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Notes to Accounts of S R Industries Ltd.

Mar 31, 2015

1. Terms/Rights attached to Equity Shares

The Company has one class of Equity Shares having a par value of Rs 10. Each holder of Equity Share is entitled to one vote per Share.

2. Terms/RIghts attached to 8% Non-Cum-Preference Shares

The Company has one class of 8% Non-Cummulative Shares having a par value of Rs 100/-. These shares are redeemed on completion of 20 years from the date of issue.

1. CONTINGENT LIABILTIES:-

a) The liabilities in respect of Income Tax, Purchase Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional Demand, if any, shall be accounted for in the year in which the assessment is complete. The status of tax assessments is as under:

i) The Income Tax assessments have been completed upto the assessment year 2012-13. An Additional demands of Rs.45.02 Lacs for A.Y. 2007-08 has already been paid and Shown under Other Current Assets as income tax paid under protest. The company has filed appeals against the said demand before the Income Tax Appellate Tribunal, which is pending for adjudication.

ii) The Sales Tax/Purchase Tax assessments have been completed up to the Financial Year 2010-11 and there is no demand outstanding.

b) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favour of the Company against the demand of Rs. 258.70 Lacs (Previous Year Rs.258.70). The Company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provisions in the books of accounts. The requisite provision, if any, will be made in the year the final decision is made.

c) . The Central Excise Authorities, Mumbai had imposed duty

and penalty aggregating to Rs. 723.00 Lacs(Previous Year Rs. 723.00 Lacs) for purchase of certain items against CT-3 forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provisions, if any, will be made in the year of final decision.

d) The Company has given counter guarantee to banks of Rs 6.00 lacs (Previous Year Rs. 6.00 Lacs) in respect of the guarantees issued by the banks on behalf of the Company in favour of HPSEB.

2. The Capital Reserve represents forfeiture of 10% upfront payment received on Convertible Warrants issued during 2005-06

3. In view of insufficient information from the suppliers regarding their status as Small, Micro & Medium Enterprises, amount overdue to such undertakings can not be ascertained. However, the Company has not received any claim from any supplier in respect of interest.

4. Two creditors of the Company have filed winding up petition against the company under Section 271 of The Companies Act, 2013 in the Punjab & Haryana High Court for payment of Rs. 7.95 Lacs, which is pending for adjudication.

5. The balance of trade receivable, trade payables, contractors and others are subject to reconciliation and confirmation

6. In the opinion of the Board of Directors all the Current Assets, Loans and Advances except to the extent of provision of Rs.9.21 Lacs for doubtful debts, if realized in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

7. As per Accounting Standard-11, "Effects of Change in Foreign Exchange Rates" issued by "The Institute of Chartered Accountants of India", the amount due to foreign creditors have been restated at closing rate i.e. rate as at 31.03.2015. The difference amount of Rs. 65,429.32 is adjusted through Exchange Rate fluctuation Account.

8. During the year, the company has provided depreciation based on the useful life of the assets as per schedule II to the companies act,2013 whereas earlier the same was provided at the rates prescribed in schedule XIV to the companies act, 1956. As the result of this change, the amount of depreciation charged is higher by Rs 42.45 Lacs.

9. As per Accounting Standard - 15 "Employee Benefits", the disclosure of Employee Benefits as defined in the Accounting Standard are as follows

The assumptions are as follows:

i) All valuation assumptions have been set strictly in accordance with guidelines contained in AS15(R)

ii) The assumptions employed for calculation are:

iii) The discount rate has been determined by reference to market yields as at 31st March, 2015 on CG-Secs of currency and term consistent with those of benefit obligations.

iv) The estimated rate of increase in compensation levels takes into account inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market. This estimate is also tempered by quick review undertaken, in cooperation with the company's officials, of the company's past and current wage structure, staff compensation practices and the level of price neutralization likely to be affected through periodic wage increase over the next 5 to 10 years. Furthur, it is assumed that the ceiling on gratuity amount will increase in line with salary inflation over the long term. No allowance has been made for performance based discretionary increase in salary in individual cases.

v) The retirement age has been uniformly taken as 58 years.

vi) No allowance has been made for future improvement in in-service mortality.

vii) It is assumed, based on their overall behavior pattern, that the employees are unlikely to avail/encash the entire accumulated/ cany forward of leave during the coming 12 months.

viii) Attrition rate vary from industry to industry and, within industry, from company to company. In practice no single averaged out figure is likely to be representative of the different attrition rates observed over the entire age range. Since the data regarding the number of employees who left the services of the company during past few years is not available, the attrition rate, which is chosen with the concurrence of the company's authorized officials, is based on the experience gathered from other similar manufacturing units broadly corresponding in size, activity and staffing pattern to those of the Company

10 RELATED PARTY DISCLOSURES:-

Disclosures as required by the Accounting Standard -18 "Related Party Disclosures" issued by the ICAI are given below:

-Associate Companies

1. Universal Cyber Infoway Pvt. Ltd.

2. Pride Properties Pvt. Ltd.

3. Susang mac Pvt. Ltd.

4 Sam Export

5. Waltz Retail and Marketing

6. Gulmohar Investments & Holdings Ltd.

7. Socks & Socks

-Key Management Personnel:

1. Mr. R.C. Mahajan - Managing Director

2. Mr. Amit Mahajan - Director Commercial & Chief Financial Officer

3. Mr. Amit Mahajan - Director Operations

4. Ms. Chetna Anand - Company Secretary

11. As per Accounting Standard -28 "Impairment of Assets" issued by ICAI, the management has reviewed its cash generating units as on 31.03.2015. No indication has been found by the management to suggest that the recoverable amount of Asset is less then the carrying amount. Hence no impairment loss on asset has been recognized.

12. During the month of July, 2014, the company's plant at District Una was flooded and the company suffered a heavy loss. Insurance claim for Rs. 163.03 Lacs was filed with the insurance company. The insurance claim was settled at Rs. 104.13 Lacs. The balance loss of Rs. 58.90 Lacs has been written off as an exceptional item in the Statement of Profit & Loss.

13. Due to inadequate profits, the company has not created Capital Redemption Reserve.

14. CIF Value of Imports, Earnings & Expenditure in foreign Currency

15. Previous year figures have been recasted/regrouped/ rearranged wherever necessary to make them comparable with that of current year.


Mar 31, 2014

1. Terms/Rights attached to Equity Shares

The Company has one class of Equity Shares having a par value of Rs 10. Each holder of Equity Share is entitled to one vote per Share.

2. Terms Rights attached to 8% Non-Cum-Preference Shares

The Company has one dass of 8% Non-Cum-Preference Shares having a par value of Rs 100. These shares are redeemed on completion of 20 years from the date of issue.

3. CONTINGENT LIABILITIES:-

a) The liabilities In respect of Income Tax, Purchase Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional Demand, if any, shall be accounted for in the year in which the assessment Is complete. The status of tax assessments is as under:

i) The Income Tax assessments have been completed upto the assessment year 2011-12 and there are demands of Rs.45.02 Lacs for the A.Y.2007-0S against which the company has filed appeals before the Commissioner of Income Tax(Appeals), which is pending for adjudication, ii) The Sales Tax/Purchase Tax assessments have been completed up to the Financial Year 2010-11 and there is no demand outstanding.

b) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favour of the Company against the demand of Rs. 256,70 Lacs (Previous Year Rs.256.70). The Company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provisions in the books of accounts. The requisite provision, if any, will be made in the year the final decision is made.

c) . The Central Excise Authorities, Mumbai had imposed duty

and penalty aggregating to Rs. 723.00 Lacs(Previous Year Rs. 723.00 Lacs) for purchase of certain items against CT- 3 forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provisions, if any, will be made in the year of final decision.

d) The Company has given counter guarantee to banks of Rs 6.00 lacs (Previous Year Rs. 6.00 Lacs) in respect of the guarantees Issued by the banks on behalf of the Company in favour of HPSE8.

4. The Capital Reserve represents forfeiture of 10% upfront payment received on Convertible Warrants issued during 2005-06

5. In view of Insufficient information from the suppliers regarding their status as Smell, Micro & Medium Enterprises, amount overdue to such undertakings can not be ascertained. However, the Company has not received any claim from any supplier in respect of interest.

6. Two creditors of the Company have filed winding up petition against the company under Section 433 & 434 of The Companies Act, 1956 in the Punjab & Haryana High Court for payment of Rs. 7.95 Lacs, which is pending for adjudication.

7. The balance of trade receivable, trade payables, contractors and others are subject to reconciliation and confirmation

8. In the opinion of the Board of Directors all the Current Assets, Loans and Advances except to the extent of provision of Rs.9.21 Lacs for doubtful debts, If realized in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

9. As per Accounting Standard-11,'"Effects of Change in Foreign Exchange Rates' issued by 'The Institute of Chartered Accountants of India*, the amount due to foreign creditors have been restated at dosing rate l.e. rate as at 31.03.2014. The difference amount of Rs.2,60 lacs is adjusted through Exchange Rate fluctuation Account.

10. The discount rate has been determined by reference to market yields as at 31st March, 2014 on CG-Secs of currency and term consistent with those of benefit obligations.

11. The estimated rate of increase in compensation levels takes into account inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market. This estimate is also tempered by quick review undertaken, in cooperation with the company's officials, of the company's past and current wage structure, staff compensation practices and the level of price neutralization likely to be affected through periodic wage Increase over the next 5 to 10 years. Furthur it is assumed that the ceiling on gratuity amount will increase in line with salary inflation over the long term. No allowance has been made for performance based discretionary increase in salary in individual cases.

12. The retirement age has been uniformly taken as 58 years.

13. No allowance has been made for future improvement in in- service mortality.

14. It is assumed, based on their overall behavior pattern, that the employees are unlikely to avail/encash the entire accumulated/ carry forward of leave during the coming 12 months.

15. Attrition rate vary from Industry to Industry and. within industry, from company to company. In practice no single averaged out figure is likely to be representative of the different attrition rates observed over the entire age range. Since the data regarding the number of employees who left the services of the company during past few years is not available, the attrition rate, which is chosen with the concurrence of the company's authorized officials, is based on the experience gathered from other similar manufacturing units broadly corresponding in size, activity and staffing pattern to those of the Company.

16. SEGMENT REPORTING

The Company has only one segment and deals only in single line of products i.e. "Footwears' .Thus the Accounting Standard 17 "Segment Reporting" issued by "The Institute of Chartered Accountants of India" is not applicable

17. RELATED PARTY DISCLOSURES:-

Disclosures as required by the Accounting Standard -18

Related Party Disclosures" issued by the ICAl are given below:

* Associate Companies

1. Universal Cyber Infoway Pvt. Ltd.

2. Pride Properties Pvt. Ltd.

3. Susamg mac Pvt. Ltd.

4 Sam Export

5. S.R. Footwears Pvt. Ltd.

6. Zoom Merchantile & Finance Ltd.

7. Gulmohar Investments 4 Holdings.Ltd.

8. Socks & Socks

* Key Management Personnel;

1. Mr. R.C. Mahajan - Managing Director

2. Mr. Amit Mahajan - Director Commercial & Chief Financial Officer

3. Mr. Amit Mahajan - Director Operations

18. As per Accounting Standard -28 'Impairment of Assets' issued by 1CAI, the management has reviewed its cash generating units as on 31.03.2014.1 No indication has been found by the management to suggest that the recoverable amount of Asset is less then the carrying amount. Hence no impairment loss on asset has been recognized.

19. Due to inadequate profits, the company has not created Capital Redemption Reserve.

20. Previous year figures have been recasted/regrouped/ rearranged wherever necessary to make them comparable with that of current year.


Mar 31, 2013

I. CONTINGENT LIABILTIES:- a) The liabilities in respect of Income Tax, Purchase Tax and

Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, shall be accounted for in the year in which the assessment is complete.

i) The Income Tax assessments have been completed upto the assessment year 2010-11 and there are demands of Rs. 58.92 Lacs for the AY 2006-07 and Rs. 45.02 Lacs for the AY 2007-08 against which the company has filed appeals before the Commissioner of Income Tax (Appeals), which are pending for adjudication.

ii) The Sales Tax/Purchase Tax assessments have been completed up to the Financial Year 2005-06 and there is no demand outstanding.

b) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favour of the Company against the demand of Rs. 258.70 Lacs (Previous Year Rs.258.70). The company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provisions in the books of account. The requisite provision, if any, will be made in the year of final decision is made.

c) The Central Excise Authorities, Mumbai had imposed duty and penalty aggregating to Rs. 723.00 Lacs(Previous Year Rs. 723.00 Lacs) for purchase of certain items against CT- 3 forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provisions, if any, will be made in the year of final decision is made.

d) The company has given counter guantees to banks of Rs.6.00 Lacs(Previous Year Rs. 6.00 Lacs) in respect of the guarantees issued by the banks on behalf of the Company in favour of PSEB.

II. The accounts have been drawn for the nine months period from July 01, 2012 to March 31, 2013.

III. The Capital Reserve represents forfeiture of 10% upfront payment received on Convertible Warrants issued during 2005-06.

IV. The stock auditor appointed by the bankers have physical verification the stock in trade of the Company as on April 30, 2013 which has been reconciliation upto March 31, 2013.

V. In view of insufficient information from the suppliers regarding their status as Small, Micro & Medium Enterprises, amount overdue to such undertakings can not be ascertained. However, the Company has not received any claim from any supplier in respect of interest.

VI. Two creditors of the Company have filed winding up petition against the company under Section 433 & 434 of The Companies Act, 1956 in the Punjab & Haryana High Court for payment of Rs. 7.95 Lacs which is pending against adjudication.

VII. The balance of trade receivable, trade payables, contractors and others are subject to reconciliation and confirmation.

VIII. In the opinion of the Board of Directors all the Current Assets, Loans and Advances except to the extent of provision of Rs. 27.69 Lacs for doubtful debts & Rs. 22.93 Lacs for doubtful receivable, if realized in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

The above does not include contribution to LIC Group Gratuity Fund and provision for Leave Encashment as such contribution/provision is made on the global basis and the employee-wise breakup is not available.

X. As per Accounting Standard - 28 “Impairment of Assets” issued by ICAI, the management has reveiwed its cash generating units as on March 31, 2013. No indication has been found by the management to suggest that the recoverable amount of Asset is less than the carrying amount. Hence no impairment loss on asset has been recognized.

XI. RELATED PARTY DISCLOSURES:-

Disclosures as required by the Accounting Standard -18 “Related Party Disclosures” issued by the ICAI are given below: -Associate Companies

1. Universal Cyber Infoway Pvt. Ltd.

2. Pride Properties Pvt. Ltd.

3. Susamg mac Pvt. Ltd. 4.Sam Export

5. S.R. Footwears Pvt. Ltd.

6. Zoom Merchantile & Finance Ltd.

7. Gulmohar Investments & Holdings. Ltd.

8. Socks & Socks

-Key Management Personnel:

1. Mr. R.C. Mahajan– Managing Director

2. Mr. Amit Mahajan– Director Commercial

3. Mr. T.N. Tikoo- Director Works

4. Mr. Y.R. Kapur-Director Finance

5. Mr. Amit Mahajan- Director Operations

XII. SEGMENT REPORTING

During the year, the Company discontinued its “Terry Towel” division and now the company deals only in the business of “Footwears”. Thus the Accounting Standard 17 “Segment

Reporting” issued by the “The Institute of Chartered Accounts of India” would not be applicable from this year.


Jun 30, 2012

I CONTINGENT LIABILTIES:-

a) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favor of the Company against the demand of Rs. 258.70 Lacs (Previous Year Rs.258.70), The company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provisions in the books of account. The requisite provision, if any, will be made in the year of decision.

b) The Central Excise Authorities. Mumbai had imposed duty and penalty aggregating to Rs. 723.00 Lacs(Previou$ Year Rs. 723.00 Lacs) for purchase of certain items against CT-3 forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provisions, if any. will be made in the year decision.

c) The company has given counter guantees to banks of Rs.6.00 Lacs(Previous Year Rs. 15.00 Lacs) in respect of the guarantees issued by the banks on behalf of the Company.

i. The accounts have been drawn for the fifteen months period from April 01, 2011 to June 30. 2012.

ii. Purchase Tax/ Sales Tax liability have been provided based on the returns filed with Sales Tax Authorities. The Sales Tax assessments have been completed up to the Financial Year 2005-06.

II. Income Tax assessments have been completed upto Assessment Year 2010-11 and no demand is pending.

III. The Capital Reserve represents forfeiture of 10% upfront payment received on Convertible Warrants issued during 2005-06.

IV. Turnover includes Rs. 2.09 Lacs (Previous Year 3.37 Lacs) on realization/entitlement of DEPB License.

V. During the year the Company has sold its Land & Building, Plant & Machinery. Electric installation, D.G. Set and Laboratory Equipments of its Terry Towel Division at Derabassi. All the fixed assets except vehicles have been transferred. The stocks lying in the factory on the date of transfer of unit had no realizable value and therefore its value has been taken as nil. Consequently, the loss on sale of terry towel division has been Rs.1019.49 lacs. Inter Corporate Loan from Religare Finvest Limited which was secured by first charge on the land has been classified as unsecured loan consequent upon the sale of the land.

VI. The advances of the Terry Towel Division amounting to Rs.7B.46 lacs are shown as considered good and receivable except to the extent provision made. The management is of the opinion the same will be realized in the coming years.

VII. The Company during the current financial year has received Rs. 30 lacs under Central Capital Investment Subsidy Scheme, 2003 and Rs. 50 lacs as grant/subsidy of assistance under Integrated Development of Leather Sector Scheme of Government of India. The amounts received have been reduced from the cost of Plant and Machinery as per the requirement of Accounting Standard AS-12.

VIII. In the opinion of the Board of Directors all the Current Assets, Loans and Advances except to the extent of provision of Rs 50.64 Lacs for doubtful, if realized in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

IX In view of insufficient information from the suppliers regarding their status as Small, Micro & Medium Enterprises, amount overdue to such undertakings can not be ascertained. However, the Company has not received any claim from any supplier in respect of interest.

X) Previous year figures have been regrouped and rearranged wherever necessary to make than comparable.


Mar 31, 2010

1) Contingent liabilities :-

a) Export/Domesfc Bills drawn on customers against letters of credit and discounted with bank are Rs. 59.19 lacs (Previous year Rs. 49.47 lacs).

b) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favour of the Company for the demand of Rs. 258.70 lacs (Previous year Rs. 258.70 lacs). The Company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provision in the Books of Account. The requisite provision, if any, will be made in the year in which any demand is finally established.

c) The Central Excise Authorities, Mumbai have imposed a duty and penalty aggregating to Rs. 723.00 lacs (Previous year Rs. 723.00 lacs) for purchase of certain temsagainstCT-3 Forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provision, if any, will be made in the year in which any demand is finally established.

d) The company has given counter gaurantee to the bank for Rs. 12.00Lacs (Previous Year Nil) in respect of the gaurantees issued by the bank on behalf of the company.

2) Purchase Tax/Sales Tax liability has been provided based on the retums filed with the Sales Tax Authorities. The Sales Tax assessments have been completed upto the financial year 200506.

3) Income Tax assessments have been completed upto the Assessment Year 2006-07.

4) In the opinion of the Management, the current assets, loans and advances have a value which on realisation in the ordinary course of business would be at least equal to that at which these have been stated in the books of account

5) The turnover includes Rs.1.29 lacs (Previous year 4.54 Lacs) on account of realisation/entitlement of DEPB Licence.

6) The term loans from the State Bank of Patiala and Uco Bank are secured by way of first parri passu charge on the fixed assets and second parri passu charge on current assets of the company. Furter, the working captal facilities from the State Bank of Patiala and UCO Bank are secured by way of first parri passu charge on the current assets and second parri passu charge on the fixed assets of the company. The term loans and working capital facilities are further secured by the personal guarantees of three Directors. Further, the loan from Religare Finvest Limited is secured by first charge on the land at Village - Bhagwanpur, Dera Bassi

7) The company after stabilisation started its commercial production at its footwear unit in Una & Gurgaon on March 26, 2010. The expenditure net of sales upto that date has been capitalised.

8) There are no claim from suppliers under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act 1993. Sundry creditors include Rs.35.54 lacs (Previous year Rs. 40.69 lacs) due to small scale industrial undertakings to whom the Company owes sum exceeding Rs. one lac and which are outstanding for more than 30 days. These units are Creative Arts, Jai Balaji Labels, Maps India Ltd.. RSA Industries Pvt. Ltd., Vaibhav International, Vee Emm Industries, Lace India Company, Tex n Nets. SMG International and Enkay HWS India Ltd. The above has been furnished on the basis of information regarding the status of suppliers available with the Company.

9) The company has opted for the exemtion under Notification No. 30/2004 dated July 9, 2004 issued by the Central Board of Excise & Customs and therefore no excise duty is payable on the goods manufactured/despatched by it.

10) Capital Reserve has arisen from the Capital profit on forfeiture of 10% upfront payments on 5,91,000 Convertible Warrants at a price of Rs. 29/- each issued during 2005-06.

11) IMPAIRMENT OF ASSETS

In the opinon of the Board, if ere is no material imparme it the value of overal assets.

12) Previous year figures have been regrouped and rearranged wherever necessary to make them comparable.


Mar 31, 2009

1) Contingent liabilities :-

a) Export/Domestic Bills drawn on customers against letters of credit and discounted with bank are Rs. 49.47 lacs (Previous year Rs. 50.88 lacs).

b) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favour of the Company for the demand of Rs. 258.70 lacs (Previous year Rs. 258.70 lacs). The Company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provision in the Books of Account. The requisite provision, if any, will be made in the year in which any demand is finally established.

c) The Central Excise Authorities, Mumbai have imposed a duty and penalty aggregating to Rs. 723.00 lacs (Previous year Rs. 723.00 lacs) for purchase of certain items against CT-3 Forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provision, if any, will be made in the year in which any demand is finally established.

d) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 403 lacs net of advances (Previous year Nil)

2) Purchase Tax/Sales Tax liability has been provided based on the returns filed with the Sales Tax Authorities. The Sales Tax assessments have been completed upto the financial year 2004-05 and no demand is pending in respect thereto.

3) Income Tax assessments have been completed upto the Assessment Year 2006-07 and no demand is pending in respect thereto.

4) In the opinion of the Management, the current assets, loans and advances have a value which on realisation in the ordinary course of business would be at least equal to that at which these have been stated in the books of account.

5) The turnover includes Rs.4.54 lacs (Previous year Nil) on account of realisation/entitlement of DEPB Licence.

6) There is no claim from suppliers under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. Sundry creditors include Rs. 40.69 lacs (Previous year Rs. 47.70 lacs) due to small scale industrial undertakings to whom the Company owes sum exceeding Rs. one lac and which are outstanding for more than 30 days. These units are Didesu Chemicals (P) Ltd., Dipsi Chemicals (P) Ltd., Creative Arts, Jai Balaji Labels (P) Ltd., M.K.Enterprises, E-Fuel, Maps India Ltd., RSA Industries (P) Ltd., Vaibhav International and Vee Emm Industries. The above information has been furnished on the basis of information regarding the status of supplier available with the Company.

7) The Company has opted for the exemption under Notification No. 30/2004 dated July 9, 2004 issued by the Central Board of Excise & Customs and therefore no excise duty is payable on the goods manufactured/despatched by it.

8) Capital Reserve has raised from the Capital profit on forfeiture of 10% upfront payment on 591000 Convertible Warrants at a price of Rs. 29/- each issued during 2005-06.

9) SEGMENT REPORTING

Based on the guiding principles given in the Accounting Standard 17 "Segment Reporting" issued by "The Institute of Chartered Accountants of India" the Board of Directors considers and maintains that the manufacture of Terry Towels" is the only business segment of the Company.

10) IMPAIRMENT OF ASSETS

In the opinion of the Board, there is no material impairment in the value of overall assets.

11) RELATED PARTY DISCLOSURE

Disclosures as required by the Accounting Standaid 18 "Related Party Disclosure" issued by the Institute of Chartered Accountants of India, are given below :-

a) RELATED PARTIES

Key Management Personnel - Mr. R. C. Mahajan, Mr. Amit Mahajan, Mr. TN.Tikco, Mr. Y.R.Kapur and Mr. Amit Mahajan

Associates - Universal Cyber Infoway (P) Ltd., Susang Mac (P) Ltd, Gulmohar Investments & Holdings Ltd. and Pride Properties (P) Ltd.

12) Previous year figures have been regrouped and rearranged wherever necessary to make them comparable.

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