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Notes to Accounts of Pokarna Ltd.

Mar 31, 2018

1. Related party disclosures :

As per IND AS 24, the disclosures of transactions with the related parties are given below:

List of related parties where control exists and related parties with whom transactions have taken place and relationships:

a) Enterprises where control exits:

Pokarna Engineered Stone Limited — wholly owned subsidiary

b) Names of the associates:

Pokarna Fabrics Pvt Limited, Pokarna Fashions Pvt Limited, Pokarna Marketing Pvt Limited, Southend, Southend Extension

c) Enterprises over which key managerial personnel are able to exercise significant influence Adam ‘N’ Eve

d) Names of Key management personnel

Gautam Chand Jain, Rahul Jain, Apurva Jain, Vishwanath Reddy

e) Names of relatives

Vidya Jain, Rekha Jain, Anju Jain, Ritu Jain, Pratik Jain, Neha Jain, Nidhi Jain, Gautam Chand Jain (HUF), Prakash Chand Jain (HUF), Bharathi Pulluru, Karvy Data Management Services, Karvy Computershare Pvt Ltd

f) Name of non-executive director

Prakash Chand Jain, Mahender Chand Chordia, Meka Yugandhar, T.V.Chowdary, Vinayak Rao Juvvadi, Dhanji Lakhamsi Sawla

A. Compensation of key management personnel of the company

The amount mentioned below represents remuneration paid and debited to the company. The compensation includes salary, employer’s contribution to PF, LTA, bonus, medical benefits, gratuity & leave encashment. All amounts mentioned below are inclusive of service tax and GST. The CMD, MD, Non-Executive Directors, CFO and Company Secretary are regarded as Key management personnel in terms of Companies act, 2013.

* Expenses towards gratuity and leave encashment provisions are determined actuarially on an overall Company basis at the end of each year and, accordingly, have not been considered in the above information.

B. Transactions with key management personnel and other related parties 2017-18 (2016-17 & 2015-16)

Other commitments:

x) Granite processing units of the company situated at Aliabad and Toopronpet village are registered as a 100% export oriented units (“EOU”), and are exempted from customs and central excise duties, GST and levies on imported & indigenous capital goods and stores

& spares. The company has executed a bond cum legal undertaking to pay customs duty, central excise duty, GST, levies and liquidated damages payable, if any, in respect of imported and indigenous capital goods and stores & spares, consumed duty free, in the event that certain terms and conditions are not fulfilled. As on 31 March, 2018, the company has a positive net foreign exchange earnings, as defined in the foreign trade policy 2009-2014 and 2015-2020 wherever applicable.

xi) The company is also involved in other lawsuits, claims, investigations and proceedings, including trade mark and commercial matters, which arise in the ordinary course of business. However, there are no material claims on such cases.

2. Discontinued operations

The Board of Directors (“Board”) in their meeting held on 8 May, 2017 approved the transfer, sale, lease, exchange, hive-off or otherwise disposing off of Apparel Business on a going concern basis. In the opinion of the Board, all assets of Apparel Business are realizable in the ordinary course of business at the value at which they are stated in the Financial Statements. The transfer, sale or otherwise disposing off of Apparel Business is subject to finding the buyer / investor and receipt of acceptable offer and which is subject to such other requisite approvals, consents and clearance from the Company’s Bankers, Company’s Shareholders and other Institutions or bodies and statutory authorities if and wherever necessary, and as may be required. The Company has initiated necessary steps and expects to complete the process in near future. The financials of Apparel Division is considered as ‘Assets held for sale and discontinued operations’ as per IND AS 105 and corresponding previous year figures of Statement of Profit and loss account has been restated accordingly.

3. In accordance with IND AS-108 “Operating segment”, segment information has been given in the consolidated financial statements of Pokarna Limited and therefore no separate disclosure on segment information is given in these financial statements.

4. Capital management

1. The board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The board of directors monitors the return on capital, which the company defines as result from operating activities divided by total shareholders’ equity.

2. The board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

5. Financial risk management objectives and policies

1. Overview

The company has exposure to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Market risk

- Operational risk

This note presents information about the company’s exposure to each of the above risks, the company’s objectives, policies and processes for measuring and managing risk, and the company’s management of capital. Further quantitative disclosures are included throughout these financial statements.

2. Risk management framework:

The Board of Directors has overall responsibility for the establishment and oversight of the company’s risk management framework. The Board is responsible for developing and monitoring the company’s risk management policies.

- Credit risk

i) Credit risk is the risk 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’s receivables from customers.

ii) Trade and other receivables: The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period.

3. Cash and cash equivalents: The company held cash and cash equivalents of J 221.45 Lakhs (31 March 2017: H 196.31 Lakhs and 1 April 2016: H 166.65 Lakhs). The cash and cash equivalents are held with public sector banks. There is no impairment on cash and cash equivalents as on the reporting date and the comparative period.

- Liquidity risk

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

ii) The company aims to maintain the level of its cash and cash equivalents and investments at an amount in excess of expected cash outflows on financial liabilities (other than trade payables) over the next six months. The company also monitors the level of level of expected cash inflows on trade receivables and loans together with expected cash outflows on trade payables and other financial liabilities. This excludes potential impact of extreme circumstances that cannot be reasonably predicted, such as natural disasters.

iii) Exposure to Liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date.

- Market risk

i) Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates prices, will affect the company’s income or the value of its financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables, long term debt and commodity prices. The company is exposed to market risk primarily related to foreign exchange rate risk and interest rate risk.

ii) Currency risk: The company is exposed to foreign exchange risk arising from foreign currency transaction. The company also imports and the risk is managed by regular follow up . The company has a policy which is implemented when the foreign currency risk become significant.

A 10% appreciation/depreciation of the foreign currencies with respect to functional currency of the Company would result in an increase/decrease in the Company’s net profit before tax by approximately J301.30 Lakhs (March 31, 2017: H 153.17 Lakhs).

iii) Interest rate risk: Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through the statement of profit and loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

A reasonably possible change of 100 basis points in interest rate at the reporting date would have increased or decreased profit or loss by J57.50 Lakhs ( 31 March 2017: H 55.25 Lakhs). This analysis assumes that all other variables remain constant.

- Operational risk

i) Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the company’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behavior. Operational risks arise from all of the company’s operations.

ii) The Company’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the company’s reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.

iii) The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management within each business unit. This responsibility is supported by the development of overall company standards for the management of operational risk in the following areas:

- Requirements for appropriate segregation of duties, including the independent authorization of transactions

- Requirements for the reconciliation and monitoring of transactions

- Compliance with regulatory and other legal requirements

- Documentation of controls and procedures

- Requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks identified

- Requirements for the reporting of operational losses and proposed remedial action

- Development of contingency plans

- Training and professional development

- Ethical and business standards

- Risk mitigation, including insurance when this is effective.

iv) Compliance with company’s standards is supported by a programme of periodic reviews undertaken by internal audit. The results of internal audit reviews are discussed with the management of the business unit to which they relate, with summaries submitted to the audit committee and board of the company.

7. Previous year figures are regrouped, rearranged and reclassified wherever considered necessary in order to confirm to the current years presentation.

8. First time IND AS adoption

As stated in Note 2A, these are the Company’s first standalone financial statements prepared in accordance with Ind AS. For the year ended 31 March 2017, the Company had prepared its standalone financial statements in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (‘previous GAAP’).

The accounting policies set out in Note 2 have been applied in preparing these standalone financial statements for the year ended 31 March 2018 including the comparative information for the year ended 31 March 2017 and the opening Ind AS balance sheet on the date of transition i.e. 1 April 2016.

In preparing the Ind AS balance sheet as at 1 April 2016 and in presenting the comparative information for the year ended 31 March 2017, the Company has adjusted amounts reported previously in standalone financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company’s financial position and financial performance.

Optional exemptions availed and mandatory exceptions

In preparing these financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

A. Optional exemptions availed

Property plant and equipment, capital work-in-progress and intangible assets

As per Ind AS 101 an entity may elect to:

i) Measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date.

ii) Use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to

- fair value;

- or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index

The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38, Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the existence of an active market).

iii) Use carrying values of property, plant and equipment, intangible assets and investment properties as on the date of transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to decommissioning liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of capital work-in-progress and intangible assets also. The carrying values of property, plant and equipment as aforesaid are after making adjustments relating to decommissioning liabilities.

B. Mandatory exceptions

1. Estimates

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

The Company’s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the standalone financial statements that were not required under the previous GAAP are listed below:

a) Determination of the discounted value for financial instruments carried at amortized cost.

b) Impairment of financial assets based on the expected credit loss model.

2. Derecognition of financial assets and liabilities

As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, Financial Instruments, prospectively for transactions occurring on or after the date of transition to Ind AS. However, an entity may apply the derecognition requirements retrospectively from a date chosen by it if the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the derecognition principles of Ind AS 109 prospectively as reliable information was not available at the time of initially accounting for these transactions.

9. Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at mortised cost has been done retrospectively except where the same is impracticable.

10. Notes for Balance sheet and profit and loss

i) Restatement of prior period items

Under Ind AS, the Company is required to retrospectively present the material prior period errors identified by:

a) restating the comparative amounts for the prior period(s) presented in which the error occurred;

b) if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and equity for the earliest prior period presented.

Under the previous GAAP, prior period items were recognized in the statement of profit and loss in the year in which identified.

ii) Re-classification of financial assets and liabilities

Under Ind AS, all financial assets and liabilities are to be disclosed separately on the face of the Balance Sheet. Under previous GAAP, there was no such requirement. Thus, all the assets and liabilities meeting the recognition criteria of financial asset or liability as per Ind AS 32 and Ind AS 109 have been re-classified and shown separately on the face of the Balance Sheet.

iii) Proposed dividend

Under previous GAAP, proposed dividends including dividend distribution tax thereon were recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid. In the case of the company, the declaration of dividend occurs after period end. Therefore, the liability recognized towards dividend as at March 31, 2017 and April

01, 2016 has been derecognized against retained earnings and recognized in the year of payment.

iv) Actuarial gain and loss

Under Ind AS, all actuarial gains and losses are recognized in other comprehensive income. Under previous GAAP the Company recognized actuarial gains and losses in profit or loss. However, this has no impact on the total comprehensive income and total equity as on 1 April 2016 or as on 31 March 2017. As per para 122 of Ind AS19, company has transferred all re-measurement cost recognized in the past within accumulated profits.

v) Borrowings at amortised cost

Based on Ind AS 109, financial liabilities in the form of borrowings have been accounted at amortised cost using the effective interest rate method.

vi) Excise duty

Under previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as an expense. This has resulted in an increase in the revenue from operations and expenses for the year ended 31 March 2017. The total comprehensive income for the year ended and equity as at 31 March 2017 has remained unchanged.

vii) Stripping cost

Recognition of Stripping Cost in the production phase of surface mine:

The impact on account of change in accounting policy from charging the stripping cost to statement of profit and loss to capitalizing as Intangible Asset as ‘Stripping Activity Asset’ is recognized in the Reserves and consequential impact of depletion and write offs/ amortization is recognized in the Statement of Profit and Loss.

viii) Other comprehensive income (OCI)

Under Indian GAAP, the company had not presented other comprehensive income separately. Hence, it has reconciled Indian GAAP profit or loss to or profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

ix) Restoration liability

The Company has estimated the asset restoration liability as per Ind AS of past years at the transition date, recognized in reserves and such obligation is recognized and measured at present value by attributing time value of money. The impact for the periods subsequent to the date of transition is reflected in the Statement of Profit and Loss.

x) Fair value of Financial assets

The Company has valued financial assets (other than investment in subsidiaries, which are accounted at cost), at fair value. Impact of fair value changes as on the date of transition, is recognized in reserves and changes thereafter are recognized in Statement of Profit and Loss or Other Comprehensive Income, as the case may be.

xi) Trade receivables

Under Ind AS, impairment allowance has been determined based on expected credit loss model (ECL).

xii) Deferred tax

The above Ind AS adjustments has resulted in changes in the deferred tax liability.


Mar 31, 2016

1. Terms / rights attached to equity shares:

The company has only one class of equity shares having a par value of Rs, 10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2016 the amount of per share dividend recognized as distribution to equity shareholders was Rs, 10.00 (previous year Rs, 3.00)

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. Term Loans & Working capital facilities from Union Bank of India are secured by hypothecation of first charge on all immovable and movable properties including machineries, current assets such as inventories, book debts and other receivables of the company, both present and future besides personal properties of some of the directors and guarantee of the Directors (other than independent directors).

3. External Commercial Borrowings from Union Bank of India are secured by way of extension of charge on fixed assets of the company.

4 Hire Purchase loans are secured by hypothecation of respective assets purchased out of finance, and personal guarantee of some of the Directors (other than independent directors).

5. Investment in Equity Shares :

a. During the year 6,10,58,764 Optionally Convertible Unsecured Debentures of Rs, 10/- each in Pokarna Engineered Stone Limited, have been opted to convert into 40,70,584 Equity shares of Rs, 10/- each at a premium of Rs, 140/- as per the provisions under the scheme of arrangement approved by Hon’ble High court of Andhra Pradesh.

b. 51% of investment in Equity shares are pledged to Bankers against the borrowings by the subsidiary -Pokarna Engineered Stone Limited

6. Security Deposit includes Rs, 64.88 lacs pledged to Mines & Geology and other departments.

7. Capital Advances includes Rs, 132.01 Lacs (p.y. Rs, 92.06 Lacs) towards consideration paid for Land admeasuring 67.04 Acres (p.y. 49.87 Acres), which are in possession of the company. The title/conveyance/ lease deeds in respect of these assets are pending for execution in favour of the company.

8. Related Party Disclosures :

As per Accounting Standard 18, the disclosures of transactions with the related parties are given below:

(i) List of related parties where control exists and related parties with whom transactions have taken place and relationships:

a) Enterprises where control exits:

Pokarna Engineered Stone Limited - Wholly owned Subsidiary

b) Names of the Associates:

Pokarna Fabrics Limited, Pokarna Fashions Limited, Pokarna Marketing Limited, Southend, Southend Extension

c) Enterprises over which key Managerial Personnel are able to exercise significant influence Adam ‘N’ Eve

d) Names of Key Management Personnel Gautam Chand Jain, Rahul Jain, Apurva Jain

e) Names of Relatives

Prakash Chand Jain, Ashok Chand Jain, Raaj Kumar Jain, Vidya Jain, Rekha Jain, Anju Jain, Ritu Jain, Chaya Jain, Pratik Jain, Neha Jain, Nidhi Jain, Suvidh Chordia, Gautam Chand Jain (HUF), Prakash Chand Jain (HUF)

The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company, regarding the status of registration of such vendor under the said Act, as per the intimation received from them on the request made by the company.

9. In accordance with AS-17 "Segment Reporting", segment information has been given in the consolidated financial statements of Pokarna Limited and therefore no separate disclosure on segment information is given in these financial statements.

Defined Benefit Plan

The employees’ gratuity fund scheme managed by a Trust (Life Insurance Corporation of India for Granite Division of the company) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Compensated Absence is recognized in the same manner as gratuity.

10. Leases:

The company has operating leases for Office premises and retail outlets, that are

(a) Renewable on a periodic basis and are cancellable by giving a notice period ranging from 1 month to 6 months and

(b) Are non-cancellable for specified periods under arrangements. Rent escalation clauses vary from contract to contract.

11. Previous year’s figures have been regrouped, rearranged and reclassified, wherever considered necessary, in order to conform to the current year’s presentation.

towards performance linked incentive called as commission for achievement of targets for the year 2015 - 16.

- has been appointed as Managing Director w.e.f. May 02, 2016

12. The terms and conditions with regard to appointments of Chairman & Managing Director and Executive Directors are contained in the respective resolutions passed by the Board or Members in their respective meetings. There is no separate provision for payment of severance fee under the resolutions governing the appointment of Chairman & Managing Director/ Executive Directors.

C. Stakeholder Relationship Committee

1. The Stakeholders'' Relationship Committee (“SRC”) is constituted in line with the provisions of Regulation 20 of SEBI Listing Regulations read with section 178 of the Act.

2. The broad terms of reference of the SRC are as under:

- consider and resolve the grievances of security holders of the Company including redressal of investor complaints such as transfer or credit of securities, non-receipt of dividend / notice / annual reports, etc. and all other securities-holders related matters;

- consider and approve issue of share certificates (including issue of renewed or duplicate share certificates), transfer and transmission of securities, etc; and

- reviewing the information required as per SEBI Listing Regulations

3. One (1) SRC meetings were held on February 08, 2016.The necessary quorum was present for all the meetings.


Mar 31, 2014

1.1.2Terms / rights attached to equity shares:

The company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in indian rupees.The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2014 the amount of per share dividend recognised as distribution to equity shareholders was Rs.2/- ( previous year -Nil-)

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.3.1 Term Loans &Working capital facilities from Union Bank of India, Hyderabad, are secured by hypothecation of first charge on all immovable and movable properties including machineries, current assets such as inventories, book debts and other receivables of the company, both present and future besides personal guarantee / security of the Directors (other than independent directors) and their relative.

2.3.2 External Commercial Borrowings from Union Bank of India, Hong Kong Branch are secured by way of extension of charge on fixed assets of the company. USD 7.81 million has been utilised out of total loan sanctioned of USD 10.80 million.

2.3.4 Hire Purchase loans are secured by hypothecation of respective assets purchased out of finance, and personal guarantee of some of the Directors (other than independent directors).

2.5.1 Zero coupon Foreign Currency Convertible Bonds (12,000 Bonds of USD 1000 each), which were matured for payment on 29th March,2012, the company has redeemed 9539 bonds as on date and the balance 2461 bonds are under negotiation for redemption with the Bond Holders as on date of Balance Sheet.

2.5.2 The repayment of installment ofTerm Loan of Rs.59.87 lacs and interest of Rs.5.01 lacs for the last two months are overdue as on the date of Balance Sheet, the company has since repaid the same as on date.

2.7.2 Provision has been retained towards premium payable on redemption of FCCB''s which were matured on 29.03.2012 as per the subsisting terms and conditions. As on date bonds have been redeemed to the extent of 9539 bonds as per the negotiated terms with the said bond holders. The gain / benefit, cost, charges including foreign exchange gain / loss at the close of the year are transferred to Pokarna Engineered Stone Limited (subsidiary) as per the Scheme of Arrangement sanctioned by Hon''ble Andhra Pradesh High Court and agreement thereto.The corresponding receivable arising thereof is disclosed under the head''Loans and Advances to Subsidiary''. The company expects no further liability other than provided for in the books.

2.9.1 During the year 4,85,36,832 Optionally Convertible Unsecured Debentures of Rs.10/- each of Pokarna Engineered Stone Limited, have been converted into Series-II Optionally convertible Unsecured Debentures of Rs.10/- each on certain terms and conditions w.e.f 1st January, 2014, refer note no.2.9.3

2.9.2 Optionally Convertible Debentures

a. The aforesaid Optionally Convertible Debentures were acquired for net consideration in terms of order of the Hon''ble High Court of Andhra Pradesh sanctioning Scheme of Arrangement between the Company and Pokarna Engineered Stone Limited for transfer of assets, liabilities and expenses.

b. Terms and Conditions: Debentures are for tenor of 7 years from the date of allotment, during this period the option to convert / redeem shall vest solely with the Company. Upon maturity, failing the exercise of option by the debenture holder, the OCDs shall stand redeemed.

c. Variable coupon / interest on debentures is computed as equivalent to all costs / expenditure incurred or income / gains / benefits earned including foreign exchange gain / loss associated with the FCCBs, which belong to and to be borne by Pokarna Engineered Stone Limited. Consequently, no interest is chargeable in respect of the OCDs after the date of redemption / conversion of the FCCBs.

d. If OCDs are opted for redemption anytime before they are due for redemption, interest shall be payable in respect of the OCDs at the rate of 8% per annum. The coupon / interest on the OCDs shall accrue and be payable at the time of redemption of the OCDs.

e. Conversion obligation: 15 (Fifteen) OCDs shall be convertible into 1 (One) equity share of Rs.10/- each of Pokarna Engineered Stone Limited.

2.9.3 Optionally Convertible Debentures - Series - II

a. Optionally Convertible Debentures - Series-II have been issued on account of part conversion of earlier debentures.

b. Terms and Conditions: Debentures are for tenor of 7 years from the date of allotment, during this period the option to convert / redeem shall vest solely with the Company.

c. Interest on debentures shall be payable @ 3% p.a.

d. Redemption obligation: Redeemable at par in cash

e. Conversion obligation: 15 (Fifteen) OCDs shall be convertible into 1 (One) equity share of Rs.10/- each of Pokarna Engineered Stone Limited.

2.16.1 Gain / Benefit on redemption of FCCB''s:

Gain / benefit has arisen due to part redemption of 5839 ( previous year 3700 ) FCCB''s at discounted price and the same has been reimbursed to Pokarna Engineered Stone Limited as pe the Scheme of Arrangement and agreement thereto.

2.23.1 Variable coupon / interest on debentures has been computed as equivalent to all costs / expenditure incurred including foreign exchange gain / loss associated with the FCCBs, which belong to and to be borne by Pokarna Engineered Stone Limited and accordingly the same has been transferred.

2.24 1. Contingent Liabilities not provided for

Particulars 31.03.2014 31.03.2013

a) Bank Guarantees 1.22 1.22 b) Letter of Credits outstanding 223.39 335.01 Claims against the company / disputed liabilities not acknowledged as debts:

c) Income tax matters, pending decisions on various appeals made by the 27.76 27.76 company and by the Department. Amount deposited 12.47 Lacs (previous

year Rs.12.47 Lacs)

d) Excise matters (including service tax). Amount deposited Rs.5.57 Lacs (previous 233.60 231.67 year Rs.5.71 Lacs)

e) Customs matters, Amount deposited Rs.37.09 Lacs (previous year Rs.40.84 Lacs) 75.91 79.66

f) Sales tax matters, Amount deposited Rs.Nil (previous year Rs.Nil Lacs) - 61.50

g) Mines & Geology matters 138.20 138.20

h) Cross subsidy charges payable to Central Power Distribution Company 61.60 61.60

i) Other Matters disputed 142.15 131.05

Other Commitments:

j) Company remains exposed to liability towards fuel surcharge adjustment, which are notified by Power Distribution Companies of Andhra Pradesh pertaining to earlier years, which are being adjusted in future tariff payable for consumption. Accordingly charges are accounted in the year of payment / bill raised for the same.

k) The company is also involved in other lawsuits, claims, investigations and proceedings, including patent and commercial matters, which arise in the ordinary course of business. However, there are no material claims on such cases.

2.27 Related Party Transactions

a) Enterprises where control exits:

Pokarna Engineered Stone Limited — 100% subsidiary

b) Names of the Associate concerns:

Pokarna Fabrics Limited, Pokarna Fashions Limited, Pokarna Marketing Limited

c) Names of the Associate Firms: Southend, Southend Extension

d) Names of Key Management Personnel Gautam Chand Jain, Rahul Jain

e) Names of Relatives

Prakash Chand Jain, Ashok Chand Jain, Raaj Kumar Jain, Apurvajain, Nidhijain, Neha Jain (Arrush Creations) and Suvidh Chordia

f) Disclosure of transactions between the company and related parties and the status of Outstanding balances for the year 2013-14 (2012-13)

2.30 In accordance with AS-17 "Segment Reporting", segment information has been given in the consolidated financial statements of Pokarna Limited and therefore no separate disclosure on segment information is given in these financial statements.

Defined Benefit Plan

The employees'' gratuity fund scheme managed by aTrust ( Life Insurance Corporation of India for Granite Division of the company) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Compensated Absence is recognized in the same manner as gratuity.

f) The estimates of future salary increases considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors.

g) The company expects to contribute Rs.10.00 Lacs to its Gratuity plan for the next year.

2.32 Leases:

The company has operating leases for Office premises and retail outlets, that are

(a) Renewable on a periodic basis and are cancellable by giving a notice period ranging from 1 month to 6 months and

(b) Are non-cancellable for specified periods under arrangements. Rent escalation clauses vary from contract to contract.

2.35 a) The Ministry of Corporate Affairs, Government of India, vide General Circular No.2 and 3 dated 8th February

2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfilment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. b) Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

2.36 Previous year''s figures have been regrouped, rearranged and reclassified, wherever considered necessary, in order to conform to the current year''s presentation.


Mar 31, 2013

1. Capital Commitments

Estimated Amount of contracts remaining to be executed on Capital Account not provided for (net of advances) 56.33 129.53

1.1 Financial and Derivative Instruments

Foreign currency exposure that are not hedged by derivative or forward contracts as on 31st March 2013 amounts to Rs.. 9261.13 Lacs (previous year Rs. 10588.60 Lacs).

1.2 Related Party Transactions

a) Enterprises where control exits:

Pokarna Engineered Stone Limited – 100% subsidiary

b) Names of the Associate concerns:

Pokarna Fabrics Limited, Pokarna Fashions Limited, Pokarna Marketing Limited

c) Names of the Associate Firms: Southend, Southend Extension

d) Names of Key Management Personnel Gautam Chand Jain, Rahul Jain

e) Names of Relatives

Prakash Chand Jain, Ashok Chand Jain, Raaj Kumar Jain

f) Disclosure of transactions between the company and related parties and the status of Outstanding balances for the year 2012-13 (2011-12)

1.3 In accordance with AS-17 "Segment Reporting", segment information has been given in the consolidated f nancial statements of Pokarna Limited and therefore no separate disclosure on segment information is tre given in these f nancial statements.

1.4 Leases:

The company has operating leases for Of ce premises and retail outlets, that are

(a) Renewable on a periodic basis and are cancellable by giving a notice period ranging from 1 month to 6 months and

(b) Are non-cancellable for specif ed periods under arrangements. Rent escalation clauses vary from contract to contract.

1.5 a) The Ministry of Corporate Af airs, Government of India, vide General Circular No.2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulf llment of conditions stipulated in the circular. The Company has satisf ed the conditions stipulated in the circular and hence is entitled to the exemption.

b) Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.


Mar 31, 2012

1.1 1. Contingent Liabilities not provided for Particulars

a) Bank Guarantees 34.10 58.87

b) Letter of Credits outstanding 280.63 201.76

c) Premium payable on FCCBs issued - 472.94

Claims against the company not acknowledged as debts:

d) Direct & Indirect Taxes disputed

(Amount Deposited Rs.11.46 Lacs (previous year Rs. 11.46 lacs ) 184.68 109.80

e) Other Matters disputed 326.29 318.83

2. Capital Commitments

Estimated Amount of contracts remaining to be executed on Capital Account not provided for 129.53 580.00

1.2 Financial and Derivative Instruments

Foreign currency exposure that are not hedged by derivative or forward contracts as on 31st March 2012 amounts to Rs. 10588.60 Lacs (Previous Year Rs.9034.64 Lacs)

1.3 Related Party Transactions

a) Enterprises where control exits:

Pokarna Engineered Stone Limited — 100% subsidiary

b) Names of the Associate concerns:

Pokarna Fabrics Limited, Pokarna Fashions Limited, Pokarna Marketing Limited

c) Names of the Associate Firms:

Southend, Southend Extension

d) Names of Key Management Personnel Gautam Chand Jain, Rahul Jain, Siddharth Jain

e) Names of Relatives

Prakash Chand Jain, Ashok Chand Jain, Raaj Kumar Jain

f) Disclosure of transactions between the company and related parties and the status of Outstanding balances for the year 2011-12 (2010-11)

1.4 In accordance with AS-17 "Segment Reporting", segment information has been given in the consolidated financial statements of Pokarna Limited and therefore no separate disclosure on segment information is given in these financial statements.

Defined Benefit Plan

The employees' gratuity fund scheme managed by a Trust ( Life Insurance Corporation of India for Granite Division of the company) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Compensated Absence is recognized in the same manner as gratuity.

1.5 Leases:

The company has operating leases for Office premises and retail outlets, that are

(a) Renewable on a periodic basis and are cancellable by giving a notice period ranging from 1 month to 6 months and

1.6 General

a) In the opinion of the company, the current assets, loans and advances are approximately of their value stated if realized in the ordinary course of business.

b) On applicability of revised Schedule VI from current year, the Company has reclassified previous year figures to conform to this year's classification. The adoption of revised Schedule VI does not impact rec- ognition and measurement principles followed for preparation of the financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of Balance Sheet.

1.7 The Ministry of Corporate Affairs, Government of India, vide General Circular No.2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption.

Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.


Mar 31, 2011

1. Contingent Liabilities not provided for

Rupees in Lakhs Particulars As on As on 31.03.2011 31.03. 2010

a) Bank Guarantees 58.87 57.66

b) Letter of Credits outstanding 201.76 314.08

c) Premium payable on FCCB's issued 472.94 960.23

Claims against the company not acknowledged as debts: d) Direct & Indirect Taxes disputed 109.80 96.16 (Amount Deposited Rs. 11.46 Lakhs (previous year Rs. 16.11 Lakhs))

e) Other Matters disputed 318.83 179.88

2. Share Capital

Share capital includes:

a) 4,24,500 Equity shares of Rs. 10/- each as fully paid up for consideration other than cash pursuant to a contract.

b) 17,12,400 Equity shares of Rs. 10/- each were allotted as fully paid up Bonus shares by capitalization of reserves in the year 1994.

c) 31,00,400 Equity shares of Rs. 10/- each were allotted as fully paid up Bonus shares by capitalization of reserves in the year 2001.

3. Secured Loans

a) Term Loan & Working capital facilities for Granite & Apparel Division from Union Bank of India, Secunderabad, are secured by hypothecation by way of first charge on all immovable and movable properties including current assets such as inventories, book debts and other receivables of the company including machineries both present and future of these two divisions besides personal guarantee / security of the Directors (other than independent directors) and their relative.

b) Hire purchase loans are secured by hypothecation of respective assets purchased out of finance, and personal guarantee of the Directors (other than independent directors).

c) Secured Loans includes interest accrued and due amounting to Rs. 87.42 lakhs (Previous year Rs. 44.82 lakhs)

d) Term Loans includes installments due and payable with in one year amounting to Rs. 1196.90 lakhs (Previous year Rs. 1251.50 lakhs)

4. Foreign Currency Convertible Bonds

a) 12,000 Zero coupon Foreign Currency Convertible Bonds (FCCB) of USD 1000 each are: Convertible by the holders at any time on and after 12th April, 2007 and prior to 14th March, 2012.

i) Each bond will be converted into fully paid up Equity Share with par value of Rs.10/- per share at a reset conversion price of Rs. 236.51 (initial conversion price was Rs. 295.64) per share with a fixed rate of exchange on conversion at Rs. 44.08 = US$ 1.00.

ii) Redeemable on maturity date at 144.50 per cent of its principal amount (7.5% per annum calculated on a semi- annual basis), if not redeemed or converted earlier.

b) Premium payable on redemption of FCCB is amortized proportionately.

c) During the year there is no conversion of FCCB.

5 Investments in Debentures

In terms of order of the Hon'ble High Court of Andhra Pradesh sanctioning Scheme of Arrangement ("Scheme") between the Company and Pokarna Engineered Stone Limited, the net consideration as per Scheme of Rs. 667.03 Lakhs has been discharged by Pokarna Engineered Stone Limited through an issue of 66,70,280 Optionally Convertible Debentures (OCDs) of face value of Rs.10/- each in favour of the Company, the terms of these debentures are as per the Scheme. For the period between appointed date i.e., 1st July,2007 and the effective date i.e., 15th May,2009, the Engineered Stone Division was part of the Company. Hence, an agency entry had been passed in the books of the Company to transfer assets, liabilities, expenses, income recorded in the books in favour of Pokarna Engineered Stone Limited. The net consideration of Rs. 5438.84 Lakhs for transfer of assets, liabilities, income and expenses for the period from 1st July,2007 to 31st March, 2009 has been discharged by Pokarna Engineered Stone Limited through an issue of 5,43,88,484 OCDs of face value of Rs. 10/- each in favour of the Company. The terms of these debentures are same as that of OCDs as per the Scheme.

Terms and Conditions: Debentures are for tenor of 7 years from the date of allotment, during this period the option to convert / redeem shall vest solely with the Company.

Rate of interest is equivalent to the interest the Company is liable to pay on account of redemption of the FCCBs. Consequently, no interest shall be payable in respect of the OCD's after the date of redemption / conversion of the FCCBs. If OCDs are opted for redemption anytime before they are due for redemption, interest shall be payable in respect of the OCDs at the rate of 8% per annum. The coupon / interest on the OCDs shall accrue and be payable at the time of redemption of the OCDs.

Conversion obligation: 15 (Fifteen) OCDs shall be convertible into 1 (One) equity share of Rs. 10/- each of Pokarna Engineered Stone Limited.

7A. Managerial remuneration under section 198 of the Companies Act, 1956 paid or payable during the financial year, to the Directors as under:

Note: The contribution to Gratuity Funds has been made on a group basis and separate figures applicable to an individual employee are not available and thereof, contribution to Gratuity Funds has not been considered in the above computation.

6. Related Party Transactions

a) Enterprises where control exists:

Pokarna Engineered Stone Limited – 100% subsidiary

b) Names of the Associate concerns:

Pokarna Fabrics Limited, Pokarna Fashions Limited, Pokarna Marketing Limited

c) Names of the Associate Firms:

Southend, Southend Extension, Gautam Granites

d) Names of Key Management Personnel

Shri. Gautam Chand Jain, Shri. Siddharth Jain, Shri. Rahul Jain

e) Names of Relatives

Prakash Chand Jain, Dilip Kumar Jain, Ashok Chand Jain, Raaj Kumar Jain

f) Disclosure of transactions between the company and related parties and the status of Outstanding balances for the year 2010-11 (2009-10)

7. Provision for contingencies

Provision has been made for contingency towards the premium of Rs. 818.60 Lakhs (Previous year Rs. 357.48 Lakhs) which may be payable on redemption of FCCBs.

8. Financial and Derivative Instruments

i) Nominal amount of forward contracts entered into by the company for hedging currency related risks and outstanding as on 31st March 2011 amounts to Rs. Nil Lakhs (Previous year Rs. Nil Lakhs)

ii) Foreign currency exposure that are not hedged by derivative or forward contracts as on 31st March 2011 amounts to Rs. 9034.64 Lakhs (Previous year Rs. 9912.54 Lakhs)

9. General

a) In the opinion of the company, the current assets, loans and advances are approximately of their value stated if realized in the ordinary course of business.

b) Paise are rounded of to the nearest Rupee.

c) Previous year's figures have been regrouped / recast wherever considered necessary to make these comparable with those of the current year.

10. Employee Benefits

Defined Benefit Plan

The employees' gratuity fund scheme managed by a Trust ( Life Insurance Corporation of India for Granite Division of the company) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Compensated Absence is recognized in the same manner as gratuity.

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority,

f) promotion and other relevant factors.

g) The company expects to contribute Rs. 30.00 Lakhs to its Gratuity plan for the next year.

11. Additional information required as per clause 4C and 4D and notes thereon of part II of Schedule VI to the Companies Act, 1956

b) (i) The Ministry of Corporate Affairs, Government of India vide its General Notification No.S.O.301(E) dated 8th February 2011 issued under section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profit and loss account. The Company being as 'export oriented company' is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 3(i)(a), 3(ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.

(ii) The Ministry of Corporate Affairs, Government of India, vide General Circular No.2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption.

Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements


Mar 31, 2010

1. The company recognizes as Provisions, the liabilities being present obligations arising from past events, the settlement of which is expected to result in an outfow of resources and which can be measured only by using a substantial degree of estimation.

2. Contingent Liabilities are disclosed by way of a note to the fnancial statements after careful evaluation by the management of the facts and legal aspects of the matters involved.

3. Contingent Assets are neither recognized nor disclosed.

P. Accounting for Taxes on Income

1. Provision for current tax is made in accordance with and at the rates specifed under the Income-Tax Act, 1961, as amended.

2. Deferred tax is recognized on timing diferences, keeping in view the matching concept and the principles of prudence.

Deferred tax assets and liabilities are accounted for based on the diference between taxable income and accounting income that originates in one period and are expected to reverse in the subsequent periods.

Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted as of the Balance Sheet date.

Q. Cash Flow Statement

Cash fows are reported using the indirect method, whereby net proft before tax is adjusted for the efects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash fows from regular revenue generating, investing and fnancing activities of the company are segregated.

1. Contingent Liabilities not provided for

Rupees in Lakhs

As on As on

Particulars 31.03.2010 31.03.2009

a) Bank Guarantees 57.66 57.66

b) Letter of Credits outstanding 314.08 84.56

c) Premium payable on FCCBs issued 960.23 1627.97

Claims against the company not acknowledged as debts:

d) Direct & Indirect Taxes disputed (Amount Deposited Rs. 16.11 Lakhs (previous year Rs. 32.59 Lakhs)) 96.16 95.28

e) Other Matters disputed 179.88 79.50

3. Share Capital

Share capital includes:

a) 4,24,500 Equity shares of Rs. 10/- each as fully paid up for consideration other than cash pursuant to a contract.

b) 17,12,400 Equity shares of Rs. 10/- each were allotted as fully paid up Bonus shares by capitalization of reserves in the year 1994.

c) 31,00,400 Equity shares of Rs. 10/- each were allotted as fully paid up Bonus shares by capitalization of reserves in the year 2001.

4. Secured Loans

a) Term Loan & Working capital facilities for Granite & Apparel Division from Union Bank of India, Secunderabad, are secured by hypothecation by way of frst charge on all immovable and movable properties including current assets such as inventories, book debts and other receivables of the company including machineries both present and future of these two divisions besides personal guarantee/security of some of the Directors and their relative.

b) Hire purchase loans are secured by hypothecation of respective assets purchased out of fnance, and personal guarantee of some of the Directors.

c) Secured Loans includes interest accrued and due amounting to Rs. 44.82 lakhs (Previous year Rs. 66.52 lakhs)

d) Term Loans includes installments due and payable with in one year amounting to Rs.1251.50 lakhs (Previous year Rs. 215.44 lakhs)

5. Foreign Currency Convertible Bonds

a) 12,000 Zero coupon Foreign Currency Convertible Bonds (FCCB) of USD 1000 each are: Convertible by the holders at any time on and after 12th April, 2007 and prior to 14th March, 2012.

i) Each bond will be converted into fully paid up Equity Share with par value of Rs.10/- per share at a reset conversion price of Rs.236.51 (initial conversion price was Rs.295.64) per share with a fxed rate of exchange on conversion at Rs.44.08 = US$ 1.00.

ii) Redeemable on maturity date at 144.50 per cent of its principal amount (7.5% per annum calculated on a semiannual basis), if not redeemed or converted earlier.

b) Premium payable on redemption of FCCB is amortized proportionately.

c) During the year there is no conversion of FCCB.

6. Investments in Debentures

In terms of order of the Honble High Court of Andhra Pradesh sanctioning Scheme of Arrangement (“Scheme”) between the Company and Pokarna Engineered Stone Limited, the net consideration as per Scheme of Rs.667.03 Lakhs has been discharged by Pokarna Engineered Stone Limited through an issue of 66,70,280 Optionally Convertible Debentures (OCDs) of face value of Rs.10/- each in favour of the Company, the terms of these debentures are as per the Scheme. For the period between appointed date i.e., 1st July,2007 and the efective date i.e., 15th May,2009, the Engineered Stone Division was part of the Company. Hence, an agency entry had been passed in the books of the Company to transfer assets, liabilities, expenses, income recorded in the books in favour of Pokarna Engineered Stone Limited. The net consideration of Rs.5438.84 Lakhs for transfer of assets, liabilities, income and expenses for the period from 1st July,2007 to 31st March,2009 has been discharged by Pokarna Engineered Stone Limited through an issue of 5,43,88,484 OCDs of face value of Rs.10/- each in favour of the Company. The terms of these debentures are same as that of OCDs as per the Scheme.

Terms and Conditions: Debentures are for tenor of 7 years from the date of allotment, during this period the option to convert/redeem shall vest solely with the Company.

Rate of interest is equivalent to the interest the Company be liable to pay on account of redemption of the FCCBs. Consequently, no interest shall be payable in respect of the OCDs after the date of redemption/conversion of the FCCBs. If OCDs are opted for redemption anytime before they are due for redemption, interest shall be payable in respect of the OCDs at the rate of 8% per annum. The coupon/interest on the OCDs shall accrue and be payable at the time of redemption of the OCDs.

Conversion obligation: 15 (Fifteen) OCDs shall be convertible into 1 (One) equity share of Rs.10/- each of Pokarna Engineered Stone Limited.

Note: The contribution to Gratuity Funds has been made on a group basis and separate fgures applicable to an individual employee are not available and thereof, contribution to Gratuity Funds has not been considered in the above computation.

Remuneration to managerial personnel provided in the accounts during the year is within the limits prescribed under schedule XIII of the companies Act, 1956. Company has made an application to the Central Government for approval of excess remuneration paid to the managerial personnel during the year 2008-09 amounting to Rs.28.55 Lakhs. Approval from the Central Government is pending as on date.

7. Related Party Transactions

a) Enterprises where control exists:

Pokarna Engineered Stone Limited - 100% subsidiary

b) Names of the Associate concerns:

Pokarna Fabrics Limited, Pokarna Fashions Limited, Pokarna Marketing Limited

c) Names of the Associate Firms:

Southend, Southend Extension, Gautam Granites

d) Names of Key Management Personnel

Shri. Gautam Chand Jain, Shri. Siddharth Jain, Shri. Rahul Jain

e) Names of Relatives

Prakash Chand Jain, Dilip Kumar Jain, Ashok Chand Jain, Raaj Kumar Jain

The entire activity pertaining to sales outside India is carried out from India

Notes:

1. The company has disclosed Business Segment as the primary segment. Segments have been identifed taking into account the nature of the products, the difering risks and returns, the organisation structure and internal reporting system. The companys operations predominantly relate to Granite and Apparel divisions.

2. Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifable to each of the segments as also amounts allocated on reasonable basis.

8. Provision for contingencies

Provision for contingencies represents an amount of Rs.357.48 Lakhs premium payable on FCCBs on redemption.

9. Financial and Derivative Instruments

i) Nominal amount of forward contracts entered into by the company for hedging currency related risks and outstanding as on 31st March, 2010 amounts to Rs. Nil lakhs (Previous year Rs. 540.27 lakhs)

ii) Foreign currency exposure that are not hedged by derivative or forward contracts as on 31st March, 2010 amounts to Rs. 9912.54 lakhs (Previous year Rs. 10732.35 lakhs)

Defned Beneft Plan

The employees gratuity fund scheme managed by MetLife India Insurance company Limited and Life Insurance Corporation of India is a defned beneft plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee beneft entitlement and measures each unit separately to build up the fnal obligation. The obligation for Compensated Absence is recognized in the same manner as gratuity.

10. Additional information required as per clause 4C and 4D and notes thereon of part II of Schedule VI to the Companies Act, 1956

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