Home  »  Company  »  Winsome Textile  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Winsome Textile Industries Ltd.

Mar 31, 2015

1.1 Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.865.50 Lacs (Previous year Rs. 867.00 Lacs) {(net of advances Rs. 142.18 Lacs)(Previous year Rs. 109.00 Lacs)}.

1.2 Trade receivable includes Rs. 1089.44 lacs is recoverable from a related party (erstwhile associate company) whose net worth as per the audited accounts as at 30th Sept 2014 became negative and balance is subject to confirmation and who has filed application before Board for Financial Industrial Reconstruction (BIFR) for rehabilitation. The management is confident about full recovery, hence no provision there against considered necessary.

1.3 The company is constructing a Hydro Electric Project (3.5 MW Power project) at Manuni, Himachal Pradesh which is shown under capital work in progress. The company has filed a writ petition before the Hon'ble Himachal Pradesh High Court at Shimla challenging levy of certain charges and additional free supply of power under "supplementary implementation agreement" to be executed by the company with the Government of Himachal Pradesh for the said power project. On Company's application, Hon'ble High Court has granted interim stay on 11th Sept' 2013 and currently the matter is sub-judice. Management is confident that there will not be any material impact of above on final settlement/decision.

1.4 The company has filed an application for the rebate claim which is disputed and pending at the office of the Joint Secretary, New Delhi under export promotion scheme of Rs.27.76 lacs.

1.5 TUFS Interest Subsidy amounting to Rs. 82.44 lacs is recoverable from two banks as on 31st 'March'2015 since Dec. 2011 (Rs. 35.05 lacs) and Sept. 2012 (Rs. 47.39 lacs) . In view of management these amounts are good and recoverable.

1.6 The company has taken legal and other persuasive actions for recovery of certain overdue Trade Receivable amounting to Rs. 66.27 lacs (includes of overdue overseas Trade Receivable of Rs. 30.84 lacs). In the opinion of the management, these outstanding are good and fully recoverable and hence no provision there against is considered necessary.

1.7 Balance of certain receivables (read with note no. 26.3), loans and advances (including capital advance), trade payables and other liabilities are in the process of confirmation / reconciliation.

1.8 In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" as notified under Company (Accounting Standard) Rules, 2006, during the year the company has assessed useful life of fixed assets in use and is of the view that no impairment is considered to be necessary in view of its expected realizable value/value in use.

1.9 Pursuant to adoption of Schedule II to the Companies Act, 2013, the depreciation charge for the year is lower by Rs. 393.57 lacs.

1.10 Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

1.11 Capital work in progress including civil work under construction, electric installation and fittings, Machinery

1.12 The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the company/ identified by the company management. As required by section 22 of the above said Act the following information is disclosed:-

1.13 As per the past practice exchange fluctuation on loan/ liability for acquisition of capital assets continue to be charged to the Statement of Profit & Loss.

1.14 In the opinion of the Board, the Current Assets, Loans and Advances appearing in the Company's Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

1.15 Employees Benefits: Defined Benefit Plan:

The employee gratuity fund is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

(i) Contribution to defined contribution plan, recognized as expenses during the year is Rs. 191.01 Lacs (P.Y. Rs. 149.81 Lacs) & as transferred to Capital Work-in-progress is Rs. Nil Lacs (P.Y. Rs. 8.39Lacs). (ii) The estimate 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. (iii) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities. (iv) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

1.16 Research and Development expenditure amounting to Rs.67.83Lacs (Previous year Rs. 59.78Lacs) have been charged to Statement of Profit and Loss in respective heads of the accounts (As certified by the management).

1.17 (a) i) As per the past practice, consumption of raw material and stores and spares is derived as net of opening stock plus purchases less closing stock , as certain item-wise records are in process of updation. ii) in view of para (i) above, closing inventories of stock in process and finished goods have been considered as taken, valued and certified by the management after providing against old/non moving inventories; if any, as assessed / estimated by the management.

(b) Profit /Loss on sale of stores and raw materials remains adjusted in their respective consumption accounts.

(c) Prior period adjustment (net) Rs.8.99 lacs (Previous year Rs. 28.47 lacs) include Testing charges- Rs 0.62 lac,(Previous year Rs 1.36 lacs)Freight& Commission- Rs NIL (Previous year Rs 0.39 lac) Fees & Subscription Rs 0.77 lac(Previous year Rs 1.97 lacs) Employee Welfare-Rs NIL(Previous year Rs 0.89 lac) Postage & Telegram- Rs NIL (Previous year Rs 0.096 lac) Repair to building & Machinery-Rs 1.17 Lacs (Previous year Rs 3.53 lacs) Recruitment Expenses Rs.0.60 lac(Previous year Rs 0.02 lac) and loss on sale of licenses Rs. NIL (Previous year Rs 20.22 lacs), Legal and Professional fee Rs 1.03 lacs, Water Charges Rs 0.27 lac, Brokerage Rs 1.80 lacs, ERP support Charges Rs 2.73 lacs.

1.18 Segment Reporting

(i) The company has only one business segment namely Textile (Yarn, Fabric and allied activities). (ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India. Information about geographical segments ( by location of customers)

1.19 As estimated and assessed by the management, certain tax allowances / deductions have been considered and accordingly Net Deferred Tax Liability of Rs. 812.44 Lacs (Previous Year Rs. 1647.28 Lacs Net Deferred Tax Liability) have been accounted for the year.

ii) Remuneration (Including Commission) to Chairman Cum Managing Director Rs. 65.11 Lacs (P.Y Rs. 68.35 Lacs), Chairman Cum Whole Time Director up to 20th September, 2014 Rs. 29.65 Lacs (P.Y Rs. 64.30 Lacs).

Remuneration to Chief Executive Officer Rs. 39.34 Lacs, Chief Financial Officer Rs. 18.89 Lacs , Company Secretary Rs. 10.23 Lac.

1.20 Based upon Future plans, expected sales and profitability as assessed by the management in near future (in next twelve months) which will enable company to utilize MAT credit entitlement of Rs. 1981.48 Lacs (Previous Year Rs. 1395.78 Lacs )and accordingly the same is shown under "Short Term Loans & Advances".

1.21 The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

1.22 During the year the company has provided Corporate Social Responsibility (CSR) expenses of Rs.17.96 Lacs, including Rs.16.04 lacs transferred to Winsome Foundation Trust.

1.23 Figures for the previous year have been re-grouped/rearranged where ever necessary to make them comparable with current year.


Mar 31, 2014

1 EXPALANATORY NOTES

1.1 (A) Contingent Liabilities, not provided for in respect of (as certified by the management):

(Rs.in lacs)

| Particulars | 2013-14 2012-13

(i) " Bills discounted with banks 3854.63 2503.58

(ii) Excise / Service Tax Matters 83.34 81.67

(iii) Outstanding Bank Guarantees 554.17 170.17

(iv) Custom duty saved of Rs. 7648.45 Lacs (Previous year Rs. 5460.96 Lacs) for import of capital good made against EPCG license against which export obligations amounting to Rs. 56695.51 Lacs (Previous year Rs. 25710.83 Lacs) is pending.

(B) In respect of certain disallowances and additions made by Income Tax Authorities, appeals are pending before the Appellate authorities and adjustment if any, will be made after the same are finally determined.

Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of tax assessment.

1.2 Estimated amount of contracts remaining to be executed on capital account and not provided for {(net of advances Rs. 109.00 Lacs) (Previous year Rs. 3027.52 Lacs)} Rs. 867.00 Lacs (Previous year Rs. 5405.43 Lacs).

1.3 During the year 2010-11, the Company had issued and alloted 12,90,000 nos. GDR''s entitling 6,45,00,000 (now 64,50,000 equity shares of Rs. 10/- each) nos. equity shares of Re.1/- each at a price of Rs. 6.94/- per share (including premium of Rs. 5.94/-, now premium is Rs. 59.40/- on Rs. 10/- per share). As on 31.03.2013, balance Rs. 4,160.43 lacs which was invested outside India (including balance in bank Rs. 13.35 lacs)

During the year the Company have received in India balance amounting to Rs. 4626.54 lacs (including exchange gain of Rs 479.47 lacs) and the same have been utilized for the purpose the issue was made.

1.4 The Company''s new spinning unit (Unit II) comprising of 41088 nos. of spindles located at Village: Kaundi, Baddi, Dist.: Solan H.P. have commenced commercial production from 15.11.2013. In Knitting Unit (Unit III), 18 machines out of Total 25 machines has commenced commercial production from 01.11.2013.

1.5 The Company has filed an application for the rebate claim which is disputed and is pending at the office of Joint Secretary, New Delhi under export promotion scheme of Rs. 26.39 lacs.

1.6 During the year, Company''s 100% wholly owned subsidiary, M/s Winsome Textile Industries, FZE have discontinued its all business operations and filed an application for termination of its license with Hamriyah Free Zone Authority, UAE.

1.7 (i) The Company has taken legal and other persuasive actions for recovery of certain overdue debtors aggregating to Rs. 85.15 Lacs (Previous Year Rs.232.70 Lacs) {(including overdue overseas debtors of amounting to Rs. 26.47Lacs) (Previous Year Rs. 94.09 Lacs)). In the opinion of the management, these outstanding are good and fully recoverable and hence considered good.

(ii) Balance of certain receivables (including associate Company Rs. 1088.19) Lacs), loans and advances (including capital advance), trade payables and other liabilities are in the process of confirmation / reconciliation.

1.8 In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" as notified under Company (Accounting Standard) Rules, 2006, during the year the Company has assessed useful life of fixed assets in use and is of the view that no impairment is considered to be necessary in view of its expected realizable value/ value in use.

1.9 Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

1.10 The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the Company/ identified by the Company management. As required by section 22 of the above said Act the following information is disclosed:-

1.11 As per the past practice exchange fluctuation on loan/liability for acquisition of capital assets continues to be charged to the statement of profit & loss.

1.12 (i) In the opinion of the Board, the Current Assets, Loans and Advances appearing in the Company''s Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

(ii) As estimated and assessed by the management certain tax deductions have been and considered accordingly Net Deferred Tax Liability of Rs. 1647.28 Lacs (Previous year Rs. 207.51 Lacs Net Deferred Tax Liability) have been accounted.

1.13 Employees Benefits:

Defined Benefit Plan:

The employee gratuity fund is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

(i) Contribution to defined contribution plan, recognized as expenses during the year is Rs. 149.81 Lacs (P.Y. Rs. 121.25 Lacs) & as transferred to Capital Work-in-progress is amounting Rs 8.39 Lacs (P.Y. Nil).

(ii) The estimate 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.

(iii) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

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

1.14 Research and Development expenditure amounting to Rs.59.78 Lacs (Previous year Rs. 48.55 Lacs) have been charged to Statement of Profit and Loss in respective head of the accounts (As certified by the management).

1.15 (a) Profit /Loss on sale of stores and raw materials remains adjusted in their respective consumption accounts. (b) Prior period adjustment (net) Rs. 28.47 Lacs (Previous year Rs.18.20 Lacs) include Quality Claims Rs. Nil (Previous year Rs. 9.11 Lacs), legal & professional Rs. Nil (Previous year Rs. 5.06 Lacs), Rent Rs. Nil (Previous year Rs. 4.03 Lacs) Testing charges- Rs 1.36 Lacs, Freight& Commission-Rs 0.39 Lacs, Fee & Subscription Rs. 1.97 Lacs, Employee Welfare-Rs 0.89 Lacs, Postage & Telegram- Rs 0.096 Lacs, Repair to building & Machinery- Rs 3.53 Lacs, Recruitment Expenses Rs.0.02 Lacs and loss on sale of licenses Rs. 20.22 Lacs.

1.16 Segment Reporting

(I) The Company is only in one line of business namely Textile (Yarn, Fabric and allied activities). (Ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India. Information about geographical segments ( by location of customers)

1.17 Related party disclosures

List of "Related party & Relationship disclosures" are given below: (as identified by the management)

1. (a) Associate Company:-

- Winsome Yarns Limited

(b) Wholly owned Subsidiary Company:-

- Winsome Textile Industries FZE UAE

2. Key management personnel and their relatives.

- Shri Satish Bagrodia Chairman Cum Whole time Director

- Shri Ashish Bagrodia Managing Director

- Shri Manish Bagrodia Son of Chairman & Brother of MD

(Resigned from directorship w.e.f. 28th Sept., 2013)

3. Organisations where Key Management Personnel & their relative have Significant influence

- Star point Financial Services (Pvt.) Ltd.

1.18 Based upon Future plans, expected sales and profitability as assured by the management in near future (in next twelve months) which will enable Company to utilise MAT credit entitlement of Rs.1395.78 Lacs and accordingly the same is shown under "Short Term Loans & Advances".

1.19 The Company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the Company.

1.20 The Company has filed a writ petition before Hon''ble Himachal Pradesh High Court at shimla challenging levy of certain charges and additional free supply of power under "supplementary implementation agreement" to be executed by the Company with Government of Himachal Pradesh for its power project- Manuni Hydro Electric Project (3.5 MW).On Company''s application, Hon''ble High Court have granted interim stay on 11 Sept, 2013 and currently the matter is sub-judice. Management is confident that there will not be any material impact of above on final settlement/decision.

1.21 Figure for the previous year have been re-grouped where ever necessary to make them comparable with current year.


Mar 31, 2013

1.1 (A) Contingent Liabilities, not provided for in respect of (as certified by the management):

(Rs. in lacs)

No. Particulars 2012-13 2011-12

(i) Bills discounted with banks 2503.58 1374.86

(ii)Excise / Service Tax Matters 81.67 81.67-

(iii) Surety Bond Executed on behalf of others (Including Entry Tax) 170.17 225.17

(iv) Custom duty saved of Rs. 5460.96 Lacs (Previous year Rs. 2287.91 Lacs) for import of capital good made against EPCG license against which export obligations amounting to Rs 25710.83 Lacs (Previous year Rs. 18209.67 Lacs) is pending.

(B) In respect of certain disallowances and additions made by Income Tax Authorities, appeals are pending before the Appellate authorities and adjustment if any, will be made after the same are finally determined.

Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of tax assessment.

1.2 Estimated amount of contracts remaining to be executed on capital account and not provided for {(net of advances Rs.3027.52 Lacs)(Previous year 1000.36 Lacs) }Rs.5405.43 Lacs (Previous year Rs. 2598.79 Lacs).

1.3 During the year 2010-11, the Company had issued and alloted 12,90,000 nos. GDR''s entitling 6,45,00,000 (now 64,50,000 equity shares of Rs. 10/- each) nos. equity shares of Re.1/- each at a price of Rs. 6.94/- per share (including premium of Rs. 5.94/-, now premium is Rs. 59.40/- on Rs. 10/- per share).

As on 31.03.2012, Rs. 4,586.69/- lacs (including exchange gain) was pending to be received in India against above issue made. During the year Rs. 777.14/- lacs {balance pending to be received on 31.03.2013 Rs. 4160.43 lacs (including balance in bank Rs. 13.35 lacs)}, as explained, have been received (credited to the account of the company) in India.

Balance amount out of above (lying outside India as on 31st March 2013), pending for utilization for the purpose for which the issue was made by the company in 2010-11, have directly been transferred/invested from EURAM Bank to a money market fund.

1.4 Capital Payables amounting to Rs. 366.35 Lacs as assessed by the company (Previous year 6.31 Lacs) have been reflected under Other Long Term Liabilities in the balance sheet as the same is payable out of the proceeds of long-term loans.

1.5 (i) The company has taken legal and other persuasive actions for recovery of certain overdue debtors aggregating to Rs 232.70 Lacs (Previous Year Rs. 185.74 Lacs) {(including overdue overseas debtors of amounting to Rs.94.09 Lacs) (Previous Year 47.13 Lacs)}. In the opinion of the management, these outstanding are good and fully recoverable.

(ii) Balance of certain receivables (including associate company Rs. 1093.07 Lacs), loans and advances (including capital advance), trade payables and other liabilities are in the process of confirmation / reconciliation.

1.6. In accordance with the Accounting Standards (AS-28) on "Impairment of Assets” as notified under Company (Accounting Standard) Rules, 2006, during the year the company has reassessed useful life of fixed assets and is of the view that no impairment/reversal is considered to be necessary in view of its expected realisable value.

1.7 (i) Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

(ii) In the current year a fire occurred on 9th March, 2013 in the company''s rented warehouse at Ludhiana where Inventory amounting Rs. 94.91 Lacs was destroyed and the company has filed an Insurance Claim of Rs. 87.29 lacs for the same. The management is confident about full realisability considering the fact that the goods were secured by the risk covered under the policy and assessment made by the management.

1.8. (A) Addition to Fixed Assets/Capital work in progress including civil work under construction, electric installation and fittings, machinery under installation/erection and pre-operative expenses. The details of Preoperative expenditure pending allocation/appropriation are as follows:

(B) The company is in process of implementation of 3.5 MW hydro power project & a new expansion project comprising a new spinning plant, a new knitting plant and modernization of existing spinning plant and expansion of existing dye house in the state of Himachal Pradesh and expenses incurred for the same till 31st March, 2013 have been included under the CWIP.

1.9. The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the company/ identified by the company management. As required by section 22 of the above said Act the following information is disclosed:-

1.10. As per the past practice exchange fluctuation on loan/liability for acquisition of capital assets continued to charge to the profit & loss account.

1.11. (i) In the opinion of the Board, the Current Assets, Loans and Advances appearing in the company''s Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

(ii) As estimated and assessed by the management certain tax deductions, Net Deferred Tax Liability of Rs. 207.51 Lacs (Previous year Rs. 159.41 lacs Net Deferred Tax Assets) have been accounted.

1.12. Employees Benefits:

Defined Benefit Plan:

The employee gratuity fund is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

1.13 Research and Development expenditure amounting to Rs. 48.55 Lacs (Previous year Rs. 48.05 Lacs) have been debited to Statement of Profit and Loss in respective head of the accounts (As certified by the management).

1.14. (a) Profit or loss on sale of stores/raw materials remains adjusted in their respective consumption accounts. (B) Prior period adjustment (net) Rs. 18.20 Lacs (Previous year Rs.1.58 Lacs) include Quality Claims Rs. 9.11 Lacs (Previous year Nil), legal & professional Rs.5.06 Lacs (Previous year Rs. 0.61 Lacs) and Rent Rs. 4.03 Lacs (Previous year Nil)

1.15. Segment Reporting

(I) The company is only in one line of business namely Textile (Yarn, Fabric and allied activities). (Ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

1.16. Related party disclosures

List of "Related party & Relationship disclosures" are given below: (as identified by the management)

1. (a) Associate Company:-

- Winsome Yarns Limited

(b) Wholly owned Subsidiary Company:-

- Winsome Textile Industries FZE

2. Key management personnel and their relatives.

- Shri Satish Bagrodia Chairman Cum Whole time Director

- Shri Ashish Bagrodia Managing Director

- Shri Manish Bagrodia Son of Chairman, WTD & Brother of MD

3. Organisations where Key Management Personnel & their relative have Significant influence

- Star point Financial Services (Pvt.) Ltd.

- Roselab Commodities Pvt. Limited.

- Kailashpati Vinimay Private Limited

1.17. Based upon Future plans, management expects to generate taxable income in the near future (in next twelve months) which will enable it to utilise MAT credit entitlement of Rs. 788.97 Lacs and accordingly the same is shown under "Short Term Loans & Advances”.

1.18. The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

1.19. Figures for the previous year have been re-grouped/recast where ever necessary to make them comparable with those of current year.


Mar 31, 2012

1.1 (A) Contingent Liabilities, not provided for in respect of (as certified by the management):

(Rs. in lacs)

No. Particulars 2011-12 2010-11

(i) Bills discounted with banks 1374.86 2494.77

(ii) Excise / Service Tax Matters 81.67 258.92

(iii) Surety Bond Executed on behalf of others (Including Entry Tax) 225.17 80.80

(iv) Custom duty saved of Rs. 2287.91 Lacs ( Previous year Rs. 1657.28 Lacs) for import of capital good made against EPCg license against which export obligations amounting to Rs. 18209.67 Lacs ( Rs. 13258.29 Lacs) is pending.

(B) In respect of certain disallowances and additions made by Income Tax Authorities, appeals are pending before the Appellate authorities and adjustment if any, will be made after the same are finally determined.

Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of above.

1.2 Estimated amount of contracts remaining to be executed on capital account and not provided for {(net of advances Rs.1000.36 Lacs)(Previous year 194.43 Lacs) }Rs. 2598.79 Lacs (Previous year Rs. 1583.54 Lacs).

1.3 Out of the total issue proceeds of the GDRs in the previous year of Rs.4475.88 Lacs, pending certain compliances Rs.4586.69 Lacs (including foreign exchange gain) is parked in the Bank "Escrow" Account outside India as on year end and accordingly the balance issue proceeds are pending to be utilized. From Escrow Account, Rs. 561.60 Lacs has been received ( Company is in process of getting the FIRC) during the year in a separate account in India out of which Rs. 222.91 lacs has been utilized as per details below:

1.4 In earlier year Company's, Debt Restructuring Proposal (DRP) had been sanctioned by the respective lenders and is effective from 1st January 2009 . DRP interlaid includes reschedulement of existing term loans, relaxation in margin for working capital loan etc.

1.5 (i) The company has taken legal and other persuasive actions for recovery of certain overdue debtors

aggregating to Rs 185.74 Lacs (Previous Year Rs. 203.40 Lacs) {(including overdue overseas debtors of amounting to Rs.47.13 Lacs)(Previous Year 39.79 Lacs)}, in the opinion of the management, these outstanding are good and fully recoverable.

(ii) Balance of certain debtors (including associate company Rs.1086.96 Lacs), loans and advances (including capital advance), creditors and other liabilities are in the process of confirmation / reconciliation.

1.6. Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

1.7. In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" as notified under Company (Accounting Standard) Rules, 2006, during the year the company has reassessed its fixed assets and is of the view that no further impairment/reversal is considered to be necessary in view of its expected realizable value.

1.8. (A) Addition to Fixed Assets/Capital work in progress including civil work under construction, electric installation

and fittings, machinery under installation/erection and pre-operative expenses. The details of Preoperative expenditure pending allocation/appropriation are as follows:

(B) The company is in process of implementation of 3.5 MW hydro power project in the state of Himachal Pradesh and expenses incurred till 31st March, 2012 have been included in the CWIP.

1.9. The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the company/ identified by the company management. As required by section 22 of the above said Act the following information is disclosed:-

1.10. As per the past practice exchange fluctuation on loan/liability for acquisition of capital assets continued to charge to the profit & loss account.

1.11. (i) In the opinion of the Board, the Current Assets, Loans and Advances appearing in the company's Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

(ii) Considering prudence and as estimated by the management, Deferred Tax Assets of Rs. 159.41 Lacs have been created which management feel realizable in near future.

1.12. Employees Benefits:

Defined Benefit Plan:

The employee gratuity fund is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

(i) Contribution to defined contribution plan, recognized as expenses during the year is Rs. 102.28 Lacs (P.Y. 92.17 Lacs).

(ii) The estimate 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.

(iii) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

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

1.13 (i) Research and Development expenditure amounting to Rs. 48.05 Lacs (Previous year Rs. 58.93 Lacs) have been debited to Profit and Loss account.( As certified by the management)

(ii) During the year company has invested amounting to Rs 4.29 lacs in a new subsidiary company created/incorporated by name Winsome Textile Industries FZE, Sarah (UAE).

1.14. (a) Profit or loss on sale of stores/raw materials remains adjusted in their respective consumption accounts.

(b) Prior period adjustment (net) Rs. 1.58 Lacs (P.Y. Nil) include fees & subscription Rs. 0.48 Lacs (P.Y. Nil), legal & professional Rs. 0.61 Lacs (P.Y. Nil) and repair & maintenance Rs. 0.49 (P.Y. Nil)

Note: In view inadequacy of profit during the current year, minimum remuneration has been paid. Gratuity not included since funded with LIC along with other employees of the company. Leave encashment not been included, payable at the end of the tenure.

1.15. Segment Reporting

(i) The company is only in one line of business namely Textile (Yarn and allied activities).

(ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

Information about geographical segments ( by location of customers)

1.16. Related party disclosures

List of "Related party & Relationship disclosures" are given below: (as identified by the management)

1. (a) Associate Company:-

- Winsome Yarns Limited

(b) Wholly owned Subsidiary Company:- - Winsome Textile Industries FZE w.e.f. 22nd June,2011

2. Key management personnel and their relatives.

- Shri Satish Bagrodia Chairman Cum Whole time Director

- Shri Ashish Bagrodia Managing Director

- Shri Manish Bagrodia Son of Chairman, WTD & Brother of MD

3. Organizations where Key Management Personnel & their relative have Significant influence

- Star point Financial Services (Pvt.) Ltd.

- Roselab Commodities Pvt. Limited.

- Kailashpati Vinimay Private Limited

*The face value of equity share has been consolidated on 19.07.2011 from Re 1/- to Rs 10/- each. Accordingly the no. of equity shares has been decreased and also EPS for the preceding period(s) have been revised/ reinstated.

1.17. Based upon Future plans, management expects to generate taxable income in the next financial year which will enable it to utilize MAT credit entitlement of Rs. 458.84 Lacs and accordingly the same is shown under "Short Term Loans & Advances".

1.18. The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

(B) Forward Contracts of Rs. 506.00 Lacs US $10.00 Lacs (Previous Year Rs. 1237.20 Lacs-US $ 26.80 Lacs) taken for the purpose of hedging of debtors are outstanding as at 31.03.12.

1.19. During the year ended 31st March 2012, the revised schedule VI has become applicable to the company. Thus previous year figures have been reclassified/ recanted suitably. The adoption of revised schedule VI does not impact recognition & measurement principle followed for preparation of financial statements except for presentation & disclosures wherever required.

2. Rights & Restrictions of Shareholders:

2.1 The Company has only one class of Equity Shares having face value of Rs. 10/- each (Previous Year Rs. 1/- each) in its issued, subscribed and paid up Equity share capital. Each shareholder is entitled to one vote per share (except GDR shareholding mentioned at point no. 2.2 below). Each shareholder have the right in profit/surplus in proportion to amount paid up with respect to share holders.

2.2 The GDR shareholding which is standing in the name of Bank of New York Mellon, as Depositary, has right to dividend, do not have any right to vote

2.3 In the event of winding up, the equity shareholders will be entitled to receive the remaining balance of assets, if any, in proportionate to their individual shareholding in the paid up equity capital of the company.

(a) During the year the company allotted NIL equity shares (P.Y. 6,06,00,000 Equity shares of Re. 1/- each at a premium of Rs. 1.40/- each) upon conversion of equal no of warrants allotted on preferential basis.

(b) During the year company has issued and allotted NIL Global Depository Receipt (P.Y. 12,90,000 GDR's representing 6,45,00,000 Equity Shares of Rs. 1/- each at a premium of Rs. 5.94/- per shares) (Refer Note No. 2.3)

@ Consolidated Re. 1/-fully paid up equity share to fully paid share of Rs. 10/- each during the year. Accordingly figures of the previous year have been revised.

Notes:

1. Term Loans and Working Capital Term Loans from Banks of Rs. 12083.32 Lacs (P.Y. Rs. 12837.97 Lacs) are secured by Joint Equitable Mortgage by deposit of title deeds on company's immovable properties(present and future) which shall be on first charge basis, shall rank pari-passu with all banks and a charge by way of hypothecation of all movable fixed assets subject to prior charge on specified equipments to banks for term loan. Above Term loans are further secured by pari-passu second charge on entire current(present and future) assets of the company. The loan is repayable in quarterly installments and maturity profile is as follows:

1. Working Capital Demand loans from bank includes Cash Credit, Packing Credit and short term loans are secured by First Charge by Hypothecation of Raw Material, Stock in Process, Finished Goods, Consumable Store and Spares, Goods in Transit, Book Debts and by Second Charge on entire Fixed Assets of the Company on Pari-passu basis with Working Capital lenders.

2. The aforesaid credit facilities mentioned above is also guaranteed by Chairman & Whole Time Director and Managing Director.


Mar 31, 2011

31st March. 2011 31st March. 2010 (Rs. in Lacs) (Rs. in Lacs)

1. (A) Contingent Liabilities, not provided for in respect of :

(i) Bills discounted with banks 2494.77 1781.42

(ii) Excise / Service Tax Matters 258.92 334.78

(iii) Surety Bond Executed on behalf of others 80.80 80.80

(iv) Export obligation against import of Plant & Machinery Under concessional duty (EPCG scheme) 13258.29 13258.29

(USD $288.14 Lacs) (USD $288.14 Lacs)

(v) Duty saved on above 1657.28 1657.28

(B) In respect of certain disallowances and additions made by Income Tax Authorities, appeals are pending before the Appellate authorities and adjustment if any, will be made after the same are finally determined. Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of above.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances Rs. 194.43 Lacs)(Previous year 76.08 Lacs) Rs. 1583.54 Lacs (Previous year Rs. 1038.86 Lacs ).

3. Capital subsidy received under TUFS has been treated as deferred income which is recognised on systematic/rational basis in proportion of the applicable depreciation over the useful life of the respective assets and is adjusted against the credit to the Profit and Loss Account. During the year based on companys revised application, the TUFS Capital Subsidy has increased to Rs. 138.64 Lacs and accordingly balance amount of Rs. 41.11 Lacs (net) received during the current year.

4. (i) In terms of the Resolution passed u/s 81(1 A) of the Companies Act, 1956, the Board of Directors of the Company have issued 75,00,000 Nos. Convertible Warrants of Rs. 10/- each at Rs. 24/- each (including premium of Rs. 14/- per warrant) at their meeting held on 10th November, 2008 on receipt of 10% application money (aggregating to Rs. 180 Lacs) out of total amount of Rs. 1800 lacs, pending receipt of balance 90% amount (Total Rs. 1620 Lacs and Rs. 21.60 per Warrant). During the previous year 1,44,00,000 Nos. fully paid Equity Shares of Rs. 1/- each were allotted on 24th March, 2010 on receipt of Rs. 3,45,60,000/- (including Rs. 2,01,60,000/- on account of premium i.e. Rs. 1.40 per warrant). (ii) During the year, 6,06,00,000 Nos. fully paid Equity Shares of Rs. 1/- each were allotted on 9th May, 2010 on receipt full amounting to Rs. 14,54,40,000/- (including premium of Rs. 8,48,40,000/- i.e. Rs. 1.40 per warrant).

5. In terms of resolution passed in the EGM held on 16th June,2010, company has issued Global Depository Receipts(GDR) during the year. Pursuing to this, 12,90,000 nos. GDRs @ USD 7.75 each (each GDR comprises of 50 equity shares at a price of 6.94 per share (including premium of Rs.5.94 per share)) has been issued and allotted on 31st March,2011 and listed on the Luxembourg Stock Exchange. Pending certain compliance, the issue proceeds of the GDRs of Rs. 4475.88 Lacs including securities premium of Rs. 3830.88 Lacs is parked in the Bank " Escrow Account" outside India and accordingly this issue proceeds is pending to be utilized for the purpose.

6. (i) Debt Restructuring Proposal which have been sanctioned by the respective lenders and is effective from 1st January 2009 interalia includes reschedulement of existing term loans, relaxation in margin for working capital loan, carving out of working capital irregularities and additional finance is in process of implementation. The effect of Debt Restructuring have been accounted for based on sanctions received. As per the Debt Restructuring, additional funding of Rs 1800/- lacs (including premium) have been brought into as Equity Share Capital. (ii) Issue proceed utilized for the purpose as stipulated and balance amount have been parked into Working Capital.

7. The company has taken legal and other persuasive actions for recovery of certain overdue debtors aggregating to Rs 203.40 Lacs(Previous Year Rs. 158.51 Lacs) (including overdue overseas debtors of amounting to Rs. 39.79 Lacs)(Previous Year 35.96 Lacs), in the opinion of the management, these outstanding are good and fully recoverable.

8. Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

9. Advances recoverable in cash or in kind or for value to be received includes capital advances amounting to Rs. 484.43 Lacs (Previous Year Rs. 326.08 Lacs).

10. In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" issued by the Institute of Chartered Accoun- tants of India, during the year the company has reassessed its fixed assets and is of the view that no further impairment/ reversal is considered to be necessary in view of its expected realisable value.

Above amount is excluding interest on term loan Rs. 46.66 Lacs (P.Y. Rs.48.24 Lacs ) net of subsidy Rs. 26.76 Lacs (P.Y. Rs. 27.02 lacs).

(B) The company is in process of implementation of 3.5 MW hydro power project in the state of Himachal Pradesh and expenses incurred till 31st march 2011 have been included in the CWIP.

11. The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the company/ identified by the company management. As required by section 22 of the above said Act the following information is disclosed

Sr. No. Particulars 2010-11 2009-10

a) (i) Principal amount remaining unpaid at the end - - of the accounting year

(ii) Interest due on above

b) The amount of interest paid by the buyer alongwith amount of payment made to - - the supplier beyond the appointed date. - -

c) The amount of interest accrued and remaining unpaid - - at the end of financial year

d) The amount of interest due and payable for the period of delay in making payment (which have been paid but - - beyond the due date during the year) but without adding interest specified under this act.

e) The amount of further interest due and payable in - - succeeding year, until such interest is fully paid.

12. In view of the Company (Accounting Standard) Rules, issued by the Ministry of Corporate Affairs for treatment of gain/(loss) on account of exchange fluctuation on loan/liability for capital assets, the company continued its policy to charge exchange difference to the profit & loss account.

13. In the opinion of the Board, the Current Assets, Loans and Advances appearing in the Companys Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

VII. Actuarial / Demographic assumptions:-

(i) Contribution to defined contribution plan, recognized as expenses during the year is Rs. 92.17 Lacs (P.Y. 88.82Lacs).

(ii) The estimate 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.

(iii) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

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

14. Research and Development expenditure amounting to Rs. 58.93 Lacs (Previous year Rs.43.14 Lacs) have been debited to Profit and Loss account.

15. Balance of certain debtors (including associate company), loans and advances (including capital advance), creditors other liabilities are in the process of confirmation / reconciliation.

16. (a) Profit or loss on sale of stores/raw materials remains adjusted in their respective consumption accounts.

(b) Prior period adjustments (net) Rs. Nil (P.Y. 0.17 Lacs ) include Processing and Dyeing Charges Rs. Nil (P.Y. Rs. 0.12 Lacs) and Repairs to Plant & Machinery Rs. Nil (P.Y. Rs. 0.05 Lacs),

Note : In view of inadequacy of profit during the current year, minimum remuneration has been paid. Gratuity not included since funded with LIC along with other employees of the Company. Leave encashment not been included, payable at the end of the tenure.

(b) During the year, Central Government approval has been received in respect of remuneration paid to Chairman and Whole Time Director.

17. Segment Reporting

(i) The Company is only in one line of business namely Yarn and allied activities.

(ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

18. Related party disclosures

List of "Related party & Relationship disclosures" are given below: (as identified by the management)

1. (a) Associate Company:-

- Winsome Yams Limited

2. Key management personnel and their relatives.

- Shri Satish Bagrodia Chairman Cum Whole time director

- Shri Ashish Bagrodia Managing Director

- S hri Manish Bagrodia Son of Chairman & WTD & Brother of MD

- Smt. Shilpa Bagrodia Wife of MD

3. Organisations where Key Management Personnel & their relative have Significant influence

- Star point Financial Services (Pvt.) Ltd.

- Roselab Commodities Pvt. Limited.

- Kailashpati Vinimay Private Limited

19. The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

20 (B) Forward Contracts of Rs. 1237.20 Lacs US $26.80 Lacs (Previous Year Rs.797.72 Lacs-US $17.05 Lacs) taken for the purpose of hedging of debtors are outstanding as at 31.03.11.

21. Figures for the previous year have been re-grouped/recast wherever necessary to make them comparable with those of current year.

22. Schedule 1 to 14 form an integral part of the Balance Sheet and Profit & Loss Account.


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances 76.08 Lacs)(Previous year Rs 304.07lacs) Rs. 1038.86 Lacs (Previous year Rs. 386.12 Lacs).

2. Depreciation on certain Plant & Machinery is provided by considering it as continuous process plant based on technical assessment.

3. Capital subsidy received under TUFS has been treated as deferred income which is recognised on systematic/rational basis in proportion of the applicable depreciation over the useful life of the respective assets and is adjusted against the depreciation/credit to the Profit and Loss Account.

4.(A)(i) In terms of the Resolution passed u/s 81 (1 A) of the Companies Act, 1956, the Board of Directors of the Company have issued 75,00,000 Nos. Convertible Warrants of Rs. 10/- each at Rs. 24/- each (including premium of Rs. 14/- per warrant) at their meeting held on 10th November, 2008 on receipt of 10% application money (aggregating to Rs. 180 Lacs) out of total amount of Rs. 1800 lacs, pending receipt of balance 90% amount (Total Rs. 1620 Lacs and Rs. 21.60 per Warrant). During the year 1,44,00,000 Nos. fully paid Equity Shares of Rs. 1/- each were allotted on 24th March, 2010 on receipt of Rs. 3,45,60,000/- (including Rs. 2,01,60,000/- on account of premium i.e. Rs. 1.40 per warrant).

(ii) Subsequent to the Balance sheet date, 6,06,00,000 Nos. fully paid Equity Shares of Rs. 1/- each were alloted on 9th May, 2010 on receipt full amounting to Rs. 14,54,40,000/- (including premium of Rs. 8,48,40,000/- i.e. Rs. 1.40 per warrant). Till 31st March, 2010 received amounting to Rs. 6,44,88,000/- (including 10% received in previous year) is shown as Convertible Warrant).

5.(B) In terms of the Resolution passed by the shareholders at their meeting held on 11th September, 2009, fully paid Equity Share of Rs. 10/- each of company have been sub-divided into 10 nos. fully paid Equity Shares of Rs. 1/- each.

6. (i) Debt Restructuring Proposal which have been sanctioned by the respective lenders and is effective from 1st January 2009 interalia includes reschedulement of existing term loans, relaxation in margin for working capital loan, carving out of working capital irregularities and additional finance is in process of implementation. The effect of Debt Restructuring have been accounted for based on sanctions received. As per the Debt Restructuring, additional funding of Rs 1800/- lacs (including premium) have been brought into as Equity Share Capital, (including subsequent to the Balance Sheet date of amounting to Rs.809.52 lacs)

(ii) Issue proceed utilized for the purpose as stipulated and balance amount have been parked into Working Capital.

7. The company has taken legal and other persuasive actions for recovery of certain overdue debtors aggregating to Rs. 158.51 lacs (including overdue overseas debtors of amounting to Rs.35.96 lacs), in the opinion of the management, these outstanding are good and fully recoverable.

8. Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

9. Advances recoverable in cash or in kind or for value to be received includes advances against capital orders amounting to Rs. 76.08 Lacs (Previous Year Rs.304.07 Lacs).

10. In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, during the year the company has reassessed its fixed assets and is of the view that no further impairment/reversal is considered to be necessary in view of its expected realisable value.

11. In view of the Company (Accounting Standard) Rules, issued by the Ministry of Corporate Affairs for treatment of gain/(loss) on account of exchange fluctuation on loan/liability for capital assets, the company continued its policy to charge exchange difference to the profit & loss account.

12. In the opinion of the Board, the Current Assets, Loans and Advances appearing in the Companys Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

13. Research and development expenditure amounting to Rs. 43.14 lacs (Previous year Rs. 45.76 lacs) have been debited to Profit and Loss Account.

14. Balance of certain debtors (including associates), loans and advances (including capital advance), creditors, Stock with job worker and other liabilities are in the process of confirmation / reconciliation.

15. (a) Profit or loss on sale of stores/ raw materials remains adjusted in their respective consumption accounts.

(b) Prior period adjustments (net) of Rs. 0.17 lacs (PY 8.57 lacs) include Processing and Dyeing Charges Rs. 0.12 Lacs (PY. Nil) Repairs to Plant & Machinery Rs. 0.05 Lacs (RY Nil), Legal & Professional Charges Rs. Nil (PY Rs.5.87 Lacs), Advertisement and Sales Promotion Rs. Nil (RY Rs 2.09 Lacs), Postage and Telegram Rs. Nil (RY Rs. 0.61 Lacs)

16. Segment Reporting

(i) The Company is only in one line of business namely Yarn and allied activities.

(ii) The segment revenue in geographical segments considered for disclosure is as follow :

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

17. The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

18(B)Forward contracts Rs. 797.72 lacs - US$ 17.05 Lacs (Previous Year Rs. 156.41 Lacs - US$ 3.00 Lacs) taken for the purpose of hedging of debtors are outstanding as at 31.03.2010.

19. Figures for the previous year have been re-grouped/recast wherever necessary to make them comparable with those of current year.

20. Schedule 1 to 15 form an integral part of the Balance Sheet and Profit & Loss Account.

 
Subscribe now to get personal finance updates in your inbox!