Notes to Accounts of BSL Ltd.

Mar 31, 2018

1. Company Overview and Accounting Policies

A. Corporate Information

BSL Limited ("the Company") is a public company incorporated under Indian Companies Act, 1956, having its registered office at Biliakalan, Mandpam, Bhilwara, Rajasthan. The Company has its primary listing on the BSE Limited and National Stock Exchange in India.

The Company''s operations predominantly relates to Textile & Generation of Wind Power. The Company is one of the India''s largest vertically integrated textile company and leading manufacturer of fashion fabrics and yarn of Poly Viscose and worsted in India.

(i) Disposal from Gross Block represents sale/transfer/discard of property, plant & equipment/ and adjustment of lease rent.

(ii) Deduction in depreciation is on account of Sale/Transfer/discard of property, plant & equipment.

(iii) Depreciation for the year 2017-18 includes Rs. 71.06 lac (P.Y. Rs. 45.65 lac) against amortization of government capital grants.

(iv) On transition date, the Company has opted to continue with carrying value of all of its property, plant & equipment as deemed cost and net carrying value under previous GAAP as on March 31^st, 2016 is recognized as gross carrying amount in Ind AS as on 01.04.2016.

(v) Assets pledged as security refer note no. 18 and 23.

During the year, the Company discounted trade receivable with an aggregate carrying amount of Rs.801.69 lac (Rs. 740.31 as on March 31^st, 2017 and Rs.1208.83 lac as on April 1^st, 2016) to the banks. If the trade receivables are not paid at maturity, the banks have right to recourse the Company to pay the unsettled balance. As the Company has not transferred significant risk and rewards relating to these trade receivables, it continues to recognize the full carrying amount of the receivables and has recognized amount received on the transfer as secured borrowings.

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

i) Term / Rights attached to Equity shares

The Company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(i) The Other Comprehensive Income (Net gains/(loss) on hedging instruments) represents the cumulative effective portion of gain / (losses) arising on changes in fair value of designated portion of hedging instruments entered into for Other Comprehensive Income. The cumulative gain/ (losses) arising on changes in fair value of designated portion of the hedging instruments that are recognized and accumulated under the heading of Other Comprehensive Income will be reclassified to the Profit and Loss only when the hedge transaction affects the Profit and Loss account.

(b) Proposed Dividend - After the reporting date, the Board of Directors of the Company has recommended a dividend @10% to Equity Shareholders i.e. Rs.1.00 (PY Rs.1.20) per Equity Share amounting to Rs.102.92 Lac (PY Rs.123.51 Lac) excluding applicable taxes for the year 2017-18. The dividend proposed by the Directors is subject to approval at the annual general meeting. The dividend has not been recognized as liability.

(i) Nature of Security: The Term Loans from Banks are secured by way of joint equitable mortgage / hypothecation of all immovable and movable existing and future assets of the Company except book debts ranking paripassu subject to prior charge created / to be created in favour of the Company''s bankers on stocks of raw materials, semi-finished, finished goods for working capital.

(ii) Terms of Repayment of Secured Borrowing: Secured term loans from banks are repayable in quarterly installments and having floating interest rates ranging from Base Rate/MCLR spread (1.00% to 2.40 % as on 31.03.2018 and 1.00% to 2.40% as on 31.03.2017) and vehicle loans are repayable in monthly installments and having interest rates ranging from 8.60% to 10.51% (P.Y. 9.48% to 10.51%). Period of maturity and installments outstanding are as under:-

(i) Bank loans for working capital are secured against hypothecation of stocks of raw materials, finished goods and goods in process. The same is also secured by second charge created/to be created in favour of Company''s Bankers by way of joint equitable mortgage on immovable properties of the Company which is ranking paripassu and having floating interest rate ranging from 9.75% to 11.50%(P.Y. 9.75% to 11.50%).

(ii) No Working Capital loan is guaranteed by Directors or Others.

There are no Micro, small and medium enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31^st March, 2018. This information as required to be disclosed under the Micro-small and medium enterprises development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

2. EMPLOYMENT BENEFIT PLANS

The company participates in defined contribution and benefit schemes, the assets of which are held (where funded) in separately administered funds. For defined contribution schemes the amount charged to the statements of profit or loss is the total of contributions payable in the year. the required disclosure are given here under:

vii) There are no amount included in the fair value of plan assets for

i) Company''s own financial instruments.

ii) Property occupied by or other assets used by the Company.

(xii) Description on Risk Exposure

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks as follows:-

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

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

C) Discount Rate - Reduction in discount rate in subsequent valuations can increase the plan''s liability

D) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

E) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan''s liability.

3. SEGMENT REPORTING

The Company''s operation predominantly relates to Textile &Generation of Wind power. On the basis of assessment of the risk and return, the Company has identified Textile and Wind Power as primary reportable segments. Further the geographical segment have been considered as secondary segment and bifurcated into Domestic & Export segments.

Identification of Segments

The Board of Directors of the Company has been identified as Chief Operation Decision Maker who monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Accounting policy in respect of segments is in conformity with accounting policy of the company as a whole.

Inter segment Transfer

Segment revenue resulting from transactions with other business segments is accounted for on basis of transfer price agreed between the segments. Transfer prices between operating segments are on arm''s length basis in a manner similar to transactions with third parties.

Segment Revenue and Results

The revenue and expenditure in relation to the respective segment have been identified and allocated to the extent possible. Other items i.e. interest expenses, income tax, etc. not allocable to specific segments are disclosed separately as unallocated and adjusted directly against the total income of the Company.

Segment Assets and Liabilities

Segment Assets includes all operating assets used by the operating segment and mainly consisting property, plant & equipment, trade receivables, cash and cash equivalents and inventory etc. Segment Liabilities primarily include trade payables and other liabilities. Common assets & liabilities which cannot be allocated to specific segments are shown as a part of unallocable assets/liabilities.

(B). Fair value hierarchy

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

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

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

Valuation Technique used to determine Fair Value

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values:

Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities measured at amortized cost is approximate to their carrying amounts largely due to the short-term maturities of these instruments. The fair value of other non-current financial assets and liabilities (security deposit taken/given and advance to employees) carried at amortized cost is approximately equal to fair value. Hence carrying value and fair value is taken same.

Long-term variable-rate borrowings measured at amortized cost are evaluated by the Company based on parameters such as interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings approximates their carrying values. Risk of other factors for the company is considered to be insignificant in valuation.

The fair values of the forward contract are determined using the forward exchange rate at the balance sheet date based on quotes from banks and financial institutions. Management has evaluated the credit and non-performance risks associated with its derivative counterparties and believe them to be insignificant and not warranting a credit adjustment.

(C) FINANCIAL RISK MANAGEMENT OBJECTIVES & POLICIES

The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The company''s activities expose it to a variety of financial risks: currency risk, interest rate risk credit risk and liquidity risk. The company''s overall risk management strategy seeks to minimize adverse effects from the unpredictability of financial markets on the company''s financial performance. The Company''s senior management is supported by a financial risk committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The financial risk committee provides assurance to the Company''s senior management the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives The Audit committee reviews and agrees policies for managing each of these risks, which are summarized below.

(D) FOREIGN CURRENCY RISK MANAGEMENT

Foreign exchange risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of changes in foreign exchange rate. The Company derives significant portion of its revenue in foreign currency, exposing it to fluctuations in currency movements. The Company has laid down a foreign exchange risk policy as per which senior management team reviews and manages the foreign exchange risks in a systematic manner, including regular monitoring of exposures, proper advice from market experts, hedging of exposures, etc.

The Company uses derivative financial instruments, such as foreign exchange forward contracts, to mitigate foreign exchange related risk exposures. Derivative financial instruments relating to a firm commitment or a highly probable forecast transaction are marked to market at every reporting date. In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Sensitivity Analysis

The Following table demonstrates the sensitivity in the foreign exchange rate (USD & EURO) to the Indian Rupees with all other variable held constant. The impact on statement of profit & loss is given below:

Interest Rate Risk Management

The company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The risk is managed by the company by maintaining an appropriate mix between fixed and floating rate borrowings. The company''s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

Interest Rate Sensitivity Analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease represents management''s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the company''s:

Profit for the year ended 31 March, 2018 would decrease/increase by Rs.84.62 lacs (31 March, 2017: decrease/increase by Rs.88.36 lacs). This is mainly attributable to the company''s exposure to interest rates on its variable rate borrowings; and the company''s sensitivity to interest rates has decreased during the current year mainly due to the reduction in variable rate debt instruments.

Other Price Risks

The company is not exposed to any instrument which has price risks arising from equity investments which is not material.

Credit Risk Management

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company''s exposure to credit risk primarily arises from trade receivables, balances with banks, investments and security deposits. The credit risk on bank balances is limited because the counterparties are banks with good credit ratings.

Trade Receivables

Credit risk is managed through credit approvals, establishing credit limits, continuous monitoring of creditworthiness of customers to which the company grants credit terms in the normal course of business. The Company also assesses the financial reliability of customers taking into account the financial condition, current economic trends and historical bad debts and ageing of accounts receivables

Cash & Cash Equivalent

With respect to credit risk arising from financial assets which comprise of cash and cash equivalents, the Company s risk exposure arises from the default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets at the reporting date. Since the counter party involved is a bank, Company considers the risks of non-performance by the counterparty as non-material.

Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company''s short, medium, and long-term funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Liquidity and Interest risk tables

The following tables detail the company''s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the company may be required to pay.

FOREIGN CURRENCY EXPOSURE

(a) The Company hedges its export realizations and import payables through Foreign Exchange Hedge Contracts in the normal course of business so as to reduce the risk of exchange fluctuations. No Foreign Exchange Hedge Contracts are taken /used for trading or speculative purpose.

(b) The Company has following gross forward contract exposure outstanding as on balance sheet date which have been designated as cash flow hedge to its exposure to movements in foreign exchange rates:

4. CAPITAL MANAGEMENT

The Company manages its capital to ensure that the entities in the Company will be able to continue as going concern while maximizing the return to shareholders and also complying with the ratios stipulated in the loan agreements through the optimization of the debt and equity balance.

The capital structure of the Company consists of net debt (borrowings as detailed in note 18 and 23 offset by cash and bank balances as detailed in note 10 & 11) and total equity of the Company. The Company is not subject to any externally imposed capital requirements.

Notes:

Under previous GAAP, dividends on equity shares recommended by the boards of directors after the end of the reporting period but before the financial statements were approved for issue were recognised in the financial statements as a liability. Under Ind AS, such dividends are recognised when declared by the members in a general meeting. The effect of this change is an increase in total equity as at 01^st April, 2016 of Rs.148.65 Lac, but does not affect profit before tax and total profit for the year ended 01^st April, 2016.

Under previous GAAP, acturial gains and losses were recognized in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability/asset which is recognized in other comprehensive income. Consequently, the tax effect of the same has also been recognized in other comprehensive income under Ind AS instead of profit or loss. The actuarial loss for the year ended 31^st March, 2017 was Rs.55.92 Lac and the tax effect thereon Rs.18.45 Lac. This change does not affect total equity, but there is increase in profit before tax of Rs.55.92 lac and in total profit of Rs.37.47 lac for the year ended 31^st March,2017.

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of statement of profit and loss as part of expenses. There is no impact on the total equity and profit.

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences, which was not required under previous GAAP.

Under Ind AS, effective portion of the cash flow hedge to be recognized in other comprehensive income and however in the previous GAAP same has been recognized under Reserve and Surplus under the head " Cash Flow Hedge Reserve". There is no impact on the total equity and profit.

Under Previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expenses, gains, or losses ae required to be presented in other comprehensive income.

5. RECENT ACCOUNTING PRONOUNCEMENTS

(i) Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On 28^th March, 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from 01^st April, 2018. The Company is evaluating the effect of this on the financial statements.

(ii) Ind AS 115- Revenue from Contract with Customers: On 28^th March, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.

(iii) The standard permits two possible methods of transition:

Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors.

Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)

(iv) The effective date for adoption of Ind AS 115 is financial periods beginning on or after 01^st April, 2018. The Company will adopt the standard on 01^st April, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended 31^st March, 2018 will not be retrospectively adjusted. The company is evaluating the effect on adoption of Ind AS 115.

6. APPROVAL OF FINANCIAL STATEMENTS

The financial statements of the Company for the year ended 31^st March, 2018 are approved for issue by the Company''s Board of Directors on 11^th May, 2018.

---

Mar 31, 2016

1) Term / Rights attached to Equity shares

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

During the year ended 31^st March, 2016, the amount per share of proposed dividend to equity shareholder is Rs. 1.20 Per Share (Previous year: Rs. 1.20 Per Share)

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

2) Detail of Shares held by Shareholders holding more than 5% shares of the Company

3) Nature of Security: The Term Loans from Banks are secured by way of joint equitable mortgage / hypothecation of all immovable and movable existing and future assets of the Company except book debts ranking pari passu subject to prior charge created / to be created in favour of the Company''s bankers on stocks of raw materials, semi-finished, finished goods for working capital.

4) Terms of Repayment of Secured Borrowing: Secured term loans from banks are repayable in quarterly installments and having floating interest rates ranging from Base Rate spread (1.00% to 2.25 % as on 31.03.2016 and 1.00% to 2.25% as on 31.03.2015) and vehicle loans are repayable in monthly installments and having interest rates ranging from 9.50% to 10.57% (P.Y. 10.50% to 10.57%). Period of maturity and installments outstanding are as under:-

5) Disposal from Gross Block represents sale/transfer/discard of fixed assets/capital grant receipt and adjustment of lease rent.

6) Deduction in depreciation is on account of Sale/Transfer/discard of Fixed Assets.

7) Gross block and Net Block of fixed assets includes Rs. 891.42 Lac (P.Y. Rs. 963.05 Lac) and Rs. 247.84 Lac (P.Y. Rs. 275.51 Lac) respectively on account of revaluation of fixed assets carried out in past by erstwhile Bhilwara Processors Limited. Depreciation of Rs. 27.67 Lac (P.Y. Rs. 30.08 Lac) on revaluation amount has been charged to statement of Profit & Loss. Carrying amount of revaluation is Rs. Nil (P.Y. Rs. 157.13 Lac) on assets having useful life nil as on 01.04.2014 has been charged to General Reserve.

8) a) Carrying amount of assets which were existed on 01.04.2014 are depreciated over the remaining useful life of the assets on 01.04.2014.

9) Assets which are acquired after 01.04.2014 i.e. after the date on which schedule II to the Companies Act, 2013 came into effect are depreciated as per useful lives defined in this schedule.

10) No provision is required for impairment of assets according to AS-28 ''Impairment of Assets” as the value in use as estimated by the management, is higher than the carrying amount of the assets as on Balance Sheet date. In order to arrive at the value in use, the Company has reviewed the future earnings of the remaining useful life of all its cash generating units as at Balance Sheet date which has been discounted at the average long term lending rate of the Company.

11. PREVIOUS YEAR FIGURES

The figures of the previous year have been regrouped/ recast wherever found necessary.

---

Mar 31, 2015

1. Term / Rights attached to equity shares

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

During the year ended 31st March, 2015, the amount per share of proposed dividend to equity shareholder is Rs. 1.20 (Previous year: Rs. 1.00 Per Share)

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Nature of Security: The Term Loans from Banks are secured by way of joint equitable mortgage / hypothecation of all immovable and movable existing and future assets of the Company except book debts ranking pari passu subject to prior charge created / to be created in favour of the Company's bankers on stocks of raw materials, semi-finished, finished goods for working capital.

i) Disposal from Gross Block represents sale / transfer / discard of fixed assets/ capital grant receipt and adjustment of lease rent.

ii) Deduction in depreciation is on account of Sale / Transfer / discard of Fixed Assets.

iii) Gross block and Net Block of fixed assets includes Rs. 963.05 Lac (P.Y. Rs. 1016.00 Lac) and Rs. 275.51 Lac (P.Y. Rs. 462.64 Lac) respectively on account of revaluation of fixed assets carried out in past by erstwhile Bhilwara Processors Limited. Depreciation of Rs. 30.08 Lac (P.Y. Rs. 78.99 Lac) on revaluation amount has been charged to statement of Profit & Loss. Carrying amount of revaluation of Rs. 157.13 Lac (P.Y. Rs. Nil) on assets having useful life nil as on 01.04.2014 has been charged to General Reserve.

iv) a) Carrying amount of assets whose lives are nil as on 01.04.2014 i.e. the date on which schedule II to the Companies Act, 2013 come into effect are recognized in the opening balance of General Reserve.

b) Carrying amount of assets other than covered under iv-a) above and existed on 01.04.2014 are depreciated over the remaining useful life of the assets.

c) Assets which are acquired after 01.04.2014 i.e. after the date on which schedule II to the Companies Act, 2013 came into effect are depreciated as per useful lives defined in this schedule.

v) No provision is required for impairment of assets according to AS-28 'Impairment of Assets" as the value in use as estimated by the management, is higher than the carrying amount of the assets as on Balance Sheet date. In order to arrive at the value in use, the Company has reviewed the future earnings of the remaining useful life of all its cash generating units as at Balance Sheet date which has been discounted at the average long term lending rate of the Company.

2. FOREIGN CURRENCY EXPOSURE

(a) The Company hedges its export realizations through Foreign Exchange Hedge Contracts in the normal course of business so as to reduce the risk of exchange fluctuations. No Foreign Exchange Hedge Contracts are taken /used for trading or speculative purpose.

(b) According to AS 30 "Financial Instruments: Recognition and Measurement" The effective portion of such forward contracts is taken into hedging reserve for Rs. 5.91 Lac (P.Y. Rs. 107.99 Lac) and profit on ineffective portion, not designated as hedge is taken into statement of profit & loss for Rs. 15.18 Lac (P.Y. Rs. 59.39 Lac).

3. CONTINGENT LIABILITIES AND COMMITMENTS (Rs. in lac)

S. Particulars For the year ended No. 31.03.2015 31.03.2014 (i) Contingent Liabilities

(a) Claims against the Company not 15.52 15.52 acknowledged as debts

(b) Guarantees given by the Company's 292.67 195.86 Bankers

(c) Others

(i) Bills discounted with Banks 666.02 1600.29

(ii) Excise duty demand disputed by 3.56 9.81 the Company

(iii) Sales Tax demand of Erstwhile - 31.64 BSL Wulfing Ltd., disputed by the Company

(ii) Commitments

(a) Estimated value of contracts remaining 1137.90 329.21 to be executed on Capital Accounts

4. PREVIOUS YEAR FIGURES

The figures of the previous year have been regrouped/ recast wherever found necessary.

---

Mar 31, 2014

1. SHARE CAPITAL

i) Term / Rights attached to Equity shares

The company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. During the year ended 31st March, 2014 the amount per share of proposed dividend to equity shareholder is Rs. 1.00 (Previous year: Rs. Nil Per Share)

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

ii) Equity Share Capital includes 29,57,469 Shares issued for consideration other than Cash, pursuant to Scheme of Amalgamation of erstwhile Bhilwara Processors Limited with the Company as approved by the Hon''ble High Court Rajasthan at Jodhpur.

2. LONG-TERM BORROWINGS

i) Nature of Security: The Term Loans from Banks are secured by way of joint equitable mortgage / hypothecation of all immovable and movable existing and future assets of the Company except book debts ranking pari passu subject to prior charge created / to be created in favour of the Company''s bankers on stocks of raw materials, semi-finished, finished goods for working capital.

ii) Terms of Repayment of Secured Borrowing: Secured term loans from banks are repayable in quarterly/ monthly installments and having floating interest rates ranging from Base Rate spread (1.25% to 2.25% as on 31.03.2014 and 1.60% to 2.25% as on 31.03.2013). Period of maturity and installments outstanding as on 31.03.2014.

3. SHORT-TERM BORROWINGS

i) Bank loans for working capital are secured against hypothecation of stocks of raw materials, finished goods and goods in process. The same is also secured by second charge created/to be created in favour of Company''s Bankers by way of joint equitable mortgage on immovable properties of the Company which is ranking pari passu and having floating interest rate ranging from 10.45% to 13.10% (P.Y. 9.70% to 13.25%).

ii) No Working Capital loan is guaranteed by Directors or Others

4. TRADE PAYABLES

There are no Micro, small and medium enterprises to whom the company owes dues, which are outstanding for more than 45 days as at 31st March, 2014. This information as required to be disclosed under the Micro-small and medium enterprises development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

5. FIXED ASSETS

i) Disposal from Gross Block represents sale / transfer / discard of fixed assets/ capital grant receipt and adjustment of lease rent.

ii) Deduction in depreciation is on account of Sale / Transfer / discard of Fixed Assets.

iii) Gross block and Net Block of fixed assets includes Rs. 1016.00 Lac (P.Y. Rs. 1094.35 Lac) and Rs. 462.64 Lac (P.Y. Rs. 563.87 Lac) respectively on account of revaluation of fixed assets carried out in past by erstwhile Bhilwara Processors Limited. Depreciation of Rs. 78.99 Lac (P.Y. Rs. 81.74 Lac) on revaluation amount has been charged to statement of Profit & Loss.

iv) No provision is required for impairment of assets according to AS-28 ''Impairment of Assets" as the value in use as estimated by the management, is higher than the carrying amount of the assets as on Balance Sheet date. In order to arrive at the value in use, the company has reviewed the future earnings of the remaining useful life of all its cash generating units as at Balance Sheet date which has been discounted at the average long term lending rate of the Company.

5. SEGMENT REPORTING

The Company''s operation predominantly relates to Textile & Generation of Wind power. On the basis of assessment of the risk and return differential in terms of AS-17, the Company has identified Textile and Wind Power as primary reportable segments. Further the geographical segment have been considered as secondary segment and bifurcated into Domestic & Export segments.

The revenue and expenditure in relation to the respective segment have been identified and allocated to the extent possible. Other items i.e. interest expenses, income tax, etc. not allocable to specific segments are disclosed separately as unallocated and adjusted directly against the total income of the Company.

6. RELATED PARTY TRANSACTIONS

a) Enterprises that directly, or indirectly through one or more intermediaries, control or are controlled by or are under common control with the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries) - None

b) Associates and joint ventures - None

c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual. - None

d) Key management Personnel and their relatives - Shri A.K.Churiwal Shri Nivedan Churiwal

e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence. - RSWM Limited

7. FOREIGN CURRENCY EXPOSURE

(a) The Company hedges its export realizations through Foreign Exchange Hedge Contracts in the normal course of business so as to reduce the risk of exchange fluctuations. No Foreign Exchange Hedge Contracts are taken /used for trading or speculative purpose.

(b) According to AS 30 "Financial Instruments: Recognition and Measurement" The effective portion of such forward contracts is taken into hedging reserve for Rs. 107.99 Lac (P.Y. Rs. -1.73 Lac) and profit on ineffective portion, not designated as hedge is taken into statement of profit & loss for Rs. 59.39 Lac (P.Y. Rs. 15.07 Lac).

8. CONTINGENT LIABILITIES AND COMMITMENTS (Rs. in lac)

S.No. Particulars This Year Previous Year

(i) Contingent Liabilities

(a) Claims against the Company not acknowledged as debts 15.52 15.52

(b) Guarantees given by the Company''s Bankers 195.86 149.19

(c) Others

(i) Bills discounted with Banks 1600.29 937.18

(ii) Excise duty demand disputed by the Company 9.81 13.37

(iii) Sales Tax demand of Erstwhile BSL Wulfing Ltd., disputed by the company 31.64 31.64

(ii) Commitments

(a) Estimated value of contracts remaining to be executed on Capital Accounts 329.21 84.75

---

Mar 31, 2013

1. The benefit, under Status Holder Incentive Scheme (SHIS) announced in Foreign Trade Policy 2009-2014 by Ministry of Commerce and Industries, Government of India to promote investment in up-gradation of technology, amounting to Rs. 153.53 lac @1 % on export sales has been accounted for during current financial year, based on clarification / legal opinion taken by the company upon its eligibility under this scheme.

Based on expert opinion obtained by the company, full value of SHIS scripts have been accounted for as income on the basis of ascertaining its probable use in the normal course of business, based on expansion plans prepared by the company.

2. SEGMENT REPORTING

The Company''s operation predominantly relates to Textile & Generation of Wind Power. On the basis of assessment of the risk and return differential in terms of AS-17, the Company has identified Textile and Wind Power as primary reportable segments. Further the geographical segment have been considered as secondary segment and bifurcated into Domestic & Export segments.

The revenue and expenditure in relation to the respective segment have been identified and allocated to the extent possible. Other items i.e. interest expenses, income tax, etc. not allocable to specific segments are disclosed separately as unallocated and adjusted directly against the total income of the Company.

3. FOREIGN CURRENCY EXPOSURE

(a) The Company hedges its export realizations through Foreign Exchange Hedge Contracts in the normal course of business so as to reduce the risk of exchange fluctuations. No Foreign Exchange Hedge Contracts are taken / used for trading or speculative purpose.

(b) According to AS 30 "Financial Instruments: Recognition and Measurement" The effective portion of such forward contracts is taken into hedging reserve for Rs. 1.73 Lac (P.Y. Rs. 150.00 Lac) and profit on ineffective portion, not designated as hedge is taken into statement of profit & loss for Rs. 15.07 Lac (P.Y. Rs. 21.25 Lac).

(c) The Company has following gross forward contract exposure outstanding as on balance sheet date which have been designated as cash flow hedge to its exposure to movements in foreign exchange rates:

4. PREVIOUS YEAR FIGURES

The figures of the previous year have been regrouped/ recast wherever found necessary.

---

Mar 31, 2012

I) Term / Rights attached to Equity shares

The company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

During the year ended 31st March,2012 the amount per share dividend recognized as distributed to equity shareholder is Rs. Nil (Previous year: Rs. 1.50 Per Share)

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

ii) Equity Share Capital includes 29,57,469 Shares issued for consideration other than Cash, pursuant to Scheme of Amalgamation of erstwhile Bhilwara Processors Limited with the Company as approved by the Hon'ble High Court of Rajasthan at Jodhpur.

i) Nature of Security: The Term Loans from Banks are secured by way of joint equitable mortgage / hypothecation of all immovable and movable existing and future assets of the Company except book debts ranking pari passu subject to prior charge created / to be created in favour of the Company's bankers on stocks of raw materials, semi-finished, finished goods for working capital.

iii) None of loans are guaranteed by Directors or Others.

ii) Deferred Tax Assets and Deferred Tax Liabilities have been offset as they relate to the same governing taxation laws.

i) Bank loans for working capital are secured against hypothecation of stocks of raw materials, finished goods and goods in process. The same is also secured by second charge created/to be created in favour of Company's Bankers by way of joint equitable mortgage on immovable properties of the Company which is ranking pari passu and having floating interest rate ranging from 10.60% to 13.50%

ii) None of Working Capital loans are guaranteed by Directors or Others

There are no Micro, small and medium enterprises to whom the company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. This information as required to be disclosed under the Micro-small and medium enterprises development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

There is no amount of Un-paid dividend, due for payment to the Investor Education and Protection Fund under Section 205C of the Companies Act, 1956 as at the year end .

i) Disposal from Gross Block represents sale / transfer / discard of fixed assets and adjustment of lease rent.

ii) Deduction in depreciation is on account of Sale / Transfer / discard of Fixed Assets.

iii) Gross block and Net Block of fixed assets includes Rs. 1096.26 Lac (P.Y. Rs. 1096.31 Lac) and Rs. 646.36 Lac (P.Y. Rs. 728.21 Lac) respectively on account of revaluation of fixed assets carried out in past by erstwhile Bhilwara Processors Limited. Depreciation of Rs. 81.82 Lac (P.Y. Rs. 87.20 Lac) has been charged to statement of Profit & Loss on these revalued assets.

iv) No provision is required for impairment of assets according to AS-28 'Impairment of Assets" as the value in use as estimated by the management, is higher than the carrying amount of the assets as on Balance Sheet date. In order to arrive at the value in use, the company has reviewed the future earnings of the remaining useful life of all its cash generating units as at Balance Sheet date which has been discounted at the average long term lending rate of the Company.

v) The commercial production of 20 Nos. Toyota Airjet weaving machines have commenced during the year w.e.f. 01.01.2012. Preoperative expenditure incurred up to the date of commencement of commercial production is Rs. 43.26 Lacs.

Trade Receivable includes Rs. 39.64 Lacs (Previous year Rs. Nil) receivables from related parties.

Short term loans and advances includes Rs. Nil (Previous year Rs. Nil) receivables from Directors/ officers/ Companies and firms under same management.

The Company has complied with Accounting Standard 15 (Revised 2005) and the required disclosure are given hereunder:

The estimation of future salary increase considered in actuarial valuation, take account of inflation, seniority promotion and othe relevant factors, such as supply and demand in the employment market etc. The above information is certified by the Actuary. Th< estimate of contribution for the next year as per actuarial valuation is as under:-.

a) Gratuity - Rs. 51.29 lac

b) Earned Leave - Rs. 12.01 lac

1. SEGMENT REPORTING

The Company's operation predominantly relates to Textile & generation of Wind power. On the basis of assessment of the risk and return differential in terms of AS-17, the Company has identified Textile and Wind Power as primary reportable segments. Further the geographical segment have been considered as secondary segment and bifurcated into Domestic & Export segments.

The revenue and expenditure in relation to the respective segment have been identified and allocated to the extent possible. Other items i.e. interest expenses, income tax, etc. not allocable to specific segments are disclosed separately as unallocated and adjusted directly against the total income of the Company.

2. RELATED PARTY TRANSACTIONS

a) Enterprises that directly, or indirectly through one or more intermediaries, control or are controlled by or are under common control with the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries) - None

b) Associates and joint ventures - None

c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual. - None

d) Key management Personnel and their relatives –

Shri Arun Churiwal

Shri Nivedan Churiwal

e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.

- RSWM Limited

f) Transactions with Related Parties

The following transactions were carried out with the related parties in the ordinary course of business:

3. FOREIGN CURRENCY EXPOSURE

(a) The Company hedges its export realizations through Foreign Exchange Hedge Contracts in the normal course of business so as to reduce the risk of exchange fluctuations. No Foreign Exchange Hedge Contracts are taken /used for trading or speculative purpose.

(b) During the year Company has early adopted AS 30 "Financial Instruments: Recognition and Measurement" and The effective portion of such forward contracts is taken into hedging reserve for Rs. 150.00 Lacs and profit on ineffective portion, not designated as hedge is taken into statement of profit & loss for Rs. 21.25 Lacs.

(c) The Company has following gross forward contract exposure outstanding as on balance sheet date which have been designated as cash flow hedge to its exposure to movements in foreign exchange rates :

4. CONTINGENT LIABILITIES AND COMMITMENTS (Rs. in lac)

S. Particulars This Year Previous Year

No.

(i) Contingent Liabilities

(a) Claims against the Company not acknowledged as debts 15.52 15.52

(b) Guarantees given by the Company's Bankers 134.58 159.38

(c) Others

(i) Bills discounted with Banks 1653.21 1229.78

(ii) Excise duty demand disputed by the Company 18.65 23.88

(iii) Sales Tax demand of Erstwhile BSL Wulfing Ltd., disputed by the company 31.64 31.64

(ii) Commitments

(a) Estimated value of contracts remaining to be executed on Capital Accounts 14.78 617.97

5. PREVIOUS YEAR FIGURES

The financial statements for the year ended 31st March, 2011 had been prepared as per the applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31st March, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

---

Mar 31, 2011

1) Contingent Liabilities not provided for:

(Rs. in lac)

This Year Previous Year

(a) Bills discounted with Banks 1229.78 1157.55

(b) Guarantees given by the Company's Bankers 159.38 79.22

(c) Claims against the Company not acknowledged as debts 15.52 15.52

(d) Excise duty demand disputed by the Company 23.88 23.88

(e) Sales Tax demand of Erstwhile BSL Wulfing Ltd., disputed by the company 31.64 31.64

(f) Estimated value of contracts remaining to be executed on Capital Accounts 617.97 569.42

2) Gross block and Net Block of fixed assets includes Rs.1096.31 Lac (P.Y. Rs. 1218.85 Lac) and Rs.728.21 Lac (P.Y. Rs. 889.70 Lac) respectively on account of revaluation of fixed assets carried out in past by erstwhile Bhilwara Processors Limited. Depreciation of Rs. 87.20 Lac (P.Y. Rs. 98.19 Lac) has been charged to Profit & Loss account on these revalued assets.

3) There are no Micro, small and medium enterprises to whom the company owes dues, which are outstanding for more than 45 days as at 31* March, 2011. This information as required to be disclosed under the Micro-small and medium enterprises development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

4) In view of legal opinion and various reliefs available under Income Tax Act, 1961 provision for taxation has been considered adequate.

5) The loans & advances, debtors and other current assets are reviewed annually and their value in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet as assessed by the management, however balance confirmation from parties are under process.

6) The figures for the previous year have been re-grouped and re-arranged wherever found necessary.

The estimation of future salary increase considered in actuarial valuation, take account of inflation, seniority promotion and other relevant factors, such as supply and demand in the employment market etc. The above information is certified by the Actuary. The estimate of contribution for the next year as per actuarial valuation is as under:-.

a) Gratuity - Rs. 53.62 lac

b) Earned Leave - Rs. 19.00 lac

viii) The overall expected rate of return on assets is assumed based on the market prices prevailing on that date over the accounting period. The Company is having approved gratuity trust and leave encashment policy, which is having insurer Managed Fund.

2) Segment Reporting

The Company's operation predominantly relates to Textile & generation of Wind power. On the basis of assessment of the risk and return differential in terms of AS-17, the Company has identified Textile and Wind Power as primary reportable segments. Further the geographical segment have been considered as secondary segment and bifurcated into Domestic & Export segments.

7) No provision is required for impairment of assets according to AS-28 'Impairment of Assets" as the value in use as estimated by the management, is higher than the carrying amount of the assets as on Balance Sheet date. In order to arrive at the value in use, the company has reviewed the future earnings of the remaining useful life of all its cash generating units as at Balance Sheet date which has been discounted at the average long term lending rate of the Company.

8) The Company hedges its export realisations through foreign exchange forward contracts in the normal course of business so as to reduce the risk of exchange fluctuation. These hedging transactions are part and parcel of normal business transactions.

The Company has outstanding foreign exchange forward contract of USD 13.38 Million and EURO 0.70 Million (Previous year USD 9.19 Millions) as on 31st March2011, which has been booked for hedging of export realisations.

---

Mar 31, 2010

(Rs. in lac)

This Year Previous Year

1) Contingent Liabilities not provided for

(a) Bills discounted with Banks 1157.55 937.43

(b) Guarantees given by the Companys Bankers 79.22 12.08

(c) Guarantees issued on behalf of other Companies Nil 86.72

(d) Claims against the Company not acknowledged as debts 15.52 21.24

(e) Excise duty demand disputed by the Company 23.88 17.61

(f) Sales Tax demand of Erstwhile BSL Wulfing Ltd., disputed by the company 31.64 31.64

(g) Estimated value of contracts remaining to be executed on Capital Accounts 569.42 -

2) There are no Micro, small and medium enterprises to whom the company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. This information as required to be disclosed under the Micro-small and medium enterprises development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

3) In view of legal opinion and various reliefs available under Income Tax Act, 1961 provision for taxation has been considered adequate.

4) Cross block and Net Block of fixed assets includes Rs. 1218.85 Lac and Rs. 889.70 Lac respectively on account of revaluation of fixed assets carried out in past by erstwhile Bhilwara Processors Limited. Depreciation of Rs.98.19 Lac has been charged to Profit & Loss account on these revalued assets.

5) To be in line and in conformity with the accounting policy of amalgamated company, method of charging depreciation on plant & machinery of erstwhile Bhilwara Processors Limited, now Processing Division has been changed from "Continuous Process Plant Method" to "Triple Shift Depreciation Method" as prescribed under Schedule XIV to the Companies Act,1956. As a result of this change, depreciation provided for the year is higher by Rs.88.00 Lac and consequently profit is lower to that extent.

6) The loans & advances, debtors and other current assets are reviewed annually and their value in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet as assessed by the management, however balance confirmation from parties are under process.

7) The figures for the previous year have been regrouped and rearranged wherever found necessary; however the same are not comparable with current year in post merger scenario.