Enter the first few characters of Company and click 'Go'

Notes to Accounts of Century Enka Ltd.

Mar 31, 2019

COMPANY OVERVIEW

Century Enka Limited (the Company) is a Public Limited Company incorporated in India having its registered office at Pune, Maharashtra, India. The Company is engaged in the manufacturing and selling of ''Synthetic Yarnâ and related products.

1 (A) CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY:

The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Key assumptions:

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(i) Useful Lives of Property, Plant & Equipment:

The Company uses its technical expertise along with historical and industry trends for determining the economic life of an asset/ component of an asset. The useful lives are reviewed by management periodically and revised, if appropriate. In case of a revision, the unamortised depreciable amount is charged over the remaining useful life of the assets.

(ii) Fair value measurement of financial instruments:

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

(iii) Defined benefit plans:

The cost of the defined benefit plans gratuity and provident fund, and the present value of the gratuity and provident fund obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

(iv) Impairment of Assets:

The Company has used certain judgments and estimations to estimate future projections and discount rates to compute value in use of cash generating unit and to assess impairment. In case of certain assets independent external valuation has been carried out to compute recoverable values of these assets.

(v) Asset held for sale:

The company has used certain judgements and estimates to determine fair value of asset held for sale. Fair value has determined on basis of independent external valuation and quotes from dealer of similar assets.

a) Includes Land Rs. 2 Lacs and Rs. 500 being the cost of 5 shares in a co-operative housing society held in the name of a nominee of the Company

b) Includes Rs. 2000 being the cost of 40 shares in co-operative societies.

c) Rupee Term Loans are secured by hypothecation of specific Plant and Machinery against which Loans have been taken.

b) Rights, Preferences and Restrictions attached to Equity Shares

The Company has only one class of Equity Shares having a par value of 10/- per share. Each holder of the Equity Shares is entitled to one vote per share. The Company declares dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the Shareholders.

d) No bonus shares have been issued during five years immediately preceding 31st March, 2019.

e) Dividend Proposed, Declared and Paid [Refer Note 37A]

f) Shares reserved for issue under options and contracts or commitments for the sale of shares or disinvestment, including the terms and amounts - Nil

g) For the period of five years immediately preceding the date at which the Balance Sheet is prepared-

1 aggregate number and class of shares allotted as fully paid up pursuant to contract without payment being received in cash - Nil

2 aggregate number and class of shares bought back - Nil

* Note: Interest rate after considering subsidy under Technology Upgradation Scheme (TUF) is 3.75% p.a.

1. Rupee Term Loans are secured by hypothecation of specific Plant and Machinery against which Loans have been taken.

2. Finance Lease obligation is secured by hypothecation of Plant and Machinery taken on lease.

Note: Working Capital borrowings

a) Working Capital borrowings are secured by way of hypothecation of Inventories, Book Debts and Receivables, both present and future.

b) Working Capital borrowings carry an average interest rate of 9.20% per annum as at 31st March, 2018

c) Working Capital Borrowings are renewed based on contract with bankers.

2 FINANCIAL RISK MANAGEMENT OBJECTIVES (IND AS 107):

The Companyâs principal financial liabilities, other than derivatives, comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the companyâs operations. The companyâs principal financial assets, other than derivatives include trade and other receivables, investments and cash and cash equivalents that derive directly from its operations.

The Companyâs activities expose it to market risk, liquidity risk and credit risk. Companyâs overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the company. The company uses derivative financial instruments, such as foreign exchange forward contracts, to hedge foreign currency risk exposure. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Company has standard operating procedures and investment policy for deployment of surplus liquidity, which allows investment in debt securities and mutual fund schemes of debt categories only and restricts the exposure in equity markets.

Compliances of these policies and principles are reviewed by internal auditors on periodical basis.

The Corporate Treasury team updates the Audit Committee on a quarterly basis about the implementation of the above policies. It also updates to the Internal Risk Management Committee of the Company on periodical basis about the various risk to the business and status of various activities planned to mitigate the risk.

A. Market Risk Management:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.

1) Foreign Currency Risk:

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to import of raw materials and spare parts, capital expenditure, exports of textile yarn and nylon chips.

When a derivative is entered for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure.

The Company evaluates exchange rate exposure arising from foreign currency transactions. The Company follows established risk management policies and standard operating procedures. It uses derivative instruments like foreign currency forwards to hedge exposure to foreign currency risk.

* EURO 17,691

Out of USD 80 Lacs Foreign Currency Exposure as at 31st March 2019, USD 74 Lacs was hedged and out of USD 47 Lacs as at 31st March 2018, USD 33 Lacs were hedged by forward contracts.

Forward Exchange Contracts:

Derivatives for hedging foreign currency risk with respect to outstanding payable/receivables & highly probable forecasted transaction

2) Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs short-term borrowing. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost. Since all the borrowings are on floating rate, no significant risk of change in interest rate.

Note: If the rate is decreased by 100 bps profit will increase by an equal amount.

I nterest rate sensitivity has been calculated assuming the borrowings outstanding at the reporting date have been outstanding for the entire reporting period.

3) Commodity price risk

Commodity price risk for the Company is mainly related to fluctuations of raw materials prices linked to various external factors, which can affect the production cost of the Company. Company actively manages inventory and in many cases sale prices are linked to major raw material prices. Energy costs is also one of the primary costsâ drivers, any fluctuation in fuel prices can lead to drop in operating margin. To manage this risk, the Company enters into long-term supply agreement for power, identifying new sources of supply etc. Additionally, processes and policies related to such risks are reviewed and managed by senior management on continuous basis.

B. Credit Risk Management:

Credit risk arises when a customer or counterparty does not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing/ investing activities, including deposits with banks, mutual fund investments, and investments in debt securities, foreign exchange transactions and financial guarantees. The Company has four major customers which represents 83% receivables as on 31st March, 2019 and company is receiving payments from these parties within due dates. Hence, the company has no significant credit risk related to these parties.

Trade receivables

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined. Wherever the Company assesses the credit risk as high the exposure is backed by either letter of credit or security deposits.

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

The Company makes provision for the trade receivable as per the following matrix:

Investments, Derivative Instruments, Cash and Cash Equivalent and Bank Deposit

Credit Risk on cash and cash equivalent, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions who have been assigned high credit rating by international and domestic rating agencies.

Credit Risk on Derivative Instruments are generally low as Company enters into the Derivative Contracts with the reputed Banks and Financial Institutions.

I nvestments of surplus funds are made only with approved Financial Institutions/ Counterparty. Investments primarily include investment in units of mutual funds. These Mutual Funds and Counterparties have low credit risk.

Total Non-current and current investments as on 31st March, 2019 is Rs. 16,845 Lacs (31st March, 2018 - Rs. 8,661 Lacs).

C. Liquidity risk management:

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Companyâs treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Companyâs liquidity position through rolling forecasts based on expected cash flows.

The table below provides details regarding the remaining contractual maturities of financial liabilities and investments at the reporting date based on contractual undiscounted payments.

3 (B) FAIR VALUE MEASUREMENTS (IND AS 113):

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The fair value of all bonds which are traded in the stock exchanges is valued using the closing price or dealer quotations as at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market (For example traded bonds, over the counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates. The mutual fund units are valued using the closing Net Asset Value. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

The management assessed that fair value of cash and bank balances, trade receivables, trade payables, cash credits and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

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

(a) The fair values of the quoted investments/units of mutual fund schemes are based on market price/net asset value at the reporting date.

(b) The fair values of unquoted investments are based on net asset value at the reporting date.

(c) The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates and interest rate curve of the respective currencies.

(d) The fair value of the remaining financial instruments is determined using discounted cash flow analysis or based on the contractual terms. The discount rates used is based on management estimates.

4 SEGMENT REPORTING (IND AS 108):

The Company is exclusively engaged in the business of synthetic yarn related products primarily in India. As per Ind AS 108 âOperating Segmentsâ, specified under Section 133 of the Companies Act, 2013, there are no reportable operating or geographical segments applicable to the Company.

Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognized as a liability (including Divided Distribution Tax thereon) as at 31st March 2019.

5(B) CAPITAL MANAGEMENT (IND AS 1):

The Companyâs objectives when managing capital are to (a) maximise shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Companyâs capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt divided by total equity.

In addition, the Company has financial covenants relating to the borrowing facilities that it has taken from the lenders like interest coverage service ratio, Debt to EBITDA, etc. which is maintained by the Company.

6 INCOME TAXES (IND AS 12):

(i) Reconciliation of Effective Tax Rate:

(ii) The Company has announced a proposed dividend of Rs. 7.00 per share and accordingly, the dividend distribution tax on account of the same amounting to Rs. 314 Lacs shall be recognized once the dividend is paid.

7 LEASES (IND AS 17):

Finance Lease:

The Company has acquired on finance lease comprises of Plant and Machinery. There is no element of contingent rent or sub lease payments. The Company has option to purchase the assets at the end of the lease term. There are no restrictions imposed by these lease arrangements regarding dividend, additional debt and further leasing.

a) Future minimum lease payments and their present values under finance lease in respect of Plant & Machinery are as follows:

b) Operating Lease: The Company does not have non-cancellable lease agreements. The operating lease payments recognized in the statement of profit and loss account is Rs. 137 Lacs (31st March 2018 Rs. 97 Lacs).

c) General description of leasing agreements:

- Leased assets: Land, Godowns, Offices, Flats.

- Future lease rentals are determined based on agreed terms.

- At the expiry of lease terms, the Company has an option to return the assets or extend the term by giving notice in writing.

- Lease agreement are generally cancellable and are renewed by mutual concent on mutually agreed terms.

8 DISCLOSURES IN ACCORDANCE WITH IND AS-19 ON âEMPLOYEE BENEFITSâ

a) Defined Contribution Plans - The Company has recognised the following amounts in the Statement of Profit and Loss for the year:

b) Defined Benefit Plans - Gratuity and Provident Fund

GRATUITY: Inherent Risk - The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risks. The Company operates a gratuity plan which is administered through Life Insurance Corporation and a trust which is administered through trustees. Every employee is entitled to a minimum benefit equivalent to 15 days salary last drawn for each completed year of service in line with Payment of Gratuity Act, 1972. However, certain employees are entitled to benefit higher than the benefit prescribed under Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier or death in service.

i) A reconciliation of opening and closing balances of the present value of the defined benefit obligation (DBO):

ii) A reconciliation of the opening and closing balances of the fair value of plan assets:

Fair value of Plan Assets for gratuity represents the amount as confirmed by the Insurer Managed Funds.

iii) Amount recognised in Balance Sheet including a reconciliation of the present value of the defined benefit obligation in b (i) and the fair value of the plan assets in b (ii) to the assets and liabilities recognised in the balance sheet:

iv) The total expense recognised in the Statement of Profit and Loss:

viii) The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

ix) The Actual Return on Plan Assets is as follows:

xiv) The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

xv) Asset liability matching strategy:

The money contributed by the Company to Gratuity Fund has to be invested. The trustee have outsourced management of investment to an Insurance Company. The Insurance Company in turn manage these funds as per mandate provided by the trustees and the asset allocation which is within permissible limits prescribed in insurance regulations. Due to restrictions in type of investments that can be held by the fund it is not possible to explicitly follow asset liability matching strategy. There is no compulsion on the part of company to fully prefund liability of the plan. The Company fund these benefit based on known liability and Level of underfunding of the plan.â

PROVIDENT FUND:

The Company makes contribution towards Provident fund for certain eligible employees to the trust, set up and administered by the Company, in line with the Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of their separation from the company or retirement, whichever is earlier. The benefits vest immediately on rendering of the services by the employee. The rules of the trust provides that if the board of trustees are unable to pay interest at the rate declared by the government under Para 60 of the Employees provident fund scheme, 1972 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company making interest shortfall a defined benefit plan. Accordingly, the Company has obtained actuarial valuation and based on the below provided assumptions there is no deficiency as at the balance sheet date. Hence, the liability is restricted towards monthly contributions only.

9 EXCEPTIONAL ITEM REPRESENTS:

For the year ended 31st March 2019, Rs. 454 Lacs towards write down of carrying value of machinery not in use and classified as held for sale and for the previous year ended 31st March 2018, Rs. 2491 Lacs towards profit on sale of property.

10 CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR) (IND AS 37):

(a) Claims against the Company not acknowledged as debt:

(b) Excise Department had issued an order dated 31st December 2013 denying the applicability of Notification No. 6/2000 dated 1st March 2000 which allowed payment of duty at specific rate instead of ad-valorem basis and raised a demand of Rs. 22,927 lacs plus interest thereon and penalty equivalent to demand amount against which the Company had filed an appeal before Appellate Tribunal (CESTAT). The CESTAT has admitted the appeal on pre-deposit of Rs. 700 lacs and granted stay against the recovery. The company has been advised by legal experts that it has a fair chance of ultimately succeeding in the matter and accordingly no provision is required to be made in accounts.

(c) The Honâble Supreme Court of India (âSCâ) by their order dated February 28, 2019, in the case of Surya Roshani Limited & others v/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal.

11 CAPITAL AND OTHER COMMITMENTS:

(a) Estimated amount of contracts remaining to be executed on capital account , not provided for (net of advances) as on 31st March, 2019 is Rs. 454.35 Lacs. (31st March, 2018 - Rs. 412.68 Lacs).

(b) Other Commitments: The Company has renewed non-cancellable agreement with Gas Utility Company on 1st January, 2017 for purchase of LNG. Under this agreement, the Company is committed to purchase certain annual minimum quantity of LNG upto 31st December, 2021 failing which it will pay the seller for any shortfall in offtake of LNG based on an agreed formula. The cost of the minimum committed quantity as at 31st March, 2019 for the remaining period of the contract at current market prices approximates Rs. 2,055 Lacs (Previous Year Rs. 2,823 Lacs). Based on the current projection Company does not expect shortfall in offtake of minimum committed quantity and therefore no material foreseeable losses are expected.

12 DISCLOSURE UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 :

Amounts due to Micro and Small Enterprises disclosed on the basis of information available with the Company regarding status of the suppliers are as follows:

13 REVENUE FROM CONTRACTS (IND AS 115):

Effective from April 1, 2018, the Company has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognized. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The company has adapted modified retrospective method and applies existing standards i.e. Ind AS 18 in comparative period.

The Company is primarily in the Business of manufacture and sale of Synthetic Yarn. Sales are made at a point in time and revenue from contract with customer are recognised when goods are dispatched and the control over the goods sold are transferred to customers. The Company does not expect to have any contracts where the period between the transfer of goods and payment by customer exceeds one year. Hence, the Company does not adjust revenue for the time value of money.

In compliance with Ind AS 115, certain discounts are treated as variable components of consideration and have been recognised as deductions from revenue instead of other expenses. Such discount was recognized as deduction from revenue in previous period also. Hence, there is no requirement to restate comparative period.

a) Revenue recognised from Contract liability (Advances from Customers):

b) Reconciliation of revenue as per contract price and as recognised in statement of profit and loss:

14 GOODS AND SERVICE TAX (GST)

Effective July 01, 2017, sales are recorded net of GST whereas earlier sales were recorded gross of excise duty which formed part of expenses. Hence revenue from operations for the year ended March 31, 2019 are not comparable with the previous year corresponding figures.

15 AMENDMENTS TO IND AS:

Ministry of Corporate Affairs (âMCAâ) has notified following amendments to Ind AS on March 30, 2019 which is effective for the annual period beginning on or after April 01, 2019:

(a) Ind AS 116 Leases:

Ind AS 116 will replace the existing leases standard, Ind AS 17 Leases. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. It introduces a single, on-balance sheet lessee accounting model for lessees. A lessee recognises right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. The standard also contains enhanced disclosure requirements for lessees.

The Company will recognize a lease liability measured at the present value of the minimum lease payments. The right-of-use asset is recognised at its carrying amount as if the Standard had been applied since the commencement date, but discounted using the lesseeâs incremental borrowing rate as at April 1, 2019. In accordance with the standard, the Company will elect not to apply the requirements of Ind AS 116 to short-term leases and leases for which the underlying asset is of low value.

The Company will adopt Ind AS 116 effectively for the annual reporting period beginning April 1, 2019.

Except for the disclosure requirement, the new standard will not impact the companyâs financial statements, as most of the Companyâs leases are short term leases and the underlying assets is of low value.

(b) Ind AS 12 - Appendix C, Uncertainty over Income Tax Adjustments

The amendment requires an entity to determine probability of the relevant tax authority accepting the uncertain tax treatment that the Company have used in tax computation or plan to use in their income tax filings.

The amendment clarifies that an entity shall recognize the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognized those past transactions or events.

(d) Ind AS 19 - Plan amendment, curtailment or settlement

The amendments require an entity to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement and to recognize in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognized because of the impact of the asset ceiling.

Based on preliminary assessment, the Company does not expect any significant impact on its financial statements on account of above amendments.

16 PREVIOUS YEARâS FIGURES HAVE BEEN REGROUPED / REARRANGED, WHEREVER NECESSARY.

Mar 31, 2018

Notes to Financial Account

41. RELATED PARTY DISCLOSURES (IND AS 24):

Related Parties with whom there were transactions during the year:

Parties	Relationship
Mr. B.K.Birla - Non-Executive Director	Key Management Personnel (KMP)
Mrs. Rajashree Birla - Non-Executive Director	Key Management Personnel (KMP)
Mr. B.S.Mehta - Independent Director	Key Management Personnel (KMP)
Mr. S.K.Jain - Independent Director	Key Management Personnel (KMP)
Mr. K.S. Thar - Independent Director	Key Management Personnel (KMP)
Mr. G.M.Singhvi - Whole-time Director upto 15.05.2017	Key Management Personnel (KMP)
Mr. O.R.Chitlange- Managing Director w.e.f. 16.05.2017	Key Management Personnel (KMP)

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

Rs / lacs
Nature of Transaction/Relationship	31stM\|	Year Ended 31st March, 2017
Services received from:
KMP (Director''s Sitting Fees and Commission)	34	35

(b) Compensation of key management personnel of the Company:

Rs / lacs
Nature of transaction/relationship	31st March, 2018 \|	Year Ended 31st March, 2017
Short-term employee benefits	266	208
Other long-term benefits	17	16
Total compensation paid to key management personnel	283	224

Based on the recommendation of the Nomination, Remuneration and Compensation Committee, all decisions relating to the remuneration of the Directors are taken by the Board of Directors of the Company, in accordance with shareholders'' approval, wherever necessary.

42. EARNINGS PER SHARE (EPS) (IND AS 33):

Particulars	Year Ended 1 31st March, 2018 \|	Year Ended 31st March, 2017
Basic/Diluted EPS:
(i) Net Profit attributable to Equity Shareholders (Rs / lacs)	7009	9097
(ii) Weighted average number of Equity Shares outstanding (Nos.)[For Basic & Diluted EPS]	21850589	21850589
Basic/ Diluted EPS in Rs Per share (Face Value Rs10 per share) (i)/(ii)	32.08	41.63

43. EXCEPTIONAL ITEM REPRESENTS:

For the year ended 31t March, 2018, Rs 2491 Lacs for profit on sale of property, and for the year ended 31st March, 2017, impairment loss of Rs 958 Lacs on the basis of management''s assessment and plan of conversion of polyester spinning machine at Bharuch to nylon machine and valuation from an independent valuer as per Ind AS 36.

44. CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR) (IND AS 37):

(a)	Claims against the Company not acknowledged as debt: Rs / lacs
	Particulars		As at 31st March, 2017
	(a) Income Tax Matters	50	50
	(b) Sales-Tax / VAT Matters	6	6
	(c) Excise , Service Tax & Custom Matters	481	470

The above amount of contingencies does not include applicable interest, if any. Cash outflows for the above are determinable only on receipt of judgments pending at various forums / authorities.

(b) Excise Department had issued an order dated 31st December 2013 denying the applicability of Notification No. 6/2000 dated 1st March 2000 which allowed payment of duty at specific rate instead of ad-valorem basis and raised a demand of Rs 22927 lacs plus interest thereon and penalty equivalent to demand amount against which the Company had filed an appeal before Appellate Tribunal (CESTAT). The CESTAT has admitted the appeal on pre-deposit of Rs 700 lacs and granted stay against the recovery. The company has been advised by legal experts that it has a fair chance of ultimately succeeding in the matter and accordingly no provision is required to be made in accounts.

45. CAPITAL AND OTHER COMMITMENTS:

(a) Estimated amount of contracts remaining to be executed on capital account, not provided for (net of advances) Rs 412.68 Lacs. (31st March, 2017 - Rs 79 Lacs).

(b) Other Commitments: The Company has renewed non cancellable agreement with Gas Utility Company on 1st January, 2017 for purchase of LNG. Under this agreement, the Company is committed to purchase certain annual minimum quantity of LNG upto 31st December, 2021 failing which it will pay the seller for any shortfall in offtake of LNG based on an agreed formula. The cost of the minimum committed quantity as at 31st March, 2018 for the remaining period of the contract at current market prices approximates Rs 2823 Lacs (Previous Year Rs 3071 Lacs). Based on the current projection Company does not expect shortfall in offtake of minimum committed quantity and therefore no material foreseeable losses are expected.

46. CORPORATE SOCIAL RESPONSIBILITY:

The amount required to be spent under Section 135 of the Companies Act, 2013 for the year ended 31st March, 2018 is Rs201.86 Lacs (31st March, 2017- Rs 177 Lacs) i.e. 2% of average net profits for last three financials years, calculated as per section 198 of the Companies Act, 2013.

47. DISCLOSURE UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 :

Amounts due to Micro and Small Enterprises disclosed on the basis of information available with the Company regarding status of the suppliers are as follows:

(Rs / lacs)				(Rs. Lacks)
Particulars	2017-18 Principal	Interest	2016-17 Principal	Interest
Principal Amount and Interest due thereon, remaining unpaid as at the end of the year	465	(Rs 58716)	48	-
Amount paid during the year	587	Rs 111909)	79	(Rs 56556)
Amount due of the previous year -

48. AUDITORS'' REMUNERATION (EXCLUDING TAXES) AND EXPENSES:

Rs / lacs
Particulars		31st March 2018	Year Ended 31st March, 2017
(a)	Statutory Auditors:
	Audit fees (including quarterly Limited Review)	35	35
	Tax audit fees	5	5
	Fees for other services	2	1
	Expenses reimbursed	1	2
	Total	43	43
(b)	Cost Auditors: Audit fees	3	3

49. IND AS 115 REVENUE FROM CONTRACTS WITH CUSTOMERS

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying Ind AS 115 ''Revenue from Contracts with Customers'', which replaces Ind AS 11 ''Construction Contracts'', Ind AS 18 ''Revenue''. Except for the disclosure requirements, the new standard will not materially impact the Company''s financial statements, as most of the Company''s sales relate to the delivery at a point in time.

50. GOODS AND SERVICE TAX

Effective July 01, 2017, sales are recorded net of GST whereas earlier sales were recorded gross of excise duty which formed part of expenses. Hence revenue from operations for the year ended March 31, 2018 are not com parable with the previous year corresponding figures.

51. PREVIOUS YEAR''S FIGURES HAVE BEEN REGROUPED / REARRANGED, WHEREVER NECESSARY.

			For and on behalf of the Board of Directors
	For Khimji Kunverji & Co. Firm Registration No. 105146W			Rajashree Birla Vice Chairperson
	Chartered Accountants		K. G. Ladsaria	DIN: 00022995
			Chief Financial Officer
	Gautam V. Shah			O.R. Chitlange
Place : Mumbai	Partner	Place : Mumbai	C. B. Gagrani	Managing Director
Date : 3rd May, 2018	Membership No. 117348	Date : 3rd May, 2018	Secretary	DIN: 00952072

Mar 31, 2017

1. AMENDMENT TO IND AS

I n March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, âStatement of cash flowsâ and Ind AS 102, âShare-based payment.â These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, âStatement of cash flowsâ and IFRS 2, âShare-based payment,â respectively. The amendments are applicable to the company from 1st April, 2017. The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

2. Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

3. Amendment to Ind AS 102:

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

4. DISCLOSURES AS REQUIRED BY IND AS 101 âFIRST TIME ADOPTION OF IND ASâ

These Financial statements, for the year ended 31st March, 2017 are the first, the Company has prepared in accordance with Ind AS. For the period upto and including the year ended 31st March, 2016, the Company prepared its financial statements in accordance with the accounting standards notified under section 133 of the Companies Act, 2013, read together with para 7 of the Companies (Accounts) rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared its financial statements to comply with Ind AS for the year ending 31st March, 2017 together with comparative date as at end for the year ended 31st March, 2016 as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at 1st April, 2015. The Companyâs date of transition to Ind AS. This note explains the principles adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April, 2015 and the financial statement as at and for the year ended 31st March, 2016.

1. I nd AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has availed the following exemptions and exceptions:

A. Deemed cost for property, plant and equipment

The Company has elected to continue with the carrying value of all of its plant and equipment and intangible assets as recognized as of 1st April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

B. Estimates

An entityâs estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimate were in error.

Ind AS estimate as at 1st April, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP The Company made estimate for following items in accordance with Ind AS as the date of transition as these were not required under previous GAAP

- Investment in equity instruments carried at FVPL or FVOCI;

- Investment in debt instruments carried at FVPL and Impairment of financial assets based on expected credit loss model.

4. Notes to the Reconciliation of equity as at 1st April, 2015 and 31st March, 2016 and Total Comprehensive Income for the year ended 31st March, 2016

A. Fair valuation of Investments

Under the previous GAAP, investment in equity instruments and mutual funds were classified as long- term investments or current investments based on the intended holding period and reliability. Long- term investments were carried at cost less provision for diminution other than temporary, in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) have been recognized in retained earnings as at the date of transition and subsequently in the profit or loss for the year ending 31st March, 2016. This has resulted an increase in the retained earnings.

Fair value changes with respect to investments in equity instruments designated as at FVOCI have been recognized in FVOCI -Equity investments reserve as at the date of transition and subsequently in the comprehensive income for the year ended 31st March, 2016.

B. Deferred Tax

I GAAP rebus\ires 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 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 IGAAP

In Addition, deferred tax adjustments is also done for transitional adjustments wherever they results in timing differences by corresponding adjustments to retained earnings or profit and loss account.

C. Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the equity increased by an equivalent amount.

D. Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts including in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these re measurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended 31st March, 2016 has decreased. There is no impact on the total equity as at 31st March, 2016.

E. Asset classified as held for sale

Under previous GAAP, assets having carrying value of '' 776 Lacs were disclosed as âAsset held for saleâ Considering at the low visibility of their sale, these assets are now reclassified under Property, Plant and Equipment and depreciation on these assets from the date they were classified as held for sale till reclassification has been charged with corresponding adjustment to retained earnings or Profit and loss account. Consequently, the equity decreased by an equivalent amount.

F. Other Comprehensive Income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as other comprehensive income includes re-measurement of defined benefits plans and fair value gains or losses on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.

Compliances of these policies and principles are reviewed by internal auditors on periodical basis.

The Corporate Treasury team updates the Audit Committee on a quarterly basis to about the implementation of the above policies. It also updates to the Internal Risk Management Committee of the Company on periodical basis about the various risk to the business and status of various activities planned to mitigate the risk.

Market Risk:

Foreign Currency Risk:

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure.

Above foreign currency exposure is hedged by forward contracts and accordingly the company does not have any unhedged foreign currency exposure.

Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs short term borrowing. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

Note: If the rate is decreased by 100 bps profit will increase by an equal amount.

Interest rate sensitivity has been calculated assuming the borrowings outstanding at the reporting date have been outstanding for the entire reporting period.

Forward Exchange Contracts:

Derivatives for hedging foreign currency risk with respect to outstanding payable/receivables & highly probable forecasted transaction:

Credit Risk Management:

Credit risk arises when a customer or counterparty does not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing/ investing activities, including deposits with banks, mutual fund investments, and investments in debt securities, foreign exchange transactions and financial guarantees. The Company has two major clients which represents 78% receivables as on 31st March, 2017 and company is receiving payments from these parties within due dates. Hence, the company has no significant credit risk related to these parties.

Trade receivables

All the Trade Receivables are less than 6 months and hence there is no provision as per expected credit loss model.

Investments, Derivative Instruments, Cash and Cash Equivalent and Bank Deposit

Credit Risk on Derivative Instruments are generally low as Company enters into the Derivative Contracts with the reputed Banks and Financial Institutions.

Investments of surplus funds are made only with approved Financial Institutions/ Counterparty. Investments primarily include investment in units of mutual funds. These Mutual Funds and Counterparties have low credit risk.

Total Non-current and current investments as on 31st March, 2017 is Rs, 9803 lacs (31st March , 2016 - Rs, 7977 lacs ; 1st April, 2015- Rs, 1713 lacs) Liquidity risk:

The table below provides details regarding the remaining contractual maturities of financial liabilities and investments at the reporting date based on contractual undiscounted payments.

5(B) FAIR VALUE MEASUREMENTS (IND AS 113):

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

The management assessed that fair value of cash and bank balances, trade receivables, trade payables, cash credits, commercial papers and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

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

(a) The fair values of the quoted investments/units of mutual fund schemes are based on market price/net asset value at the reporting date.

(b) The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates and interest rate curve of the respective currencies.

(c) The fair value of the remaining financial instruments is determined using discounted cash flow analysis or based on the contractual terms. The discount rates used is based on management estimates.

6. SEGMENT REPORTING (IND AS 108):

The Company is exclusively engaged in the business of synthetic yarn related products primarily in India. As per Ind AS 108 âOperating Segmentsâ specified under Section 133 of the Companies Act, 2013, there are no reportable operating or geographical segments applicable to the Company.

b) Defined Benefit Plans - Gratuity and Provident Fund Gratuity:

Inherent Risk - The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risks.

The Company operates a gratuity plan which is administered through Life Insurance Corporation and a trust which is administered through trustees. Every employee is entitled to a minimum benefit equivalent to 15 days salary last drawn for each completed year of service in line with Payment of Gratuity Act, 1972. However, certain employees are entitled to benefit higher than the benefit prescribed under Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier or death in service.

xiii) The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

Provident Fund:

7. GOVERNMENT GRANT (IND AS 20):

Other Operating Revenues includes subsidy received against Capital Investments, under Technology Upgradation Fund (TUF) Scheme of Rs, 298 Lacs (31st March,2016- Nil).

8. RELATED PARTY DISCLOSURES (IND AS 24):

Related Parties with whom there were transactions during the year:

Parties Relationship

Mr.B.K.Birla - Non-Executive Director Key Management Personnel (KMP)

Mrs. Rajashree Birla - Non-Executive Director Key Management Personnel (KMP)

Mr. B.S.Mehta - Independent Director Key Management Personnel (KMP)

Mr. S.K.Jain - Independent Director Key Management Personnel (KMP)

Mr. K.S. Thar - Independent Director Key Management Personnel (KMP)

Mr. G.M.Singhvi - Whole-time Director Key Management Personnel (KMP)

9 IMPAIRMENT OF ASSETS (IND AS 36)

Based on Managementâs assessment and plan of conversion of polyester spinning machine at Bharuch to nylon machine and valuation from an independent valuer, the company has made impairment provision of Rs, 958 lacs and the same is shown under Exceptional Item in statement of Profit & Loss.

Management has assessed Rs, 444 lacs, the recoverable amount of machines as fair value less cost of disposal on the basis of valuation report from an independent valuer. Fair value measurements of the machines are derived on the basis of Level 2 inputs.

Fair value of machines as on the date of valuation has been worked out using replacement value as the basis. Replacement value means price expected to replace existing asset with similar equivalent new asset as on date of valuation. To this replacement value, suitable depreciation has been applied based on useful life of asset.

Previous yearâs exceptional item of Rs, 754 lacs is towards write down of Continuous Polyester Polymerization Unit at Bharuch Plant.

The above amount of contingencies does not include applicable interest, if any. Cash outflows for the above are determinable only on receipt of judgments pending at various forums / authorities.

(b) Excise Department had issued an order dated 31st December 2013 denying the applicability of Notification No. 6/2000 dated 1st March 2000 which allowed payment of duty at specific rate instead of ad-valorem basis and raised a demand of '' 22,927 lacs plus interest thereon and penalty equivalent to demand amount against which the Company had filed an appeal before Appellate Tribunal (CESTAT). The CESTAT has admitted the appeal on pre-deposit of Rs, 700 lacs and granted stay against the recovery. The company has been advised by legal experts that it has a fair chance of ultimately succeeding in the matter and accordingly no provision is required to be made in accounts.

10. CAPITAL AND OTHER COMMITMENTS:

(a) Estimated amount of contracts remaining to be executed on capital account, not provided for (net of advances) Rs, 79 Lacs. (31st March, 2016 - Rs, 362 Lacs, 1st April, 2015 - Rs, 1369 Lacs).

(b) Other Commitments: The Company has renewed non cancellable agreement with Gas Utility Company on 1st January, 2017 for purchase of LNG. Under this agreement, the Company is committed to purchase certain annual minimum quantity of LNG up to 31st December, 2021 failing which it will pay the seller for any shortfall in off take of LNG based on an agreed formula. The cost of the minimum committed quantity as at 31st March, 2017 for the remaining period of the contract at current market prices approximates Rs, 3071 Lacs (Previous Year Rs, 752 Lacs). Based on the current projection, Company does not expect shortfall in off take of minimum committed quantity and therefore no material foreseeable losses are expected.

11. CORPORATE SOCIAL RESPONSIBILITY:

Expenditure incurred on Corporate Social Responsibility activities, included in different heads of expenses in the Statement of Profit and Loss is Rs, 174 Lacs (31st March, 2016 - Rs, 131 Lacs). The amount required to be spent under Section 135 of the Companies Act, 2013 for the year ended 31st March , 2017 is Rs, 177 Lacs (31st March, 2016- Rs, 132 Lacs) i.e. 2% of average net profits for last three financials years, calculated as per section 198 of the Companies Act, 2013.

12 Previous Year''s figures have been regrouped / rearranged, wherever necessary.

Mar 31, 2016

Note : It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

1. Other Commitments: The Company has entered into non cancellable agreement with Gas Utility Company on 22nd July, 2010 for purchase of LNG. Under this agreement, the Company is committed to purchase certain annual minimum quantity of LNG up to 30th April, 2017 failing which, it will pay the seller for any shortfall in off take of LNG based on an agreed formula. The cost of the minimum committed quantity as at 31st March, 2016 for the remaining period of the contract at current market prices approximates Rs, 752 Lacs (Previous Year Rs, 2561 Lacs). Based on the current projection Company does not expect shortfall in off take of minimum committed quantity and therefore no material foreseeable losses are expected.

2. Derivative Instruments and Unheeded Foreign Currency Exposures

The Company enters into forward exchange contracts being derivative instruments, which are not intended for trading or speculative purposes, but for hedge purposes.

ii Mark-To-Market Losses provided for Rs, 14 Lacs (Previous Year Rs, 119 Lacs).

3. Revenue expenditure incurred on Research and Development during the year is Rs, 161 Lacs (Previous Year Rs, 221 Lacs).

4. Production in Continuous Process Plant at Bharuch producing Polyester Yarn was suspended in November 2013. A part of the said plant was converted to non-continuous and put into operation for manufacture of Nylon Filament Yarn. Remaining portion of the said plant is in the process of evaluation and conversion to non-continuous. The Management, based on the business scenario with respect to the Continuous Polyester Polymerization Unit (CPU), concluded that the carrying amount of CPU needed to be written down by Rs, 754 lacs with no further write down expected. The write down has been classified as an Exceptional Item.

5. The Gross Block of Fixed Assets was written up by Rs, 8301 Lacs on revaluations carried out in the year 1983 and 1989.

6. Segment Reporting

a) Primary Segment (by Business Segment):

Based on the guiding principles given in the Accounting Standards on Segment Reporting (AS-17), the Company is primarily in the business of manufacture and sale of Synthetic Yarn and Tyre Cord Fabric which mainly have similar risks and returns. The Company''s business activity falls within a single geographical and business segment (Synthetic Yarn), hence it has no other primary reportable segments.

b) Secondary Segment (by Geographical demarcation):

i) The secondary segment is based on geographical demarcation i.e. in India and outside India.

(a) The above provision represents claims against the Company not acknowledged as debt with respect to various litigations.

(b) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

7. Related Party Disclosures as per Accounting Standard (AS-18) (As identified by the Management and where transactions exist)

(i) Related Party Relationships

Key Management Personnel Mr. G. M. Singhvi (Whole-time Director)

There are no amounts outstanding as at 31^st March, 2016 and 31^st March, 2015

8. Corporate Social Responsibility Expenditure:

Gross amount required to be spent during the year Rs, 132 Lacs (Previous Year Rs, 91 Lacs)

9. Previous Year''s figures have been regrouped / rearranged, wherever necessary.

Mar 31, 2015

1. short-terM BorroWings

a) Working Capital borrowings are secured by way of hypothecation of Inventories, Book Debts and Receivables, both present and future.

b) Working Capital borrowings carry an average interest rate of 9.79 % (Previous Year 10.10%) per annum and Buyers Import Credit for Raw Materials paid during the year carried an interest rate ranging from Libor 0.48% per annum to Libor 0.65 % per annum.

c) Working Capital Borrowings are renewed based on contract with bankers. Rupee term loans and Buyers Import Credit facility for Raw Material purchases carry maximum tenure of 30 days and 180 days respectively.

2. Defined Benefit Plans - gratuity and Provident Fund

Gratuity: The Company operates a gratuity plan which is administered through Life Insurance Corporation and a trust which is administered through trustees. Every employee is entitled to a minimum benefit equivalent to 15 days salary last drawn for each completed year of service in line with Payment of Gratuity Act, 1972. However, certain employees are entitled to benefit higher than the benefit prescribed under Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier or death in service.

Provident Fund: Provident fund for certain eligible employees is managed by the Company through trust, in line with the Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of their separation from the Company or retirement, whichever is earlier. The benefits vest immediately on rendering of the services by the employee.

3. Contingent Liability: Rs. / Lacs

Claims against the Company not acknowledged 31st March, 31st March, as debts (to the extent not 2015 2014 provided for) (Refer Note below)

a) 1) Income-Tax Matters 92 674

2) Sales-Tax Matters 47 534

3) Excise and Customs Matters 757 360

4) Others - 75

Total 896 1643

b) Excise Department had issued an order dated 31st December, 2013 denying the applicability of Notification No. 6/2000 dated 1st March, 2000 which allowed payment of duty at specific rate instead of advalorem basis and consequently raising a demand of Rs. 22927 Lacs plus interest thereon and penalty of Rs. 22927 Lacs against which the Company has filed an appeal with the Customs Excise and Service Tax Appellate Tribunal (CESTAT). The Hon''ble CESTAT has passed an order on 12th September, 2014 to grant a stay against the demand and admit the appeal on a pre deposit of Rs. 700 Lacs. The Company has deposited this amount on 24th December, 2014. The Company has been advised by legal experts that it has a fair chance of ultimately succeeding in the matter and accordingly no provision is required to be made in the accounts.

Note : It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

4. Other Commitments: The Company has entered into non cancellable agreement with Gas Utility Company on 22nd July, 2010 for purchase of LNG. Under this agreement, the Company is committed to purchase certain annual minimum quantity of LNG upto 30th April, 2017 failing which, it will pay the seller for any shortfall in offtake of LNG based on an agreed formula. The cost of the minimum committed quantity as at 31st March, 2015 for the remaining period of the contract at current market prices approximates Rs. 2561 Lacs (Previous Year Rs. 4138 Lacs). Based on the current projection Company does not expect shotfall in offtake of minimum commited quantity and therefore no material forseeable losses are expected.

5. Revenue expenditure incurred on Research and Development during the year is Rs. 221 Lacs (Previous Year Rs. 324 Lacs).

6. Production in Continuous Process Plant at Bharuch producing Polyester Yarn was suspended in November, 2013. A part of the said Plant was converted to non-continuous process and has been put into operation. Some of the portion of the plant is still in the process of conversion to non-continuous process. As the operation of remaining Plant continues to be unviable, the Company, for the time being, has decided to continue suspension of the remaining Plant to protect overall profitability of the Company.

8. The Gross Block of Fixed Assets was written up by Rs. 8301 Lacs on revaluations carried out in the year 1983 and 1989.

9. Exceptional items of Rs. 220 Lacs for the year ended 31st March 2014 represents loss on account of disposal/ write off due to non usability of certain fixed assets consequent to closure of operations at Mahad and is net of write back of provision for earlier years consequent to finalisation of the liability.

10. The Company has adopted useful lives of the fixed assets as those specified in Part C of Schedule II to the Companies Act, 2013 (''the Act'') effective 1st April, 2014. Accordingly carrying amount of assets, for which the useful lives as per the revised estimate are exhausted as of 1st April, 2014 have been recognised in the retained earning as on that date after retaining the residual value of these assets. For the other assets,the carrying amount as of 1st April, 2014 will be amortised over the remaining useful lives of the assets.

As a result :

a) An amount of Rs. 517 Lacs (Net of Deferred tax of Rs. 220 Lacs ) has been recognised to the opening retained earning as of 1st April, 2014.

b) An amount of Rs. 102 Lacs has been transferred from Revaluation reserves to General reserve with respect to previously revalued assets

c) Depreciation charge for the year ended 31st March, 2015 is lower by Rs. 2748 Lacs

11. Tax expenses for the year ended 31st March, 2015, includes Rs. 627 Lacs for additional charge of deferred tax due to change in effective rates of income-tax.

12. Previous Year''s figures have been regrouped / rearranged, wherever necessary.

Mar 31, 2014

1 DISCLOSURES IN ACCORDANCE WITH REVISED AS-15 ON "EMPLOYEE BENEFITS".

b) Defined benefit Plans - Gratuity and Provident Fund

Gratuity: The Company operates a gratuity plan which is administered through Life Insurance Corporation and a trust which is administered through trustees. Every employee is entitled to a minimum benefit equivalent to 15 days salary last drawn for each completed year of service in line with Payment of Gratuity Act, 1972. However, certain employees are entitled to benefit higher than the benefit prescribed under Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier or death in service.

Provident Fund: Provident fund for certain eligible employees is managed by the Company through trust, in line with the Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notifed by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of their separation from the company or retirement, whichever is earlier.

The benefits vest immediately on rendering of the services by the employee.

xi) The estimates of future salary increases considered in actuarial valuation takes into account infation, seniority, promotion and other relevant factors.

xii) The above disclosures for Provident Fund are limited to the extent of disclosures provided by the actuary.

c) Para 132 of AS 15 (revised 2005) does not require any Specific disclosures except where the expense resulting from compensated absence is of such size, nature or incidence that its disclosure is relevant under AS 5 or AS 18 and accordingly,the expense resulting from compensated absence is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (revised 2005).

2 Capital Commitments: Estimated amount of Contracts remaining to be executed on Capital Account and not provided for Rs. 1976 Lacs (Previous Year Rs. 242 Lacs) against which advances have been paid Rs. 208 Lacs (Previous Year Rs. 19 Lacs).

3 Contingent Liability: Rs. / Lacs

31st 31st March, Claims against the company not acknowledged as debts (to the extent not provided for) March, 2013 (Refer Note below) 2014

a) 1) Income-Tax Matters 674 674

2) Sales-Tax Matters 534 534

3) Excise and Customs Matters 360 336

4) Others 75 75

Total 1643 1619

b) Excise Department has issued an order dated 31st December,2013 denying the applicability of Notifcation No. 6/2000 dated 1st March, 2000 which allowed payment of duty at Specific rate instead of advalorem basis and consequently raising a demand of Rs. 22927 Lacs plus interest thereon and penalty of Rs. 22,927 lacs against which the Company has fled an appeal with the Customs Excise and Service Tax Appellate Tribunal (CESTAT). The Company has been advised by legal experts that it has a strong case and accordingly no provision has been made in the accounts.

Note : It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending disputed matters till these are resolved.

4 Other Commitments: The Company has entered into non cancellable agreement with Gas Utility Company on 22nd July, 2010 for purchase of LNG. Under this agreement, the Company is committed to purchase certain annual minimum quantity of LNG upto 30th April, 2017 failing which, it will pay the seller for any shortfall in offtake of LNG based on an agreed formula. The cost of the minimum committed quantity as at 31st March, 2014 for the remaining period of the contract at current market prices approximates Rs. 4138 Lacs (Previous Year Rs. 8789 Lacs). The Company expects to maintain the offtake of minimum commited quantity.

5 Revenue expenditure incurred on Research and Development during the year is Rs. 324 Lacs (Previous Year Rs. 223 Lacs).

6 From November 2013, Polyester operations at Bharuch were partially shutdown (Continuous Process Plant only) on account of preventive maintenance. While doing so, the Company also decided to carryout some modifications in the plant so as to increase fexibility in product mix and improve margins. This work is expected to continue for another 4 to 6 months.The partial stoppage of operations is not likely to have an adverse material impact on the profitability of the Company .

7 The Gross Block of Fixed Assets was written up by Rs. 8301 Lacs on revaluations carried out in the year 1983 and 1989.

8 Segment Reporting a) Primary Segment (by Business Segment):

Based on the guiding principles given in the Accounting Standards on Segment Reporting (AS - 17), the Company is primarily in the business of manufacture and sale of Synthetic Yarn and Tyre Cord Fabric which mainly have similar risks and returns. The Company''s business activity falls within a single geographical and business segment (Synthetic Yarn), hence it has no other primary reportable segments.

9 Exceptional items of:

(a) Rs. 220 Lacs for the year ended 31st March 2014 represents loss on account of disposal/ write off due to non usability of certain fixed assets consequent to closure of operations at Mahad and is net of write back of provision which was created as of 31st March 2013 consequent to finalisation of the liability.

(b) Rs. 1503 Lacs for the year ended 31st March 2013, represents (i)Expenses on account of suspension of operation at Mahad including retrenchment compensation to workmen and (ii) Compensation paid under Voluntary Retirement Scheme to employees at Pune.

10 Related Party Disclosures (As identified by the Management and where transactions exist) (i) Related Party Relationships

(a) Key Management Personnel Mr. G. M. Singhvi (Whole-time Director)

(b) Other Related Parties

Mr. B. K. Birla

Century Textiles and Industries Limited

Kesoram Industries Limited

Jay Shree Tea and Industries Limited

Parvati Tea Co. Ltd

Note: The parties listed under (b) above are not "related parties" as per the requirements of Accounting Standard AS-18. However, as a matter of abundant caution, they are being included for making the Financial Statements more transparent.

11 Previous Year''s figures have been regrouped / rearranged, wherever necessary.

Mar 31, 2013

(a) Rights, Preferences and Restrictions 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 of Rs. 6.00 per share proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting.

(a) Secured Working Capital borrowings , Rupee Term Loans and Buyers Import Credit for Raw Materials are secured by way of hypothecation of Inventories, Book Debts and Receivables, both present and future.

(b) All Working Capital borrowings, Rupee Term Loans carry an average interest rate of 10.12% (Previous Year 10.52%) per annum and Buyers Import Credit for Imported Raw Materials carry interest rate ranging from Libor 0.05% per annum to Libor 1.45% per annum (Previous Year Libor 0.25% per annum to Libor 2.90% per annum).

(c) Working Capital Borrowings are renewed based on contract with bankers. Rupee term loans and Buyers Import Credit facility for Raw Material purchases carry maximum tenure of 45 days and 365 days respectively.

(d) Fixed Deposits from Employees carry interest rate of 10% per annum (Previous Year 10% per annum) and are repayable at the end of one year from the date of deposit.

b) Defined Benefit Plans - Gratuity and Provident Fund

Gratuity: The Company operates a gratuity plan which is administered through Life Insurance Corporation and a trust which is administered through trustees.

Every employee is entitled to a minimum benefit equivalent to 15 days salary last drawn for each completed year of service in line with Payment of Gratuity Act, 1972. However, certain employees are entitled to benefit higher than the benefit prescribed under Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier or death in service.

Provident Fund: Provident fund for certain eligible employees is managed by the Company through trust, in line with the Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of their separation from the company or retirement, whichever is earlier.

The benefits vest immediately on rendering of the services by the employee.

i) The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

ii) The above disclosures for Provident Fund are limited to the extent of disclosures provided by the actuary.

c) Para 132 of AS 15 (revised 2005) does not require any specific disclosures except where the expense resulting from compensated absence is of such size, nature or incidence that its disclosure is relevant under Accounting Standard No. 5 or Accounting Standard No. 18 and accordingly, the expense resulting from compensated absence is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (revised 2005).

1 Capital Commitments: Estimated amount of Contracts remaining to be executed on Capital Account and not provided for Rs. 242 Lacs (Previous Year Rs. 987 Lacs) against which advances have been paid Rs. 19 Lacs (Previous Year Rs. 364 Lacs).

2 Other Commitments: The Company has entered into two non cancellable agreements with Gas Utility Companies on 22nd July, 2010 and 15th March, 2011 for purchase of LNG. Under these agreements, the company is committed to purchase certain annual minimum quantities of LNG upto 31st December, 2016 and 31st December, 2013 respectively, failing which, it will pay the seller for any shortfall in offtake of LNG calculated based on agreed formula. The cost of the minimum committed quantity as at 31st March, 2013 for the remaining period of the contract at current market prices approximates t 8789 Lacs (Previous Year Rs. 11400 Lacs).

3 Revenue expenditure incurred on Research and Development during the year is Rs. 223 Lacs ( Previous Year Rs. 206 Lacs).

4 The Ministry of Corporate Affairs has issued the amendment dated 29th December, 2011 to AS-11 " The Effect of Changes in Foreign Exchange Rate",to allow companies to deferral/capitalisation of exchange differences arising on Long-Term foreign currency monetary items.

In accordance with the amendment/earlier amendment to AS-11, the Company has capitalised exchange loss, arising on Long-Term foreign currency loan, amounting to Rs. 3 Lacs (Previous Year exchange loss Rs. 31 Lacs) to the cost of Plant and Machinery.

5 The Gross Block of Fixed Assets was written up by Rs. 8301 Lacs on revaluation carried out in the year 1983 and 1989.

6 Segment Reporting

a) Primary Segment (by Business Segment):

Based on the guiding principles given in the Accounting Standards on Segment Reporting (AS -17), the Company is primarily in the business of manufacture and sale of Synthetic Yarn and Tyre Cord Fabric which mainly have similar risks and returns. The Company''s business activity falls within a single geographical and business segment (Synthetic Yarn), hence it has no other primary reportable segments.

b) Secondary Segment (by Geographical demarcation):

i) The secondary segment is based on geographical demarcation i.e. in India and outside India.

7 Exceptional items includes following:

(a) Due to operational losses, the production at both the factories at Mahad was suspended on 25th May, 2012. Effective 14th August, 2012, the Company has retrenched all workmen. The total expense due to suspension of operations including retrenchment compensation to workmen amounting to Rs. 1255 Lacs has been disclosed as an exceptional item.

(b) The company announced Voluntary Retirement Scheme for certain category of employees at Pune unit on 7th March, 2013. The compensation payable of Rs. 248 Lacs to the employees who accepted voluntary retirement has been disclosed as an exceptional item.

8 Related Party Disclosures (As identified by the Management and where transactions exist)

(i) Related Party Relationships

(a) Key Management Personnel Mr. G. M. Singhvi (Whole-time Director)

(b) Other Related Parties Mr. B. K. Birla

Century Textiles and Industries Limited Jay Shree Tea and Industries Limited Kesoram Industries Limited

9 Previous Year''s figures have been regrouped / rearranged wherever necessary.

Mar 31, 2012

(a) Pursuant to Special Resolution passed by the shareholders through postal ballot on 9th December, 2009, the Board of Directors in its meeting ' held on 17th December, 2009 allotted 18,00,000 Preferential Warrants to the Promoters of the Company at a price of Rs. 189.16 per warrant and received Rs 47.29 per warrant being 25% upfront price. The Promoters were entitled to apply for allotment of one fully paid up equity share of Rs. 10/- each against each warrant at any time after the date of allotment but on or before expiry of 18 months from the date of allotment.

The Promoters have exercised the option to convert preferential warrants into fully paid-up equity shares of Rs. 10/- each in two tranches and the Board of Directors accordingly, allotted 8,00,000 fully paid-up equity shares ofRs 10/- each on 27th January, 2010 and 10,00,000 fully paid-up equity shares of Rs. 10 each on 3rd May, 2010.

(b) Rights, Preferences and Restrictions 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.

Note: Deduction / Adjustment during the year represents additional depreciation for the year charged on Revaluation, transferred to Statement of Profit and Loss.

(a) Secured Working Capital borrowings , Rupee Term Loans and Buyers Import Credit for Raw Materials are secured by way of hypothecation of Inventories, Book Debts and Receivables, both present and future.

(b) All Working Capital borrowings , Rupee Term Loans carry an average interest rate of 10.52% per annum and Buyers Import Credit for Imported Raw Materials carry interest rate ranging from Libor 0.25% per annum to Libor 2.90% per annum.

(c) Fixed Deposits from Employees carry interest rate of 10% per annum (Previous Year 9.50% per annum)

i) The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

c) Para 132 of AS 15 (revised 2005) does not require any specific disclosures except where the expense resulting from compensated absence is of such size, nature or incidence that its disclosure Is relevant under Accounting Standard No. 5 or Accounting Standard No. 18 and accordingly, the expense resulting from compensated absence is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (revised 2005).

d) Defined Benefit Plana Employer Managed Provident Fund

I) The Defined Benefit Obligation of interest rate guarantee on exempt provident fund in respect of certain employees of the Company at March 31,2012 is t Nil. The balance in the surplus account of the provident fund is approx f 178 Lacs and hence the net liability to be provided for In the books of accounts of the Company is Rs. Nil.

1. Other Commitments: The Company has entered into two non cancellable agreements with Gas Utility Companies for purchase of LNG. Under these agreements the company has commuted to purchase certain annual minimum quantities of LNG for the next two to five years, falling which, it will pay the seller for any shortfall in off take of LNG calculation based on agreed formula. The cost of the minimum committed quantity at current market prices approximates Rs 11400 Lacs.

2. Derivative Instruments and Unheeded Foreign Currency Exposures

The Company enters Into forward exchange contracts being derivative Instruments, which are not Intended for trading or speculative purposes, but for hedge purposes.

3. Revenue expenditure incurred on Research and Development during the year is Rs 206 Lacs ( Previous Year Rs. 195 Lacs).

4. The Ministry of Corporate Affairs has issued the amendment dated 29 December 2011 to AS-11 "The Effect of Changes in Foreign Exchange Rate", to allow companies deferral/capitalization of exchange differences arising on Long-Term foreign currency monetary items.

In accordance with the amendment/earlier amendment to AS-11, the Company has capitalized exchange loss, arising on Long-Term foreign currency loan, amounting to Rs. 31 Lacs (previous year exchange loss Rs. 52 Lacs) to the cost of Plant and Machinery.

5. The Gross Block of Fixed Assets was written up by Rs. 8301 Lacs on revaluation carried out in the year 1983 and 1989.

6. Segment Reporting

a) Primary Segment (by Business Segment):

Based on the guiding principles given in the Accounting Standards on Segment Reporting (AS -17) the Company is primarily in the business of manufacture and sale of Synthetic Yarn and Tyre Cord Fabric which mainly have similar risks and returns. The Company's business activity falls within a single geographical and business segment (Synthetic Yarn), hence it has no other primary reportable segments.

b) Secondary Segment (by Geographical demarcation):

I) The secondary segment Is based on geographical demarcation ie. in India and outside India.

7. In view of inadequacy of net profit for the year ended March 31, 2012 determined in accordance with the provisions of Sec 349 of the Companies Act, 1956 of India, the remuneration of the Whole-time Director of the Company, payable under the terms of employment aggregating to Rs 95 lacs, has exceed the limit of Rs 48 lacs prescribed in Part II of Schedule XIII to the Act. The remuneration has been retrospectively approved by the remuneration committee in its meeting held on May 2, 2012. The Company, having become aware of the excess remuneration paid over the prescribed limit, will seek the approval of the Shareholders of the Company by way of a special resolution in the ensuing Annual General Meeting for the aforesaid remuneration paid by it to its Whole-time Director.

8. The financial statements for the year ended March 31,2011 had been prepared as per the then 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 March 31,2012 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. DISCLOSURES IN ACCORDANCE WITH REVISED AS-15 ON "EMPLOYEES BENEFITS".

b) Defined Benefit Plans -

The following figures are as per the actuarial valuation, as at the Balance Sheet date, carried out by an independent actuary.

ix) The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

x) Para 132 of AS 15 (revised 2005) does not require any specific disclosures except where the expense resulting from compensated absence is of such size, nature or incidence that its disclosure is relevant under Accounting Standard No. 5 or Accounting Standard No. 18 and accordingly, the expense resulting from compensated absence is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (revised 2005).

2. There was no impairment loss on Fixed Assets on the basis of review carried out by the Management in accordance with Accounting Standard 28.

3. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for Rs.2011 Lacs (Previous Year Rs.8623 Lacs) against which advances have been paid Rs. 181 Lacs (Previous Year Rs.319 Lacs).

4. Contingent Liability in respect of:

(a) Taxation matters Rs. 899 Lacs (Previous Year Rs.231 Lacs)

(b) Taxation matters for which department has gone in appeals Rs. 730 Lacs (Previous Year Rs 369 Lacs)

(c) Other matters Rs. Nil Lacs ( Previous Year Rs.8 Lacs)

5. (a) Excise Department had retrospectively cancelled registration granted to one of the Companys factories at Mahad. This order was set aside by the Commissioner (Appeals). The appeal of the Department against the order of Commissioner (Appeals) was dismissed by the Tribunal against which Excise Department had fled an appeal before the High Court which appeal is yet to be admitted.

Excise Department had also issued various separate Show Cause cum Demand Notices(SCNs) on almost similar grounds pertaining to the period April 2000 to March 2003 for alleged short payment of duty on clearances of Polyester Filament yarn from one of the Companys factories at Mahad, denying applicability of an exemption notification. These SCNs are yet to be disposed off. In view of favourable order of the Tribunal (referred to in the foregoing paragraph) and legal opinions received by the Company, the demands are unjustified and the Company is advised that it has a very strong case on merits.

(b) The Gujarat Sales-Tax Department had in the earlier years retrospectively withdrawn its own circular which permitted Sales-Tax exemption on purchases of fuel oil by units exempted from payment of Sales Tax. It had consequently issued notices to the Company for reopening of assessments and levy of tax, interest and penalty amounting to Rs 360 Lacs for the earlier periods. Pursuant to applications fled by the industry, the Gujarat High Court decided the matter in favour of the industry. The Gujarat Government has fled an appeal before Supreme Court which is yet to be decided.

6. Revenue expenditure incurred on Research and Development during the year is Rs.195 Lacs ( Previous Year Rs.105 Lacs).

7. Pursuant to an option given in the Notification No.G.S.R 225 (E) issued by Ministry of Corporate affairs on 31.03.2009, the exchange rate loss of Rs 52 Lacs (Previous Year exchange gain Rs 91 Lacs) arising on account of reporting long term Foreign Currency monetary items relating to fixed assets has been added to (previous year reduced from) the cost of fixed assets. Consequently profit for the year is higher by 51 Lacs (previous year lower by 86 Lacs).

8. The Gross Block of Fixed Assets was written up by Rs.8301 Lacs on revaluation carried out in the year 1983 and 1989.

9. Segment Reporting

a) Primary Segment (by Business Segment):

Based on the guiding principles given in the Accounting Standards on Segment Reporting ( AS - 17 ) the Company is primarily in the business of manufacture and sale of Synthetic Yarn and Tyre Cord Fabric which mainly have similar risks and returns. The Companys business activity falls within a single geographical and business segment (Synthetic Yarn), hence it has no other primary reportable segments.

b) Secondary Segment (by Geographical demarcation):

i) The secondary segment is based on geographical demarcation i.e. in India and outside India.

10. Related Party Disclosures (As identified by the Management and where transactions exist )

(i) Related Party Relationships

(a) Key Management Personnel Mr.G.M. Singhvi Whole-time Director

(b) Other Related Parties Mr.B.K. Birla Century Textiles and Industries Limited, Jay Shree Tea and Industries Limited, Kesoram Industries Limited NOTES:

1) The parties listed under (b) above are not "related parties" as per the requirements of Accounting Standard AS-18. However, as a matter of abundant caution, they are being included for making the Financial Statements more transparent.

2) In respect of the above parties, there is no provision for doubtful debts as on 31st March,2011 and no amount has been written off or written back during the year in respect of debts due from/to them.

11. Previous Years figures have been regrouped and rearranged, wherever necessary.

12. All the amounts in rupees have been rounded off to lacs as permitted under Notifcation No.GSR 545 (E) dated 1st August,2002 issued by Department of Company Affairs, Government of India. Figures less than Rs.50,000 have been shown as actuals in brackets.

NOTE: Signatures to schedules from Schedule A to Schedule I forming part of the Accounts

Mar 31, 2010

1 DISCLOSURES IN ACCORDANCE WITH REVISED AS-15 ON ÃEMPLOYEES BENEFITSÃ.

a) Pursuant to the accounting treatment permitted by the revised Accounting Standard (AS-15) on Employees Benefi ts, the payments made during the accounting year 2007-08 under the Voluntary Retirement Scheme (VRS) are being charged to Profi t and Loss Account over a period of three accounting years or payback period,whichever is earlier commencing from accounting year 2007-08. Accordingly, the balance VRS compensation charged for the year ended 31st March, 2010 aggregate Rs. 3.36 crores (Previous Year Rs 3.50 crores).

2. There was no impairment loss on Fixed Assets on the basis of review carried out by the Management in accordance with Accounting Standard 28 issued by the Institute of Chartered Accountants of India.

3. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for Rs. 86.23 crores (Previous Year Rs. 0.58 crores) against which advances have been paid Rs. 3.19 crores (Previous Year Rs. NIL crores)

4. Contingent Liability in respect of:

(a) Taxation matters Rs. 2.31 crores (Previous Year Rs. 6.08 crores)

(b) Taxation matters for which department has gone in appeals Rs. 3.69 crores (Previous Year 2.94 crores)

(c) Other matters Rs. 0.08 crores (Previous Year Rs. 0.74 crores)

5. (a) Excise Department had retrospectively cancelled registration granted to one of the Companys factories at Mahad. This order was set aside by the Commissioner (Appeals). The appeal of the Department against the order of Commissioner (Appeals) was dismissed by the Tribunal against which Excise Department had fi led an appeal before the High Court which appeal is yet to be admitted.

Excise Department had also issued various separate Show Cause cum Demand Notices (SCNs) on almost similar grounds pertaining to the period April 2000 to March 2003 for alleged short payment of duty on clearances of Polyester Filament yarn from one of the Companys factories at Mahad, denying applicability of an exemption notifi cation. These SCNs are yet to be disposed off. In view of favourable order of the Tribunal (referred to in the foregoing paragraph) and legal opinions received by the Company, the demands are unjustifi ed and the Company is advised that it has a very strong case on merits.

(b) The Gujarat Sales-Tax Department had in the earlier years retrospectively withdrawn its own circular which permitted Sales-Tax exemption on purchases of fuel oil by units exempted from payment of Sales Tax. It had consequently issued notices to the Company for reopening of assessments and levy of tax, interest and penalty amounting to Rs 3.60 crores for earlier periods. Pursuant to applications fi led by the industry, the Gujarat High Court decided the matter in favour of the industry. As a result, the matter now stands resolved.

6. Revenue expenditure incurred on Research and Development during the year is Rs. 1.05 crores (Previous Year Rs.1.37 crores).

7. During the previous year,the company has opted for Notifi cation No. G.S.R 225 (E) issued by Ministry of Corporate Affairs on March 31,2009. In accordance with this notifi cation,during the previous year company has credited Rs 2.62 crores (net of deferred tax 1.34 crores) to the General Reserve in respect of prior years on account of exchange difference arising on reporting of long term foreign currency monetary items relating to fi xed assets at rates different from those at which they initially recorded during the period, or reported in the prior years fi nancial statement with corresponding effect given to fi xed assets. As a result, in the current year, exchange gain of Rs. 0.91 crores (Previous Year loss Rs 9.34 crores) arising on reporting of long term foreign currency monetary items relating to fi xed assets has been reduced from the cost of fi xed assets in accordance with the Notifi cation mentioned above. Had the Company not opted for this Notifi cation, the profi t for the year (PBT) would have been higher by Rs. 0.86 crores (previous year lower by Rs 8.59 crores) after considering the adjustment of depreciation thereon of Rs.0.05 crores (previous year Rs 0.75 crores), which is debited to profi t and loss account.

8. The Gross Block of Fixed Assets was written up by Rs. 83.01 crores on revaluation carried out in the year 1983 and 1989.

9. Segment Reporting

a) Primary Segment (by Business Segment):

Based on the guiding principles given in the Accounting Standards on Segment Reporting (AS - 17) the Company is primarily in the business of manufacture and sale of Synthetic Yarn and Tyre Cord Fabric which mainly have similar risks and returns. The Companys business activity falls within a single geographical and business segment (Synthetic Yarn), hence it has no other primary reportable segments.

10. Related Party Disclosures (As identifi ed by the Management and where transactions exist)

(i) Related Party Relationships

(a) Key Management Personnel Ã Mr. G. M. Singhvi Whole-time Director

(b) Other Related Parties Mr. B. K. Birla

Century Textiles and Industries Limited, Jay Shree Tea and Industries Limited, Kesoram Industries Limited

NOTES:

1) The parties listed under (b) above are not "related parties" as per the requirements of Accounting Standard AS- 18. However, as a matter of abundant caution, they are being included for making the Financial Statements more transparent.

2) In respect of the above parties, there is no provision for doubtful debts as on 31st March, 2010 and no amount has been written off or written back during the year in respect of debts due from/to them.

11. Previous Years figures have been regrouped and rearranged, wherever necessary.

12. All the amounts in rupees have been rounded off to crores with lacs in decimals as permitted under Notification No.GSR 545 (E) dated 1st August,2002 issued by Department of Company Affairs, Government of India. Figures less than Rs.50,000 have been shown as actuals in brackets.

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article