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Notes to Accounts of Ashima Ltd.

Mar 31, 2017

1. Shares Held by holding/ultimate holding company and/or their subsidiaries/associates

Out of issued, subscribed and paid up capital:

Nil (Previous Year Nil) Equity Shares are held by holding company

Nil (Previous Year Nil) Equity Shares are held by ultimate holding company

Nil (Previous Year Nil) Equity Shares are held by subsidiary of holding company

Nil (Previous Year Nil) Equity Shares are held by associates of holding or ultimate holding company.

2. The details of bonus shares issued, shares issued for consideration otherwise than in cash and shares bought back in preceding five years:

The company issued 1,50,00,000 equity shares of Rs.10/- each aggregating to Rs.1500 Lacs by conversion of secured debt as explained in Note 2.2(a)(3) above. The company has not issued any bonus shares and has not bought back any shares in year under review and preceding five years.

3. Details of Unpaid calls due from Directors or officers

There were no unpaid calls due from Directors/Officers of the Company.

4. Rights of Shareholders, Dividend and Repayment of Capital:

Rights of Equity Share holders

5. Holder of equity shares is entitled to one vote per share.

6. The Company declares and pays dividends in Indian Rupees. The Companies Act, 2013 provides that the Dividend shall be declared only out of the profits of the relevant year or out of the profits of any previous financial year(s) after providing for depreciation in accordance with the provisions of the Act and the Company may transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company.

7. In case of inadequacy or absence of profits in any year, the Company may declare dividend out of free reserves subject to the condition that the rate of dividend shall not exceed average of the rates at which dividend was declared by the Company in three years immediately preceding that year.

8. In the event of Liquidation of the Company, the holders of shares shall be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders.

Rights of Preference Share holders

9. As per Section 47(2) of the Companies Act, 2013, Preference Shareholders shall have right to vote only on resolutions placed before company which directly affect their rights attached to preference shares and any resolution for winding up of the company or for repayment or reduction of share capital shall be deemed directly to affect their rights.

10. Voting rights of the preference shareholders shall be in proportion as the paid up equity share capital bears to the paid up preference share capital.

11. Where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.

12. Loans and advances include an amount of Rs.1.66 lacs (Previous year Rs. 1.41 lacs) due from officers of the company.

13. The Sales Tax authorities have issued notices for demand of Sales Tax of Rs.747.93 lacs, penalty of Rs.619.58 lacs and interest of Rs.538.51 lacs, aggregating to Rs.1906.01 lacs for various assessment years. The company disputes the said demand. The company has filed appeals against these notices and got stay orders against the same.

14. During the year under review due to loss the company has not provided for Income-tax for the Assessment Year 2017-18 (Previous year Rs. NIL).

As regards deferred tax as per Accounting Standard - 22 (AS-22) on “Accounting for Taxes on Income” issued by The Institute of Chartered Accountants of India, there is a net deferred tax asset for the past years and for the current year after adjusting unabsorbed depreciation and carry forward losses of the past years. Considering the provisions of the AS-22 and as a matter of prudence, the company has not recognized the said deferred tax asset while preparing the accounts for the year under review.

The Income-tax assessments of the company are completed up to A.Y 2014-15. In respect of assessment for A.Y 1996-97, income-tax department had disputed some of the claims and raised demand of Rs. 676.66 lacs for tax and interest. The company had preferred an appeal against the said assessment and had succeeded before Commissioner of Income-tax (Appeal) and demand has been deleted. However, Income-tax department has preferred further appeal before the Income-tax Appellate Tribunal for which Tribunal has sent back file to Assessing Officer with certain directions for which appeal effect order is yet to be received from the Assessing Officer.

15. The cost of purchase is arrived at after considering effect of any settlement reached with the suppliers during the year.

16. Export benefits/incentives in respect of duty draw back and purchase of raw material from local suppliers (against advance released orders under duty exemption scheme) are accounted on accrual basis in order to follow the system of accounting which is mandatory as per the provisions of section 128 of the Companies Act, 2013.

17. There are no amounts outstanding for more than 30 days in respect of small scale industrial undertakings. The company has provided for interest of Rs.NIL (Previous year Rs.NIL) on outstanding for more than 45 days payable to Micro, Small and Medium enterprises. The total amount due to these parties is Rs.NIL (Previous year Rs.NIL) as at the balance sheet date. This information 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.

18. The unsecured loans include Rs. 750.00 lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The dispute is the subject matter of notice correspondence between HDFC Bank and BBK and under dispute between the company, BBK and HDFC Bank in various courts.

Order dated 18.4.2016 of the Debt Recovery Tribunal (DRT), Mumbai, directing BBK to refund amount received by it to HDFC and thereupon increase loan amount of Ashima with continuing rate of interest as contractually applicable on the loan amount under intimation to Ashima, was stayed by the Hon''ble Bombay High Court and the stay continues till disposal of the proceedings before DRT. The proceedings at DRT are under completion stage. Until such time the DRT pronounces its order, the said amount of Rs.750 lacs is continued in the suspense account.

19. The Company has fulfilled all its commitments and obligations under the Scheme of Arrangement for Reconstruction and Compromise between the Company and its Equity Shareholders, Preference Shareholders and Secured Creditors under sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013 (“the Scheme”) which had become effective on 5th October, 2015. It has paid entire settlement amount as per the scheme. It also prepaid amounts due to a secured creditor at present value arrived at by discounting the amounts due on various dates specified in the scheme and accounted for the same as prescribed in the Scheme.

20. The expenditure incurred in respect of assets damaged for which insurance claim has been received has been debited under respective heads.

21. Extraordinary item represents profit on sale of part of surplus land mainly to repay dues to secured creditors settled under the Scheme of Arrangement.

22. As stated in the notes to financial statements for the previous year, equity shares under Rights Issue of 8,00,85,089 equity shares of Rs. 10 each at par aggregating to Rs.8008.51 Lacs were allotted on 5th May, 2016. Further, a secured creditor was allotted 1,50,00,000 equity shares of Rs. 10 each at par aggregating to Rs. 1500.00 Lacs on the same date. Consequently, upon the allotment, the issued, subscribed and paid up equity share capital stands at Rs.12845.39 Lacs. The amounts appearing as share application money pending allotment, refunds due and share application money collected have been duly adjusted upon allotment of equity shares.

23. Segment reporting (Accounting Standard - 17):

The company''s operations relate only to manufacture and sale of textile and related products and hence primary reporting disclosure is not applicable.

The company sells goods in domestic market and also exports them to various countries. However, for the year as well as previous year, export sales, which is the reportable segment, is less than the prescribed threshold of 10% of total revenue, hence secondary segment reporting is not applicable as per AS - 17 on Segment Reporting.

24. Based on review carried out as on 31.03.2017, no impairment loss is required to be provided for as per Accounting Standard 28 on “Impairment of Assets”.

25. Previous year figures have been regrouped / rearranged wherever necessary to confirm to this year''s figures.

26. Remittances in foreign currency on account of dividend: NIL

27. Figures less than Rs. 500/- which are required to be shown separately have been shown as actual in brackets. As per our report of even date attached


Mar 31, 2016

1 reconciliation of number of shares outstanding:

2 Equity Share: The Company has issued shares on Right Basis, which are pending allotment, as per Note No.41. As a result, there is no addition to issued equity share capital during the year.

3 Preference Shares: The Company has not issued or bought back any preference share during the year under review. However, as provided for in the Scheme of Arrangement under section 391 of the Companies Act, 1956, which has become effective on 5th October, 2015 the company has issued 20,50,000 1% Redeemable Non-cumulative Preference Shares of Rs.100/- each aggregating to Rs.2050.00 Lacs as fully paid up against existing 4,50,000 13% redeemable cumulative preference shares of Rs.100/- each fully paid up and 16,00,000 11% redeemable cumulative preference shares of Rs.100/- each fully paid up, with 1 new Preference share being issued against every existing Preference Share. The aggregate issued and paid up Preference Share Capital remains the same in number and value terms.

4 shares Held by holding/ultimate holding company and/or their subsidiaries/associates

Out of issued, subscribed and paid up capital:

Nil (Previous Year Nil) Equity Shares are held by holding company

Nil (Previous Year Nil) Equity Shares are held by ultimate holding company

Nil (Previous Year Nil) Equity Shares are held by subsidiary of holding company

Nil (Previous Year Nil) Equity Shares are held by associates of holding or ultimate holding company.

5 (a) the details of equity shareholders holding more than 5 % of issued equity share capital:

6 The details of bonus shares issued, shares issued for consideration otherwise than in cash and shares bought back in preceding five years:

The company has not issued any bonus shares, shares for consideration otherwise than in cash and has not bought back any shares in year under review and preceding five years.

7 Details of Unpaid calls due from Directors or officers

There were no unpaid calls due from Directors/Officers of the Company.

8 Rights of Shareholders, Dividend and Repayment of Capital:

Rights of Equity Share holders

(a) Holder of equity shares is entitled to one vote per share.

(b) The Company declares and pays dividends in Indian Rupees. The Companies Act, 2013 provides that the Dividend shall be declared only out of the profits of the relevant year or out of the profits of any previous financial year(s) after providing for depreciation in accordance with the provisions of the Act and the Company may transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company.

(c) In case of inadequacy or absence of profits in any year, the Company may declare dividend out of free reserves subject to the condition that the rate of dividend shall not exceed average of the rates at which dividend was declared by the Company in three years immediately preceding that year.

(d) In the event of Liquidation of the Company, the holders of shares shall be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders. Rights of Preference Share holders

(a) As per Section 47(2) of the Companies Act, 2013, Preference Shareholders shall have right to vote only on resolutions placed before company which directly affect their rights attached to preference shares and any resolution for winding up of the company or for repayment or reduction of share capital shall be deemed directly to affect their rights.

(b) Voting rights of the preference shareholders shall be in proportion as the paid up equity share capital bears to the paid up preference share capital.

(c) Where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.

9. Appropriations out of Balance in Profit and Loss Account:

There is no appropriation out of Profit and Loss Account for the period / previous year.

Notes:

10 All the debentures and loans are secured/ to be secured by charge on plant and machinery and land and building of the compamy situated at Mouje Karannagar, Taluka Kadi, District Mehsana, North Gujarat; and at Mithipur, Ahmedabad in the State of Gujarat and the land and building situated at Mouje Rajpur-Hirpur, District Ahmedabad and 201, Tulsiani Chambers situated at Nariman Point, Mumbai-400021. The details of debentures in terms of respective debenture trust deeds and/or memorandum of entry signed and executed by the company are as per details given below.

11 Secured by current assets including stock of raw materials, stock-in-process, finished goods, stores, spares, color chemicals and book debts and second charge on movable and immovable assets of the company.

12. Terms of repayment of term Loans:

The rate of interest and terms of repayment of debt outstanding as on 31.03.2016 is as follows, which are as provided in the Scheme of Arrangement u/s. 391 of the Companies Act, 1956 which became effective on 5.10.2015:

13. FOREIGN CURRENCY TRANSACTIONS:

The company used forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The company did not enter into any contract to derivative instruments for trading or speculative purposes. The foreign currency exposure not hedged as at March 31, 2016 are as under:

14. Loans and advances to staff include Rs.1.41 lacs (Previous year Rs. 0.65 lacs) due from officers of the company.

15. The Sales Tax authorities have issued notices for demand of Sales Tax of Rs. 747.93 lacs, penalty of Rs.619.58 lacs and interest of Rs.538.51 lacs, aggregating to Rs.1906.01 lacs for various assessment years. The company disputes the said demand. The company has filed appeals against these notices and got stay orders against the same.

16. During the year under review due to loss the company has not provided for Income-tax for the Assessment Year 2016-17 (Previous year Rs. NIL). Wealth tax has been abolished w.e.f. Assessment year 2016-17(Wealth tax provision of Rs.0.32 lacs was made for the previous year).

As regards deferred tax as per Accounting Standard - 22 (AS-22) on “Accounting for Taxes on Income” issued by The Institute of Chartered Accountants of India, there is a net deferred tax asset for the past years and for the current year after adjusting unabsorbed depreciation and carry forward losses of the past years. Considering the provisions of the AS-22 and as a matter of prudence, the company has not recognized the said deferred tax asset while preparing the accounts for the year under review.

The Income-tax assessments of the company are completed up to A.Y 2013-14. In respect of assessment for A.Y 1996-97, income-tax department had disputed some of the claims and raised demand of Rs. 676.66 lacs for tax and interest. The company had preferred an appeal against the said assessment and had succeeded before Commissioner of Income-tax (Appeal) and demand has been deleted. However, Income-tax department has preferred further appeal before the Income-tax Appellate Tribunal for which Tribunal has sent back file to Assessing Officer with certain directions for which appeal effect order is yet to be received from the Assessing Officer.

17. The cost of purchase is arrived at after considering effect of any settlement reached with the suppliers during the year.

18. Export benefits/incentives in respect of duty draw back and purchase of raw material from local suppliers (against advance released orders under duty exemption scheme) are accounted on accrual basis in order to follow the system of accounting which is mandatory as per the provisions of section 209 of the Companies Act, 1956.

19. There are no amounts outstanding for more than 30 days in respect of small scale industrial undertakings. The company has provided for interest of Rs.NIL (Previous year Rs.NIL) on outstanding for more than 45 days payable to Micro, Small and Medium enterprises. The total amount due to these parties is Rs. NIL (Previous year Rs.NIL) as at the balance sheet date. This information 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.

20. The unsecured loans include Rs. 750.00 lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The dispute is the subject matter of notice correspondence between HDFC Bank and BBK and under dispute between the company, BBK and HDFC Bank in various courts.

The Debt Recovery Tribunal (DRT), Mumbai, vide its order dated 18.4.2016, has directed BBK to refund amount received by it to HDFC and thereupon increase loan amount of Ashima with continuing rate of interest as contractually applicable on the loan amount under intimation to Ashima. No such intimation has been received by Ashima in pursuance to the said Order and the Company has decided to appeal against this order, hence the said amount of Rs.750 lacs is continued in the suspense account.

21. The Company came out with a Rights Issue of 8, 00, 85,089 equity shares of Rs. 10 each aggregating to Rs.8008.51 Lacs at par in the ratio of 24:10 to part-finance settlement of secured debt under Scheme of Arrangement u/s. 391 of the Companies Act, 1956. The issue closed on 2nd December, 2015 and the basis of allotment was approved by BSE Limited, the designated Stock Exchange, on 11th December, 2015. The process of refund, allotment and listing of shares was to be completed by 17th December, 2015, but the company could not complete these processes due to a status-quo order passed by the Debt Recovery Tribunal (“DRT”), Mumbai, restraining Bankers to the Issue from release of any funds and the Company from withdrawing the funds collected in the Rights Issue, in a pending case which was filed by HDFC Bank against the Company.

Subsequently, several legal cases and processes followed at DRT the Debt Recovery Appellate Tribunal and Hon. Bombay High Court. As per various orders of The Hon. Bombay High Court including final order dated 3rd May 2016, which directed the Bankers to release the funds collected under Rights Issue towards refund and release allotment money which allowed company to complete the further processes of the Rights Issue, allotment was made on 5th May, 2016 and refund amounts were processed on 7th May, 2016. The shares of the company under the Rights Issue will be listed shortly upon completion of certain other formalities.

The Company has sufficient authorized share capital to cover the shares issued under the Rights Issue.

The “share application money pending allotment” amounting to Rs. 8008.51 lacs has been disclosed as a separate item below Shareholders'' Funds in the Balance Sheet. Refunds due, amounting to Rs.179.12 lacs, under non-ASBA applications has been disclosed as part of Other Current Liabilities. Share application money amounting to Rs.813.13 Lacs collected through non-ASBA applications has been disclosed as part of Cash and Bank Balance. Allotment money collected through ASBA applications amounting to Rs.1156.78 lacs have been disclosed as part of Other Current Assets.

22. The expenditure incurred in respect of assets damaged for which insurance claim has been received has been debited under respective heads.

23. The company has componentized its fixed assets and has separately assessed the life of the major components forming part of the main asset. Consequently, the depreciation charge for the year is higher by Rs.30.56 lacs.

24. During the year, the Company filed a Scheme of Arrangement for Reconstruction and Compromise between the Company and its Equity Shareholders, Preference Shareholders and Secured Creditors under sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013 (the “Scheme”). The Equity Shareholders, Preference Shareholders and Secured Creditors of the company, present and voting, approved the said Scheme unanimously at their respective court convened meetings held on 20th August, 2015. The Honorable High Court of Gujarat sanctioned the Scheme vide its order dated 24th September, 2015 and the Scheme became effective on 5th October, 2015 upon filing of the same with the Registrar of Companies at Ahmedabad.

Key features of the Scheme are as follows:

(a) As full and final settlement of the entire Outstanding Secured Debts of the Secured Creditors, the Company has offered three different settlement options consisting of cash payments (to be made upon the Scheme becoming effective), deferred payments (to be paid in annual installments over a period of 5 years) and conversion of a part of debt into equity shares. The deferred payments will be secured by an exclusive charge on assets and will carry interest @15% under Option I. In case of equity shares, the Company shall also pay to Secured Creditors the “Shortfall Amount”, if any, upon disposal of shares by the Secured Creditors as more particularly detailed in the Scheme. As per the options selected by various secured creditors, cash payments amount to Rs.11,075.21 lacs, deferred payments amount to Rs.8,782.60 lacs and amount of debt to be converted into equity shares amounts to Rs.1,500 lacs.

(b) The balance outstanding secured debts together with outstanding interest, penalty and other charges, etc. whether provided or not in the books of the Company to be regarded as waived.

(c) Existing charge or security held by the Secured Creditors shall be released upon occurrence of various milestones provided in the Scheme.

(d) Preference Shareholders to be allotted 1(one) 1% Redeemable Non Cumulative Preference Share of the face value of Rs.100/- each for every 1(One) Redeemable Cumulative Preference Share of the face value of Rs.100/- each held by them. Arrears of dividend of the Preference Shareholders shall be considered as waived.

(e) Funds required for the purpose of payments under the Scheme are to be raised through various sources including funding by the Promoters, proceeds from the Rights Issue of the equity shares of the company and realization of its current/fixed assets.

(f) The Scheme provides for various Events of Default that include non-payment of any amount as per the provision of the Scheme, default in issuance of Equity Shares, non-payment of Shortfall amount, if any, etc. In case of occurrence of any of the Event of Default, the Secured Creditors have stringent rights including cancellation of reliefs and concessions given under the Scheme, forfeiture of monies already paid to them and taking over the management control and enforcement of security interest subject to applicable laws.

The Company has given effect to the Scheme in its books of accounts during the year.

25. Retirement Benefits (Accounting Standard - 15):

Provision for Gratuity

The following table sets out the status of the gratuity plan as required under AS 15 on “Employee Benefits”. 45.1 Reconciliation of opening and closing balances of the present value of the defined benefit and fair value of the plan assets.

26. Segment reporting (Accounting Standard - 17):

The company''s operations relate only to manufacture and sale of textile and related products and hence primary reporting disclosure is not applicable.

The company sells goods in domestic market and also exports them to various countries. Accordingly, secondary segment reporting is based on sales in India and exports outside India.

Disclosure has been made relating to debtors only, as other assets and liabilities are used interchangeably between the segments and hence cannot be allocated to segments.

Note: For F.Y 2015-16, the Preference shares being non-cumulative in nature, no dividend is considered in view of loss. For F.Y 2014-15 the old 13% and 11% Preference shares being cumulative in nature, its dividend has been added to loss for the year in the above calculation, though the appropriation for the same has not been done.

27. Based on review carried out as on 31.03.2016, no impairment loss is required to be provided for as per Accounting Standard 28 on “Impairment of Assets”.

28. Previous year figures have been regrouped / rearranged wherever necessary to confirm to this year''s figures.

29. Remittances in foreign currency on account of dividend: NIL

30. Earnings in foreign currency:

- Figures less than Rs. 500/- which are required to be shown separately have been shown as actual in brackets.


Mar 31, 2015

1. Reconciliation of number of shares outstanding:

The company has not issued or bought back any equity or preference shares during the year under review.

2. Shares Held by holding/ultimate holding company and/or their subsidiaries/associates

Out of issued, subscribed and paid up capital:

Nil (Previous Year Nil) Equity Shares are held by holding company

Nil (Previous Year Nil) Equity Shares are held by ultimate holding company

Nil (Previous Year Nil) Equity Shares are held by subsidiary of holding company

Nil (Previous Year Nil) Equity Shares are held by associates of holding or ultimate holding company.

3.The details of bonus shares issued, shares issued for consideration otherwise than in cash and shares bought back in preceding five years:

The company has not issued any bonus shares, shares for consideration otherwise than in cash and has not bought back any shares in year under review and preceding five years.

4. Details of Unpaid calls due from Directors or officers

There were no unpaid calls due from Directors/Officers of the Company.

5. Rights of Shareholders, Dividend and Repayment of Capital:

Rights of Equity Share holders

(a) Holder of Equity Shares is entitled to one vote per share.

(b) The Company declares and pays dividends in Indian Rupees. The Companies Act, 2013 provides that the Dividend shall be declared only out of the profits of the relevant year or out of the profits of any previous financial year(s) after providing for depreciation in accordance with the provisions of the Act and the Company may transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company.

(c) In case of inadequacy or absence of profits in any year, the Company may declare dividend out of free reserves subject to the condition that the rate of dividend shall not exceed average of the rates at which dividend was declared by the Company in three years immediately preceding that year.

(d) In the event of Liquidation of the Company, the holders of shares shall be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders.

Rights of Preference Share holders

(a) As per Section 47(2) of the Companies Act, 2013, Preference Shareholders shall have right to vote only on resolutions placed before company which directly affect their rights attached to preference shares and any resolution for winding up of the company or for repayment or reduction of share capital shall be deemed directly to affect their rights.

(b) Voting rights of the preference shareholders shall be in proportion as the paid up equity share capital bears to the paid up preference share capital.

(c) Where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.

6. Appropriations out of Balance in Profit and Loss Account:

There is no appropriation out of Profit and Loss Account for the year / previous year.

7. All the debentures and loans are secured/ to be secured by charge on plant and machinery and land and building of the company situated at Mouje Karannagar, Taluka Kadi, District Mehsana, North Gujarat; and at Mithipur, Ahmedabad in the State of Gujarat and the land and building situated at Mouje Rajpur-Hirpur, District Ahmedabad and 201, Tulsiani Chambers situated at Nariman Point, Mumbai - 400 021. The details of debentures in terms of respective debenture trust deeds and/or memorandum of entry signed and executed by the company are as per details given below.

8. Secured by current assets including stock of raw materials, stock-in-process, finished goods, stores, spares, colour chemicals and book debts and second charge on movable and immovable assets of the company.

9. Terms of Repayment of Debentures and Loans:

The company has filed draft scheme of arrangement, which provides for debt settlement as elaborately referred to in Note No.44.

The draft scheme provides for three options for debt settlement, with each option specifying payment of certain portion of outstanding principal secured debt, as settlement money, over varying time period extending upto 31.03.2020 and includes, in one option, issue of equity shares for certain portion of settlement amount. As per one of the options, interest is payable at 15% p.a. on payments to be made after 1.4.2015.

10. Period and Amount of Default:

As stated above, the company has filed draft scheme of arrangement, which provides for debt settlement with secured creditors. Secured creditors accounting for about 99% of total secured debt of the company have given letters to the company indicating their in-principal approval for preference of options from those given in the scheme. The status of the scheme is as given in note no.44.

In view of this, there are no defaults in repayment of dues to banks, financial institutions and debenture holders.

(Rupees in lacs)

As at As at Mar. 31,15 Mar. 31, 14

11. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(A) Claims against the company not 2,781.51 2,691.44 acknowledged as debt

(B) Guarantees - 24,625.14

(C) Other money for which the company 44.00 40.73 is contingently liable

TOTAL 2,825.51 27,357.31

12. Loans and advances to staff include Rs.0.65 lacs(Previous year Rs. 0.63 lacs) due from officers of the company.

13. The Sales Tax authorities have issued notices for demand of Sales Tax of Rs.747.93 lacs, penalty of Rs.619.58 lacs and interest of Rs.538.51 lacs, aggregating to Rs.1906.01 lacs for various assessment years. The company disputes the said demand. The company has filed appeals against these notices and got stay orders against the same.

14. During the year under review due to loss the company has not provided for Income-tax for the Assessment Year (A.Y) 2015-16 (Previous year Rs. NIL). Provision for wealth-tax is made of Rs.0.32 lacs (Previous year Rs. 0.39 lacs).

As regards deferred tax as per Accounting Standard - 22 (AS-22) on "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, there is a net deferred tax asset for the past years and for the current year after adjusting unabsorbed depreciation and carry forward losses of the past years. Considering the provisions of the AS-22 and as a matter of prudence, the company has not recognised the said deferred tax asset while preparing the accounts for the year under review.

The Income-tax assessments of the company are completed up to A.Y 2012-13. In respect of assessment for A.Y 1996-97, income-tax department had disputed some of the claims and raised demand of Rs. 676.66 lacs for tax and interest. The company had preferred an appeal against the said assessment and had succeeded before Commissioner of Income-tax (Appeal) and demand has been deleted. However, Income-tax department has preferred further appeal before the Income-tax Appellate Tribunal for which Tribunal has sent back file to Assessing Officer with certain directions for which appeal effect order is yet to be received from the Assessing Officer.

15. The cost of purchase is arrived at after considering effect of any settlement reached with the suppliers during the year.

16. Export benefits/incentives in respect of duty draw back and purchase of raw material from local suppliers (against advance released orders under duty exemption scheme) are accounted on accrual basis in order to follow the system of accounting which is mandatory as per the provisions of section 128 of the Companies Act, 2013.

17. There are no amounts outstanding for more than 30 days in respect of small scale industrial undertakings. The company has provided for interest of Rs.NIL (Previous year Rs.0.07 lacs) on outstanding for more than 45 days payable to Micro, Small and Medium enterprises. The total amount due to these parties is Rs.NIL (Previous year Rs.NIL) as at the balance sheet date. This information 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.

18. The unsecured loans include Rs. 750.00 lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The dispute is the subject matter of notice correspondence between HDFC Bank and BBK and under dispute between the company, BBK and HDFC Bank in various courts.

19. The expenditure incurred in respect of assets damaged for which insurance claim has been received has been debited under respective heads.

20. The company has retired its captive power plant from active use, as it had become very old and was not commercially viable to operate due to high fuel costs. The same is being carried at its estimated realizable value as asset held for sale. A portion of old building of its Spinfab Division, which was unusable and in a dilapidated condition, was demolished during the year. The aggregate loss of Rs.1096.73 lacs on account of retirement/demolition has been debited to revenue as a separate line item under Note 26 "other expenditure".

21.Based on useful life of each class of fixed assets determined upon technical evaluation, depreciation for the year comes to Rs.441.22 lacs compared to Rs.648.62 lacs as per old basis of providing depreciation.

22. The company has signed a term sheet for settlement of secured loans with one of its major secured creditors during the year. The Term Sheet provided for a Scheme of Arrangement under section 391 of the Companies Act 1956 to be implemented for debt settlement. Accordingly, the company has filed with the Stock Exchanges, a draft Scheme of Arrangement for Reconstruction and Compromise between the company and its equity shareholders, preference shareholders and secured creditors under Sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013. It provides for settlement based on percentage of outstanding principal amount only, as per various options given to secured creditors. As per the scheme, no interest is payable on these loans for the period till date. Secured creditors accounting for about 99% of total secured debt of the company have given letters to the company indicating their in-principle approval for preference of options from those given in the scheme. The scheme also provides for restructuring of preference shares.

The company has received Observation Letter for the scheme from the Stock Exchanges. The company is in the process of filing the Scheme with the Hon. Gujarat High Court for approval. The scheme will be effective upon approval by the Hon. Gujarat High Court.

The company has made on account payment of Rs.7700.00 lacs to one of its secured creditors against debt settlement dues under the scheme, which will be appropriated as payment of settlement dues upon the scheme becoming effective. The amount is disclosed in the Balance Sheet as "Short Term Loans and Advances" under the head "Advances Recoverable in Cash or Kind" in Schedule 17.

23. In view of the substantial progress in debt restructuring as stated above, and considering that the draft scheme of arrangement provides for debt settlement at less than outstanding principal amount of secured debt, and does not provide for payment of any interest, the company is not required to provide for interest on secured loans.

24. The company has settled secured loans with certain lenders during the year for consideration less than the outstanding principal loan amounts and taken the excess of liability over settlement amount to "Reconstruction Reserve".

25. Retirement Benefits (Accounting Standard - 15) :

Provision for Gratuity

The following table sets out the status of the gratuity plan as required under AS 15 on "Employee Benefits".

26. Segment reporting (Accounting Standard - 17):

The company's operations relate only to manufacture and sale of textile and related products and hence primary reporting disclosure is not applicable.

The company sells goods in domestic market and also exports them to various countries. Accordingly, secondary segment reporting is based on sales in India and exports outside India.

27. Related parties disclosures (Accounting Standard - 18):

(i) Relationships

(a) Key management personnel and their relatives:

Mr. Chintan N. Parikh - Chairman & Managing Director

Mr. Krishnachintan C. Parikh - Relative of key managerial personnel (Vice President - Denims)

(b) Other related parties:

Ashima Dyecot Limited Atrium Exports Private Limited

Elephants Enterprises Limited Lahar Trading and Investments Limited

Apus Investments Private Limited Albus Investments Private Limited

28. Based on review carried out as on March 31,2015, no impairment loss is required to be provided for as per Accounting Standard 28 on "Impairment of Assets".

29. Previous year figures have been regrouped / rearranged wherever necessary to confirm to this year's figures.

30. Remittances in foreign currency on account of dividend: NIL

31. Figures less than Rs. 500/- which are required to be shown separately have been shown as actual in brackets.


Mar 31, 2014

1. Reconciliation of number of shares outstanding:

The company has not issued or bought back any equity or preference shares during the year under review.

2. Shares Held by holding/ultimate holding company and/or their subsidiaries/associates Out of issued, subscribed and paid up capital:

Nil (Previous Year Nil) Equity Shares are held by holding company

Nil (Previous Year Nil) Equity Shares are held by ultimate holding company

Nil (Previous Year Nil) Equity Shares are held by subsidiary of holding company

Nil (Previous Year Nil) Equity Shares are held by associates of holding or ultimate holding company.

3. The details of bonus shares issued, shares issued for consideration otherwise than in cash and shares bought back in preceding five years:

The company has not issued any bonus shares, shares for consideration otherwise than in cash and has not bought back any shares in year under review and preceding five years.

4. Details of Unpaid calls due from Directors or officers

There were no unpaid calls due from Directors/Officers of the Company.

5. Rights of Shareholders, Dividend and Repayment of Capital:

Rights of Equity Share holders

a. Holder of equity shares is entitled to one vote per share.

b. The Company declares and pays dividends in Indian Rupees. The Companies Act, 1956 provides that any dividend be declared out of accumulated distributable profits only after the transfer to a general reserve of a specified percentage of net profit computed in accordance with current regulations.

c. In the event of liquidation of the Company, the holders of shares shall be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders.

Rights of Preference Share holders

a. Preference shareholders shall have right to vote only on resolutions placed before company which directly affect their rights attached to preference shares. As per explanation to Sec. 87 (2)(a) any resolution for winding up the company or for repayment or reduction of share capital shall be deemed directly to affect their rights.

b The holders of preference Shares (whether cumulative or non cumulative) have a right to vote on any resolutions of the company where dividends are in arrears -

1 In case of cumulative preference shares, on all resolutions of the company at any meeting if dividends are in arrears for aggregate period of not less than 2 years on the date of meeting.

2 In case of non cumulative preference shares, if arrears of 2 financial years immediately preceding date of such meeting or any 3 years arrears out of 6 years preceding date of meeting.

3 Such voting right is proportionate to preference paid up capital bears to total paid up equity capital.

6. Notes :

1 All the debentures and loans are secured/ to be secured by charge on plant and machinery and land and building of the company situated at Mouje Karannagar, Taluka Kadi, District Mehsana, North Gujarat; and at Mithipur, Ahmedabad in the State of Gujarat and the land and building situated at Mouje Rajpur-Hirpur, District Ahmedabad and 201, Tulsiani Chambers situated at Nariman Point, Mumbai - 400 021. The details of debentures in terms of respective debenture trust deeds and/or memorandum of entry signed and executed by the company are as per details given below.

2 Secured by current assets including stock of raw materials, stock-in-process, finished goods, stores, spares, colour chemicals and book debts and second charge on movable and immovable assets of the company.

(Rupees in lacs)

As at As at Mar. 31, 14 Mar. 31, 13

7. CONTINGENT LIABILITIES AND COMMITMENTS

(TO THE EXTENT NOT PROVIDED FOR)

(A) Claims against the company not acknowledged as debt 2,691.44 2,689.89

(B) Guarantees 24,625.14 24,625.14

(C) Other money for which the company is contingently liable 40.73 37.92

TOTAL 27,357.31 27,352.95

8. Loans and advances to staff include Rs.0.63 lacs (Previous year Rs. 2.71 lacs) due from officers of the company.

9. The Sales Tax authorities have issued notices for demand of Sales Tax of Rs.747.93 lacs, penalty of Rs.619.58 lacs and interest of Rs.538.51 lacs, aggregating to Rs.1906.01 lacs for various assessment years. The company disputes the said demand. The company has filed appeals against these notices and got stay orders against the same.

10. During the year under review due to loss the company has not provided for Income-tax for the Assessment Year (A.Y.) 2014-15 (Previous year Rs. NIL). Provision for wealth-tax is made of Rs.0.39 lacs (Previous year Rs. 0.35 lacs).

As regards deferred tax as per Accounting Standard - 22 (AS-22) on "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, there is a net deferred tax asset for the past years and for the current year after adjusting unabsorbed depreciation and carry forward losses of the past years. Considering the provisions of the AS-22 and as a matter of prudence, the company has not recognised the said deferred tax asset while preparing the accounts for the year under review.

The Income-tax assessments of the company are completed up to A.Y. 2011-12. In respect of assessment for A.Y. 1996-97, income-tax department had disputed some of the claims and raised demand of Rs. 676.66 lacs for tax and interest. The company had preferred an appeal against the said assessment and had succeeded before Commissioner of Income-tax (Appeal) and demand has been deleted. However, Income-tax department has preferred further appeal before the Income- tax Appellate Tribunal for which Tribunal has sent back file to Assessing Officer with certain directions for which appeal effect order is yet to be received from the Assessing Officer.

11. The cost of purchase is arrived at after considering effect of any settlement reached with the suppliers during the year.

12. Export benefits/incentives in respect of duty draw back and purchase of raw material from local suppliers (against advance released orders under duty exemption scheme) are accounted on accrual basis in order to follow the system of accounting which is mandatory as per the provisions of section 209 of the Companies Act, 1956.

13. There are no amounts outstanding for more than 30 days in respect of small scale industrial undertakings.

The company has provided for interest of Rs.0.07 lacs (Previous year Rs.0.19 lacs) on outstanding for more than 45 days payable to Micro, Small and Medium enterprises. The total amount due to these parties is Rs.NIL (Previous year Rs.6.43 lacs) as at the balance sheet date. This information 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.

14. In view of ongoing comprehensive debt restructuring, the company has not made provision of Rs.32,213.63 lacs for unpaid interest (Previous year Rs.27,409.57 lacs). The loss for the year is understated by Rs. 32,213.63 lacs (Previous year Rs. 27,409.57 lacs). This amount and the amount due to the lenders is disclosed based on information available with the management. As a result, outstanding dues of lenders are subject to reconciliation.

15. The unsecured loans include Rs. 750.00 lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The dispute is the subject matter of notice correspondence between HDFC Bank and BBK and under dispute between the company, BBK and HDFC Bank in various courts.

16. The expenditure incurred in respect of assets damaged for which insurance claim has been received has been debited under respective heads.

17. The net worth of the company has eroded. However, the company expects to revive its financial position in view of the ongoing debt restructuring and good prospects of improvement in its operational performance in future. Considering these facts, the accounts of the company are prepared on going concern basis.

18. Segment reporting (Accounting Standard - 17):

The company''s operations relate only to manufacture and sale of textile and related products and hence primary reporting disclosure is not applicable.

The company sells goods in domestic market and also exports them to various countries. Accordingly, secondary segment reporting is based on sales in India and exports outside India.

Disclosure has been made relating to debtors only, as other assets and liabilities are used interchangeably between the segments and hence cannot be allocated to segments.

19. Related parties disclosures (Accounting Standard - 18):

(i) Relationships

(a) Key management personnel:

Mr. Chintan N. Parikh - Chairman & Managing Director

(b) Other related parties where control exists:

Ashima Dyecot Limited Atrium Exports Private Limited

Elephants Enterprises Limited Lahar Trading and Investments Limited

Apus Investments Private Limited Albus Investments Private Limited

20. Based on review carried out as on March 31, 2014, no impairment loss is required to be provided for as per Accounting Standard 28 on "Impairment of Assets".

21. Previous year figures have been regrouped / rearranged wherever necessary to confirm to this year''s figures.

22. Remittances in foreign currency on account of dividend: NIL

23. Figures less than Rs. 500/- which are required to be shown separately have been shown as actual in brackets


Mar 31, 2013

1. Loans and advances to staff include Rs.2.71 lacs (Previous year Rs. 2.16 lacs) due from officers of the company.

2. The Sales Tax authorities have issued notices for demand of Sales Tax of Rs.747.93 lacs, penalty of Rs.619.58 lacs and interest of Rs.538.51 lacs, aggregating to Rs.1906.02 lacs for various assessment years. The company disputes the said demand. The company has filed appeals against these notices and got stay orders against the same.

3. During the year under review due to loss the company has not provided for Income-tax for the Assessment Year (A.Y.) 2013-14 (Previous year Rs. NIL). Provision for wealth-tax is made of Rs.0.35 lacs (Previous year Rs. 0.33 lacs).

As regards deferred tax as per Accounting Standard - 22 (AS-22) on "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, there is a net deferred tax asset for the past years and for the current year after adjusting unabsorbed depreciation and carry forward losses of the past years. Considering the provisions of the AS-22 and as a matter of prudence, the company has not recognised the said deferred tax asset while preparing the accounts for the year under review.

The Income-tax assessments of the company are completed up to A.Y. 2010-11. In respect of assessment for A.Y. 1996-97, income-tax department had disputed some of the claims and raised demand of Rs. 676.66 lacs for tax and interest. The company had preferred an appeal against the said assessment and had succeeded before Commissioner of Income-tax (Appeal) and demand has been deleted. However, Income-tax department has preferred further appeal before the Income- tax Appellate Tribunal for which Tribunal has sent back file to Assessing Officer with certain directions for which appeal effect order is yet to be received from the Assessing Officer.

4. The cost of purchase is arrived at after considering effect of any settlement reached with the suppliers during the year.

5. Export benefits/incentives in respect of duty draw back and purchase of raw material from local suppliers (against advance released orders under duty exemption scheme) are accounted on accrual basis in order to follow the system of accounting which is mandatory as per the provisions of section 209 of the Companies Act, 1956.

6. Names of small scale industrial undertakings in whose account amount was outstanding for more than 30 days are as under:

Krupa Printers, Super Engineering Co., Atul Enterprise, Gemini Polyplast Industries, Mascot Industries, Hydro Flex Hose Industries, Sun Industries, Balagee Textile Services, Vaishali Corporation, Kadam Environmental Consultants, Mina Tin Works, Royal Electric Engineering Co. and Hariom Refrigeration.

The company has provided for interest of Rs.0.19 lacs (Previous year Rs.0.10 lacs) on outstanding for more than 45 days payable to Micro, Small and Medium enterprises. The total amount due to these parties is Rs.6.43 lacs (Previous year Rs.9.36 lacs) as at the balance sheet date. This information 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.

7. In view of ongoing comprehensive debt restructuring, the company has not made provision of Rs.27,409.57 lacs for unpaid interest (Previous year Rs.23,442.98 lacs). The loss for the year is understated by Rs. 27,409.57 lacs (Previous year Rs. 23,442.98 lacs). This amount and the amount due to the lenders is disclosed based on information available with the management. As a result, outstanding dues of lenders are subject to reconciliation.

8. The unsecured loans include Rs. 750.00 lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The dispute is the subject matter of notice correspondence between HDFC Bank and BBK and under dispute between the company, BBK and HDFC Bank in various courts.

9. The expenditure incurred in respect of assets damaged for which insurance claim has been received has been debited under respective heads.

10. The net worth of the company has eroded. However, the company expects to revive its financial position in view of the ongoing debt restructuring and good prospects of improvement in its operational performance in future. Considering these facts, the accounts of the company are prepared on going concern basis.

11. Retirement Benefits (Accounting Standard – 15) : Provision for Gratuity

The following table sets out the status of the gratuity plan as required under AS 15 on "Employee

Benefits".

Reconciliation of opening and closing balances of the present value of the defined benefit and fair value of the plan assets.

12. Segment reporting (Accounting Standard - 17):

The company''s operations relate only to manufacture and sale of textile and related products and hence primary reporting disclosure is not applicable.

The company sells goods in domestic market and also exports them to various countries. Accordingly, secondary segment reporting is based on sales in India and exports outside India.

Disclosure has been made relating to debtors only, as other assets and liabilities are used interchangeably between the segments and hence cannot be allocated to segments.

13. Related parties disclosures (Accounting Standard – 18): (i) Relationships

(a) Subsidiary

Ashima Textiles Inc., U.S.A. - up to 05.05.2011

(b) Key management personnel:

Mr. Chintan N. Parikh - Chairman & Managing Director

(c) Other related parties where control exists:

Ashima Dyecot Limited Atrium Exports Private Limited

Elephants Enterprises Limited Lahar Trading and Investments Limited

Apus Investments Private Limited Albus Investments Private Limited

Note: Preference shares being cumulative in nature, its dividend has been added to loss for the year in the above calculation, though the appropriation for the same has not been done.

14. Based on review carried out as on 31.03.2013, no impairment loss is required to be provided for as per Accounting Standard 28 on "Impairment of Assets".

15. Previous year figures have been regrouped / rearranged wherever necessary to confirm to this year''s figures.

16. Remittances in foreign currency on account of dividend: NIL

17. Figures less than Rs. 500/- which are required to be shown separately have been shown as actual in brackets


Mar 31, 2012

1.1 Reconciliation of number of shares outstanding:

The company has not issued or bought back any equity or preference shares during the year under review.

1.2 Shares Held by holding/ultimate holding company and/or their subsidiaries/associates Out of issued, subscribed and paid up capital:

Nil (Previous Year Nil) Equity Shares are held by holding company

Nil (Previous Year Nil) Equity Shares are held by ultimate holding company

Nil (Previous Year Nil) Equity Shares are held by subsidiary of holding company

Nil (Previous Year Nil) Equity Shares are held by associates of holding or ultimate holding company.

1.3 The details of bonus shares issued, shares issued for consideration otherwise than in cash and shares bought back in preceding five years:

The company has not issued any bonus shares, shares for consideration otherwise than in cash and has not bought back any shares in year under review and preceding five years.

1.4 Details of Unpaid calls due from Directors or officers

There were no unpaid calls due from Directors/Officers of the company.

1.5 Rights of Shareholders, Dividend and Repayment of Capital:

Rights of Equity Share holders

a. Holder of equity shares is entitled to one vote per share.

b. The Company declares and pays dividends in Indian Rupees. The Companies Act, 1956 provides that any dividend be declared out of accumulated distributable profits only after the transfer to a general reserve of a specified percentage of net profit computed in accordance with current regulations.

c. In the event of liquidation of the Company, the holders of shares shall be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders.

Rights of Preference Share holders

a. Preference shareholders shall have right to vote only on resolutions placed before company which directly affect their rights attached to preference shares. As per explanation to Sec. 87 (2)(a) any resolution for winding up the company or for repayment or reduction of share capital shall be deemed directly to affect their rights.

b The holders of preference Shares (whether cumulative or non cumulative) have a right to vote on any resolutions of the company where dividends are in arrears -

1 In case of cumulative preference shares, on all resolutions of the company at any meeting if dividends are in arrears for aggregate period of not less than 2 years on the date of meeting.

2 In case of non cumulative preference shares, if arrears of 2 financial years immediately preceding date of such meeting or any 3 years arrears out of 6 years preceding date of meeting.

3 Such voting right is proportionate to preference paid up capital bears to total paid up equity capital.

Notes :

1 All the debentures and loans are secured/ to be secured by charge on plant and machinery and land and building of the company situated at Mouje Karannagar, Taluka Kadi, District Mehsana, North Gujarat; and at Mithipur, Ahmedabad in the State of Gujarat and the land and building situated Mouje Rajpur-Hirpur, District Ahmedabad and 201, Tulsiani Chambers situated at Nariman Point, Mumbai - 400 021. The details of debentures in terms of respective debenture trust deeds and/or memorandum of entry signed and executed by the company are as per details given below.

2 Secured by current assets including stock of raw materials, stock-in-process, finished goods, stores, spares, colour chemicals and book debts and second charge on movable and immovable assets of the company.

(Rupees in lacs) As at As at Mar. 31, 12 Mar. 31, 11

3. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(A) Claims against the company not acknowledged as debt 2,676.89 2,948.21

(B) Guarantees 24,625.14 24,625.14

(C) Other money for which the company is contingently liable 32.80 358.31

TOTAL 27,334.83 27,931.66

4. Loans and advances to staff include Rs.2.16 lacs (Previous year Rs. 0.44 lacs) due from officers of the company.

5. The Sales Tax authorities have issued notices for demand of Sales Tax of Rs.747.93 lacs, penalty of Rs.619.58 lacs and interest of Rs.538.51 lacs, aggregating to Rs.1906.02 lacs for various assessment years. The company disputes the said demand. The company has filed appeals against these notices and got stay orders against the same.

6. During the year under review due to loss the company has not provided for Income-tax for the Assessment Year 2012-13 (Previous year Rs. NIL). Provision for wealth-tax is made of Rs.0.33 lacs (Previous year Rs. 0.47 lacs).

As regards deferred tax as per Accounting Standard - 22 (AS-22) on "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, there is a net deferred tax asset for the past years and for the current year after adjusting unabsorbed depreciation and carry forward losses of the past years. Considering the provisions of the AS-22 and as a matter of prudence, the company has not recognised the said deferred tax asset while preparing the accounts for the year under review.

The Income-tax assessments of the company are completed up to A.Y. 2010-11. In respect of assessment for A.Y. 1996-97, income-tax department had disputed some of the claims and raised demand of Rs. 676.66 lacs for tax and interest. The company had preferred an appeal against the said assessment and had succeeded before Commissioner of Income-tax (Appeal) and demand has been deleted. However, Income-tax department has preferred further appeal before the Income-tax Appellate Tribunal for which Tribunal has sent back file to Assessing Officer with certain directions for which appeal effect order is yet to be received from the Assessing Officer.

7. Export benefits/incentives in respect of duty draw back and purchase of raw material from local suppliers (against advance released orders under duty exemption scheme) are accounted on accrual basis in order to follow the system of accounting which is mandatory as per the provisions of Section 209 of the Companies Act, 1956.

8. The cost of purchase is arrived at after considering effect of any settlement reached with the suppliers during the year.

38. In view of ongoing comprehensive debt restructuring, the company has not made provision of Rs.23,442.98 lacs for unpaid interest (Previous year Rs.19,989.04 lacs). The loss for the year is understated by Rs. 23,442,98 lacs (Previous year Rs. 19,989.04 lacs).

9. The unsecured loans include Rs. 750.00 lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The dispute is the subject matter of notice correspondence between HDFC Bank and BBK and under dispute between the company, BBK and HDFC Bank in various courts.

10. Exceptional item represents amount of compensation paid to workers for voluntary retirement. Extraordinary items for the previous year mainly include balances written off.

11. The expenditure incurred in respect of assets damaged for which insurance claim has been received has been debited under respective heads.

12. The net worth of the company has eroded. However, the company expects to revive its financial position in view of the ongoing debt restructuring and good prospects of improvement in its operational performance in future. Considering these facts, the accounts of the company are prepared on going concern basis.

13. Names of small scale industrial undertakings in whose account amount was outstanding for more than 30 days are as under:

Krupa Printers, Alpa Industries, Super Engineering Co., Hariom Industries, Atul Enterprise, Gemini Polyplast Industries, Mascot Industries, Sun Industries, Balagee Textile Services, Vaishali Corporation, Kadam Environmental Consultants, Sohanlal Chauhan, Royal Electric Engineering Co. and Hariom Refrigeration.

The company has provided for interest of Rs.0.10 lacs (Previous year Rs.0.02 lacs) on outstanding for more than 45 days payable to Micro, Small and Medium enterprises. The total amount due to these parties is Rs.9.36 lacs (Previous year Rs.3.63 lacs) as at the balance sheet date. This information 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.

14. Segment reporting (Accounting Standard - 17):

The company's operations relate only to manufacture and sale of textile and related products and hence primary reporting disclosure is not applicable.

The company sells goods in domestic market and also exports them to various countries. Accordingly, secondary segment reporting is based on sales in India and exports outside India.

Disclosure has been made relating to debtors only, as other assets and liabilities are used interchangeably between the segments and hence cannot be allocated to segments.

Note: Preference shares being cumulative in nature, its dividend has been added to loss for the year in the above calculation, though the appropriation for the same has not been done.

15. Based on review carried out as on 31.03.2012, no impairment loss is required to be provided for as per Accounting Standard 28 on "Impairment of Assets".

16. Previous year figures have been regrouped / rearranged wherever necessary to confirm to this year's figures.

17. Remittances in foreign currency on account of dividend: NIL


Mar 31, 2010

1. Estimated amount pf contracts remaining to be executed on capital account and not provided for Rs 7.22 lacs (Previous year Rs. 1.95 lacs).

2. Contingent liabilities not provided for:

(Rupees in lacs) As on Mar. 31,10 Mar. 31, 09 (i) In respect of bills of exchange discounted 35.88 28.32 (ii) In respect of guarantee given by the company to lenders on behalf of Ashima Dyecot Limite.d 24,625.14 24,625.14 (iii) In respect of disputed income-tax demand not acknowledged by the company 719.15 774.61 (iv) In respect of disputed demand of central excise not acknowledged by the company 273.74 292.92 (v) In respect of disputed custom duty not acknowledged by the company 46.89 44.48 (vi) In respect of disputed demand of service tax not acknowledged by the company 148.01 142.06 (vii) In respect of disputed demand of Sales tax not acknowledged by the company 1906.02 - (viii) In respect of employees who have yet not opted for VRS. 470.03 416.89 (ix) Arrears of fixed cumulative dividend (including dividend tax) on cumulative preference shares for the following period. 11 % cumulative preference shares for the period from March 26, 2001 to Mar. 31, 2010 Rs. 1857.71 lacs. 13% cumulative preference shares for the period from ,, July 1,2000 to Mar, 31, 2010 Rs. 667.74 lacs. 2,525.45 2,251.10

3. (i) Sundry debtors as appearing in the balance sheet include Rs. NIL (Previous year Rs. 917.97 i lacs) due from companies in which a director of the company is director. (ii) Loans and advances to staff include Rs*. 2.38 lacs (Previous year Rs. 9.00 lacs) due from officers of the company (Maximum amount outstanding at any time during the year Rs.4.54 lacs, previous year Rs. 20.95 lacs). .

4. During the year 2002, central excise authorities had raised a demand for excise duty of Rs. 127.18 lacs and penalty of Rs. 139.00 lacs aggregating to Rs. 266.18 lacs. The company has paid Rs. 15.00 lacs under protest. Subsequently the company has succeeded in the appeal before Commissioner of Central Excise, Ahmedabad. The department has preferred an appeal before Customes, Excise and Service Tax Appellate Tribunal against the order passed by Commissioner of Central Excise, Ahmedabad.

5. The service tax authorities have raised demand of service tax of Rs. 43.01 lacs (Previous year Rs.43.01 lacs), penalty of Rs. 46.36 lacs (Previous, year Rs. 46.00 lacs) and interest of Rs. 58.64 lacs (Previous year Rs. 53.05 lacs) aggregating to Rs. 148.01 lacs (Previous year Rs. 142.06 lacs).The appeal filed by the company against the demand was decided in favour of the company by the Commissioner of Central Excise (Appeals). A subsequent appeal against the same by the Excise department has been rejected by the CESTAT.

6. The Sales Tax authorities have issued notices for demand of Sales Tax of Rs.747.93 lacs, penalty of Rs.619:58 lacs and interest of Rs.538.51 lacs, aggregating to Rs.1906.02 lacs for various assessment years. The company disputes the said demand. The company has filed appeals and got stay orders against some notices and is in the process of filing appeals and stay applications for the remaining notices.

7. During the year under review due to loss the company has not provided for income-tax for the Assessment Year (A.Y.) 2010-11 (Previous year Rs. NIL). Provision for wealth-tax is made of Rs.0.61 lacs. (Previous year Rs. 0.86 lacs).

As regards deferred tax as per Accounting Standard - 22 (AS-22) on "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, there is a net deferred tax asset for the past years and for the current year after adjusting unabsorbed depreciation and carry forward losses of the past years. Considering the provisions of the AS-22 and as a matter of prudence, the company has not recognised the said deferred tax asset while preparing the accounts for the year under review.

The Income-tax assessments of the company are completed up to A.Y. 2006-07. In respect of assessment for A.Y. 1996-97, income-tax department had disputed some of the claims and raised demand of Rs. 676.66 lacs for tax and interest. The company had preferred an appeal against the said assessment and had succeeded before Commissioner of Income-tax (Appeal) and demand has been deleted. However, Income-tax departme/it has preferred further appeal before the Income-tax Appellate Tribunal for which Tribunal has sent back file to Assessing Officer with certain directions for which appeal effect order is yet to be received from the Assessing Officer.

8. The cost of purchase is arrived at after considering effect of any settlement reached with the suppliers during the year.

9. Export benefits/incentives in respect of duty draw back and purchase of raw material from local suppliers (against advance released orders under duty exemption scheme) are. accounted on accrual basis in order to follow the system of accounting which is mandatory as per the provisions of section 209 of the Companies Act, 1956.

10. Names of small scale industrial undertakings in whose account amount was outstanding for more than 30 days are as under:

Krupa Printers, Alpa Industries, Super Engineering Co., Perfect Engineering Corporation, Hariom Industries, Atul Enterprise, Gemini Polyplast, Mascot Industries, Sun Industries, Vaishali Corporation, Balagee Textile Services, Sapphire, Hariom Refrigeration.

The company has provided for interest of Rs.0.10 lacs (Previous year Rs.0.13 lacs) on outstanding for more than 45 days payable to Micro, Small and Medium enterprises. The total amount due to these parties is Rs.3.51 lacs (Previous year Rs.5.90 lacs) as at the balance sheet date. This information 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.

11. In view of ongoing comprehensive debt restructuring, the company has not made provision of Rs.19,617.97 lacs for unpaid interest {Previous year Rs.13,357.80 lacs). The loss for the year is understated by Rs. 19,617.97 lacs (Previous year Rs. 13,357.80 lacs).

12. The unsecured loans include Rs. 750.00 lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The dispute is the subject matter of notice correspondence between HDFC Bank and BBK and under dispute between the company, BBK and HDFC Bank in various courts.

13. Extraordinary items mainly include loss on sale of investments.

14. The expenditure incurred in respect of assets damaged for which insurance claim has been received has been debited Under respective heads.

15. The net worth of the company has eroded. However, the company expects to revive its financial position in view of the ongoing debt restructuring and good prospects of improvement in its operational performance in future. Considering these facts, the accounts of the company are prepared on going concern basis.

16. Retirement Benefit* (Accounting Standard -15): Provision for Gratuity

The following table sets out the status of the gratuity plan as required under AS 15 on "Employee Benefits".

17. Segment reporting (Accounting Standard-17):

The companys operations relate only to manufacture and sale of textile and related products and hence primary reporting disclosure is not applicable.

The company sells goods in domestic market and also exports them to various countries. Accordingly, secondary segment reporting is based on sales in India and exports outside India.

Disclosure has been made relating to debtors only, as other assets and liabilities are used interchangeably between the segments and hence cannot be allocated to segments.

(d) Other related parties where control exists:

Atrium Exports Private Limited

N.C.P. Enterprises Limited

Elephants Enterprises Limited

Lahar Trading and Investments Limited

Nachmo Trading Company Limited

Amrakadamb Investments Private Limited

Amrashagun Investments Private Limited

Note: Preference shares being cumulative in nature, its dividend has been added to loss for the year in the above calculation, though the appropriation for the same has not been done.

18. As per Accounting Standard 21 on "Consolidated Financial Statements" and Accounting Standard 23 on" Accounting for investments in Associates in Consolidated Financial Statements" issued by The Institute of Chartered Accountants of India, the company has presented consolidated financial statements separately, including subsidiaries and associate, in this annual report.

19. In accordance with the provisions of Accounting Standard 28 on "Impairment of Assets" issued by The Institute of Chartered Accountants of India, the company has provided for the impairment loss of Rs.95.95 lacs, which has been set off against revaluation reserve.

20. Previous year figures have been regrouped/rearranged Wherever necessary to confirm to this years figures.

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