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Notes to Accounts of TCI Industries Ltd.

Mar 31, 2019

Background

TCI Industries Limited (the Company) is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on Bombay Stock Exchange (BSE) in India. The registered office of the Company is located at 1-7-293, Mahatma Gandhi Road, Secunderabad-500 003, Telangana.

The Company is principally engaged in the rendering services by providing space for film shooting, TV serials and advertisements.

1. Significant Accounting Policies

1.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind-AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended).

The financial statements have been prepared on a historical cost basis, except for the freehold land, buildings and Plant & equipment which were revalued under the previous GAAP (Indian GAAP) and shown at revalued price deemed as cost.

2. Significant accounting judgements, estimates and assumptions

The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expense for the periods presented.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the company and that are believed to be reasonable under the circumstances.

Terms/rights attached to equity shares:

The Company has only one class of equity shares having a par value of INR 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.

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 shareholders.

Terms/rights attached to preference shares:

Each preference share has a par value of INR 100 per share issued at premium of Rs.300/- each. The preference shares rank ahead of the equity shares in the event of liquidation. The Preference shares issued are 0% Non-Convertible Redeemable Preference Shares. Each Preference shares shall be non-participating in the surplus-funds, not carry any dividend do not carry voting rights except in accordance with the provisions of Sec. 47 (2) of the Companies Act, 2013, be non-convertible and be redeemed within 20 years from the date of issue or on an earlier date only at the discretion of the issuer company, at a premium of 18% (Simple) p.a. on the issue price, payable at the time of redemption.

Note: During the year 2004-05, company had introduced a scheme duly approved by Honâble High Court of Andhra Pradesh at Hyderabad for consequential reduction of Capital whereby the company proposed the reduction, cancellation and extinguishments of small-lot of Shareholdings (Shareholders holding 10 or less than 10 no. of shares) subject to such terms and conditions as specified in the scheme at a predetermined price. At the same time the company had created the liability for making the repayment to shareholders called as "Payable as per Scheme of Arrangement 2003". The company is still making payments to the shareholders as and when the request is received.

Note 3- Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the quarter attributable to equity holders by the weighted average number of Equity shares outstanding during the quarter.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the quarter plus the weighted average number of equity shares that would be issued on conversion of all dilutive potential Equity shares into Equity shares.

Note 4- Non-Convertible Redeemable Preference Shares:

During the year, Company has issued 28,159 0% Non-Convertible Redeemable Preference Shares of Rs. 100/- each at an issue price of Rs. 400/- each including premium of Rs. 300/- for consideration in cash, which are redeemable within 20 years from the date of issue or on an earlier date only at the discretion of the issuer company, at a premium of 18% (Simple) p.a. on the issue price, payable at the time of redemption. The Indian GAAP does not prescribe distinction between equity and liability of a financial instrument.

As per Ind-AS 32, a financial instrument may be classified as an equity or financial liability based on its substance rather than its legal form. The said Ind-AS 32 also explains when a financial instrument can be classified as equity or financial liability. To determine the classification of the said preference shares issued, the Company has taken a legal opinion relying on which the said preference shares have been classified as Equity.

Note 5- Contingent liability and commitments: (to the extent not provided for)

Claim against the company not acknowledgement as debt:-

a) The Honâble. Bombay High Court, by a judgment dated 1st March 2012, awarded a decree in favour of Cotton Corporation of India Ltd for Rs. 22,78,578/- which together with interest amount to Rs. 89,26,844/- as on 31^st March 2013. The Company has filed in a earlier year SLP before the Honâble Supreme Court, against the said judgement, which has been admitted and stay has been granted on the execution of impugned decree. As directed by the Honâble Supreme Court an amount of Rs. 50 Lakhs has been deposited with Cotton Corporation of India Ltd. The SLP is pending for hearing.

b) The Brihanmumbai Electric Supply & Transport Undertaking of The Brihan Mumbai Mahanagarpalika filed in an earlier year writ petition in The Honâble Bombay High Court in respect of electricity charges of the Ex Workers of the Company. As per the directions given by the Hon. Bombay High Court, the BEST calculated and demanded a sum of Rs. 8,55,168/- comprising energy charges of Rs. 83,366/- and interest charges of Rs. 7,71802/-. The company has paid the energy charges and challenged the interest demand by way of a writ petition in the Hon. Bombay High Court and also deposited with BEST Rs. 2.50 Lakhs as per Court order. The writ is pending for hearing.

c) With regard to the proposed property development, the Hon. Bombay High Court in an earlier year rejected the writ petition filed by the Company upholding the rejection by Municipal Corporation of the plans submitted by the Company on the ground of absence of âNo Objectionâ from the Defence /Navy. The Company has preferred SLP in the Hon. Supreme Court against the said order of Bombay High Court, which has been admitted and is pending for final hearing.

d) Municipal Corporation of Greater Mumbai in an earlier year revised property taxes in Mumbai with retrospective effect from 1^st April 2010 by migrating to capital value system from erstwhile rateable value system. In terms of the same the company received notices from the corporation, from time to time, demanding tax of Rs. 36.51 lakhs for the period 1-4-2010 to 31-3-2015 for various structures.

Writ petitions were filed in Bombay High Court by certain parties challenging the said revision in property taxes and by an interim order, the property owners were allowed to pay taxes at old rate plus 50 % of the difference between old and revised rates, pending disposal of the writ petitions. In terms of which the Company paid property taxes for the period upto 31^st March, 2015 amounting to Rs. 27.50 lakhs. For the financial year 2015-16 and 2016-17, the Corporation raised demand of Rs. 18.42 lakhs. However, the Corporation did not accept the payment as per the aforesaid interim order and accepted Rs. 4.21 lakhs only. The Corporation subsequently in the year 2017-18, accepted payment of Rs. 9.30 lakhs for the aforesaid period in terms of the interim order of Bombay High Court, in respect of the structures for which in earlier years it had not accepted payment.

The Company also received in earlier years notices from the Corporation demanding property tax under the capital value system as follows- (i) Rs. 201.10 lakhs per annum with retrospective effect from 1^st April, 2010 to 31^st March, 2015, and Rs. 281.55 lakhs for the year 2015-16, treating the property as Open land instead of structures as earlier assessed. The Corporation also during the year 2015-16, by its notices cancelled earlier demands/bills for the retrospective period of 2010-2015 amounting to Rs. 4.03 lakhs for structures, against which the Company had paid an amount of Rs. 3.00 lakhs as per the aforesaid court order. (ii) for the years 2016-17 & 2017-18 Rs. 289.75 lakhs per year on the basis of open land & structures.

(iii) for the year 2018-19 under review Rs. 289.75 lakhs treating the property as Open Land & Structures.

The company has filed with concerned authorities, from time to time itâs replies/ objections to the aforesaid notices which are to be heard. The Honourable Bombay High Court vide its judgment dated 24-4-2019 has disposed off all the above mentioned petitions filed by various parties & struck down certain rules regarding fixing of Capital Value of lands & buildings, made by the Corporation. The Company is consulting its lawyers and will thereafter decide on further course of action.

Capital Commitments:

The company has no other capital commitments requiring separate disclosure. Such capital commitments will be disclosed as and when it arises.

Note 6 - Financial risk management:

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk; and

- Market Risk - Interest rate

Risk management framework

The Companys board of directors have overall responsibility for the establishment and oversight of the Companyâs risk management framework. The board of directors have authorized respective business Managers to establish the processes, who ensures that executive management controls risks through the mechanism of properly defined framework.

The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed by the business managers periodically to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

(i) Credit risk

The maximum exposure to credit risks is represented by the total carrying amount of these financial assets in the Balance Sheet

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.

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Companyâs Management has established a credit policy under which each new customer is analysed individually for creditworthiness before the Companyâs standard payment and delivery terms and conditions are offered. The Companyâs review includes market check, industry feedback, past financials and external ratings, if they are available, and in some cases bank references. Receivable limits are established for each customer and any receivable exceeding those limits require necessary approval.

The gross carrying amount of receivables is Rs. 0.10 lakhs.

(ii) Liquidity risk

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 assets. The Companyâs approach to manage liquidity is to have sufficient liquidity to meet itâs liabilities when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under credit facilities.

Liquidity risk results from the Companyâs potential inability to meet the obligations associated with its financial liabilities, for example settlement of financial debt and paying suppliers. The Companyâs liquidity is managed by Company Treasury. The aim is to ensure effective liquidity management, which primarily involves obtaining sufficient committed credit facilities to ensure adequate financial resources and, to some extent, tapping a range of funding sources.

Net financial debt is used internally by Company Treasury to monitor the Companyâs credit resources available. Net financial debt is the Companyâs net interest-bearing debt, excluding interest-bearing assets, as these assets are not actively managed in relation to liquidity risk.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The contractual cash flow amounts are gross and undiscounted, and includes interest accrued but not due on borrowings.

(iii) Market risk

Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk namely: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

A. Currency risk

Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. As the Company has taken borrowings in INR only, therefore, currency risk will not arise.

B. Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs borrowings with floating interest rates.

Exposure to interest rate risk

The Companyâs interest rate risk arises majorly from the carrying fixed rate of interest. These obligations exposes the Company to cash flow interest rate risk. The exposure of the Companyâs borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows:

Note 7 - Segment Information:

During the year, the Company operated in a single segment- âIncome from rendering services by providing space for film shooting, TV serials and advertisementsâ. Therefore, separate segment disclosures have not been given.

Note 8- Related Party Disclosures*:

1. Key Management Personnel of the entity:

1. Shri S. K. Warerkar - Executive Director

2. Other Related Parties:

a. Individuals and their close family members:

b. Other related entities:

3. Related Party Transactions during the year:

(a) Key managerial personnel compensation

Note 9. Employee benefit obligations:

Defined benefit plans:

Gratuity

The Company operates a gratuity plan through the âTCI Industries Ltd Employees Group Gratuity Assurance Schemeâ. Every employee is entitled to a benefit equivalent to 15 days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972 or Company scheme whichever is beneficial. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after 5 years of continuous service.

Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Interest rate risk: A fall in the discount rate which is linked to the G. Sec. rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the planâs liability.

Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

Note 10 - Deferred Tax

As there is no reasonable certainty that sufficient future taxable income will be available against which deferred tax assets can be realized, no deferred tax assets have been recognized in the books.

Note 11 - Disclosure requirement under MSMED Act, 2006

As required to be disclosed under Micro, Small & Medium Enterprises Development Act, 2006 and to the extent such parties are identified on the basis of information available with the Company, there are no Micro enterprises or Small scale enterprises to whom the Company owes any due which are outstanding for more than 45 days as at 31^st March 2019.

Note 12 - Authorisation for issue of the Financial Statements

The Financial Statements were authorised for issue by the Board of Directors on May 18, 2019.

Note 13 - Regrouped / Recast / Reclassified

Previous year figures been regrouped/rearranged wherever considered necessary.

Mar 31, 2018

Note 1- Related Party Disclosures: 1. Key Management Personnel of the entity:

1. Mr. Sunil K. Warerkar - Executive Director

2. Other Related Parties:

a. Individuals and their close family members: Sr. No. Name of the Related Party Description of relationship

1 Mr. Dharmpal Agarwal Director

2 Mr. Mahendra Agarwal Director

3 Dr. Ashok Kumar Agarwal Director

4 Mr. Vikas Agarwal Director

5 Mr. Siddhartha Agarwal Director

I 59 I â

6 Mr. Ashish Agarwal Director

7 Mr. Utsav Agarwal Director

8 Mr. Satyanarayan Agarwal Father of Siddhartha Agarwal

9 Mr. Ayan Kumar Agarwal Son of Ashok Kumar Agarwal

10 Mrs. Nirmal Agarwal Mother of Ashish Agarwal

11 Mr. Chander Agarwal Son of Dharmpal Agarwal

12 Mr. Vivek Agarwal Brother of Siddhartha Agarwal

13 Mr. Vineet Agarwal Son of Dharmpal Agarwal

14 Mrs. Avani Agarwal Daughter of Ashok Kumar Agarwal

15 Mrs. Manisha Agarwal Wife of Ashok Kumar Agarwal

16 Mrs. Kanika Agarwal Wife of Siddhartha Agarwal

17 Mrs. Nidhi Agarwal Promoter & Shareholder

18 Mrs. Umah Agarwal Mother of Siddhartha Agarwal

b. Other related entities: Sr. No. Name of the Related Party

1 M/s. Ashok Kumar Ayan Kumar

2 M/s. Assam Bengal Carriers

3 M/s. Pragya Enterprises

4 M/s. ABC Financial Services Pvt. Ltd.

5 M/s. ABC India Limited

6 M/s. Bhoruka Capital Limited (Earlier known as Mukesh Textile Mills Ltd)

7 M/s. Mahendra Investment Advisors Private Limited

8 M/s. Sweta Financial Services Pvt. Ltd.

9 M/s. Transcorp Enterprises Limited. (Earlier known as Transcorp housing Finance Ltd)

10 M/s. Transcorp Estates Private Limited

11 M/s. Bhoruka Power Corporation Limited

*As certified by the management and relied upon by auditors.

Note 2 - Segment Information:

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the company, in deciding how to allocate resources and assessing performance.

The Company has identified business segments (industry practice) as reportable segments. The business segments comprise: 1) Textile Trading 2) Services.

Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses.

Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Property, plant and equipment that are used interchangeably among segments are not allocated to reportable segments.

Note: The Assets of the Company are used interchangeably and it''s impracticable to allocate these segments wise. Note 26. Employee benefit obligations:

Defined benefit plans:

Gratuity

The Company operates a gratuity plan through the âTCI Industries Ltd Employees Group Gratuity Assurance Scheme''. Every employee is entitled to a benefit equivalent to 15 days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972 or Company scheme whichever is beneficial. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after 5 years of continuous service.

Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

Expecte contributions to post-employment benefit plans for the year ending 31^st March, 2019 are INR 43,189.

Note 3 - Deferred Tax

Note 4 - Disclosure requirement under MSMED Act, 2006

Note 5 - Regrouped / Recast / Reclassified

Figures of the earlier year have been reclassified to conform to Ind AS presentation requirements.

Note 6 - Authorization for issue of the Financial Statements

The Financial Statements were authorized for issue by the Board of Directors on May 25, 2018.

Note 7- Transition to Ind AS:

These are the first Financial Statements of the Company prepared in accordance with Ind AS.

The Accounting Policies set out in Note 1 have been applied in preparing the Financial Statements for the year ended March 31, 2018, the comparative information presented in these Financial Statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS Balance Sheet as at April 01, 2016 (the date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in Financial Statements prepared in accordance with the Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (IGAAP). An explanation of how the transition from IGAAP to Ind AS has affected the financial position, financial performance and cash flows of the Company is set out in the following tables and notes:

A) Exemptions and exceptions availed:

In preparing these Ind AS Financial Statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards, as explained below. The resulting difference between the carrying values of the assets and liabilities in the Financial Statements as at the transition date under Ind AS and IGAAP have been recognized directly in equity (retained earnings or another appropriate category of equity). This Note explains the adjustments made by the Company in restating its IGAAP Financial Statements, including the Balance Sheet as at April 01,

2016 and the Financial Statements as at and for the year ended March 31, 2017.

a) Ind AS optional exemptions:

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from IGAAP to Ind AS.

i) Deemed Cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the Financial Statements as at the date of transition to Ind AS, measured under IGAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. Accordingly, the Company has elected to measure all of its property, plant and equipment at their IGAAP carrying value in their Financial Statements.

Leasehold land and Freehold buildings (properties) were carried in the balance sheet prepared in accordance with Indian GAAP on the basis of valuations performed on 30^th June 1984.

b) Ind AS mandatory exceptions:

The Company has applied the following exceptions from full retrospective application of Ind AS as mandatorily required under Ind AS 101:

i) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in financial instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

B) Reconciliation between IGAAP and Ind AS:

Ind AS 101 requires an entity to reconcile equity, Total Comprehensive Income and cash flows for prior periods. The following tables represent the reconciliations from IGAAP to Ind AS:

b) Impact of Ind AS adoption on the Statements of Profit and Loss for the year ended March 31, 2017

The transition from IGAAP to Ind AS has not had a material impact on the Statement of Profit and loss.

c) Impact of Ind AS adoption on the Statements of Cash Flows for the year ended March 31, 2017

The transition from IGAAP to Ind AS has not had a material impact on the Statement of Cash Flows.

C) Notes to reconciliations

a) Revaluation Reserve

In the previous years, depreciation on differential increase in values arising out of revaluation was not recouped from Revaluation Reserve. The same has now been adjusted with retained earnings as at April 01, 2016.

b) Other Reserve

In the previous years, a capital subsidy of Rs. 34,40,509/- was not transferred to Profit and Loss Account. The same has now been adjusted with retained earnings as at April 01, 2016.

c) Retained Earnings

Retained earnings have been adjusted consequent to the above adjustments.

Mar 31, 2017

1. Earning per share - No. of Equity Shares 8,96,791. Net Loss for the year Rs. 23.67 Lacs.

Earnings per share of Rs. 10/- each Rs. (-) 2.64 (Previous Year Rs.- 5.05 )

2. With regard to the proposed property development, the Hon. Bombay High Court in a earlier year rejected the writ petition filed by the Company upholding the rejection by Municipal Corporation of the plans submitted by the Company on the ground of absence of âNo Objectionâ from the Defense /Navy. The Company has preferred SLP in the Hon. Supreme Court against the said order of Bombay High Court, which has been admitted and is pending.

3. Municipal Corporation of Greater Mumbai in earlier years revised property taxes with effect from 01^st April 2010. Writ petitions were filed in Bombay High Court by certain parties challenging the said revision in property taxes and by an interim order the property owners were allowed to pay taxes at old rate plus 50 % of the difference between old and revised rates, pending disposal of the writ petitions, in terms of which the Company paid property taxes for the period up to 31^st March, 2016. The Corporation has accepted such taxes partly to the extent of Rs. 2,29,260/- for six months up to 30-09-2015 and thereafter has not accepted any taxes for the subsequent period.

As stated in previous year the Company received special notice dated 09^th April, 2015 from Municipal Corporation of Greater Mumbai revising property taxes, treating the property as Open land instead of structures as earlier assessed and proposing total tax after capping, at Rs. 2,01,10,414/- p.a for the period April 2010 to March 2015. Subsequently on 3^rd August, 2015 the Company received Notice from Municipal Corporation of Greater Mumbai dated 23^rd May, 2015, demanding tax of Rs. 2,81,54,580/- for the period 01-04-2015 to 31-03-2016 treating the property as Open Land instead of Structures as was assessed earlier. During the year the Company received further notice dated 19-05-2016 from Municipal Corporation of Greater Mumbai demanding tax of Rs. 2,89,75,098/- for the year 2016-17. The Company has filed replies to all the said notices and hearings in the matter is pending. As stated in earlier year, the Corporation also by its notices dated 24^th March, 2016 cancelled earlier demands/bills for the retrospective period of 2010-2015 raised for structures amounting to Rs. 4,60,493/- against which the company had paid on amount of Rs. 2,18,420/- as per the aforesaid court order.

4. Contingent Liability and commitments: ( to the extent not provided for )

Claim against the company not acknowledgement as debt :-

5. The Hon''ble Bombay High Court, by a judgment dated 1^st March 2012, awarded a decree in favour of Cotton Corporation of India Ltd for Rs. 22,78,578/- which together with interest amount to Rs. 89,26,844/- as on 31^st March 2013. The Company, has filed SLP before the Hon''ble Supreme Court which has been admitted and stay has been granted on the execution of impugned decree. As directed by the Hon''ble Supreme Court an amount of Rs. 50 Lac has been deposited with Cotton Corporation of India Ltd.

6. The Brihanmumbai Electric Supply & Transport Undertaking of The Brihan Mumbai Mahanagarpalika filed writ petition in The Hon''ble Bombay High Court in respect of electricity charges of the Ex Workers of the Company. As per the directions given by the Hon. Bombay High Court, the BEST calculated and demanded a sum of Rs. 8,55,168/- comprising energy charges of Rs. 83,366/- and interest charges of Rs. 7,71,802/-. The company has paid the energy charges and challenged the interest demand by way of a writ petition in the Hon. Bombay High Court and also deposited with BEST Rs. 2.50 Lakhs as per Court order. The writ is pending for hearing.

Mar 31, 2016

ACCOUNTING POLICIES:

i. Recognition of Income & Expenditure: Income and expenditure are recognized on accrual basis.

ii. Fixed assets are stated at cost and/or at revaluation.

iii. Depreciation is provided as per Schedule II to the companies Act, 2013. Depreciation on addition/deductions is calculated pro-rata from/to the month of addition/deduction.

iv. Gratuity: The Company is a participant of group gratuity scheme with Life Insurance Corporation of India and the required premium under the scheme is paid.

v. As there is no reasonable certainty that sufficient future taxable income will be available against which deferred tax assets can be realized, no deferred tax assets have been recognized in the accounts in respect of brought forward losses eligible as per Income Tax Act.

Mar 31, 2014

I. No provision has been made for depreciation on assets, which have already been depreciated to the exten of 95% of the value.

ii. The Company trades in textiles only, hence the requirement for segment reporting is not applicable.

iii. Earning per share Â No. of Equity Shares 8,96,791. Loss for the year Rs.20.24 Lacs. Earning per share of Rs. 10/- each Rs.(-) 2.26 (Previous Year Rs.- 9.16 )

iv. The accumulated losses of the Company exceed its net worth. However these accounts have been prepared on a going concern basis as the management believes that the company will be able to meet all its liabilitie on the basis of the financial support from its Promoters/Directors who have agreed to provide all the necessar financial support from time to time.

Accordingly these financial statements do not include any adjustments relating to the recoverability an classification of the carrying amount of Assets and classification of Liabilities that might have to be don should the company be unable to continue as Going Concern.

v. With regard to the proposed property development,the Hon. Bombay High Court rejected the writ petitio filed by the Company upholding the rejection by Municipal Corporation of the plans submitted by the Compan on the ground of absence of "No Objection" from the Defence /Navy. The Company has preferred SLP in th Hon. Supreme Court against the said order of Bombay High Court, which has been admitted and is pending for final hearing.

vi. Municipal Corporation of Greater Mumbai has revised property taxes with effect from 01st April 2010 and bill in this behalf were received during the previous year. The differential tax arrears relating to the year of R 7,30,300/- ( Previous year Rs 15,24,279 ) has been provided in these accounts and Rs. 5,07,643 has bee paid during the year . Writ petitions have been filed in Bombay High Court by certain parties challenging th said revision in property taxes and by an interim order the property owners have been allowed to pay taxes a old rate plus 50 % of the difference between old and revised rates, pending disposal of the writ petitions.

vii. Related Party Disclosures

I. Directors/key Management Personnel:

1. Mr. S. N. Agarwal Â Director

2. Mr. D. P. Agarwal Â Director

3. Mr. M. K. Agarwal Â Director

II. Enterprises over which persons at (I ) above exercise significant influence/relatives:

1. Mr. Chander Agarwal 7. M/s. Pragya Enterprises.

2. Mr. D. P. Agarwal 8. Mr. S. N. Agarwal

3. Mrs. Kanika Agarwal 9. Mr. Siddhartha Agarwal.

4. Mr. M. K. Agarwal 10. Mrs. Umah Agarwal.

5. M/s. Mahindra Investment Advisors P. Ltd 11. Mr. Vivek Agarwal.

6. Mrs. Nidhi Agarwal. 12. Mr. Vineet Agarwal.

III. Nature of transaction: Advances received against proposed property development Rs. 9.90 Lacs Advances Refunded Rs.19.92Lacs

Balance carried forward as on 31/03/2014 Rs.1,041.71Lacs

ix. Figures for previous year have been regrouped / rearranged wherever necessary. x. Contingent Liability and commitments: ( to the extent not provided for ) Claim against the company not acknowledgement as debt :- a) Income Tax demands under dispute Rs. 116 Lacs. The company has filed appeals before ITAT, Hyderabad, against the demand and has paid Rs. 32 lakhs pending disposal of the appeals.

b) The Hon''ble. Bombay High Court, by a judgment dated 1st March 2012, awarded a decree in favour of Cotton Corporation of India Ltd for Rs.22,78,578 which together with interest amount to Rs. 89,26,844/ - as on 31st March 2013. The Company, has filed SLP before the Hon''ble Supreme Court which has been admitted and stay has been granted on the execution of impugned decree. As directed by the Hon''ble Supreme Court an amount of Rs. 50 Lac has been deposited with Cotton Corporation of India Ltd . The SLP is pending hearing.

c) Municipal Corporation of Greater Mumbai (BEST) filed writ petition in The Hon''ble Bombay High Court in respect of electricity charges of the Ex Workers of the Company. As per the directions given by the Hon. Bombay High Court, the BEST calculated and demanded a sum of Rs. 8,55,168 comprising energy charges of Rs. 83,366/- and interest charges of Rs. 7,71,802. The company has paid the energy charges and challenged the interest demand by way of a writ petition in the Hon. Bombay High Court. The writ is pending for hearing.

Mar 31, 2013

I. No provision has been made for depreciation on assets, which have already been depreciated to the extent of 95% of the value.

ii. The Company trades in textiles only, hence the requirement for segment reporting is not applicable.

iii. Earning per share Â No. of Equity Shares 8,96,791. Loss for the year Rs.82.16 Lacs. Earning per share of Rs. 10/- each Rs.(-) 9.16 (Previous Year Rs. -22.21)

iv. The accumulated losses of the Company exceed its net worth. However these accounts have been prepared on a going concern basis as the management believes that the company will be able to meet all its liabilities on the basis of the financial support from its Promoters/Directors who have agreed to provide all the necessary financial support from time to time.

Accordingly these financial statements do not include any adjustments relating to the recoverability and classification of the carrying amount of Assets and classification of Liabilities that might have to be done should the company be unable to continue as Going Concern.

v. With regard to the proposed property development, the Hon. Bombay High Court rejected the writ petition filed by the Company upholding the rejection by Municipal Corporation of the plans submitted by the Company on the ground of absence of "No Objection" from the Defence /Navy. The Company has preferred SLP in the Hon. Supreme Court against the said order of Bombay High Court, which has been admitted.

vi. Municipal Corporation of Greater Mumbai has revised the property taxes w.e.f. 01st April 2010 and bills have been received during the year. The differential tax arrears of Rs 15,24,279 has been provided in these accounts.

vii. Related Party Disclosures

I. Directors/key Management Personnel:

1. Mr. S. N. Agarwal Â Director

2. Mr. D. P. Agarwal Â Director

3. Mr. M. K. Agarwal Â Director

II. Enterprises over which persons at (I ) above exercise significant influence/relatives:

1. Mr. Chander Agarwal

2. Mr. D. P. Agarwal

3. Mrs. Kanika Agarwal

4. Mr. M. K. Agarwal

5. M/s. Mahindra Investment Advisors P. Ltd

6. Mrs. Nidhi Agarwal.

7. M/s. Pragya Enterprises

8. Mr. S. N. Agarwal

9. Mr. Siddhartha Agarwal.

10. Mrs. Umah Agarwal.

11. Mr. Vivek Agarwal.

12. Mr. Vineet Agarwal.

viii. Figures for previous year have been regrouped / rearranged wherever necessary.

ix. Contingent Liability and commitments: ( to the extent not provided for ) Claim against the company not acknowledgement as debt :- a) Income Tax demands under dispute Rs. 116 Lacs

b) The Hon''ble. Bombay High Court, by a judgment dated 1st March 2012, awarded a decree in favour of Cotton Corporation of India Ltd for Rs.22,78,578 which together with interest amount to Rs. 89,26,844/- as on 31st March 2013. The Company, has filed SLP before the Hon''ble Supreme Court which has been admitted and stay has been granted on the execution of impugned decree. As directed by the Hon''ble Supreme Court an amount of Rs. 50 Lac has been deposited with Cotton Corporation of India Ltd . The SLP is pending hearing.

c) Municipal Corporation of Greater Mumbai (BEST) filed writ petition in The Hon''ble Bombay High Court in respect of electricity charges of the Ex Workers of the Company. As per the directions given by the Hon. Bombay High Court, the BEST calculated and demanded a sum of Rs. 8,55,168 comprising energy charges of Rs. 83,366/- and interest charges of Rs. 7,71,802. The company has paid the energy charges and challenged the interest demand by way of a writ petition in the Hon. Bombay High Court. The writ is pending for hearing.

Mar 31, 2012

1. No provision has been made for depreciation on assets, which have already been depreciated to the extent of 95% of the value.

2. The Company trades in textiles only, hence the requirement for segment reporting is not applicable.

3. Earning per share - No. of Equity Shares 8,96,791. Loss for the year Rs. 199.21 Lacs.

Earning per share of Rs. 10/- each Rs. -22.21 (Previous Year Rs. -5.11)

4. The accumulated losses of the Company exceed its net worth. However these accounts have been prepared on a going concern basis as the management believes that the company will be able to meet all its liabilities on the basis of the financial support from its Promoters/Directors who have agreed to provide all the necessary financial support from time to time.

Accordingly these financial statements do not include any adjustments relating to the recoverability and classification of the carrying amount of Assets or the amount and classification of Liabilities that might have to be done should the company be unable to continue as Going Concern.

5. With regard to the proposed property development, the Hon. Bombay High court rejected the writ petition filed by the Company upholding the rejection by Municipal Corporation of the plans submitted by the Company on the ground of absence of NOC of Defence/Navy. The Company has preferred SLP in the Hon. Supreme Court against the said order of Bombay High Court, which has been admitted.

8. Figures for previous year have been regrouped / rearranged wherever necessary.

9. Contingent Liability and commitments: (to the extent not provided for)

Claim against the company not acknowledgement as debt

a) M/s. Cotton Corporation of India Ltd had filled suit no. 1891 of 1980 against the Company on 29.10.1980 in the Bombay High Court claiming damages of Rs.22,78,578/- for breach of contract. The said suit was decided by an order and judgement on 15/12/2008 and a decree for Rs.2,35,691 /-only was awarded by the Hon'ble High Court. The said amount has been provided for in the accounts for 2008 - 2009. Cotton Corporation of India preferred an appeal before the division bench of the Hon'ble High Court Mumbai against the said order and vide their judgement dated 01/03/2012, the Hon'ble Court has reversed the order of the single judge & awarded a decree for Rs.22,78,578/- along with interest @ 9% PA from the date of Institution of the suit which works out to Rs. 87,21,772/-till 31st March 2012. The Company will be filing SLP in the Supreme Court Of India against this order as advised to the Company by it's Legal Advisors.

b) Income tax demands under dispute Rupees 116 lacs.

Mar 31, 2011

1. No provision has been made for depreciation on assets, which have already been depreciated to the extent of 95% of the value.

2. The Company trades in textiles only, hence the requirement for segment reporting is not applicable.

3. Earning per share - No. of Equity Shares 8,96,791. Loss for the year Rs.45.86 Lacs. Earning per share of Rs. 10/- each Rs. -5.11 (Previous Year Rs.-0.78)

4. The accumulated losses of the Company exceed its net worth. However these accounts have been prepared on a going concern basis as the management believes that the company will be able to meet all its liabilities on the basis of the financial support from its Promoters/Directors who have agreed to provide all the necessary financial support from time to time.

Accordingly these financial statements do not include any adjustments relating to the recoverability and classification of the carrying amount of Assets or the amount and classification of Liabilities that might have to be done should the company be unable to continue as Going Concern.

5. The proposed property development at Colaba, Mumbai could not commence in the absence of requisite approvals/sanctions from the authorities concerned due to objections raised by Navy resulting in the litigation on the matter, which is still continuing.

Certain administrative expenses incurred during the year have been debited to Property Development Expenses as per practice followed since last few years and carried in the Balance Sheet.

6. Related Party Disclosures

I. Directors/key Management Personnel:

1. Mr. S. N. Agarwal - Chairman 2. Mr. D. P. Agarwal - Director

3. Mr. M. K. Agarwal - Director

II. Enterprises over which persons at I above exercise significant influence/relatives:

1. M/s. Bhoruka Engineering Inds. Ltd

2. Mr. Chander Agarwal 8. M/s. Pragya Enterprises.

3. Mr. D. P. Agarwal 9. Mr. S. N. Agarwal

4. Mrs. Kanika Agarwal 10. Mr. Siddhartha Agarwal.

5. Mr. M. K. Agarwal 11. Mrs. Umah Agarwal.

6. M/s. Mahindra Investment Advisors P. Ltd 12.Mr.Vivek Agarwal

7. Mrs. Nidhi Agarwal. 13. Mr. Vineet Agarwal.

III. Nature of transaction:

Advances received against proposed property development 35.70 Lacs

Advances Refunded 00.00 Lacs

Balance carried forward as on 31/03/2011 825.74 Lacs

Mar 31, 2010

1. No provision has been made for depreciation on assets, which have already been depreciated to the extent of 95% of the value.

2. The Company trades in textiles only, hence the requirement for segment reporting is not applicable.

3. Earning per share - No. of Equity Shares 8,96,791. Loss for the year Rs.7.02 Lacs. Earning per share of Rs. 10/-each(Rs.0.78)

4. Related Party Disclosures

I. Directors/key Management Personnel:

1. Mr. S. N. Agarwal - Chairman 2. Mr. D. R Agarwal - Director

3. Mr. M. K. Agarwal - Director

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