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Notes to Accounts of Vardhman Acrylics Ltd.

Mar 31, 2021

(b) Terms/ rights attached to equity shares

The company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share held.

In the event of liquidation of the Company, the holders of equity shares will be entiled to receive any of the remaining assests of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting except in case of interim dividend.

(i) Capital redemption reserve: Capital Redemption Reserve is a statutory , non-distributable reserve into which amounts are transferred following the redemption of capital or purchase of a company''s own shares.

(ii) Securities premium : The amount received in excess of face value of the equity shares is recognised in Securities Premium. It can be utilized in accordance with the provisions of the Companies Act 2013, for issuance of bonus shares , to provide for premium on redemption of shares or debentures, write-off equity related expenses like underwriting costs etc

(iii) General Reserve: General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

(iv) Retained earnings: Retained earnings represents amount that can be distributed by the Company to its equity shareholders is determined based on the financial statements of the Company and also considering the requirements of the Companies Act 2013.

(v) Reserve for equity instruments through other comprehensive income : Reserve for equity instruments through other comprehensive income represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of amount reclassified to retained earnings when those assets have been disposed off.

(vi) Reserve for other items of other comprehensive income : Other items of other comprehensive income comprises income/ (Expense) represent the acturial gain/(loss) recognised during the year (net of taxes)

b. Liability on account of outstanding bank guarantees and letter of credit of Rs.401.07 Lakhs (previous year Rs. 183.75Lakhs).

c. The amounts shown above represents the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately or relate to a present obligations that arise from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate cannot be made. The Company has been advised that it has strong legal positions against such disputes.

d. The Hon''ble Supreme Court in a recent ruling last year had passed a judgement on the definition and scope of ‘Basic Wages'' under the Employees'' Provident Funds and Miscellaneous Provision Act, 1952. Pending issuance of guidelines by the regulatory authorities on the application of this ruling, the impact on the Company, if any, cannot be ascertained. The Company will update its provision, on receiving further clarity on this subject matter.

The Company sponsors funded defined benefit plan for qualifying employees. This defined benefit plan of gratuity is administered by a separate trust that is legally separate from the entity. The trustees are required by the law to act in the interest of the trust and all the relevant stakeholders i.e. active employees, inactive employees, retired employees and employers, etc. The trust is responsible for investment policy with regard to the assets of the trust. The Company has a gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days salary last drawn for each completed year of service. Gratuity is payable to all eligible employees of the Company on retirement, separation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972 or as per the Company''s plan, whichever is more beneficial.

These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.

i. Salary Risk- Actual salary increases will increase the Plan''s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

ii. Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

iii. Interest Risk- A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the plan assets.

iv. Longevity risk- The present value of the defined benefit liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

The following tables set out the funded status of the gratuity plan and the amounts recognized in the Company''s financial statements as at 31st March 2021 and 31st March 2020.

37. Segment Information

The Company is primarily in the business of manufacturing, purchase and sale of “Acrylic Fibre and Tow. The Chairman and Managing Director of the Company, which has been identified as being the Chief Operating Decision Maker (CODM), evaluates the Company''s performance, allocate resources based on the analysis of the various performance indicator of the Company as a single unit. Therefore, there is only one reportable segment for the Company.

38. Related Party transactions:

In accordance with the requirements of IND AS 24, on “Related Party Disclosures", name of the related party, related party relationship, transactions and outstanding balances including commitments where control exits and with whom transactions have taken place during reported periods, are:

39. Disclosures as required by Indian Accounting Standard (Ind AS) 116 “Leases”:-

The Company has lease contracts for Land. Leases of land have lease terms of 99 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets.

In 2019-20 on transition, while adoption of the new standard resulted in recognition of ‘Right of Use'' asset of Rs 0.08 lakhs and a lease liability of Rs.0.08 lakhs. Further, in respect of leases which were classified as operating leases, applying Ind AS 17, Rs. 1162.54 lakhs had been reclassified from “Other Assets" to “Right of Use Asset". The effect of this adoption was insignificant on the profit before tax, profit for the period and earnings per share. Ind AS 116 resulted in an increase in cash inflows from operating activities and an increase in cash outflows from financing activities on account of lease payments.

42. Financial Instruments and Risk Management

42 (a) Capital Management

The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through optimization of debt and equity balance. The capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the company''s capital management is to maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value.

The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings. In order to maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital The Company''s gearing ratio was as follows:

Level 1:

Quoted prices in the active market. This level of hierarchy includes financial assets that are measured by reference to quoted prices in the active market.

Level 2:

Valuation techniques with observable inputs. This level of hierarchy includes items measured using inputs other than quoted prices included within Level 1 that are observable for such items, either directly or indirectly.

Level 3:

Valuation techniques with unobservable inputs. This level of hierarchy includes items measured using inputs that are not based on observable market data (unobservable inputs). Fair value determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instruments nor based on available market data.

Sensitivity of Level 3 financial instruments are insignificant.

The fair value of the financial instruments are determined at the amount that would be received to sell an asset in an orderly transaction between market participants.

The following methods and assumptions were used to estimate the fair values:

Investments in mutual funds: Fair value is determined by reference to quotes from the financial institutions, i.e. net asset value (NAV) for investments in mutual funds declared by mutual fund house.

Investment in preference shares: Fair value is determined by reference to quotes from fund houses/portfolio management services companies/respective issuer of preference shares, i.e. value of investments.

Derivative contracts: The Company has entered into various foreign currency contracts to manage its exposure to fluctuations in foreign exchange rates. These financial exposures are managed in accordance with the Company''s risk management policies and procedures. Fair value of derivative financial instruments are determined using valuation techniques based on information derived from observable market data, i.e., mark to market values determined by the Authorized Dealers Banks.

Quoted equity investments: Fair value is derived from quoted market prices in active markets.

Unquoted equity investments: Fair value is derived on the basis of net asset value approach, in this approach the net asset value is used to capture the fair value of these investments.

Financial risk management

The financial assets of the company include investments, loans, trade and other receivables, and cash and bank balances that derive directly from its operations.

The principal financial liabilities of the company, other than derivatives, include loans and borrowings, trade and other payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.

The company is mainly exposed to the following risks that arise from financial instruments:

(i) Market risk

(ii) Liquidity risk

(iii) Credit risk

The Company''s senior management oversees the management of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company.

This note explains the risks which the company is exposed to and policies and framework adopted by the company to manage these risks:

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: interest rate risk, foreign currency risk and investment risk.

(a) Foreign currency risk

The company imports certain assets and material from outside India. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently the company is exposed to foreign currency risk and the results of the company may be affected as the rupee appreciates/ depreciates against foreign currencies. Foreign exchange risk arises from the future probable transactions and recognised assets and liabilities denominated in a currency other than company''s functional currency.

The company measures the risk through a forecast of highly probable foreign currency cash flows and manages its foreign currency risk by hedging appropriately. The Company uses foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

Foreign currency sensitivity analysis

Any changes in the exchange rate of EURO and USD against INR is not expected to have significant impact on the Company''s profit due to the less exposure of these currencies. Accordingly, a 10% appreciation/depreciation of the INR as indicated below, against the EURO and USD would have increased/reduced profit by the amounts shown below. This analysis is based on the foreign currency exchange rate variances that the Company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variable remains constant:

The Company uses derivative financial instruments exclusively for hedging financial risks that arise from its commercial business or financing activities. The company''s Corporate Treasury team measures the risk through a forecast of highly probable foreign currency cash flows and manages its foreign currency cash flows by appropriately hedging the transactions. When a derivative is entered into for the purpose of being a hedge, the company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency. All identified exposures are managed as per the policy duly approved by the Board of Directors.

(b) Interest Rate Risk Management

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates.

As the Company has no significant interest-bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates, which are included in interest bearing loans and borrowings in these financial statements. The company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

(c) Security Price Risk Management Exposure in equity

The Company is exposed to equity price risks arising from equity investments held by the Company and classified in the balance sheet as fair value through OCI.

Equity price sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to equity price risks at the end of the year. If the equity prices had been 5% higher / lower:

Other comprehensive income for 31st March 2021 would increase / decrease by Rs. 13.00 Lakhs (31st March 2020: increase / decrease by Rs. 14.00 Lakhs) as a result of the change in fair value of equity investment measured at FVTOCI.

Exposure in mutual funds

The Company manages the surplus funds majorly through investments in debt based mutual fund schemes. The price of investment in these mutual fund schemes is reflected though Net Asset Value (NAV) declared by the Asset Management Company on daily basis as reflected by the movement in the NAV of invested schemes. The Company is exposed to price risk on such Investments.

Mutual fund/Preference share price sensitivity analysis

The sensitivity analysis below have been determined based on Mutual Fund Investment at the end of the year. If NAV has been 1% higher / lower:

Profit for the year ended 31st March 2021 would increase / decrease by Rs. 229.20 Lakhs (31st March 2020 by Rs. 157.22 Lakhs ) as a result of the changes in fair value of mutual fund investments.

(ii) Liquidity Risk

The financial liabilities of the company, other than derivatives, include loans and borrowings, trade and other payables. The company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.

The company monitors its risk of shortage of funds to meet the financial liabilities using a liquidity planning tool. The company plans to maintain sufficient cash and marketable securities to meet the obligations as and when fall due. The below is the detail of contractual maturities of the financial liabilities of the company at the end of each reporting period:

(iii) Credit Risk Management

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables which are typically unsecured. Credit risk on cash and bank balances is limited as the company generally invests in deposits with banks and financial institutions with high credit ratings assigned by credit rating agencies. Investments primarily include investment in liquid mutual fund units, bonds, fixed maturity plan etc. issued by institutions having proven track record.

The company assesses the creditworthiness of the customers internally to whom goods are sold on credit terms in the normal course of business. The credit limit of each customer is defined in accordance with this assessment

The impairment analysis is performed on client to client basis for the debtors that are past due at the end of each reporting date. The company has not considered an allowance for doubtful debts in case of Trade receivables that are past due but there has not been a significant change in the credit quality and the amounts are still considered recoverable.

42. Financial Instruments and Risk Management (Contd..)

Other than financial assets mentioned above, none of the Company''s financial assets are either impaired, and there were no indications that defaults in payment obligations would occur.

Write off policy

The financials assets are written off in case there is no reasonable expectation of recovering from the financial asset.

43. In accordance with the Ind AS-36 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

As per section 135 of the Companies Act, 2013, a company meeting the applicable threshold, need to spend at least 2% of the average net profit for the immediate preceding three financial years on CSR activities as defined in Schedule VII of the Companies Act 2013.

(a) Gross amount required to be spent by the company during the year Rs.79.53 Lakhs (previous year Rs 90.90 Lakhs).

(b) Amount spent during the year Rs.118.30 Lakhs (previous year Rs.68.12 Lakhs)

(c) Amount remaining unspent as on 31st March 2021 Nil (Previous year Rs. 22.78 Lakhs)

(d) Activity

c. Contract Liabilities

Contract Liabilities includes long term or short term advances received from customers to deliver goods.

The amount of revenue recognized during the year for the amount included in contract liabilities at the beginning of the year is Rs.93.65 Lakhs (previous year Rs. 25.64 Lakhs).

e. Performance obligation and remaining performance obligation

The performance obligation is satisfied upon the delivery of Acrylic Fibre and payment is generally due within 0 days to 90 days after the delivery.

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. As on 31st March, 2021, there were no remaining performance obligation as the same is satisfied upon delivery of goods/services.

47 . On account of COVID-19 pandemic, the Government of India had imposed a complete nation-wide lockdown on March 24, 2020 leading to temporarily shut down of company''s manufacturing facilities and operations for some period during first quarter. Since then the Government of India progressively relaxed lockdown conditions and has allowed industry to resume its operations. The Company has made assessment of its liquidity position for the current year and the recoverability and carrying value of its assets comprising property, plant and equipment, right of use assets, investments, inventories and trade receivables. The Company has considered internal and external sources of information for making said assessment. On the basis of said assessment, the Company expects to recover the carrying amount of these assets and no material adjustments is required in the financial statements. Given the uncertainties associated with nature, condition and duration of COVID-19, the Company will closely monitor any material changes arising out of the future economic conditions and its impact on the business of the Company.

48 . The Code on Social Security 2020 has been notified in the Official Gazette on 29th September 2020. The effective date from which the changes are applicable is yet to be notified. Impact if any of the change will be assessed and accounted in the period in which said Code becomes effective.

49 . Previous year figures in the financial statements, including the notes thereto, have been reclassified wherever required to confirm to the current year presentation/classification.


Mar 31, 2018

1. CORPORATE AND GENERAL INFORMATION

Vardhman Acrylics Limited (“the Company’’) is a public limited company, incorporated and has its registered office at Vardhman Premises, Chandigarh Road, Ludhiana, Punjab, India. The company has its listing on National Stock Exchange of India Limited.

The Company is a leading manufacturer and supplier of Acrylic Fibre and Tow with manufacturing facility in Gujarat, India.

The financial statements are approved by board of directors of the Company on May 03, 2018.

(a) Terms/ rights attached to equity shares

The company has only one class of equity shares having par value of ‘10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entiled to receive any of the remaining assests of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) Shares held by holding company and/ or their subsidiaries/ associates

Out of equity shares issued by the company, shares held by its holding company, ultimate holding company and their subsidiaries/associates are as below:

As per records of the company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(c) Basis of Fair value of Financial assets and liabilities

(i) Fair Value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

d) The Company has contested demand in respect of Sales tax / GVAT amounting toRs. 379.01 Lakhs (31 March 2017Rs. 379.01 Lakhs). As against the above demand a sum of ‘45.04 Lakhs (31 March 201 7:Rs. 45.04 Lakhs) has been deposited under protest and stands under the head “Other current Assets-Balances and Deposits with Government Authorities or Others”. The company has filed an appeal with Appellate Authorities and is advised that the demand is not in accordance with law. No Provision therefore, has been made in accounts in respect thereof.

e) The Company has contested the additional demand in respect of income tax amounting toRs. 24.34 Lakhs (31 March 2017:Rs. 11 7.59 Lakhs). Pending appeal with appellate authorities, provision ofRs. 29.88 Lakhs (31 March 201 7:Rs. 48.29 Lakhs) has not been made in the books of account as the company is confident to get the desired relief, however the said demand has been adjusted against the dues to the company.

Notes:-

a) The company does not expect any reimbursement in respect of the above contingent liabilities.

b) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (c) to (e) above, pending resolution of the appellate proceedings.

2. Disclosures as required by Indian Accounting Standard (Ind AS) 19 Employee Benefits:

Gratuity plan: The following tables set out the funded status of the gratuity plan and the amounts recognized in the Company’s financial statements as at March 31, 2018 and March 31, 201 7.

3. Based on the guiding principles given in Ind AS 108 on “Operating Segments” the company’s business activities falls within a single operating segment namely “Acrylic Fibre & Tow”. Accordingly, the disclosure segment of Ind AS 108 are not applicable.

Information by Geographic: The company has not made exports during the year and in the preceding years hence the geographic information are also not applicable.

4. Related Party Disclosure:

In accordance with the requirements of IND AS 24, on Related party disclosures, name of the related party, related party relationship, transactions and outstanding balances including commitments where control exsits and with whom transactions have taken place during reported periods, are:

Related party and their relationship:-

(a) Key Management Personnel

(i) Whole time director Mr. B. K. Choudhary

(ii) Non-executive directors Ms. Apinder Sodhi (w.e.f November-1 7)

Ms. Geeta Mathur (upto September-1 7)

Mr. Munish Chandra Gupta Mr. Sanjit Paul Singh Mr. Surinder Kumar Bansal

(iii) Chief Financial Officer Mr Vivek Gupta

(iv) Company secretary Ms. Ruchita Vij (upto August’ 1 7)

Mr. Ankur Gauba (w.e.f. February’ 18)

5. Disclosures as required by Indian Accounting Standard (Ind AS) 17 Leaser-

Operating lease commitments:

(i) Company as lessee:-

The Company’s significant leasing arrangements are in respect of operating leases for premises (residential, godown etc.). These leasing arrangements, which are non-cancellable with range from 11 months to 99 years and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under ‘Other Expenses’.

Future minimum rentals payable under non-cancellable operating leases are as follows:

6. Earning Per Share

The calculation of Earning Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Ind AS- 33 on “Earnings Per Share”.

The following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share: (Number of shares)

The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity, if any.

7. Income Tax:

a) Any change in the amount of deferred tax liability on account of change in the enacted tax rates and change in the quantum of depreciation allowable under the tax laws, is disclosed in the statement of profit and loss account as ‘Deferred tax adjustment’.

8. Financial Risk Management

The financial assets of the company include investments, loans, trade and other receivables, and cash and bank balances that derive directly from its operations.

The financial liabilities of the company, other than derivatives, include loans and borrowings, trade and other payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.

The company is mainly exposed to the following risks that arise from financial instruments:

(i) Market risk

(ii) Liquidity risk

(iii) Credit risk

The Company’s senior management oversees the management of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company.

This note explains the risks which the company is exposed to and policies and framework adopted by the company to manage these risks:

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise two types of risk: interest rate risk, foreign currency risk.

(a) Foreign currency risk

The company imports certain assets and material from outside India. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently the company is exposed to foreign currency risk and the results of the company may be affected as the rupee appreciates/ depreciates against foreign currencies. Foreign exchange risk arises from the future probable transactions and recognized assets and liabilities denominated in a currency other than company’s functional currency.

The company measures the risk through a forecast of highly probable foreign currency cash flows and manages its foreign currency risk by hedging appropriately. The Company uses foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The Company’s exposure to foreign currency risk was based on the following amounts as at the reporting dates:

Foreign currency sensitivity analysis

Any changes in the exchange rate of EURO and USD against INR is not expected to have significant impact on the Company’s profit due to the less exposure of these currencies. Accordingly, a 10% appreciation/depreciation of the INR as indicated below, against the EURO and USD would have increased/reduced profit by the amounts shown below. This analysis is based on the foreign currency exchange rate variances that the Company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variable remains constant:

The following table gives details in respect of outstanding foreign currency forward held by the company to mitigate the risk of changes in exchange rates on foreign currency exposures.

(b) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates.

As the Company has no significant interest-bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates, which are included in interest bearing loans and borrowings in these financial statements. The company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Cash flow sensitivity analysis for variable rate instruments

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. A change of 100 basis points in interest rates for variable rate instruments at the reporting date would have increased/(decreased) profit or loss for the below years by the amounts shown below. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows :

(ii) Liquidity Risk

The financial liabilities of the company, other than derivatives, include loans and borrowings, trade and other payables. The company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.

The company monitors its risk of shortage of funds to meet the financial liabilities using a liquidity planning tool. The company plans to maintain sufficient cash and marketable securities to meet the obligations as and when falls due.

(iii) Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables which are typically unsecured. Credit risk on cash and bank balances is limited as the company generally invests in deposits with banks and financial institutions with high credit ratings assigned by credit rating agencies.

The company assesses the creditworthiness of the customers internally to whom goods are sold on credit terms in the normal course of business. The credit limit of each customer is defined in accordance with this assessment

The impairment analysis is performed on client to client basis for the debtors that are past due at the end of each reporting date. The company has not considered an allowance for doubtful debts in case of Trade receivables that are past due but there has not been a significant change in the credit quality and the amounts are still considered recoverable.

9. Capital Management

The capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the company’s capital management is to maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value.

The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings. In order to maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

Further, there have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

There were no changes in the objectives, policies or processes for managing capital during the year ended 31 March 2018 and 31 March 2017.

10. In accordance with the Ind AS-36 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

11. The details of amounts outstanding to Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), based on the available information with the Company are as under:

12. Expenditure incurred on Corporate Social Responsibility.

As per section 135 of the Companies Act, 2013, a company meeting the applicable threshold, need to spend atleast 2% of the average net profit for the immediate preceeding three financial years on CSR activities as defined in Schedule-VII of the Companies Act 2013.

(a) Gross amount required to be spent by the company during the yearRs. 61.61 Lakhs Previous year (Rs. 45.98 Lakhs).

(b) Amount spent during the year:

13. In accordance with Ind AS 18 on “Revenue” and Schedule III to the Companies Act, 2013, Sales for the previous year ended 31 March 201 7 and for the period 1 April to 30 June 201 7 were reported gross of Excise Duty and net of VAT/ CST. Excise Duty was reported as a separate expense line item. Consequent to the introduction of Goods and Services Tax (GST) with effect from 1 July 201 7, VAT/CST, Excise Duty etc. have been subsumed into GST and accordingly the same is not recognised as part of sales as per the requirements of Ind AS 18. This has resulted in lower reported sales in the current year in comparison to the sales reported under the pre-GST structure of indirect taxes. With the change in structure of indirect taxes, certain expenses where credit of GST is available are also being reported net of taxes.

14. Previous Year figures have been regrouped/ reclassified wherever considered necessary.


Mar 31, 2016

1.) Provision and Contingent Liabilities:

i) Provision is recognized (for liabilities that can be measured by using a substantial degree of estimation) when:

a) the company has a present obligation as a result of a past event;

b) a probable outflow of resources embodying economic benefits is expected to settle the obligation; and

c) the amount of the obligation can be reliably estimated

ii) Contingent liability is disclosed in case there is:

a) possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise;

b) a present obligation arising from past events but is not recognized

2. when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

3. a reliable estimate of the amount of the obligation cannot be made.

4) Cash and cash equivalents:

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

5.) Cash flow Statement:

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of noncash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

(b) Terms/rights attached to equity shares

The company has only one class of equity shares having par value of ''10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entailed to receive any of the remaining assists of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

d) Company has contested demand i n respect of Sales tax/VAT amounting to Rs, 379.01 lac (Previous year Rs, 406.75 lac). As agai nst the above demand, a sum of Rs, 45.04 Lac (Previous year Rs, 45.04 Lac) has been deposited under protest and stands under the head "Other current Asset-Balances and Deposits with Government Authorities & Others". The company has filed an appeal with Appellate Authorities and is advised that the demand is not in accordance with law. No Provision therefore, has been made in accounts in respect thereof.

e) The Company has contested the additional demand in respect of income tax amounting to Rs, 92.92 lacs (Previous year Rs, 1,182.61 lacs). Pending appeal with Appellate Authorities, provision of Rs, 74.52 lac (Previous Year Rs, 571.22 lac) has not been made in the books of account as the company is confident to get the desired relief.

(e) Investment details of Fund: During the year, fund for the company has been got constituted and funds have been invested with banks to the tune of Rs, 108.71 lacs.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employee market.

(h) During the year, the company has recognized an expense of Rs, 59.01 Lac (Previous Year Rs, 50.71 Lac) in respect of Contribution to Provident Fund and Rs, 4.48 Lac (Previous Year Rs, 4.85 Lac) in respect of Contribution to Superannuation Scheme.

C. The Company operates in only one business segment viz. "Acrylic Fibre & Tow", which is the reportable segment in accordance with the requirements of Accounting Standard (AS) - 17 on "Segment Reporting" as prescribed under section 1 33 of the Companies Act, 201 3 (''Act'').

D. Related Party Disclosure:

a) Disclosure of Related parties and relationship between parties: -

I Key Management Personnel : Mr. B. K. Choudhary (Managing Director)

: Mr. Vivek Gupta (Chief Financial Officer)

: Ms. Ruchita Vij (Company Secretary)

II Holding Company : Vardhman Textiles Limited

III Fellow Subsidiary Companies : VMT Spinning Company Limited,

: VTL Investments Limited,

: Vardhman Yarns & Threads Limited,

: Vardhman Nisshinbo Garments Company Limited

* As the liabilities for gratuity, leave encashment and sick leave are provided on an actuarial basis for the Company as a whole, the amount pertaining there to are not included in above.

E. Operating lease: company as lessee

The Company''s significant leasing arrangements are in respect of operating leases for premises (residential, go down etc.). These leasing arrangements, which are non-cancellable, range between 11 months to 9 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payables are charged as Rent under Note-15.

F. Earnings Per Share

The calculation of Earnings Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Accounting Standard (AS)-20 on "Earning Per Share" as prescribed under section 133 of the Companies Act, 2013.

b) Any change in the amount of deferred tax liability on account of change in the enacted tax rates and change in the quantum of depreciation allowable under the tax laws, is disclosed in the statement of profit and loss account as ''Deferred tax adjustment''.

H. In accordance with the Accounting Standard (AS)-28 on Impair rment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly, no impairment loss has been provided in the books of account.

I. The Company owes dues of Rs, 4.47 lacs towards Micro and Small Enterprises, which are outstanding for more than 45 days as at 31st March, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

J. Disclosure required by Regulation 34 read with Schedule V of SEBI (Listing obligations and Disclosure Requirements) Regulations,2015:-

The Company has given inter corporate deposits aggregating to Rs, Nil (Previous Year Rs, 24,073.00 lacs) to M/s Vardhman Textiles Ltd. duri ng the year. The maxi mum amount outstanding duri ng the year was Rs, Nil (Previous Year Rs, 7,021.00 Lacs). The Balance outstanding as on 31.03.1 6 is Rs, Nil (Previous Year is Rs, Nil).

K. Excise Duty amounting to Rs, 3,506.90 Lacs (Previous Year Rs, 4,272.47 Lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the difference of excise duty between the closing stock and opening stock has been disclosed separately in the statement of profit and loss.

L. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.

N. In accordance with the provisions of section 1 35 of the Companies Act, 201 3 the company has contributed Rs, 1 4.84 lacs towards approved CSR activities. The said amount stands debited to the "charity and donation" under head "Other Expenses".

O. Additional information pursuant to the Part II of Schedule III to the Companies Act, 201 3.

P. Previous year''s figures have been regrouped wherever necessary to conform with this year''s classification.


Mar 31, 2015

NOTE NO.-1 (Rs.in Lacs-

As at 31.03.2015 As at 31.03.2014

A. Contingent Liabilities not provided for:

a) Letters of Credit Outstanding 1683.40 4487.28

b) Bank Guarantees 302.00 302.00

c) Service Tax, Excise duty and cenvat credit under dispute against which appeals have been filed / are being filed 120.63 51.59

d) Company has contested demand in respect of Sales tax / VAT amounting to Rs. 406.75 lac (Previous year Rs. 406.75 lac). As against the above demand a sum of Rs. 45.04 Lac (Previous year Rs. 20.04 Lac) has been deposited under protest and stands under the head "Other current Asset-Balances and Deposits with Government Authorities & Others'. The company has filed an appeal with Appellate Authorities and is advised that the demand is not in accordance with law. No Provision therefore, has been made in accounts in respect thereof.

e) The Company has contested the additional demand in respect of income tax amounting to Rs. 1182.61 lac (Previous Year Rs. 899.56 lac). Pending appeal with appellate authorities, provision of Rs. 571.22 lac (Previous Year Rs. 293.09 lac) has not been made in the books of account as the comDanv is confident to get the desired relief.

B. Employee Benefits:

(b) The Liability in respect of leave encashment and gratuity is un-funded; therefore no disclosure of change in fair Value of Plan Assets has been made.

C. The Company operates in only one business segment viz. "Acrylic Fibre & Tow", which is the reportable segment in accordance with the requirements of Accounting Standard (AS) - 1 7 on "Segment Reporting", issued by companies (Accounting Standards) Rules 2006.

D. Related Party Disclosure:

a) Disclosure of Related parties and relationship between parties:-

I Key Management Personnel : Mr. B. K. Choudhary (Managing Director)

II Holding Company : Vardhman Textiles Limited

III Fellow Subsidiary Companies : VMT Spinning Company Limited,

: VTL Investments Limited,

: Vardhman Yarns and Threads Limited, -

: Vardhman Nisshinbo Garments Comoanv Limited

E. Operating lease: company as lessee

The Company's significant leasing arrangements are in respect of operating leases for premises (residential, godown etc.). These leasing arrangements, which are non-cancellable, range between 11 months to 9 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Note-15.

F. Earning Per Share

The calculation of Earning Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Accounting Standard (AS)-20 on "Earning Per Share" referred to in the Companies (Accounts) Rules, 2014.

FI. Consequent to the enactment of the Companies Act,2013 (the Act) and its applicability for accounting periods commencing from 1st April 2014, the Company has recalculated the remaining useful life of fixed assets in accordance with provisions of Schedule II to the Act. In case of Fixed assets which have already completed their useful life in terms of Schedule II of the Act, the carrying value (net of residual value) of such assets as at 1st April 2014 amounting to Rs. 296.61 Lacs has been adjusted to Retained Earnings and in case of other fixed assets the carrying value (net of residual value) is being depreciated as per Straight line method over the re-calculated remaining useful life. The depreciation and amortisation expense charged for the period ended 31 st March, 2015 would have been higher by Rs. 671.60 Lacs respectively, had the Company continued with the previously prescribed depreciation rates as per Schedule-XIV of Companies Act, 1956.

I. In accordance with the Accounting Standard (AS)-28 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

Notes to financial statements for the year ended 31st March 2013.

J. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31st March, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

K. Disclosure required by Clause 32 of Listing Agreement:

The Company has given inter corporate deposits aggregating to Rs. 24,073.00 lacs (Previous Year Rs. 75,878.46 lacs) to M/s Vardhman Textiles Ltd. during the year. The maximum amount outstanding during the year was Rs. 7,021.00 lacs (Previous Year Rs. 9,458.46 Lacs). The Balance outstanding as on 31.03.15 is Nil (Previous Year is Rs. Nil).

L. Excise Duty amounting to Rs. 4,272.47 Lacs (Previous Year Rs. 4,108.66 Lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the difference of excise duty between the closing stock and opening stock has been disclosed separately in the statement of profit and loss.

M. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.


Mar 31, 2014

As at As at 31.03.2014 31.03.2013

A. Contingent Liabilities not provided for:

a) Letters of Credit Outstanding 4487.28 5593.91

b) Bank Guarantees 302.00 277.36

c) Service Tax, Excise duty and cenvat credit under dispute against which appeals have been filed / are being filed. 51.59 47.68

d) Demand in respect of sales tax/ VAT / purchase tax pending appeal with Appellate Authorities. 406.75 203.55

e) Income Tax demands where the cases are pending at various stages of appeal with the authorities. 293.09 149.00

f) Capital and other commitments

i) For commitments relating to lease arrangements, please refer note no – 16.E - –

ii) Corporate guarantees/undertaking issued on behalf of third parties. 232.90 232.90

iii) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances). 315.94 –

B. Employee Benefits:

The summarized position of Post–employment benefits and long term employee benefits recognized in the Statement of Profit & Loss and Balance Sheet as required in accordance with Accounting Standard – 15 are as under: –

Notes to financial statements for the year ended 31st March 2014.

(e) Investment details of Fund: Not Applicable

(f) Principal actuarial assumption at the Balance Sheet Date (expressed as weighted average)

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employee market.

(g) Other Short term employee''s benefits (Un–Funded)

(h) During the year, the company has recognized an expense of Rs.44.34 Lac (Previous Year Rs.40.39 Lac) in respect of Contribution to Provident Fund and Rs.2.81 Lac (Previous Year Rs.4.46 Lac) in respect of Contribution to Superannuation Scheme.

C. The Company operates in only one business segment viz. "Acrylic Fibre & Tow", which is the reportable segment in accordance with the requirements of Accounting Standard (AS) – 17 on "Segment Reporting", issued by Companies (Accounting Standards) Rules 2006.

D. Related Party Disclosure:

a) Disclosure of Related parties and relationship between parties:–

I Key Management Personnel : Mr. B. K. Choudhary (Managing Director)

II Holding Company : Vardhman Textiles Limited

III Fellow Subsidiary Companies : VMT Spinning Company Limited,

VTL Investments Limited,

Vardhman Yarns & Threads Limited,

Vardhman Nisshinbo Garments Company Limited

(Formerly known as Vardhman Texgarments Limited)

b) Details of transactions entered into with related parties during the year as required by Accounting Standard (AS) – 18 on "Related Party Disclosures" issued by issued by Companies (Accounting Standards) Rules 2006 are as under:

* No transaction has taken place with fellow subsidiary companies during the year.

** As the liabilities for gratuity, leave encashment and sick leave are provided on an actuarial basis for the Company as a whole, the amount pertaining there to are not included in above.

E. Operating lease: company as lessee

The Company''s significant leasing arrangements are in respect of operating leases for premises (residential, godown etc.). These leasing arrangements, which are non–cancellable, range between 11 months to 9 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Note–15.

Future minimum rentals payable under non–cancellable operating leases are as follows:

F. Earning Per Share

The calculation of Earning Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Accounting Standard (AS)–20 on "Earning Per Share" issued by Companies (Accounting Standards) Rules, 2006.

A statement on calculation of Basic / diluted EPS is as under:

b) Any change in the amount of deferred tax liability on account of change in the enacted tax rates and change in the quantum of depreciation allowable under the tax laws, is disclosed in the statement of profit and loss account as ''Deferred tax adjustment''.

H. In accordance with the Accounting Standard (AS)–28 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

I. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31st March, 2014. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

J. Disclosure required by Clause 32 of Listing Agreement

The Company has given inter corporate deposits aggregating to Rs. 75,878.46 lacs (Previous Year Rs. 53,288.00 lacs) to M/s Vardhman Textiles Ltd. during the year. The maximum amount outstanding during the year was Rs. 9,458.46 lacs (Previous Year Rs. 4,241.00 Lacs). The Balance outstanding as on 31.03.14 is Nil (Previous Year is Rs. Nil).

K. Excise Duty amounting to Rs. 4,108.66 Lacs (Previous Year Rs. 3,720.24 Lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the difference of excise duty between the closing stock and opening stock has been disclosed separately in the statement of profit and loss.

L. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.


Mar 31, 2013

A. Related Party Disclosure:

a) Disclosure of Related parties and relationship between parties:-

I Key Management Personnel : Mr. B. K. Choudhary (Managing Director)

II Holding Company : Vardhman Textiles Limited

III Fellow Subsidiary Companies VMT Spinning Company Limited,

VTL Investments Limited,

Vardhman Yarns & Threads Limited,

Vardhman Nisshinbo Garments Company Limited

(Formerly known as Vardhman Texgarments Limited)

Vardhman Special Steels Limited (upto 7th April 2011)

b) Details of transactions entered into with related parties during the year as required by Accounting Standard (AS) - 18 on "Related Party Disclosures" issued by Companies (Accounting Standards) Rules, 2006 are as follows:

B. Operating lease: company as lessee

The Company''s significant leasing arrangements are in respect of operating leases for premises (residential, godown etc.). These leasing arrangements, which are non-cancellable, range between 11 months to 9 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent underNote-15.

C. Earning Per Share

The calculation of Earning Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Accounting Standard (AS)-20 on "Earning Per Share" issued by Companies (Accounting Standards) Rules, 2006.

D. In accordance with the Accounting Standard (AS)-28 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

E. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31 st March, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

F Disclosure required by Clause 32 of Listing Agreement:

(a) The Company has given inter corporate deposits aggregating to Rs. 53,288.00 lacs (Previous Year Rs. 50,473.60 lacs) to M/s Vardhman Textiles Ltd. during the year. The maximum amount outstanding during the year was Rs. 4,241.00 lacs (Previous Year Rs. 5,627.95 Lacs). The Balance outstanding as on 31.03.13 was Rs. Nil (Previous Year Rs. 1 75.00 lacs).

(b) The Company has given inter corporate deposits aggregating to Rs. Nil ( Previous year Rs. Nil) to M/s Vardhman Special Steels Ltd, (cease to be fellow subsidiary with effect from 8th April 2011). The maximum amount outstanding during the year was Rs. Nil ( Previous Year Rs. 3,202.00 lacs.).

G. Excise Duty amounting to Rs. 3,720.24 Lacs (Previous Year ^ 3,107.96 Lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the difference of excise duty between the closing stock and opening stock has been disclosed separately in the statement of profit and loss.

H In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.

I. Project and Pre-operative Expenses (included in Capital Work-in-Progress)

Company has abandoned the Project and Rs. 30.33 Lacs has been accounted for in the statement of Profit & Loss in respective accounts during the year.

J. The company uses forward contracts to hedge its risk associated with fluctuation in foreign currency relating to foreign currency assets and liabilities, firm commitment and highly probable forecast transactions. The use of the aforesaid financial instruments is governed by the company''s overall strategy. The company does not use forward contracts and options for speculative purposes. The details of the outstanding forward contracts is as under:


Mar 31, 2012

1. CORPORATE INFORMATION

Vardhman Acrylics Limited (The Company) is a public company incorporated under the provisions of the Companies Act, 1956. The company is engaged in manufacturing of Acrylic Fibre/Tow.

As at 31.03.2012 As at 31.03.2011 (Rs. in Lacs) (Rs. in Lacs)

2.1. Contingent Liabilities not provided for

a) Letters of Credit Outstanding 5,138.19 4,374.77

b) Bank Guarantees 268.77 293.45

c) Custom duty, Excise duty and cenvat credit under dispute against which appeals have been filed / are being filed. 60.71 45.85

d) Demand in respect of sales tax/ purchase tax pending appeal with Appellate Authorities. 71.02 43.28

e) Bonds executed in favour of Govt. Authorities in respect of EPCG license in which export obligation has already been completed in previous year. - -

2.2. Employee Benefits:

The summarized position of Post-employment benefits and long term employee benefits recognized in the Profit & Loss Account and Balance Sheet as required in accordance with Accounting Standard – 15 (Revised) are as under: -

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employee market.

(a) During the year, the company has recognized an expense of Rs.37.61 Lac (Previous Year Rs.35.22 Lac) in respect of Contribution to Provident Fund and Rs.4.35 Lac (Previous Year Rs.4.22 Lac) in respect of Contribution to Superannuation Scheme.

2.3. The Company operates in only one business segment viz. "Acrylic Fibre & Tow", which is the reportable segment in accordance with the requirements of Accounting Standard (AS) - 17 on "Segment Reporting", issued by Companies (Accounting Standards) Rules 2006.

2.4. In accordance with the Accounting Standard (AS)-28 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly, no impairment/loss has been provided in the books of account.

2.5. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31st March, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

2.6. Disclosure required by Clause 32 of Listing Agreement:

a) The Company has given Inter Corporate Deposits aggregating to Rs. 50,473.60 Lacs (Previous Year Rs. 44,899.20 Lacs) to M/s Vardhman Textiles Ltd. during the year. The maximum amount outstanding during the year was Rs. 5,627.95 Lacs (Previous Year Rs. 7,835.00 Lacs). The Balance outstanding as on 31.03.12 is Rs. 175.00 Lacs (Previous Year Rs. 590.70 Lacs).

b) The Company has given inter corporate deposits aggregating to Rs. Nil (Previous Year Rs. 3,202.00 Lacs) to M/s Vardhman Special Steels Limited during the year upto 7th April 2011. The maximum amount outstanding during the year was Rs. 3,202.00 Lacs (Previous Year Rs. 3,202.00 Lacs). The Balance outstanding as on 07.04.11 was Rs. 3,202.00 lacs (Previous Year Rs. 3,202.00 lacs).

2.7. Excise Duty amounting to Rs. 3,107.96 Lacs (Previous Year Rs. 3,153.87 Lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the difference of excise duty between the closing stock and opening stock has been disclosed separately in the statement of profit and loss.

2.8. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.

2.9. Capital and other commitments

i) For commitments relating to lease arrangements, please refer note no-17.5.

ii) Guarantee of Rs. 232.90 Lacs (Previous year Rs.232.90 Lacs) given by the company on behalf of another company, to the extent utilized.

iii) Estimated amount of contracts of Rs. 10.27 Lacs (Previous year-Nil) remaining to be executed on capital account and not provided for (net of advances).


Mar 31, 2011

As at As at 31.03.2011 31.03.2010 (Rs. in Lacs) (Rs. in Lacs)

1.Contingent Liabilities not provided for:

a) Letters of Credit Outstanding 4,374.77 297.63

b) Bank Guarantees 293.45 206.00

c) Guarantee given by the Company on behalf of another company, to the extent utilized. 232.90 232.90

d) Custom duty, Excise duty and Cenvat Credit under dispute against which appeals have been filed / are being filed. 45.85 66.69

e) Demand in respect of Sales tax/ Purchase tax pending appeal with Appellate Authorities. 43.28 43.28

f) Bonds executed in favour of Govt. Authorities in respect of EPCG license in which export obligation has already been completed in previous year. - 793.39

2. Employees Benefits:

(b) The liability in respect of leave encashment and gratuity is un-funded; therefore, no disclosure of change in fair Value of Plan Assets has been made.

(e) Investment details of Fund: Not Applicable

3. The Company operates in only one business segment viz. "Acrylic Fibre & Tow", which is the reportable segment in accordance with the requirements of Accounting Standard (AS) -17 on "Segment Reporting", issued by Companies (Accounting Standads)Rules, 2006.

4. Related Party Disclosure:

a) Disclosure of Related parties and relationship between parties:-

i key Management Personnel : Mr. B. K. Choudhary

ii Holding Company : Vardhman Textiles Limited

iii Fellow Subsidiary Companies : VMT Spinning Company Limited

VTL Investments Limited

Vardhman Yarns & Threads Limited

Vardhman Nisshinbo Garments Company Limited

Vardhman Special Steels Limited

5. The Company's significant leasing arrangements are in respect of operating leases for premises (residential, godown etc.). These leasing arrangements which are not-cancellable range between 11 months and 9 years generally, or longer, and are usually renewable on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Schedule- 15.

6. Earning Per Share

The calculation of Earning Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Accounting Standard (AS)-20 on "Earning Per Share" issued by Companies (Accounting Standards) Rules, 2006.

7. b) Any change in the amount of deferred tax liability on account of change in the enacted tax rates and change in the quantum of depreciation allowable under the tax laws, is disclosed in the statement of profit and loss account as 'Deferred tax adjustment'.

8. In accordance with the Accounting Standard (AS)-28 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

9. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31st March, 2011. This information as required to be disclosed under the Micro, Small and Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

10. Disclosure required by Clause 32 of Listing Agreement:

a) The Company has given inter corporate deposits aggregating to Rs. 44,899.20 lacs (Previous Year Rs. 39,392.53 lacs) to M/s Vardhman Textiles Ltd. during the year. The maximum amount outstanding during the year was Rs. 7,835.00 lacs (Previous Year Rs. 6,917.00 lacs). The Balance outstanding as on 31.03.11 is Rs. 590.70 lacs (Previous Year Rs. 5,543.00 lacs).

b) The Company has given inter corporate deposits aggregating to Rs. 3,202.00 lacs (Previous Year Rs. NIL.) to M/s Vardhman Special Steels Limited during the year. The maximum amount outstanding during the year was Rs. 3,202.00 lacs (Previous Year Rs. NIL). The Balance outstanding as on 31.03.11 is Rs. 3,202.00 lacs (Previous Year Rs. NIL).

11. Excise Duty amounting to Rs. 3,153.87 lacs (Previous Year Rs. 1,625.69 lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further, the difference of excise duty between the closing stock and opening stock has been disclosed separately in the statement of profit and loss,

12. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.

13. Previous year's figures have been recast / regrouped, wherever necessary, to make them comparable with current year's figures.'


Mar 31, 2010

As at As at

31.03.2010 31.03.2009

(Rs. in Lacs) (Rs. in Lacs)

1. Contingent Liabilities not provided for:

a) Letters of Credit Outstanding 297.63 1,682.34

b) Bank Guarantees 206.00 248.75

c) Guarantee given by the Company on behalf of another company, to the 232.90 232.90

extent utilized

d) Custom duty, Excise duty and cenvat credit under dispute against which 66.69 58.25

appeals have been filed / are being filed

e) Demand in respect of Sales tax/ Purchase tax pending appeal with Appellant Authorities 43.28 44.28

f) Bonds executed in favour of Govt. Authorities in respect of license in 793.39 793.39

which export obligation has already been completed

2. Estimated amount of contracts remaining to be executed on capital account and 45.45 Nil not provided for (net of advances)

3. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.

4. Previous years figures have been recast/regrouped, wherever necessary, to make them comparable with current years figures.

5. Figures in bracket indicate deductions.

6. Sundry Creditors include amounts owed to small scale industrial undertaking(s) Rs. 9.28 lacs (Previous year Rs. 0.24 lacs). Amount which is outstanding for a period of more than 30 days is Rs. Nil (Previous year Rs. Nil). The Company has not made any delays in settlement of balances due to small scale undertakings and hence no provision for interest on delayed payment is required. Further, there are no outstanding amounts payable beyond the agreed period to small, micro and medium enterprises as on the Balance Sheet date to the extent such enterprises have been identified, based on the information available with the Company.

7. Depreciation adjustments represent provision for depreciation for earlier years, provision written back and similar adjustments for depreciation.

8. The Company operates in only one business segment viz. "Acrylic Fibre & Tow", which is the reportable segment in accordance with the requirements of Accounting Standard (AS) - 17 on "Segment Reporting", issued by the Institute of Chartered Accountants of India.

9. No asset qualifies for the current year according to AS-28 issued by the Institute of Chartered Accountants of India.

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