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Notes to Accounts of Vishal Fabrics Ltd.

Mar 31, 2023

Description of nature and purpose of each reserve:

1 Security Premium

The amount received in excess of face value of the equity shares is recognised in equity security premium.

2 Retained Earnings

Retained earnings are the profits/losses that the Company has earned till date less any transfer to other reserves, dividends or other distributions to shareholders.

3 Other Comprehensive income

a) The fair value change of the equity instruments measured at fair value through other comprehensive income is recognised in equity instruments through Other Comprehensive income.

b) The remeasurement gain/(loss) on net defined plan is recognised in Other Comprehensive Income net of Tax

1 Refer note no.41 for credit risk, liquidity risk and market risk for current financial liability

2 The company has complied few covenants for loan

3 As at March 31, 2023, the register of charges of the Company as available in records of the Ministry of Corporate Affairs (MCA) includes charges that were created/modified since the inception of the company.

1 The Cash Credit facility and packaging credit facility from banks Rs. 100.89 crore ( P.Y 114.05 crore) is secured against first paripasu charge on entire current assets of the company present and future. Second paripasu charge on entire fixed assets of the company. The working capital loan is secured by personal guarantees of promoters namely Mr. Brijmohan D Chiripal, Mr. Ved Prakash Chiripal, Mr. Jyoti Prasad Chiripal and Mr. Jai Prakash Chiripal and by corporate guarantee of M/s Prakash calender Pvt Ltd and M/s Bhushan petrofills pvt. ltd. andPledge of 10% promoters'' holding in the name of Promoter guarantors as on 30th September 2018. i.e 29,92,099 equity shares of the company. As on date 1,34,64,444 equity shares of the promoter.

2 Effective interest rate of cash credit facility is in range of 9.45% to 10.40% p.a (P.Y 9.45% to 10.05%)

3 In previous FY 2021-22 the company has taken loan under ECLGS 2.0 facility of 52.69 Cr. Company has taken further loan under ECLGS 2.0 extension facility introduce by Government of India amounting to Rs. 36.45 Cr out of which Rs. 20.51 Cr was disbursed up to March 22 and balance of Rs.15.94 Cr was disbursed up to March 23. Effective rate of Interest is 7.95% p.a. to 9.25% p.a.

4 Details submitted to lenders on quarterly basis are in conformity with books of accounts.

5 Refer note no.41 for credit risk, liquidity risk and market risk for current financial liability

1 Details of Dues to Micro, Small & Medium Enterprises as defined under MSMED Act, 2006 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. This has been relied upon by the auditors.

Contingent assets / liabilities not provided for in accounts : Contingent liabilities :

(Rs. in Crore)

Sr.

As at

No.

31/03/2023

31/03/2022

A Claims against the company not acknowledged as debt

1 Estimated amount of contracts, remaining to be executed, on capital account (net off payment)

1.29

1.79

2 For letters of credit (net off Margin)

2.00

0.27

3 For bank guarantee (net off Margin)

2.46

3.15

4 Corporate Guarantee Given

2.97

2.97

B Others

0.49

0.39

Notes:

1 The company has reviewed all its pending litigations and proceedings and has adequately provided where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The company does not expect the outcome of these proceedings to have materially adverse effect on its financial position. The company does not expect any reimbursement in respect of the above contingent liabilities.

2 The company has signed First Loss Default Guarantee in favour of State Bank of India against EDFS facility provided by bank to our customer. The liability of the company will arise only when customers make default in repayment of EDFS facility provided by bank. Outstanding as on 31st March, 2023 all customer collectively has outstanding of Rs. 18.91 Cr against EDFS facility.

3 The Income Tax Department ("the Department") conducted a Search activity ("the Search" under Section 132 of the Income Tax Act on the Company in July 2022. Subsequently, the Company has provided all support and cooperation and the necessary documents and data to the Department, as requested by the Department. The Company is examining and reviewing details of the matter and will take appropriate actions, including addressing regulatory actions, if and when they occur.

While the uncertainty exists regarding the outcome of the proceedings by the department, the Company after considering all available information and facts as of date, has not identified the need for any adjustments to the current or prior period financial statements.

Note 35

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components and for which discrete financial information is available. The Company''s chief operating decision maker (CODM) is considered to the Company''s Managing Director (MD). The Company is engaged in the business of Production of Yarn and Processing of Fabric which are widely used in Textile Unit. Information reported to and evaluated regularly by the CODM for the purposes of resource allocation and assessing performance focuses on the business as a whole and accordingly, in the context of Operating Segment as defined under the Indian Accounting Standard 108 ''Segment Information'', there is no separate reportable segment.

(i) The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

(ii) The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for management of plan assets.

III. Terms and conditions

A. Goods were sold during the year based on the price lists in force and terms that would be available to third parties. All other transactions were made on normal commercial terms and conditions at market rates. All outstanding balances are unsecured and are repayable in cash and bank.

B. Disclosure is made in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year.

The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measurements described below: Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities; and

Level 2 : Inputs other than the quoted prices included withing Level 1 that are observable for the asset or liability, either directly or indirectly.

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

1) The carrying amounts of trade receivables, trade payables, cash and cash equivalents, other bank balance, other current financial liability, loans and other current assets are considered to be the same as their fair values, due to their short-term nature.

2) The fair values for loans and security deposits were calculated based on cash flows discounted using a current lending rate.

3) The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate.

III. Measurement of fair values

A. Valuation techniques and significant unobservable inputs

The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.

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

• Credit risk ;

• Liquidity risk ; and

• Market risk

1. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors along with the top management are responsible for developing and monitoring the Company''s risk management policies.

The Company''s 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 regularly to reflect changes in market conditions and the Company''s 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.

The Company''s audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company,

2. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investments in debt securities.

The carrying amount of following financial assets represents the maximum credit exposure:

The maximum exposure to credit risk for trade and other receivables are as follows:

A. Trade receivables

The Company has developed guidelines for the management of credit risk from trade receivables. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue, Further, management believes that

the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk.

Other financial assets

This balance primarily constitute of Bank fixed deposits having maturity of more than 12 months.

Cash and cash equivalents

The Company held cash and cash equivalents with credit worthy banks and financial institutions as at the reporting dates which has been measured on the 12-month expected loss basis. The credit worthiness of such banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk. Also, no impairment loss has been recorded in respect of fixed deposits that are with recognised commercial banks and are not past due

The above receivables which are past due but not impaired are assessed on individual case to case basis and relate to a number of independent third party customers from whom there is no recent history of default. These financial assets were not impaired as there had not been a significant change in credit quality and the amounts were still considered recoverable based on the nature of the activity of the customer portfolio to which they belong and the type of customers. There are no other classes of financial assets that are past due but not impaired except for Trade receivables as at 31.03.2023 and 31.03.2022

Note 41

Financial instruments - Fair values and risk management 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 asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company has current financial assets which the management believes is sufficient to meet all its liabilities maturing during the next 12 months.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, including contractual interest.

Note 42

Financial instruments - Fair values and risk management Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company''s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk and the market value of our investments. Thus, our exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

The functional currency of the Company is Indian Rupee. The Company is exposed to currency risk on account of payables and receivables in foreign currency. The company has formulated policy to meet the currency risk.

company does not use derivative financial instruments for trading or speculative purposes.

B. Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The company adopts a policy to ensure that maximum interest rate exposure is at a fixed rate. This is achieved by entering into fixed-rate instruments.

Capital management

"For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise 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. 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 plus net debt. The Company includes within net debt, borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2023 and 31 March 2022.

VI. Nature of CSR activities - To promoting education, employement enhancing vocation skills especially among children and women.

VII. The company used F.Y. 2020-21 balance amount of Rs. 0.30 Cr as current year CSR expenses and during the last year the company used F.Y. 2020-21 balance amount of Rs. 0.05 Cr as CSR expenses.

VIII. The company does not carry any provision for corporate Social Responsibility expenses for current year and previous year.

Note 47

No transaction to report against the following disclosure required as notified by MCA pursuant to amended Schedule III:

a) Crypto Currency or Virtual Currency

b) Benami property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

c) Related to borrowed funds:

I. Wilful defaulter

d) The company has no transaction with company struck-off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

e) As the company has no holding or subsidiary company requirement with respect to number of layers prescribed under clause 87 of sub section 2 of the Companies Act, 2013 read with companies (restriction on number of layers) rules, 2017 is not applicable

Note 48

The company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the

understanding (whether records in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

Note 49

Figures have been presented in ''crore'' of rupees with two decimals. Figures less than Rs. 50,000 have been shown at actual in

brackets

Note 50

The financial statements are approved by the audit committee and Board of Directors at its meeting held on 16Th May, 2023. The said financial statements are subject to approval of Share Holders in Annual General Meeting.


Mar 31, 2021

Description of nature and purpose of each reserve:

1 Security Premium

The amount received in excess of face value of the equity shares is recognised in equity security premium.

2 Retained Earnings

Retained earnings are the profits/losses that the Company has earned till date less any transfer to other reserves, dividends or other distributions to shareholders.

3 Other Comprehensive income

a) The fair value change of the equity instruments measured at fair value through other comprehensive income is recognised in equity instruments through Other Comprehensive income.

b) The remeasurement gain/(loss) on net defined plan is recognised in Other Comprehensive Income net of Tax

1 Refer note no.41 for credit risk, liquidity risk and market risk for current financial liability

2 Refer note no.33 for non current financial liabilities pledged/lien as security by the Company.

3 The company has complied few covenants for loan

4 The company has opted for moratorium period till August 2020 as per relief measures due to Covid 19 announced by Reserve Bank of India on 27th March 2020. Current maturity of term loans are subject to revised repayment schedule as may be decided by respective banks.

5 Out of total moratorium benefit company has paid all unpaid interest of moratorium period by end of financial year.

1 The Cash Credit facility and packaging credit facility from banks Rs. 107.23 crore ( P.Y 115.48 crore) is secured against first paripasu charge on entire current assets of the company present and future.Second paripasu charge on entire fixed assets of the company. The working capital loan is secured by personal gurantees of promoters and by corporate gurantee of M/s Prakash calender Pvt Ltd and M/s Bhusahn petrofills pvt ltd. and pledged of 10% promoters'' holding in the name of Promoter gurantors as on 30th September 2018. i.e 29,92,099 equity shares of the company

The company has reviewed all its pending litigations and proceedings and has adequately provided where provisions are required and disclosed as contingent liabilities where applicable,in its financial statements. The company does not expect the outcome of these proceedings to have materially adverse effect on its financial position. The company does not expect any reimbursement in respect of the above contingent liabilities.

The company has signed First Loss Default Guarantee in favor of State Bank of India against EDFS facility provided by bank to our customer. The liability of the company will arise only when customers make default in repayment of EDFS facility provided by bank. Outstanding as on 31st March, 2021 all customer collectlively has outstanding of Rs. 24.29 Cr against EDFC facility.

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incure expenses, including revenues and expenses that relate to transactions with any of the Company''s other components and for which discrete financial information is available. The Company''s chief operating decision maker (CODM) is considered to the Company''s Managing Director (MD). The Company is engaged in the business of Production of Yarn and Processing of Fabric which are widely used in Textile Unit. Information reported to and evaluated regularly by the CODM for the purposes of resource allocation and assesing performance focuses on the business as a whole and accordingly, in the context of Operating Segment as defined under the Indian Accounting Standard 108 ''Segment Information'', there is no separate reportable segment.

(i) The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

(ii) The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for management of plan assets.

Under the Micro Small and Medium Enterprises Development Act, 2006, (MSMED) which came in to force from 02.10.2006, certain disclosers are required to be made relating to Micro, Small and Medium enterprises. On the basis of the information and records available with management, outstanding dues to the Micro and Small enterprise as defined in the MSMED Act, 2006 are disclosed as below

Micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

III. Terms and conditions

A. Goods were sold during the year based on the price lists in force and terms that would be available to third parties. All other transactions were made on normal commercial terms and conditions at market rates. All outstanding balances are unsecured and are repayable in cash.

B. Disclosure is made in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year.

The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measuremnets described below:

Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities; and

Level 2 : Inputs other than the quoted prices included withing Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: inputs are unobservable inputs for the asset or liability.

II. Fair value of financial assets and liabilities measure at amortised cost Notes:

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

1) The carrying amounts of trade receivables, trade payables, cash and cash equivalents, other bank balance, other current financial liability, loans and other current assets are considered to be the same as their fair values, due to their short-term nature.

2) The fair values for loans and security deposits were calculated based on cash flows discounted using a current lending rate.

3) The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate.

III. Measurement of fair values

A. Valuation techniques and significant unobservable inputs

The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.

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

• Credit risk ;

• Liquidity risk ; and

• Market risk

1. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors along with the top management are responsible for developing and monitoring the Company''s risk management policies.

The Company''s 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 regularly to reflect changes in market conditions and the Company''s 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.

The Company''s audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

2. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investments in debt securities.

The carrying amount of following financial assets represents the maximum credit exposure:

The maximum exposure to credit risk for trade and other receivables are as follows:

A. Trade receivables

The Company has developed guidelines for the management of credit risk from trade receivables. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue, Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behavior and extensive analysis of customer credit risk.

Other financial assets

This balance primarily constitute of Bank fixed deposits having maturity of more than 12 months.

Cash and cash equivalents

The Company held cash and cash equivalents with credit worthy banks and financial institutions as at the reporting dates which has been measured on the 12-month expected loss basis. The credit worthiness of such banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk. Also, no impairment loss has been recorded in respect of fixed deposits that are with recognised commercial banks and are not past due.

The above receivables which are past due but not impaired are assessed on individual case to case basis and relate to a number of independent third party customers from whom there is no recent history of default. These financial assets were not impaired as there had not been a significant change in credit quality and the amounts were still considered recoverable based on the nature of the activity of the customer portfolio to which they belong and the type of customers. There are no other classes of financial assets that are past due but not impaired except for Trade receivables as at 31.03.2021 and 31.3.2020

Note 41 Financial instruments - Fair values and risk management

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 asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company has current financial assets which the management believes is sufficient to meet all its liabilities maturing during the next 12 months.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, including contractual interest.

Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company''s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk and the market value of our investments. Thus, our exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

A. Foreign currency risk management

The Company''s functional currency is Indian Rupees (INR). The Company undertakes transactions denominated in foreign currencies (USD) ; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company''s revenue from export markets and the costs of imports, primarily in relation to raw materials. The Company is exposed to exchange rate risk under its trade and debt portfolio.

Adverse movements in the exchange rate between the Rupee and any relevant foreign currency result''s in increase in the Company''s overall debt position in Rupee terms without the Company having incurred additional debt and favourable movements in the exchange rates will conversely result in reduction in the Company''s receivables in foreign currency.

In order to hedge exchange rate risk, the Company has a policy to hedge cash flows up to a specific tenure using forward exchange contracts and options. At any point in time, the Company hedges its estimated foreign currency exposure in respect of forecast sales over less than 1 year. In respect of imports and other payables, the Company hedges its payables as when the exposure arises. Short term exposures are hedged progressively based on their maturity.

All hedging activities are carried out in accordance with the Company''s internal risk management policies, as approved by the Board of Directors, and in accordance with the applicable regulations where the Company operates.

The carrying amounts of the Company''s monetary assets and monetary liabilities at the end of the reporting period are as follows:

The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates. The Company''s exposure to foreign currency risk is nominal.

Company does not use derivative financial instruments for trading or speculative purposes.

Derivative insruments and unhedged foreign currency exposure:

i) Derivative outstanding as at reporting date - Nil

ii) Particulars of unhedged foreign currency exposure as at the reporting date:

Derivatives

(i) The company has entered in to various currency future contracts to hedge its risks associated with respect to currency fluctuation. The use of currency future contracts is governed by the company''s strategy approved by the board of directors, which provides principles on the use of such future contracts consistent with the company risk management policy. The company does not use future contracts for speculative purpose.

(ii) At the end of the year all outstanding derivative contracts are fair valued on a market to market basis and resulted profit & loss has been adjusted in the profit & loss account.

(iii) Risk associated with fluctuation in the currency is minimized by hedging on future market. The result of currency hedging contracts, transactions are treated in profit & loss account as income or expenditure as the case may be.

(iv) Outstanding currency future contracts (USD) entered in to by the company as on 31.03.2021 is Nil (PY- Nil)

B. Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The company adopts a policy to ensure that maximum interest rate exposure is at a fixed rate. This is achieved by entering into fixed-rate instruments.

3. Fair value sensitivity analysis for fixed-rate instruments

The company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss, and the Company does not have any designate derivatives (interest rate swaps). Therefore, a change in interest rates at the reporting date would not affect profit or loss.

Note 43 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise 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. 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 plus net debt. The Company includes within net debt, borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2021 and 31 March 2020.

Note 46

Figures have been presented in ''crore'' of rupees with two decimals. Figures less than Rs. 50,000 have been shown at actual in brackets

Note 47

The financial statements are approved by the audit committee as at its meeting and by the Board of Directors on 11Th June, 2021

Note 48

Company has not given any loan or guratees during the year and in previous year hence disclosure under section 186(4) of the companies Act 2013 is not given

Note 49

As a result of lockdown lockdown policies, restriction on business activities and business shutdowns, the volumes of the current financial year is impacted. Revenue from operation in absolute term have decreased due to COVID-19 related market volatility. Therefore, financial results for the year ended 31st March, 2021 are not comparable to previous corresponding period results. Further the management believes that the impact of this outbreak on the business and financial position of the Company will not be significant. The management does not see any risks in the Company''s ability to continue as a going concern and meeting its liabilities as and when they fall due.

Significant Accounting Policies

The accompanying Notes 2 to 49 are integral part of the Financial Statements.


Mar 31, 2018

A. Optional exemptions availed

1. Property plant and equipment

"As per Ind AS 101 an entity may elect to:(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date(ii) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to:- fair value;- or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.(iii) use carrying values of property, plant and equipment as on the date of transition to Ind AS (which are measured in accordance with previous GAAP prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition."

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment.

2. Derecognition of previously recognised financial instruments:

The Company as classified investment in equity instuments at fair value through other comprehensive income.

B. Mandatory exceptions

1. Estimates

"Ind AS estimates on the date of transition are consistent with the estimates as at the same date made in conformity with previous GAAP."

2. Derecognition of financial assets and liabilities

The Company has applied the derecognition requirements of Ind AS 109 prospectively from the date of transition to Ind AS.

3. Classification and measurement of financial assets

"The Company has assessed classification and measurement of financial assets based on facts and circumstances prevalent on the date of transition to Ind AS."

4. Impairment of financial assets :

The Company has applied impairment requirements of Ind AS 109 retrospectively to financial instruments and concluded that there is no need to recognize any additional loss allowance on financial assets.

Notes to the reconciliation between previous GAAP and

IndAS:

(A) Fair value of investments in equity instruments recognized in other comprehensive income : Under IndAS, Investment in equity shares is classified for fair value through other comprehensive income. Under previous GAAP, long-term investments are carried at cost less provision for diminution in the value of investment, other than temporary. This difference has resulted in increase of equity by Rs. 4,332,597 as at 31 March 2017 (Rs. 2,906,241 as at 1 April 2016) and profit by Rs. 1,426,356 for the year ended 31 March 2017.

(B) Long term borrowings at amortised cost : Under IndAS, long-term borrowings are carried at amortised cost. Under previous GAAP, the borrowings are carried at their historical cost. This difference has resulted in increase in equity under IndAS Rs. 21,967,367 as at 31 March 2017 (Rs. Nil as at 1 April 2016) and increase of profit by Rs. 21,967,367 for the year ended 31 March 201 7.

(C) Share issue expenses : Under Ind AS, Transaction costs

in relation to an equity transaction are accounted for as a deduction from equity. Under previous GAAP, these costs were shown under Non-current assets and amortised over the period of five years. This difference has resulted in decrease in equity under IndAS of Rs. 4,561,079 as at 31 March 2017 (Rs. 4,049,842 as at 1 April 2016) and increase in profit of Rs. 1,701,690 for the year ended 31 March 2017.

(D) Remeasurement of gratuity recognised in other comprehensive income : Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset and are recognised in other comprehensive income. Under previous GAAP, actuarial gains and losses were recognised in statement of profit and loss. This difference has resulted in decrease in profit by Rs. 1 7,423,000 for the year ended March 31, 2017.

Cash flow statement

The transition from previous GAAP to IndAS has not had a material impact on the statement of cash flows.

Capital management

"For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise 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. 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 plus net debt. The Company includes within net debt, borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations"

"In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017."

(6.1a).Term Loan Rs. 712.09/- (P.Y. Rs. 127.44/-) are secured by way of first pari passu over all fixed assets/ immovable properties of the company situated at Ranipur, Narol Road, Narol, Ahmedabad over the movable assets including Plant & Machineries situated at Ranipur Narol road, Narol Ahmedabad, further corporate guarantee given by certain companies and personal guarantee of Managing Director and relative of such Managing Director, repayable in 28 to 32 equal quarterly instalments Further Term Loans are secured by second pari passu charge over current assets.

"(6.1b).Term Loan Rs. 16073.20/- (P.Y. Rs. 9689.03/-) are secured by assets purchase/created out of our Bank''s finance and under consortium arrangement for setting up a unit situated at plot No:2 & 3,Dholi Integrated Spinning Park Ltd.,Dholi,Dholka Taluka, Ahmedabad Dist. Gujarat. The Term Loan is further collaterally secured by:(a) first pari- Vehicles Loans are secured by hypothecation of vehicles in favour of Bank and other terms as prescribe by the respective banks. Other loans and advances from bank (un secured) is collateraly secured by property situated at A-621 Sushant Lok-1, Nr. Centre Point Pizza Hut, Gurgaon, Delhi owned by partnership firm own by relatives of Managing Director, further guarantee of Managing Director, relative of such Managing Director of the company .

c) Financial risk management

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

a) credit risk (see (C)(ii));

b) liquidity risk (see (C)(iii)); and

c) market risk (see (C)(iv))."

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors along with the top management are responsible for developing and monitoring the Company''s risk management policies.

The Company''s 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 regularly to reflect changes in market conditions and the Company''s 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.

The Company''s audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company,

ii. Credit risk

Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s trade receivables, certain loans and advances and other financial assets.

The carrying amount of financial assets represents the maximum credit exposure.

Trade receivables

"The Company has developed guidelines for the management of credit risk from trade receivables. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment."

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses Given that the macroeconomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue, Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk.

Other financial assets

This balance primarily constitute of Bank fixed deposits having maturity of more than 12 months.

Cash and cash equivalents

The Company held cash and cash equivalents with credit worthy banks and financial institutions as at the reporting dates which has been measured on the 12-month expected loss basis. The credit worthiness of such banks and financial institutions are evaluated by the management on an on-going basis and is considered to be good with low credit risk. Also, no impairment loss has been recorded in respect of fixed deposits that are with recognised commercial banks and are not past due.

iii. Liquidity risks

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

The Company has current financial assets which the management believes is sufficient to meet all its liabilities maturing during the next 12 months.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, including contractual interest.

iv. Market risks

Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables. The Company is exposed to market risk primarily related to foreign exchange rate risk (currency risk), interest rate risk and the market value of its investments. Thus the Company''s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

90 VISHAL FABRICS LIMITED

In absence of available information regarding suppliers / buyers fall within definition of section 16 of Micro, Small and Medium Enterprises Development Act, 2006 the amount outstanding and interest due thereon to Micro, Small and Medium Enterprises is not ascertainable as on Balance Sheet Date.

Note 35 Operating segment

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components and for which discrete financial information is available. The Company''s chief operating decision maker (CODM) is considered to the Company''s Managing Director (MD). The Company is engaged in the business of Production of Yarn and Processing of Fabric which are widely used in Textile Unit. Information reported to and evaluated regularly by the CODM for the purposes of resource allocation and assessing performance focuses on the business as a whole and accordingly, in the context of Operating Segment as defined under the Indian Accounting Standard 108 ''Segment Information'', there is no separate reportable segment.

Note 36 Related party disclosures Details of related parties Description of relationship Names of related parties

(i) Concerns in which KMP or Relative of KMP Interested Chiripal Charitable Trust with whom transaction during the year Chiripal Industries Ltd.

Chiripal Textile Mills Pvt. Ltd.

CIL Nova Petrochemicals Ltd.

Dholly Integrated Spinning Park Ltd.

Milestone Educom Trust Nandan Denim Ltd.

Nandan Industries Pvt. Ltd.

Nandan Terry Pvt. Ltd.

Narol Textile Infrastructure & Enviro Management Nova Textile Pvt. Ltd.

Prakash Calender Pvt. Ltd.

Shanti Education Initiative Ltd.

Shanti Exports Pvt. Ltd.

Tripoli Management Pvt. Ltd.

(ii) Key Management Personnel (KMP) Jyoti Prasad D. Chiripal

Brijmohan D. Chiripal Amit Kadmawala Shubhnkar Jha Dhara Shah Chitranjan Singh Tanuj Agarwal Mahesh Kawat Tanushree Deepak Vyas

(iii) Relative of Key Management Personnel (KMP)"

Note: Related parties have been identified by the Management.

Note 1

The previous year figures have been regrouped/rearranged to make them comparable with the current year''s figure.

Note 2

In the opinion of the Board, all the current assets, loans and advances have a value on the realization in the ordinary course of the business at least equal to the amount at which they are stated.

Note 3

Balances of sundry debtors, sundry creditors and loans and advances etc. are subject to confirmation and reconciliation and consequential adjustment if any.


Mar 31, 2017

Note: 1 Provision for current year''s income tax aggregating to Rs.466.49 (P.Y. Rs.320.00) has been made on estimated basis for the accounting year ended on 31.03.2017. The actual tax liabilities of the company will be determined on the basis of taxable income of the company for F.Y 2016-17.

The employee wise break up & facility on account of gratuity based on an actual evaluation is not ascertainable. The amounts related to the Directors are therefore, not considered above.

Note: 2 Related Party

The Company has identified the following related parties under Accounting standard - 18 on related parties, issued by the institute of chartered accountants of India and as per Section 188 of The Companies Act 2013.

a) Related parties with whom transaction have taken place during the year Associates /Enterprise which has significant influence

i. Chiripal Industries Ltd.

ii. Nandan Denim Ltd

iii. Shanti Exports Pvt. Ltd.

iv. Chiripal Poly Films Ltd

v. Shanti Educational Initiatives Limited

vi. Millestone Educom Trust

vii. Shanti Polytechnic Foundation

viii. Dholly Integrated Spinning Park Ltd.

ix. Chiripal Textile Mills Pvt. Ltd.

x. Shanti Spincot Pvt. Ltd.

xi. Tripoli Management Pvt. Ltd.

b) Key Management Personnel

i. Mr. Jyotiprasad D. Chiripal (Managing Director) (Appointment w.e.f. 04.04.14)

ii. Mr. Vinodkumar Ajmera (Vice President)

iii. Mr. Amit Kadmawala (Whole-time Director) (Appointment w.e.f. 13.11.14)

iv. Mrs. Nitika D. Chiripal (Director) (Resigned w.e.f. 17.08.15)

v. Mrs. Dhara S. Shah (Independent Director) (Appointment w.e.f. 05.03.15)

vi. Mr. Maheshchandra Kawat (Chief Financial Officer) (Appointment w.e.f. 04.04.14)

vii. Ms. Tanushree Dave (Company Secretary)

viii. Ms. Poonam Pabla (Company Secretary) (resigned on 23.07.2016)

ix. Mr.Shubhankar Jha (Independent Director) (Appointment w.e.f. 28.05.15

x. Mr. Arakhita Khandual (Independent Director) (Appointment w.e.f. 04.04.14)*

* Expired on 22.03.2017

Note: 3 Capital Work in Progress and Pre operative Expenditure and capitalization during the period.

Company is under implementing 80 MMPA Denim Fabric Manufacturing and processing unit of fabrics width upto 2100 MM at Plot No. 2 & 3, Dholi Integrated Spinning Park Ltd., Village : Dholi, TA.: Dholka, Dist.: Ahmedabad at the estimated project cost of Rs. 283.26 crore. During the year company has commenced commercial production on two Indigo dying range machinery w.e.f 21s October 2016 & one Indigo dying range w.e.f 31s March 2017. Accordingly WIP- pre operative expenditure as per management estimation have been capitalized on pro rata basis of assets put to use, considering total six Indigo dying range machinery line to be installed along with building & plant & machinery and other assets. The expenditure incurred till 31.03.2017 have been classified and allocated to capitalization of assets (Refer Note No.13), the details thereof produced below.

Tax Impact for the above purpose has been arrived by applying a tax rate of 34.608 % being the rate prevailing for the Indian Companies under the Income Tax Act, 1961

Note: 4 Segment Information

a) The segments have been identified in line with the AS-17, taking into account the organization structure as well as the differential risks and returns of these segments. Business segments have been considered as primary segments.

b) Inter segment revenue have been accounted for based on the transaction price agreed between segments which is primarily market led.

c) Geographical segment is not considered as exports are insignificant.

Note: 5 Impairment of assets

The company has not recognized any loss on impairment in respect of assets of the Company as is required in terms of Accounting Standard 28 on Impairment of Assets issued by The Institute of Chartered Accountants of India, since in the opinion of the management the reduction in value of any assets, to the extent required, has already been provided for in the books.

Note: 6 Employee Benefit Plans

Defined Contribution Plans: Provident Fund

The Company makes Provident Fund contributions to defined contribution plans for qualifying employee. Under the schemes the company is required to contribute a specified percentage of the payroll costs to fund the benefits. The company recognized Rs. 43.46/-(P.Y. Rs. 32.54/-) for Provident Fund contributions in the statement of Profit and Loss. The contributions payable to these plans by the company are at rates specified in the rules of the schemes.

Defined Benefit Plans: Gratuity

The following table sets out the funded status of the defined benefit schemes and the amount recognized in the financial statements.

Note: 7

- The Previous year figures have been regrouped/rearranged to make them comparable with the current year''s figures. Figures in brackets are of previous years''.

- In the opinion of the Board, all the current assets, Loans and advances have a value on the realization in the ordinary course of the business at least equal to the amount at which they are stated.

- Balances of sundry debtors, sundry creditors and loans and advances etc., are subject to confirmation and reconciliation, and consequential adjustment, if any.


Mar 31, 2016

1 Working capital loans are secured by hypothecation of present and future stock of Raw Materials, Stock In Process, Semi Finished Goods, stores and spares, Book Debts and receivables further corporate guarantee given by certain companies and personal guarantee of Managing Director and relatives of such Managing Director of the Company repayable on demand having interest rate of 12.80% to 13.20%.

In absence of available information regarding suppliers / buyers fall within definition of section 16 of Micro, Small and Medium Enterprises Development Act, 2006, the amount outstanding and interest due thereon to Micro, Small and Medium Enterprises is not ascertainable as on Balance Sheet date.

Note : 2 CONTINGENT LIABILITIES

(a) The estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 3581.32 Lac. (P.Y.250.00 Lac.) against which advance have been paid Rs. 1322.38 Lac. (P.Y. 111.30 Lac.)

(b) Un-expired Letter of Credits and Bank Guarantee (net of margins) Rs. 237.65 Lacs (Previous Year Rs. 740.27 Lacs)

C) The Company has received Assessment Order U/s. 143(3) of the Income Tax Act, 1961 for the A.Y. 2012-13, against which company has preferred an appeal before CIT (A). Due to effect of this Assessment order MAT Credit Entitlement has been reduced by Rs. 203415/-, As the matter is pending with CIT (A), company is hopeful of positive outcome, hence, no provision is made in books of accounts.

(d) The Company has received Assessment Order U/s. 143(3) of the Income Tax Act, 1961 for the A.Y. 2013-14, against which company has preferred an appeal before CIT (A). Due to effect of this Assessment order refund has been reduced from Rs. 8836324/- to Rs. 5993820/- and consequently MAT Credit Entitlement has also been reduced. As the matter is pending with CIT (A), company is hopeful of positive outcome, hence, no provision is made in books of accounts.

(e) Income Tax Department has filed an appeal against the order of CIT (A) for A.Y. 2011-12, having demand of Rs. 730110/-. CIT (A) has decided the appeal for A.Y. 2011-12 in favor of the assessed . As the matter is pending with ITAT, till date, no provision for same is made in books of account.

(f) As per information and explanation given to us, an employee fraud had occurred in the company for the amount aggregating to Rs.1193137/- as per the FIR filed with the Police station, Ahmadabad out that Rs.66927/- covered in the F.Y.2007-08. The company has not provided for that in the books of account and shown as recoverable in the name of employee under the head Loans and Advances as the board is of the opinion that the amount is fully recoverable.

(g) During the F.Y. 2010-11 Fire has occurred in the factory premises of the company and the company has lodge the claim of Rs.763.65 lacs with insurance company for loss of damaged goods and assets own and parties goods received for job work, out of total Rs.717.92 Lacs for goods received from various parties for job work. Against which company has received claim of Rs. 399.95 lacs out of Rs. 133.00 Lacs accounted/adjusted against loss to the assets of the company and balance as explained and informed made payment and/or adjusted to parties account, The company has not provided for the same as the claim/matter is pending with insurance company till the date. The company has provided for loss of own goods costing Rs.45.73 Lacs.

(h) Civil Suit is filed against the company for recovery of Rs. 457378/- in City Civil Court, Ahmadabad and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

(I) Company has filled petition against order of Textile CASs Appellate Tribunal for demand amounting to Rs. 1775285/- and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

(j) There are three cases filed against the company for aggregating to Rs. 250000/- with Labor Court Ahmadabad and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

(k) In respect of Corporate Guarantee given: Not provided in the accounts in respect of Corporate Guarantee given : Rs. 296.74 Lac

(l) The Company has received Assessment Order U/s. 32,34,35 of Gujarat Value Added Tax Act, 2003 for the F.Y. 2011-12 and raised demand in respect of VAT Rs. 2544091/- and CST Rs. 1004749/-, against which company has preferred an appeal before Joint Commissioner of Commercial Tax (A). As the matter is pending with Joint Commissioner of Commercial Tax (A), company is hopeful of positive outcome, hence, no provision is made in books of accounts. till date, no provision for same is made in books of account. The company has already paid Rs. 2223252/- against the same.

Note : 3

Provision for current year''s income tax aggregating to Rs.3,20,00,000/- (P.Y. Rs. 60,00,000/- ) has been made on estimated basis for the accounting year ended on 31.03.2015. The actual tax liabilities of the company will be determined on the basis of taxable income of the company for F.Y 2015-16.

Note : 4

Expenses includes following payments to Directors

Employment cost include managerial remuneration paid / payable during the year in accordance with the provisions of Companies Act, 2013.

The employee wise break up & facility on account of gratuity based on an actual evaluation is not ascertainable. The amounts related to the Directors are therefore, not considered above.

Note : 5

Related Party

The Company has identified the following related parties under Accounting standard - 18 on related parties, issued by the institute of chartered accountants of India and as per Section 188 of The Companies Act 2013.

a) Related parties with whom transaction have taken place during the year Associates /Enterprise which has significant influence

i. Chiripal Industries Ltd.

ii. Nandan Denim Ltd

iii. Shanti Export Pvt. Ltd.

iv. Chiripal Poly Films Ltd

v. Shanti Educational Initiative Limited

vi. Millestone Educom Trust

vii. Shanti Polytechnic Foundation Ltd.

viii. Dholly Integrated Spinning Park Ltd.

ix. Chiripal Textile Mills Pvt. Ltd.

x. Shanti Spincot Pvt. Ltd.

xi. Tripoli Management Pvt. Ltd.

b) key management personnel

i. Mr. Jyotiprasad D. Chiripal (Managing Director) (Appointment w.e.f. 04.04.14)

ii. Mr. Vinodkumar Ajmera (Vice President)

iii. Mr. Amit Kadmawala (Additional Director) (Appointment w.e.f. 13.11.14)

iv. Mr. Arakhita Khandul ( Independent Director) (Appointment w.e.f. 04.04.14)

v. Mrs. Nitika D. Chiripal (Director) (Resignation w.e.f. 17.08.15)

vi. Mrs. Dhara S. Shah (Additional Director) (Appointment w.e.f. 05.03.15)

vii. Mr. Maheshchandra Kawat (Chief Financial Officer) (Appointment w.e.f. 04.04.14)

viii. Ms. Poonam Pabla (Company Secretary)

ix. Mr.Shubhankar Jha (Independent Director) (Appointment w.e.f. 28.05.15)

Note : 6

Employee Benefit Plans

a. Defined Contribution Plans : Provident Fund

The Company makes Provident Fund contributions to defined contribution plans for qualifying employee. Under the schemes the company is required to contribute a specified percentage of the payroll costs to fund the benefits. The company recognized Rs. 4345517/- (P.Y. Rs. 3253943/-) for Provident Fund contributions in the statement of Profit and Loss. The contributions payable to these plans by the company are at rates specified in the rules of the schemes.

b. Defined Benefit Plans : Gratuity

The following table sets out the funded status of the defined benefit schemes and the amount recognized in the financial statements.

Note : 7

-The Previous year figures have been regrouped/rearranged to make them comparable with the current year''s figures. Figures in brackets are of previous year''s.

-In the opinion of the Board, all the current assets, Loans and advances have a value on the realization in the ordinary course of the business at least equal to the amount at which they are stated.

-Balances of sundry debtors, sundry creditors and loans and advances etc., are subject to confirmation and reconciliation, and consequential adjustment, if any.


Mar 31, 2015

NOTE: 1 COMPANY INFORMATION

The company was incorporated as private limited company as Vishal Fabrics Private Limited on 22/10/1985 under the Companies Act, 1956, in the state of Gujarat at Ahmedabad. The company was then converted in to public limited company on 31/03/2014, subsequently name change to Vishal Fabrics Limited. The company had came out with IPO by offering 3474000 equity shares of Rs. 45/- (including premium Rs. 35/-) and listed on BSE SME Platform.

Vishal Fabrics Limited promoted by Chiripal Group engaged in manufacturing of wide range of textile fabrics on Job work and own requirement having manufacturing fabrics at Ranipur, Opp. Kashiram Mills, Narol Road, Narol, Ahmedabad.

2.1 3474000 Equity Shares @ Rs. 45/- each (including premium Rs. 35/-) were alloted under IPO Issue as on 31st July 2014 in Accounting year 2014-15

2.2 There was a sub division of Equity Share Capital from Rs. 100/- to Rs. 10/- per share vide board resolution dt. 25th February 2014 in Accounting year 2013-14

2.3 Terms attached to Equity Share

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.

In the event of liquidation of the Company, the holders of the equity shares would 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 the equity shares held by the shareholders.

2.4 As per the records of the Company including its Register of Shareholder/members, the above shareholding represent both legal & beneficial ownership of the shares

3.1 Term Loan Rs. 71436140/- (P.Y. Rs. 96073599/-) are secured by way of first pari passu over all fixed assets/ immovable properties of the company situated at Ranipur, Narol Road, Narol, Ahmedabad over the movable assets including Plant & Machineries situated at Ranipur Narol road, Narol Ahmedabad, further corporate guarantee given by certain companies and personal guarantee of Managing Director and relative of such Managing Director, repayable in 28 to 32 equal quarterly installments having rate of interest of 14.25% to 14.50% p.a. Further Term Loans are secured by second pari passu charge over current assets.

3.2 Vehicles Loans are secured by hypothecation of vehicles in favour of Bank.

3.3 Other loans and advances from bank (un secured) is collaterally secured by property situated at A-621 Sushant Lok-1, Nr. Centre Point Pizza Hut, Gurgaon, Delhi owned by partnership firm own by relatives of Managing Director, further guarantee of Managing Director, relative of such Managing Director of the company and corporate guarantee of Chiripal Industries Ltd.

4.1 Working capital loans are secured by hypothecation of present and future stock of Raw Materials, Stock In Process, Semi Finished Goods, stores and spares, Book Debts and receivables further corporate guarantee given by certain companies and personal guarantee of Managing Director and relatives of such Managing Director of the Company repayable on demand having interest rate of 13.50% to 14.25%.

Note: 5 Contingent Liabilities

a) The estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 250.00 Lac. (P.Y. 500.00 Lac.) against which advance have been paid Rs. 111.30 Lac. (P.Y. 409.98 Lac.)

b) Un-expired Letter of Credits and Bank Guarantee (net of margins) Rs. 740.27 Lacs (Previous Year Rs. 480.28 Lacs)

c) As per information and explanation given to us, an employee fraud had occurred in the company for the amount aggregating to Rs. 1193137/- as per the FIR filed with the Police station, Ahmedabad out that Rs. 66927/- covered in the F.Y.2007-08. The company has not provided for that in the books of account and shown as recoverable in the name of employee under the head Loans and Advances as the board is of the opinion that the amount is fully recoverable.

d) During the F.Y. 2010-11 Fire has occurred in the factory premises of the company and the company has acknowledge the claim of Rs. 763.65 lacs with insurance company for loss of damaged goods, out of total Rs. 717.92 Lacs for goods received from various parties for job work. The company has not provided for the same as the claim/matter is pending with insurance company till the date. The company has also not provided for loss of own goods costing Rs. 45.73 Lacs.

e) Civil Suit is filed against the company for recovery of Rs. 457378/- in City Civil Court, Ahmedabad and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

f) Deputy Commissioner of Customs, Custom Division, Jamnagar has imposed a penalty amounting to Rs. 90000/- and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

g) Company has filled petition against order of Textile Cess Appellate Tribunal for demand amounting to Rs. 1775285/- and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

h) There are seven cases filed against the company for aggregating to Rs. 250000/- with Labour Court Ahmedabad and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

Note: 6 During the year the Company has made an Initial Public Offer (IPO), for 34,74,000 equity shares of Rs. 10/- each at a price of Rs. 45/- per share (including premium of Rs. 35/- per share). The company is listed on BSE SME Platform.

Note: 7 The company has incurred Rs. 6050000/- for IPO and it has been treated as deferred revenue expenditure to be written off in next 5 years, commencing for F.Y. 2014-15.

Note: 8 Provision for current year's income tax aggregating to Rs. 60,00,000/- (P.Y. Rs. 77,00,000/- ) has been made on estimated basis for the accounting year ended on 31.03.2015. The actual tax liabilities of the company will be determined on the basis of taxable income of the company for F.Y 2014-15.

Note: 9 Foreign Exchange difference Credited to Profit and Loss Account amounting to Rs. NIL/- (P.Y. Rs. 12606/-)

Note: 10 Expenses includes following payments to Directors Employment cost include managerial remuneration paid / payable during the year in accordance with the provisions of the Companies Act, 2013

The employee wise break up & facility on account of gratuity based on an actual evaluation is not ascertainable. The amounts related to the Directors are therefore, not considered above.

Note: 11 Related Party

The Company has identified the following related parties under Accounting Standard – 18 on related parties, issued by the Institute of Chartered Accountants of India and as per Section 188 of the Companies Act, 2013.

a. Related parties with whom transaction have taken place during the year Associates /Enterprise which has significant influence

i. Chiripal Industries Ltd.

ii. Nandan Exim Ltd

iii. Shanti Export Pvt. Ltd.

iv. Chiripal Poly Films Ltd

v. Shanti Educational Initiative Limited

vi. Millestone Educom Trust

vii. Shanti Polytechnic Foundation Ltd.

viii. Dholi Integrated Spinning Park Ltd.

b. Key Management Personnel

i. Mr. Jyotiprasad D. Chiripal (Managing Director) (Appointment w.e.f. 20.07.04)

ii. Mr. Vinodkumar Ajmera (Vice President)

iii. Mr. Amit Kadmawala (Additional Director) (Appointment w.e.f. 13.11.14)

iv. Mr. Arakhita Khandul (Director)

v. Ms. Nitika D. Chiripal (Director) (Appointment w.e.f. 04.04.14)

vi. Ms. Dhara S. Shah (Additional Director) (Appointment w.e.f. 05.03.15)

vii. Mr. Maheshchandra Kawat (Chief Financial Officer) (Appointment w.e.f. 04.04.14)

viii. Ms. Poonam Pabla (Company Secretary)

ix. Mr. Vinodkumar Shah (Resignation w.e.f. 04.04.14)

x. Mr. Gautam Gandhi (Additional Director) (Resignation w.e.f. 29.04.15)

Note: 12 Deferred Taxes

In accordance with the Accounting Standard 22 "Accounting for Taxes on Income issued by the ICAI, the company has accounted for deferred taxes during the year.

Tax Impact for the above purpose has been arrived by applying a tax rate of 32.45% being the rate prevailing for the Indian Companies under the Income Tax Act, 1961

Note: 13 The Company is not a subsidiary company as on 31/03/2015. The Company was subsidiary of Chiripal Industries Limited in F.Y. 2013- 14.

Note: 14 Borrowing cost incurred during the year, which are attributable to the acquisition or construction of qualifying assets to the extent of Rs. Nil (P.Y. Rs. Nil) capitalized by the company.

Note: 15 Segment Information

a) The segments have been identified in line with the AS-17, taking into account the organization structure as well as the differential risks and returns of these segments. Business segments have been considered as primary segments.

b) Inter segment revenue have been accounted for based on the transaction price agreed between segments which is primarily market led.

c) Geographical segment is not considered as exports are insignificant.

Note: 16 Impairment of assets

The company has not recognized any loss on impairment in respect of assets of the Company as is required in terms of Accounting Standard 28 on Impairment of Assets issued by The Institute of Chartered Accountants of India, since in the opinion of the management the reduction in value of any assets, to the extent required, has already been provided for in the books.

Note: 17 Employee Benefit Plans

a) Defined Contribution Plans : Provident Fund

The Company makes Provident Fund contributions to defined contribution plans for qualifying employee. Under the schemes the company is required to contribute a specified percentage of the payroll costs to fund the benefits. The company recognized Rs. 3253943/- (P.Y. Rs. 4242228/-) for Provident Fund contributions in the statement of Profit and Loss. The contributions payable to these plans by the company are at rates specified in the rules of the schemes.

b) Defined Benefit Plans : Gratuity

The following table sets out the funded status of the defined benefit schemes and the amount recognized in the financial statements.

Note: 18

- The Previous year figures have been regrouped / rearranged to make them comparable with the current year's figures. Figures in brackets are of previous year's.

- In the opinion of the Board, all the current assets, Loans and advances have a value on the realization in the ordinary course of the business at least equal to the amount at which they are stated.

- Balances of sundry debtors, sundry creditors and loans and advances etc., are subject to confirmation and reconciliation, and consequential adjustment, if any.


Mar 31, 2014

1.1 345000 Shares @ Rs. 100/- each ware alloted as Bonus Shares by capitalisation of Securities Premium and General Reserves in the ratio of 3:1 vide board resolution dt. 20th January 2014.

1.2 There was a sub division of Equity Share Capital from Rs. 100/- to Rs. 10/- per share vide board resolution dt. 25th February 2014

1.3 4600000 shares @ Rs. 10/- each were allotted as Bonus shares by capitalisation of Securities Premium and General Reserves in the ratio of 1:1 vide board resolution dt. 25th February 2014

1.4 250000 shares allotted to M/s. Devkinandan Corporation LLP @ Rs. 10/- each and 250000 shares were allotted to M/s. Chiripal Exim LLP @ Rs. 10/- each vide board resolution passed dt. 29th March 2014.

1.5 Terms attached to Equity Share

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.

In the event of liquidation of the Company, the holders of the equity shares would 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 the equity shares held by the shareholders.

1.6 The details of Shareholders holding more than 5% shares

1.7 As per the records of the Company including its Register of Shareholder/members, the above shareholding represent both legal & beneficial ownership of the shares.

2.(a) 3. The maturity of unsecured loans and Other parties is between 1 to 2 year

2.(b) 1. Details of Security, Rates of Interest and Repayment and Terms (Secured)

In absence of available information regarding suppliers / buyers fall within definition of section 16 of Micro, Small and Medium Enterprises Development Act, 2006, the amount outstanding and interest due thereon to Micro, Small and Medium Enterprises is not ascertainable as on Balance Sheet date.

Note: 3 C

CONTINGENT LIABILITIES

(a) The estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 500.00 Lacs (P.Y. NIL) against which advance have been paid Rs. 409.98 (P.Y. NIL)

(b) Un-expired Letter of Credits and Bank Guarantee (net of margins) Rs. 480.28 Lacs (Previous Year Rs. 222.28 Lacs)

(c) As per information and explanation given to us, an employee fraud had occurred in the company for the amount aggregating to Rs.1193137/- as per the FIR filed with the Police station, Ahmedabad out that Rs.66927/- covered in the F.Y.2007-08. The company has not provided for that in the books of account and shown as recoverable in the name of employee under the head Loans and Advances as the board is of the opinion that the amount is fully recoverable.

(d) During the F.Y. 2010-11 Fire has occurred in the factory premises of the company and the company has acknowledge the claim of Rs.763.65 lacs with insurance company for loss of damaged goods, out of total Rs.717.92 Lacs for goods received from various parties for job work. The company has not provided for the same as the claim/matter is pending with insurance company till the date. The company has also not provided for loss of own goods costing Rs.45.73 Lacs.

(e) During the year company has received demand notice from the Income Tax Department for A.Y. 2011-12 amounting to Rs.730110/- against which the company has filed appeal with CIT(A) and matter is still pending at Balance sheet date. Accordingly company has not provided for demand of Rs. 730110/- in the books of account.

(f) Civil Suit is filed against the company for recovery of Rs. 457378/- in City Civil Court, Ahmedabad and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

(g) Deputy Commissioner of Customs, Custom Division, Jamnagar has imposed a penalty amounting to Rs. 90000/- and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

(h) Company has filled petition against order of Textile Cess Appellate Tribunal for demand amounting to Rs. 633613/- and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

(i) There are seven cases filed against the company for aggregating to Rs. 265000/- with Labour Court, Ahmedabad and according to the company the matter is still pending at the Balance sheet date hence not provided in the books of account.

Note: 4 Provision for current year''s income tax aggregating Rs.77,00,000/- (Previous Year Rs. 88,00,000/- ) has been made on estimated basis for the accounting year ended on 31.03.2014. The actual tax liabilities of the company will be determined on the basis of taxable income of the company for F.Y year 2013-14.

Note: 5 Foreign Exchange difference debited to Profit and Loss Account amounting to Rs. NIL/- (P.Y. Rs. 2121189/-) and Profit and Loss Account credited amounting to Rs. 12606/- (P.Y. Rs. NIL)

Note: 6 Expenses includes following payments to Directors Employment cost include managerial remuneration paid / payable during the year in accordance with the provisions of Section 198 of the Companies Act, 1956

The Company has identified the following related parties under Accounting standard - 18 on related parties, issued by the institute of chartered accountants of India.

a) Holding Company

Chiripal Industries Ltd.

b) Other related parties with whom transaction have taken place during the year Associates /Enterprise which has significant influence

i. Nandan Exim Ltd

ii. Prakash Calender Pvt. Ltd.

iii. Dindayal Processors Pvt. Ltd

iv. Shanti Export Pvt. Ltd.

v. S.D.Education Trust

vi. Chiripal Poly Films Ltd

vii. Shanti Education Initiative Ltd

viii. Quality Exim Pvt. Ltd.

ix. Deepak Impex Pvt. Ltd.

c) key management personnel

i. Mr. Mahavirsing Yadav (Resignation w.e.f. 04.04.2014)

ii. Mr. Jyotiprasad D. Chiripal

iii. Mr. Vinodkumar Ajmera

iv. Mr. Arakhita Khandual ( Appointment w.e.f. 04.04.2014)

v. Mrs. Nitika D. Chiripal ( Appointment w.e.f. 04.04.2014)

vi. Mr. Gautam C. Gandhi (Appointment w.e.f. 04.04.2014)

vii. Mr. Vinodkumar Shah ( Resignation w.e.f. 04.04.2014)

viii. Mrs. Binaben Khatri ( Appointment w.e.f. 31.03.2014 and Resignation w.e.f. 31.03.2014)

Note: 7 Deferred Taxes

In accordance with the Accounting Standard 22 "Accounting for Taxes on Income issued by the ICAI, the company has accounted for deferred taxes during the year.

a) The segments have been identified in line with the AS-17, taking into account the organization structure as well as the differential risks and returns of these segments. Business segments have been considered as primary segments.

b) Inter segment revenue have been accounted for based on the transaction price agreed between segments which is primarily market led.

Note: 8 Impairment of assets

The company has not recognized any loss on impairment in respect of assets of the Company as is required in terms of Accounting Standard 28 on Impairment of Assets issued by The Institute of Chartered Accountants of India, since in the opinion of the management the reduction in value of any assets, to the extent required, has already been provided for in the books.

Note: 9 Others

- The Previous year figures have been regrouped/rearranged to make them comparable with the current year''s figures. Figures in brackets are of previous year''s.

- In the opinion of the Board, all the current assets, Loans and advances have a value on the realization in the ordinary course of the business at least equal to the amount at which they are stated.

- Balances of sundry debtors, sundry creditors and loans and advances etc., are subject to confirmation and reconciliation, and consequential adjustment, if any.

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