Notes to Accounts of H P Cotton Textiles Mills Ltd.

Mar 31, 2015

Note 1 : Insurance Claim Receivable

The Company has received the intimation from Insurer that it has approved the insurance claim; relating to free incident during the financial year 2010-11, for Rs.17160 thousand. For this claim the company had made provision of Rs. 33362 thousand. The company; not being satisfied with the claim approved by the insurer, has referred such matter to the appellate forum and the first appellate forum is arbitration. Company has received Interim Payment of Rs. 12870 thousand during the financial year 2014-15,which has been credited to Insurance Claim Receivable.

Pending decision of the appellate forum; no provision for loss [the difference between the insurance claim as per books of account and claim approved by the insurer] has been made in the books of account. Adjustment if any, arising upon the settlement of claim will be made in the year when the insurance claim is finally settled.

Note 2: Notes On Accounts:

1. In the opinion of the management, current assets including trade receivables, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the books. Howvever, certain balances under Trade Receivables, Loan and Advances are subject to confirmation.

2. Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

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Mar 31, 2014

1. Rights, Preferences and Restrictions Attached to shares:

Equity Shares

The Company has one class of equity shares having a par value of Rs. 10/- each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

2. Cash Credits and other working capital facilities from Banks viz. State Bank of Patiala and Oriental Bank of Commerce are secured by hypothecation and charge by way of a first charge ranking pari-passu without any preference or priority to one over the other on the stock of Raw Materials, Goods in Process, Loose Yarn, Finished Goods, Stores & Spares and Book Debts (both present and future) and second charge on fixed assets of the company.

3. Cash Credits from State Bank of Patiala & Oriental Bank of Commerce are guaranteed by Sh. R. K. Agarwal, Sh. A. K. Agarwal and Sh. K.K. Agarwal, Promoter/Directors of the Company in their personal capacity.

Trade Receivable outstanding for a period more than six months (Unsecured) includes Rs. 915403.00 under litigation. Loss; if any arising upon the decision of the court, will be accounted for in the year when the judgement is passed by the court. *

* The Company has received the intimation from Insurer that it has approved the insurance claim; relating to fire incident during the financial year 2010-11, for Rs. 17160 thousand. For this claim the company had made provision of Rs. 33362 thousand. The company; not being satisfied with the claim approved by the insurer, has referred such matter to the appellate forum and the first appellate forum is arbitration.

Pending decision of the appellate forum; no provision for loss [the difference between the insurance claim as per books of account and claim approved by the insurer] has been made in the books of account. Adjustment if any, arising upon the settlement of claim will be made in the yearwhen the insurance claim is finally settled.

** VAT credit receivable includes Rs. 597 thousand towards input tax reversed by D.E.T.C. cum Assessing Authority, Hisar for which company has gone into Appeal before Hon''ble J.E.T.C. (Appeals). Adjustment if any; arising upon the decision of the appeal, will be accounted for in the year when the appeal will be settled.

Note 4: Contingent Liabilities

Unredeemed Bank Guarantees - 278

Other money for which the company is contigently liable* 5,845 4,837

* The Entry tax was imposed by the Haryana Government but was struck down by the Hon''ble Punjab & Haryana High Court. The Haryana Government has gone into appeal before the Hon''ble Surpreme Court of India against the judgement of Punjab & Haryana High Court. The liability of Entry Tax; if any, arising upon the judgement of Hon''ble Surpreme Court of India will be provided during the year in which the judgement is passed by the Hon''ble Court.

Note 5: Notes On Accounts:

i) Balance of Trade Receivable, Advance Recoverable and Trade Payables are subject to Confirmation.

ii) Stores and Spares consumed includes spares consumed for repairs of Plant & Machinery.

iii) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

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Mar 31, 2013

Note 1: Contingent Liabilities

Contingent Liabilities Shall be classified as:

Unredeemed Bank Guarantees 278 28

Other money for which the company is contigently liable* 4,837 3,807

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Mar 31, 2012

Rights, Preferences and Restrictions Attached to shares:

Equity Shares

The Company has one class of equity shares having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

1. The Term Loans from Industrial Development Bank of India (IDBI) are secured by the first charge by way of equitable mortgage by deposit of title deeds in respect of Land situated at V.P.O. Mayar, Distt. Hisar (Haryana) and' by hypothecation of all the movables (save and except book debts) including movable machinery & spares, tools and accessories both present and future, subject to the prior charges on moveable assets in favour of Banks for working capital Borrowings.

2. The Term Loans from IDBI are guaranteed by Sh. K. L, Agarwal and Sh. A.K. Agarwal, Promoter/Directors 'of the Company in their personal capacity.

3. The Term loans from ICICI Bank Ltd, HDFC Bank Limited and Kotak Mahindra Prime Ltd are secured by hypothecation of vehicles acquired under the respective loans.

4. There is no default in repayment of principal loan or interest there on.

5. Repayment Schedule:

1. Cash Credits and other working capital facilities from Banks viz. State Bank of Patiala and Oriental Bank of Commerce are secured by hypothecation and charge by way of a first charge ranking pari - passu without any preference or priority to one over the other on the stock of Raw- Materials, Goods in Process, Loose Yarn, Finished Goods , Stores & Spares and Book Debts (both present and future) and second charge on fixed assets of the company. . ,

2. Cash Credits from State Bank of Patiala & Oriental Bank of Commerce are guaranteed by Sh. Raj Kumar Agarwal, Sh. Ashok Kumar Agarwal and Sh. Kailash Kumar Agarwal, Promoter/Directors of the Company in their personal capacity.

Trade Receivable outstanding for a period more than six months (Unsecured) includes Rs.915403.00 under litigation. Loss; if any arising upon the decision of the court, will be accounted for in the year when the judgement is passed by the court. .

‘Insurance Claim receiveable is subject to settlement by the insurance company. Adjustment;if any, arising upon the settlement of claim will be made during the year in which claim is settled by the insurance company.

*The Entry tax was imposed by the Haryana Government but was struck down by the Hon'ble Punjab & Haryana High Court. The Haryana Government has gone into appeal before the Hon'ble Surpreme Court of India aginst the judgement of Punjab & Haryana High Court. The liability of Entry Tax; if any, arising upon the judgement of Hon'ble Surpreme CoOrt of India will be provided during the year in which the judgement is passed by the Hon'ble Court.

1. Balance of Trade Receivable, Advance Recoverable and Trade Payables are subject to Confirmation.

2. Stores and Spares consumed includes spares consumed for repairsof Plant & Machinery.

3. Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

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Mar 31, 2010

1. CONTINGENT LIABILITIES :

i. Unredeemed Bank Guarantees Nil (Previous year Rs. 336900/-).

ii. In respect of Entry Tax Rs.18.90 Lakh (Previous Year Rs.8.88 Lakh). The said tax was imposed by the Haryana Government but was struck down by the Honble Punjab & Haryana High Court. The Haryana Government has gone into appeal before the Hobble Surpreme Court of India aginst the judgement of Punjab & Haryana High Court. The liability of Entry Tax; if any, arising upon the judgement of Honble Surpreme Court of India will be provided during the year in which the judgement is passed by the Honble Court.

2. Balances of Sundry Debtors, Advances Recoverable and Sundry Creditors are subject to confirmation.

3. Sundry Debtors outstanding for a period more than six months (Unsecured) includes Rs 915403.00 under litigation. The provision for bad debts, if any arising upon the decision of the court will be made in the year when the judgement is passed by the court.

4. Stores and Sapres consumed includes spares consumed for repairs of Plant & Machinery.

5. Names of the Small Scale Undertakings to whom any amount was payable as on the Balance Sheet as under

Diamond Plastic Industry 110242

Eagle Art Press 7,650

Facoba Textile Machinery, Delhi 126510

Ganesh Enterprises, Delhi 6625

Gats Enterprises, Gurgaon 4464

Glaxy Trading Corp. (Mfg. Unit) 14382

Golden Industries, Hisar 378019

Gupta Package Industries 8855

Haryana Paper Cone Industry 428,896

Haryana Wax Industries 18720

Impact Leather (Mfg.) Co. Kanpur 4,640

Janta Industries, Amritsar 23,990

Nand Polymers, Delhi 222692

New Geeta Brush Industries, Kanpur 91,422

North Star Engineers, Ballabhagarh 126650

P.B. Packers, Modinagar 25,636

Rakesh Industries 713,098

Reshmi Industries-Coimbatore 18,785

Shanti Paper Products 167,992

Shree Ganpati Packers, Delhi 197600

Shree Ram Paper Packaging, Panipat 199,614

Shrink Pack Labels (P) Ltd.Bahadurgarh 58,398

Supreme Packers 883,530

Vaibhav Enterprises, Delhi 99766

The above information has been compiled in respect of parties to the extent to which they could be identified as Small Scale Undertaking on the basis of information available with the Company.

The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the Micro,Small and Medium Enterprises Development Act 2006) claiming their status as Micro, Small or Medium enterprises.Consequently the amount paybale to these parties is Nil.

6. Related Party Transactions

As Per AS-18 issued by the Institute of Chartered Accountants of India, the Companys related parties and Transactions with them are as under

7. Schedules 1 to 19 form an integral part of the accounts and have been duly authenticated. As per our report of even date attached.