Institute of Chartered Accountants of India, the company has accounted for deferred tax during the year. Major components of deferred tax assets/(Liabilities) are detailed below:

18. The Company has also reclassified /regrouped the previous year figures in accordance with the requirements applicable to the Current year data for the purpose of comparison.

19. Figures have been rounded off to the nearest rupee.

20. Contingent Liabilities as on 31.03.2015: Nil

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Mar 31, 2014

(A) OTHER DISCLOSURES:

1. The Company has discontinued its production operations from the end of June 2011, during the year and sold the entire machineries and Electrical equipments. The Company has no intention to continue the production operations henceforth and has decided to lease out the Factory premises. However, the Company continues its Trading Activities.

2. Claims against the Company not acknowledged as debts:

The Cotton Corporation of India : Rs.180 Lakhs pertaining to earlier years.

Price difference and interest on purchase of cotton aggregating to ''180 Lakhs is disputed by the Company and the matter is before arbitration pertaining to earlier years.

3. Loans and Advances of Rs.50,38,879/- paid to cotton suppliers is in dispute pertaining to earlier years.

4. In the absence of details received from suppliers, no disclosures have been made under the provisions of Micro, Small and Medium Enterprises Development Act, 2006.

5. The Commercial Tax Authorities have raised a demand including interest and penalty thereon for an amount of ''1,80,16,068/- payable in 5 installments of six months each as per the payment schedule prescribed in the order. The Company has not paid any of the said installments as demanded and went in appeal with Hon''ble BIFR for setting off the same. The matter is pending. This matter is pertaining to earlier years.

6. No provision has been made in the accounts for Employee Benefits as per AS-15 issued by the Institute of Chartered Accountants of India (ICAI).

7. No provision has been made in the accounts towards depletion in the market value of Investment. This matter is pertaining to earlier years

8. The Company has received notice from CESCOM for an amount of ''28,43,845/- as back billing for which no provision is created in the Books, since the Company is disputing the same with the CESCOM authorities. This matter is pertaining to earlier years

9. LICENSED, INSTALLED CAPACITY & PRODUCTION:

Company has stopped it production and all the Plant and machinery are sold by the company.

10. MANAGERIAL REMUNERATION:

b. No employee was in receipt of remuneration beyond the limits prescribed under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

11. RELATED PARTY DISCLOSUER AS PER AS – 18:

a) Name : PASARI EXPORTS LTD

b) Description of Relationship : Common Directors and major share holder

c) Description and Nature of Transaction : Financial Assistance Received.

d) Volume of Transaction :

i) Unsecured Loan Received during Current Year : Rs.11,71,186 /-

ii) Unsecured Loan Paid during Current Year : Rs. 14,832 /-

a) Name : TKR TEXTILES PVT LTD

b) Description of Relationship : Two of the Directors of the Company are also the Directors of TKR Textiles Pvt. Ltd

c) Description and Nature of Transaction : Loans and Advances to TKR Textile Pvt Ltd.,

We have not recognized any deferred tax for the current year.

12. The Revised Schedule VI notified under Companies Act 1956 has become applicable to the Company for the year ended 31st March 2012 for preparation and presentation of its Financial Statements. The Adoption of the revision does not impact recognition and measurement principles followed by the company in preparing the Financials. The Company has also reclassified /regrouped the previous year figures in accordance with the requirements applicable to the Current year data for the purpose of comparison.

13. Figures have been rounded off to the nearest rupee.

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Mar 31, 2013

1. The Company has discontinued its production operations from the end of June, 2011, during the year and sold the entire machineries and Electrical Equipments. The company has no intention to continue the production operations henceforth and has decided to lease out the factory premises. However, the company continues its trading activities.

2. Claims against the company not acknowledged as debts:

The Cotton Corporation of India: Rs.180 lakhs

Price difference and interest on purchase of cotton aggregating to Rs.180 lakhs is disputed by the company and the matter is before Arbitration.

3. Loans and advances Rs.50,38,879 paid to the cotton suppliers which is in dispute.

4. In the absence of details received from the suppliers, no disclosures have been made under the Provisions of Micro, Small and Medium Enterprises Development Act, 2006.

5. The Commercial Tax Authorities have raised a demand including interest and penalty thereon for an amount of Rs.1,80,16,068/- payable in five installments of six months each, as per the payment schedule prescribed in the order. The Company has not paid any of the said installments as demanded and went in appeal with Hon''ble BIFR for setting off the same. The matter is pending.

6. No Provision has been made in the accounts for Employee Benefits as per AS-15 issued by the Institute of Chartered Accountants of India (ICAI).

7. No provision has been made in the accounts towards depletion in the Market Value of Investment.

8. The Company has received notice from CESCOM for an amount of Rs.28, 43,845 as back billing for which no provision is created in the books. Since the company is disputing the same with the CESCOM authorities.

9. LICENSED, INSTALLED CAPACITY & PRODUCTION:

Company has stopped it production and all the Plant and machinery are sold by the company.

10. AUDITOR''S REMUNERATION:

Auditor''s remuneration includes:

a. As Auditors : Rs. 60,000

b. For expenses : Rs.

c. Service Tax : Rs. 7,416 Total : Rs. 67,416

14. RELATED PARTY DISCLOSURE AS PER AS- 18

1. a) Name : PASARI EXPORTS LTD

b) Description of Relationship : Common Directors and major share holder

c) Description and Nature of Transaction :

i) Financial Assistance Received.

d) Volume of transaction:

i) Unsecured Loan Received during Current Year : Rs. 50,00,169 /-

ii) Unsecured Loan Paid during Current Year : Rs. 29,54,000 /-

2. a) Name : TKR TEXTILES PVT LTD

b) Description of Relationship : Two of the Directors of the Company are also the Directors of TKR Textiles Pvt. Ltd

c) Description and Nature of Transaction : Loans and Advances to TKR Textile Pvt Ltd.,

11. DEFERRED TAXATION

In accordance with Accounting Standard-22, "Accounting for Taxes on income" and the pronouncement issued by the institute of chartered Accountants of India, the company has accounted for deferred tax during the year. Major components of deferred tax assets/(Liabilities) are detailed below:

12. The Revised Schedule VI notified under Companies Act 1956 has become applicable to the Company for the year ended 31st March 2013 for preparation and presentation of its Financial Statements. The Adoption of the revision does not impact recognition and measurement principles followed by the company in preparing the Financials. The Company has also reclassified /regrouped the previous year figures in accordance with the requirements applicable to the Current year data for the purpose of comparison.

13. Figures have been rounded off to the nearest rupee.

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Mar 31, 2012

1. The Company has discontinued its production operations from the end of June, 2011, during the year and sold the entire machineries and Electrical Equipments except two machineries pending for sale. The company has no intention to continue the production operations henceforth and has decided to lease out the factory premises. However, the company continues its trading activities.

2. Claims against the company not acknowledged as debts:

The Cotton Corporation of India: Rs. 180 lakhs

Price difference and interest on purchase of cotton aggregating to Rs.180 lakhs is disputed by the company and the matter is before Arbitration.

3. Loans and advances Rs. 50,38,879 paid to the cotton suppliers which is in dispute.

4. Advance received from Madanapalli Spinning Ltd., is adjusted against sales of Cotton Yarn and the Balance Amount Rs. 19,28,851/- is considered as Interest free advance from the Party, as the Company has stopped the business Operations during the year.

5. In the absence of details received from the suppliers, no disclosures have been made under the Provisions of Micro, Small and Medium Enterprises Development Act, 2006.

6. The Commercial Tax Authorities have raised a demand including interest and penalty thereon for an amount of Rs. 1,80,16,068/- payable in five installments of six months each, as per the payment schedule prescribed in the order. The Company has not paid any of the said installments as demanded and went in appeal with Hon'ble BIFR for setting off the same. The matter is pending.

7. No Provision has been made in the accounts for Employee Benefits as per AS-15 issued by the Institute of Chartered Accountants of India (ICAI).

8. No provision has been made in the accounts towards depletion in the Market Value of Investment.

9. MANAGERIAL REMUNERATION:

a. No employee was in receipt of remuneration beyond the limits prescribed under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

10. The Revised Schedule VI notified under Companies Act 1956 has become applicable to the Company for the year ended 31st March 2012 for preparation and presentation of its Financial Statements. The Adoption of the revision does not impact recognition and measurement principles followed by the company in preparing the Financials. The Company has also reclassified/regrouped the previous year figures in accordance with the requirements applicable to the Current year data for the purpose of comparison.

11. Figures have been rounded off to the nearest rupee.

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Mar 31, 2010

1. CLAMS-AGAINSTTHE COMPANY NOT ACKNOWLEDGED AS DEBTS:

The Cotton Corporation of India: Rs.180 lakhs Price difference and interest on purchase of cotton aggregating to Rs,180 lafchs is disputed by the company and the matter is before Arbitration.

2. Nd confirmation of balance has been obtained in respect of Debtors, Creditors and other advances.

3. toarts and advances includes Rs.50,38,879 paid to the cotton suppliers which is in dispute.

4. Based on the information available with the management, the company does not owe any sum to a small scale industrial undertaking as defined in clause (j) to section 3 of the Industries (Development and Regulation) Act,1951.

5. In the absence of details received from the suppliers, no disclosure have been made under the Provisions of Micro, Small and Medium Enterprises Development Act, 2006.

6. Against the aggregate demand of Rs.1,75,47,888 raised by the Commercial Tax Authorities for the years 93-94 to 2003-04 the Company has so far paid Rs.13,29,945. The Commercial Tax Authorities have waived Interest aggregating to Rs.3,30,607. No provision has been made for the balance of Rs. 1,59,14,324 towards the demand.

7. No Provision has been made in the accounts for Employee Benefits as per AS-15 issued by the Institute of Chartered Accountants of lndta.(ICA1}

8. No provision has been made in the accounts towards depletion in the Market Value of Investment

9. DETAILS OF SALES:

10. RAW MATERIAL CONSUMPTION:

11. DETAILS OF CLOSING STOCK:

12. DETAILS OF PURCHASES:

13. LICENSED, INSTALLED CAPACITY & PRODUCTION

14. MANAGERIAL REMUNERATION:

15. AUDITORS REMUNERATION:

16. RELATED PARTY DISCLOSURE AS PER AS-18:

17. DISCLOSURE UNDER AS-20 EARNING PER SHARE:

18. DEFERREDTAXATION:

In accordance with Accounting Standard-22, "Accounting forTaxes on Income* and the pronouncement issued by the institute of Chartered Accountants of India, the Company has accounted for deferred tax during the year. Major components of deferred tax Assets / (Liabilities) are detailed below:

19. Previous year figures have been re-grouped / re-arranged where ever considered necessary to make them comparable with the current year figures.

20. Figures have been rounded off to the nearest rupee.