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Notes to Accounts of Reliance Chemotex Industries Ltd.

Mar 31, 2014

31st March, 2014 31st March, 2013 Rs. Rs.

1 Contingent Liabilities are not provided for in respect of i) Bonds executed in favour of Customs and Excise Authorities 1,00,00,000 1,04,00,000

ii) Unredeemed Bank Guarantees 1,55,00,000 1,55,00,000

iii) Unexpiredlettersofcredit 17,55,35,631 15,14,89,053

iv) Foreign Bills discounted with Banks 23,56,38,164 28,32,92,396

v) Claims not acknowledged as debts (Disputed by the Company and or appealed against);

a) Demand of Income Tax 1,62,59,210 7,20,58,480*

* Assessing officer''s order pending for giving appeals effect.

b) Demands by Excise department (including for Service Tax) 47,86,725 47,86,725

c) Demands of SalesTax. 31,240 31,240

d) Demands of workers 6,01,069 5,26,385

Except as stated above, there are no other pending cases and or claims against the Company, as certified by the management.

vi) Custom duty along with applicable amount of interest payable for non-fulfilment of export obligations of Rs. 1,21,28,62,000 within allowed time of eight years (upto 31-03-2020) for import of Capital goods under EPCG scheme 20,53,382 20,53,382

2 In the opinion of the Board of Directors, the Assets (other than Fixed Assets and non-current Investments), Trade Receivables, Loans, Advances and Deposits are approximately of the value stated, if realized in the ordinary course of business, unless otherwise stated. The provisions for liabilities except as stated above are adequate and not in excess of the amount reasonably necessary.

3 Company has been giving loans to other bodies corporate (this year as well as in previous years) in spite of borrowings from Banks and others. The Company has been advised by the Company''s Solicitors that the aforesaid activity does not come within the purview of Section 149(2A) of the Companies Act, 1956.

4 M/s V.S. Lignite Power Pvt. Ltd., from whom company is purchasing power, was raising bills up to 31.03.2012 part of which was disputed by the company, though being charged under the head Power and Fuel Account in Note 26. The dispute was referred to arbitration during the previous year and the arbitrators settled the dispute in favour of the company. Accordingly, a sum of Rs.1,26,83,136/-charged to Power and Fuel Account till 31.03.2012 but remaining unpaid had been written back and was included under the head Liability no longer required written back as per Note 21 of statement of profit and loss for the year ended 31.03.2013. Accordingly the company has also not provided for disputed amount of Rs.3,02,99,129/- (P.Y. Rs.2,05,71,494/-) (including Rs.97,27,635/- (P.Y. Rs.78,88,358/-) for the year for bills raised by M/S V.S. Lignite Power Pvt. Ltd. for the period from 04.07.2010 to 31.03.2014. M/S V.S. Lignite Power Pvt. Ltd. had filed an appeal in Session Court in earlier year and the Session Court had also decided the matter in favour of the Company. But the said company filed further appeal with Honorable Rajasthan High Court at Jaipur Bench and such case for Rs.3,02,99,129/- is still pending in Rajasthan High Court at Jaipur Bench. Liability, if any, arising on such appeal is intended to be provided as and when the case is decided.

5(i) (a) Accounts in respect of Current and Non-Current Liabilities, Trade Receivables, Other Current Assets, Loans and Advances and Deposits are subject to confirmations of respective parties.

(b) The management has considered the following amounts outstanding as on 31-03-2014 as good and fully recoverable.

Adjustments for non-recovery and or for short realisations, if any, the amount whereof is not presently ascertainable are intended to be made in accounts as and when such outstandings are realised.

ii) The management has certified that the Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, disclosures, if any, relating to total outstanding dues of Micro Enterprises and Small Enterprises and the Principal amount and Interest due thereon remaining unpaid and the amount of Interest paid/ payable as required under amended Schedule VI of the Companies Act.1956 could not be compiled and disclosed.

The Auditors have relied on the certificate of the management in this regard.Copies of letters written to the suppliers seeking information regarding their status were also not available for Auditors verification.

iv) (a) Interest Expenses as per Note 25 forfinance cost includes interest of Rs. 17,64,476/- (P.Y. Rs. 17,18,977/-) relating to purchases of Raw Materials.

(b) As referred to under Note No.l(c) of Long Term Borrowings in Note 3, the company is still to seek approval from IDBI Bank Ltd.for payment of interest on Unsecured Loans. The company had provided interest this year as well as in earlier years on Unsecured Loans (including funds to be deployed as promoter''s contribution in the project up front and amount to be converted Rs.400 lacs into Equity Capital as per SEBI formula within 6 months from date of first disbursement (also refer note II in note 1). Interest so provided (amount not ascertained and stated) is included under the head " Interest Expense" in note 25 of" Finance Costs". The Company had been advised by the solicitors that no approval of IDBI Bank Ltd. is necessary for making only provisions for interest in accounts. But, the company has also made payments (amount not ascertained and stated) during this year and in previous year out of such provisions for Interest. However, the company has applied to IDBI Bank Ltd. for relaxation of certain terms and conditions as per sanction letter for Term Loans and one of the terms for which relaxation has been sought is regarding payments of interest on Unsecured Loans brought in to meet the terms and conditions prescribed by IDBI Bank Ltd. Payment of interest as aforesaid are subject to above refered relaxation by and or approval of IDBI Bank Ltd. in this regard. Such correspondence by the Company with IDBI Bank ltd. could not be made available for Auditors inspection and therefore they have relied on the Certificate of the management in this regard.

vii) Expenses as per Note 22 of ''Cost of materials consumed1 and Note 26 of "Other Expenses" includes :

(i) Octroi etc.in cases levied (amounts not separately ascertained and stated (P.Y. Same)

(ii) Service Tax on expenses in respect of which Cenvat credits have not been claimed/availed (amounts not separately ascertained and stated (P.Y. Same)

viii) Disclosure of Foreign Currency Exposure as on 31.03.2014 (P.Y. 31.03.2013)

a. Foreign Currency Exposure hedged and Forward booking outstanding as on 31.03.2014 (P.Y. 31.03.2013)

The particulars as stated above regarding hedged/not hedged currencies are as per certificate of the management and relied upon bytheAuditors.

ix) "Other Expenses11 as per Note ''26'' includes Rs. 6,16,565/-, (P.Y. Rs.4,59,300/-) cost of capital assets/equipments as under:

(a) Assets not exceeding cost of Rs.5000/- for each item Rs. 96,580/- (P.Y. Rs.l,50,660/-).Such accounting in respect of cost of capital assets/vastu equipments (not exceeding cost of Rs. 5000/-for each item) has not affected materially the results of the Company, as after capitalisation of such assets/ equiments, 100% depreciation is claimable thereon.

(b) Vastu equipments exceeding cost of Rs.5,000/- for each item, Rs. 5,19,985/- (P.Y. Rs. 3,08,640/-) considered being for uninterrupted working of the Factory.

x) Advances of Rs. 10,00,000/- as referred to under (c ) in Note 18 are for payments to SBI Life Insurance Company Ltd. towards Life Insurance Premium against SBI Life-Flexi Smart Plus Policies dated 31.03.2014 on Life of Sri Rahul Shroff and Sri AmeyaShroff,Whole Time Directors -Designated as Executive Directors, of the Company. Maturity amount alongwith bonus and other benefits, if any, will be received by the Company on the maturity of the Policies. The above Policies are endorsed and assigned with effect from 23.04.2014 in favour of Sri Rahul Shroff and Sri Ameya Shroff respectively, which will be effective in case of the death of the life assured or if company achieves yearly turnover growth of 30% for five years.Yearly premium of Rs. 500000/- in respect of each of the policies is payable by the Company upto 31-03-2019.

6 Related Party Disclosures

(A) List of Related Parties

(i) Enterprises over which Key Management Personnel/ Directors/ relatives have control or significant influence.

a) Modern Fibotex India Limited

b) lndoTextiles&Fibres Limited

c) Spell Fashions Pvt.Ltd.

d) A.R.Fibtex Pvt. Ltd.

e) Khaitan&Co.

f) Khaitan &Co. LLP

g) Khaitan&Co. AOP

h) A.R. Commercial Private Limited

i) A.S. Chemotexpvt. Ltd.

j) Sunrise Producers Pvt. Ltd.

K) Sunrise Cotton Industries Limited

(ii) Key Management Personnel and Relatives of Key Management Personnel

a) Mr. SanjivShroff (Managing Director)

b) Mr. R.N.Sharma (Wholetime Director)

c) Mr. Shanker Lai Shroff, Chairman (Fatherof Mr. SanjivShroff)

d) Mrs. Bimla Devi Shroff (Motherof Mr. SanjivShroff)

e) Mrs. Dipika Shroff (Wife of Mr. SanjivShroff)

f) Mr. Rahul Shroff (Wholetime Director Designated as Executive Director)

g) Mr. Ameya Shroff (Wholetime Director Designated as Executive Director)

h) Mr. N.G.Khaitan (Director) Partner in Solicitor Firms

7 The Company had entered into an agreement dated 22.02.07 (as amended by agreement dt. 01.07.2008) with M/s Marudhar Power Private Limited (Subsequently name changed to VS Lignite Power Private Limited), settng up a Group Captive Power Plant, at Bikaner in the State of Rajasthan, for supply of 8MW of Power also to the Company and in pursuance to such agreements, the Company had subscribed for 16,74,719 Class "A" Equity Shares of Rs.10/- each fully paid at a total value of Rs. 1,67,47,190/- and for 14,85,629 Class "A" 0.01% Cumulative Redeemable Preference Shares of Rs.l0/-each fully paid at a total value ofRs.1,48,56,290/- and the same have been classified as "Non-Current Investments" in Note "12" as "Trade Investements"

Further, the Company had agreed to create lien on the aforesaid Shares at appropriate time in favour of M/s VS Lignite Power Private Limited (Formerly known as Marudhar Power Private Limited), as per terms of the Charter Documents as security towards its obligation under the Power delivery Agreement dated 22.02.2007 and as amended by agreement dt. 01.07.2008 (also refer Note l(vi)(c) above)

8 Segment Reporting Policies

(a) Identification of Segments:

(i) Primary Segment - Business Segment -

The Company''s operation predominantly comprises of only one segment l.e. Manufacturing of Synthetic Blended Yarn. In view of the same, separate segmental information is not required to be given as per the requirements of Accounting Standard 17 - "Segment Reporting" issued by The Institute of Chartered Accountants of India.

(ii) Secondary Segment-Geographical Segment-

The analysis of geographical segment is based on the geographical location of the customers. Thegeogriphical segments considered for disclosure are as follows:

Sales within India include sales to customers located within India Sales outside India include sales to customers located outside India

(ii) Fixed Assets as per Geographical Locations

The entire activity pertaining to sales outside India is carried out from Fixed Assets in India and there are no Fixed Assets outside India.

9. The disclosures required as per the revised Accounting Standards (AS-15- Employee Benefits) notified under the Companies (Accounting Standards) Rules, 2006 are as under:

Defined - Contribution Plans : The Company offers its employees defined contribution plan in the form of provident fund(PF), family pensionsfund (FPF) and Employees Insurance Scheme (ESI). Provident Fund, Family Pension Fund Employees State Insurance Scheme cover substantially all regular employees. Contribution are paid during the year into separate funds under certain fiduciary- typearrangements. Both the employees and the company pay predetermined contribution into the provident funds, family pension fund and the Employees State Insurance Scheme. The Contributions are normally based on a certain proportion of the employee''s salary. Contribution to Defined Benefit Plan, recognized and charged off for the year are as under (excluding for on contracts payments)

Defined - Benefit Plans

The Company offers its employees defined- benefit Plans in the form of a Gratuity Scheme. Benefits under the defined benefit plan is typically based either on years of service and the employee''s compensation (generally immediately before retirement). The Gratuity scheme covers substantially all regular employees. The Company contributes funds to Life Insurance Corporation of India, which is irrevocable. Commitments are actuarially determined at year end. The actuarial valuation is done based on "Projected Unit Credit" method. Gains & Losses of changed actuarial assumptions are charged to the profit and loss account. The obligations for leave encashment is recognised in the same manner as gratuity.

(A) These figures are pending reconciliation by the management with the relative figures as per "Employee Benefits Expense" in Note 24. The likely impact, after such reconciliation on the results for the year/ earlier years and on the year end Assets/ Liabilities, could not be ascertained and stated.

The acturial calculations used for estimated defined benefit commitments and expenses are based on the following assumptions, which, if changed, would affect the defined benefit commitment''s size, funding requirements.

The estimates of future salary increases, considered in actuarial Valuation, take acount of inflation, seniority, promotion, and other relevant factors such as demand and supply in the employment market. The above information is as submitted and or obtained from Actuariesand relied upon bytheAuditors.

The estimated contribution expected to be made by the Company for the year ending 31.03.2015 is not readily ascertainable and therefore could not be disclosed.

10 Previous Year, figures have been regrouped / rearranged, wherever necessary.


Mar 31, 2013

1. Related Party Disclosures

(A) List of Related Parties

(i) Enterprises over which Key Management Personnel/Directors/Relatives have control or significant influence

a) Modern Fibotex India Limited

b) Indo Textiles & Fibres Limited

c) Spell Fashions Pvt. Limited

d) A. R. Fibtex Pvt. Limited

e) Khaitan & Co.

f) Khaitan & Co. LLP

g) Khaitan & Co. AOR

h) A. R. Commercial Pvt. Limited

i) A. S. Chemotex Pvt. Ltd.

j) Sunrise Producers Pvt. Ltd.

(ii) Key Management Personnel and Relatives of Key Management Personnel

a) Shri Sanjiv Shroff (Managing Director)

b) Shri R. N. Sharma (Wholetime Director)

c) Shri Shanker Lai Shroff (Father of Shri Sanjiv Shroff)

d) Smt. Bimla Devi Shroff (Mother of Shri Sanjiv Shroff)

e) Smt. Dipika Shroff (Wife of Shri Sanjiv Shroff)

f) Shri Rahul Shroff (Son of Shri Sanjiv Shroff)

g) Shri N. G. Khaitan, Partner of Solicitor''s Firm

Documents as sSy towSds £oStio under thePo Umtod)'' 3S P6r t6rmS °f tfle Charter by agreement dt. OlSoa Agreement dated 22.02.2007 and as amended

2. Segment Reporting Policies

(a) Identification of Segments

(i) Primary Segment - Business Segments

The Company''s operation predominantly comprises of only one segment i.e. Manufacturing of Synthetic Blended Yarn. In view of the same, separate segmental information is not required to be given as per the requirements of Accounting Standard 17 - "Segment Reporting" issued by The Institute of Chartered Accountants of India.

(ii) Secondary Segment - Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The geographical segments considered for disclosure are as follows : Sales within India include sales to customers located within India Sales outside India include sales to customers located outside India.

Defined - Contribution Plans

Insurance Scheme cover substantially all regular employees. Contribution are paid during the year into separate funds under certain fiduciary-type arrangements. Both the employees and the Company pay predetermined contribution into the provident funds, family pension fund and the Employees State Insurance Scheme. The Contributions are normally based on a certain proportion of the employee''s salary.


Mar 31, 2011

1 Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances of Rs. 89,11,350/- (Previous year Rs. 41,34,040/-)

31st March, 2011 31st March, 2010

Rs. Rs.

2 Contingent Liabilities are not provided for in respect of

i) Bonds executed in favour of Customs and Excise Authorities 1,04,00,000 1,04,00,000

ii) Unredeemed Bank guarantees 1,56,00,000 1,56,00,000

iii) Unexpired letters of credit 17,23,72,310 13,75,28,271

iv) Bills discounted with Banks 22,97,09,702 27,03,50,980

v) Claims not acknowledged as debts (Disputed by the Company);

a) Demands by Excise department

(including for Service Tax ) 47,86,725 47,86,725

b) Demands of Sales Tax. 90,300 90,300

c) Demands of workers 4,04,122 5,20,394

vi) Obligations to Export towards Custom duty saved on The obligations for 18,54,67,006 Purchases of capital goods under Export Promotion Rs.18,54,67,006 have Capital Goods Scheme (Refer Note 7(x)) been fulfilled during the year. There were no such obligations against imports during the year (as certified by the Management)

vii) Except as stated above, there are no other pending cases and or claims against the Company.

3 In the opinion of the Board of Directors, the Current Assets, Loans, Advances and Deposits are approximately of the value stated, if realised in the ordinary course of business unless otherwise stated. The provisions for liabilities except as stated above are adequate and not in excess of the amount reasonably necessary.

4 i) Accounts in respect of Current Liabilities, Debtors, Otiter "Current Assets, Advances and Deposits are subject to confirmation of respective parties.

ii) The Management has certified that the Company has not received any intirnation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, disclosures, if any, relating to total outstanding dues of Micro Enterprises and Small Enterprises and the Principal amount and Interest due thereon remaining unpaid and the amount of Interest paid/ payable as required under amended Schedule VI of the Companies Act.1956 could not be compiled and disclosed. The Auditors have relied on the certificate of the Management in this regard.

iv) Miscellaneous Expenses as per Schedule 20 includes Rs. 30,223 /- (Previous year Rs.Nil A) paid for taxation matters to a firm in which any of the partners of the firm of Auditors are partners.

v) a) Other Financial Charges as per Schedule 22 includes interest paid on Raw Material payments Rs. 54,89,326/- (Previous Year Rs.29,12,149/-).

b) As referred to under Note No.1 in schedule "3" of Loan Funds, the Company would seek approval from IDBI Bank Ltd. for payment of interest on Unsecured Loans. The company has provided interest this year as well as in earlier years on Unsecured Loans (including funds to be deployed as promoter's contribution in the project upfront and amount to be converted into Equity Capital as per SEBI formula within 6 months from date of first disbursment). Interest so provided (amount not ascertained and stated) is included under the head " Interest on Unsecured Loans " in schedule 22 of "Financial Expenses ".The Company has been advised by the solicitors that no approval of IDBI Bank Ltd. is necessary for making such provisions of interest in accounts. The Company has made certain payments during this year and in previous year out of such provisions for Interest. The Company has applied to IDBI Bank Ltd. for relaxation of certain terms and conditions as per sanction letter for Term Loans and one of the terms for which relaxation has been sought is regarding payments of interest on Unsecured Loans brought in to meet the terms and conditions prescribed by IDBI Bank Ltd. Payment of interest as aforesaid are subject to above refered relaxation by and or approval of IDBI Bank Ltd. in this regard.

(b) No reimbursement is expected in the case of Contingent Liabilities and Liabilities shown respectively under note no. 3 and (a) above.

viii) (a) Advances as per Shedule 11 includes lease rent etc receivable Rs. Nil (P.Y. 2,569/-) (net of T.D.S.) (Maximum amount due Rs. 30,000/-) (RY. Rs. 30,000/-) due from Spell Fashions Pvt. Ltd., a Company under the same Management and in which a Director is Director and or Member.

(b) Expenses as per Schedule 17 of 'Raw Materials Cost', Schedule 19 of 'Manufacturing Cost' and Schedule 20 of 'Other Cost includes :

(i) Octroi etc.in cases levied,amount not seperately ascertained and stated (Previous year same).

(ii) Service Tax on expenses in respect of which Cenvat credits have not been claimed/availed (amount not ascertained and stated) (also refer Notes 1(viiii)(c) and 1(ix)(f)).

x) Additions to Plant and Machinery as per Shedule "4" includes Rs. Nil /- (P.Y. Rs. 47,65,954/-) for purchases under the Export Promotion Capital Goods Scheme of the Government of India. The Company is under an obligation to fulfill quantified exports to the extent of Eight times of Custom Duty saved i.e. Rs. Nil /- (P.Y.Rs.98,38,835/-) within a period of Eight years. The Balance Excise Duty of Rs. 13,40,325/- due since previous year as on 31.03.11 which is refundable in due course, paid by the Company on above purchases has been included under the head Advances in Schedule "11". Adjustments, for non-recovery and for short realisations, the amount where of is not presently ascetainable, is to be made as and when such refund is received.

xi) In view of certain court decisions and to fall strictly in line with relative Accounting Standards, the Company had in previous year reversed the capitalisation under the head "Plant & Machinary" in an earlier year in respect of payments of Rs. 1,54,08,480/- to Rajasthan Rajya Vidyut Prasaran Nigam Ltd. for Electric Installations (not owned by the Company) and so also depreciation provided thereon in such earlier year. Consequently such expenditure of Rs. 1,54,08,780/- had in previous year been charged to Profit & Loss account as per schedule '19' of" Manufacturing Cost" and had written back Depreciation of Rs.98,074/-. As a result of such change in method of accounting, the profits of the Company for the previous year were reduced by Rs. 1,53,10,406/- (net of write back of Depreciation) and so also the Fixed Assets of the company. The related laibilities for taxation for earlier years are also to be accordingly affected, the amounts whereof have not been ascertained and stated.

xii) "Manufactuing Cost " as per schedule'19' and 'Other Cost ' as per Schedule '20' includes Rs.3,02,450/-, (P.Y. Rs 11,88,375) cost of capital assets/ equipments as under:

(a) Assets not exceeding cost of Rs.5,000/- for each item Rs.1,90,000/- (P.Y. Rs.5,87,064/-).

(b) Assets exceeding cost of Rs.5,000/- for each item Rs.1,12,450/- (P.Y. Rs.6,21,175/-).

The Company has considered the cost of above assets/equiments as revenue expenditure as having been made for uninterrupted working of the Factory. Such accounting in respect of cost of capital assets/ equipments (not exceeding cost of Rs. 5,000/- for each item) has not affected materially the results of the Company, as after capitalisation of such assets/ equiments , 100% depreciation was to be claimed thereon. In respect of capital assets/ equipments (Cost for each item exceeding Rs. 5,000/-), the results of the Company for the year have been affected to the extent of such cost of Rs.1,12,450/- (P.Y. Rs.6,21,175/- (Less allowable depreciation).

xiii) (a) Turnover as per Profit & Loss Account and Schedule "14" of "Turnover" includes Net Foreign Exchange Gain of Rs 3,67,34,719 (P.Y. Rs 3,21,00,165) (net of loss of Rs 22,60,268 (P.Y. Rs 2,57,815) on account of forward cover etc. for Export sales. The bifurcation of total figure of Rs 4,13,41,971 (P.Y. Rs 2,82,01,752) of "Net Exchange Gain" for the purpose of including Rs 3,67,34,719 (P.Y. Rs 3,21,00,165)(net of loss of Rs 22,60,268 (P.Y. Rs 2,57,815) in Schedule "14" of Turnover as "Net Foreign Exchange Gain" on Account of forward cover etc. for Export Sales and showing the remaining debit amount of Rs 7,86,941 (P.Y. Rs 38,98,413) as "Exchange Loss" (net of gain of Rs NIL (P.Y. Rs 5,87,451) in Schedule 20 of "Other Cost" is only as per certificate of the Management and have been relied upon by the Auditors. The Company is of the view that the aforesaid presentation / groupings are not contrary to the Accounting Standard AS-11, as applicable and the provisions of Schedule VI (Part II) of the Companies Act 1956.

(b) The amounts as stated under item (a) above includes/ excludes premium/ discount on forward contracted rates amortised as expenses or income over the Life of the contracts, as referred to under note 1(xiii)(c) above. The relative amount of premium/ discount has not been seperatly ascertained and stated.

xiv) Payment of Interim Dividend of Rs. 39,80,507/- on 01.02.2011 on 4,79,500 - 10% Cumulative Redeemable Preference Shares of Rs. 10/- each as per Board Resolution dated 28.01.11 not in accordance to the terms of the issue of such shares nor the consent of the Equity Shareholders and permission of the Financial institutions were obtained in this regard. Such payment of Interim Dividend is not in accordance to the provision of the Companies Act, 1956. The Company is obtaining necessary legal opinion in this regard and do needful accordingly in current year.

9 "The Company had entered into agreement dated 22.02.07 (as amended by agreement dt. 01.07.2008) with M/s. Marudhar Power Private Limited (Subsequently name changed to M/s. VS Lignite Power Private Limited), setting up a Group Captive Power Plant, at Bikaner in the State of Rajasthan, for supply of 8MW of Power also to the Company and in pursuance to such agreements, the Company had subscribed for 7,70,371 Class ""A"" Equity Shares of Rs.10/- each fully paid at a total value of Rs.77.04 Lacs and for 14,85,629 Class ""A"" 0.01% Cumulative Redeemable Preference Shares of Rs.10/- each fully paid at a total value of Rs. 148.56 Lacs and the same have been classified as Long Term Investments in Schedule ""5"" as Trade Investements.

Further, the Company had agreed to create lien on the aforesaid Shares at appropriate time in favour of M/s. VS Lignite Power Private Limited (Formerly known as M/s. Marudhar Power Private Limited), as per terms of the Charter Documents as security towards its obligation under the Power delivery Agreement dated 22.02.2007 and as amended by agreement dt. 01.07.2008."

10. Related Party Disclosures

(A) List of Related Parties

(i) Enterprises over which Key Management Personnel/Directors/Relatives have control or significant influence

a) Modern Fibotex India Limited

b) Indo Textiles & Fibres Limited

c) Spell Fashions Pvt. Limited

d) A. R. Fibtex Pvt. Limited

(ii) Key Management Personnel and Relatives of Key Management Personnel

a) Shri Sanjiv Shroff (Vice Chairman & Managing Director)

b) Shri R. N. Sharma (Wholetime Director)

c) Shri Shanker Lai Shroff (Father of Shri Sanjiv Shroff)

d) Smt. Bimla Devi Shroff (Mother of Shri Sanjiv Shroff)

e) Smt. Dipika Shroff (Wife of Shri Sanjiv Shroff)

f) Shri Rahul Shroff (Son of Shri Sanjiv Shroff)

g) Shri N. G. Khaitan (Partner of Solicitors' Firm)

11 Segment Reporting Policies

(a) Identification of Segments:

(i) Primary Segment - Business Segment -

The Company's operation predominantly comprises of only one segment i.e. Manufacturing of Synthetic Blended Yarn. In view of the same, separate segmental information is not required to be given as per the requirements of Accounting Standard 17 - "Segment Reporting" issued by The Institute of Chartered Accountants of India.

(ii) Secondary Segment - Geographical Segment -

The analysis of geographical segment is based on the geographical location of the customers. The geogriphical segments considered for disclosure are as follows:

Sales within India include sales to customers located within India

Sales outside India include sales to customers located outside India

(ii) Fixed Assets as per Geographical Locations

The Company has common fixed assets for producing goods for domestic as well as overseas market. Hence segmentwise information for fixed assets/ additions to fixed assets cannot be furnished.

13. The disclosures required as per the revised Accounting Standards (AS-15- Employee Benefits) notified under the Companies (Accounting Standards) Rules, 2006 are as under: Defined - Contribution Plans

The Company offers its employees defined contribution plan in the form of Provident Fund (PF), Family Pensions Fund (FPF) and Employees Insurance Scheme (ESI). Provident Fund, Family Pension Fund Employees State Insurance Scheme cover substantially all regular employees. Contribution are paid during the year into separate funds under certain fiduciary- type arrangements. Both the employees and the Company pay predetermined contribution into the Provident Funds, Family Pension Fund and the Employees State Insurance Scheme. The Contributions are normally based on a certain proportion of the employee's salary.

Defined - Benefit Plans

The Company offers its employees defined- benefit plans in the form of a Gratuity Scheme. Benefits under the defined benefit plan is typically based either on years of service and the employee's compensation (generally immediately before retirement). The Gratuity scheme covers substantially all regular employees. The Company contributes funds to Life Insurance Corporation of India, which is irrevocable. Commitments are actuarially determined at year end. The actuarial valuation is done based on "Projected Unit Credit" method. Gains & Losses of changed actuarial assumptions are charged to the profit and loss account. The obligations for leave encashment is recognised in the same manner as gratuity.

5 Figures for the Previous year have been regrouped, re-arranged and re-cast wherever found necessary.

Signatures to Schedules 1 to 23

 
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