Notes to Accounts of Hindoostan Mills Ltd.

Mar 31, 2018

Note 1: Corporate Information:

Hindoostan Mills Limited (“The Company“) is a Public Limited Company, incorporated under the provision of the Companies Act, 1956 (as amended by the Companies Act, 2013). Its Shares is listed on Bombay Stock Exchange. The Company is engaged in the business of Manufacture and Sale of Fabric and Yarn, Technical Fabric and Refiling of Elastic Calendar Bowls. The Company has its the Registered Office and principal place of business at SIR VITHALDAS CHAMBERS,16 MuMBAI SAMACHAR MARG, FORT, MuMBAI - 400001

The Company’s financial statements are reported in Indian Rupees, which is also the Company’s functional currency.

Note 2.1 : For investment property existing as on 1st April 2016, i.e., its date of transition to Ind AS, the company has used Indian GAAP carrying value as deemed cost.

Note 2.2 : Estimation of Fair Value :

The fair value ought to be based on current prices in the active market for similar properties. The main inputs to be used are quantum, area, location, demand, restrictive entry, age of builidng and the trend of the fair market rent.

The investment property held by the company has certain handicaps like it being part of larger property, lack of active market for this property and long term protected tenants in part occupation in this property. In view of these limitations, reliable measurement of fair value is not possible.

Inventory write down is accounted, considering the nature of inventory, age, liquidation plan and net realisable value. Write down of inventories during the year amount to Rs.51.98 lacs (Previous year - Rs.47.66 lacs). The effect of these write down were recognised in cost of materials consumed, and changes in value of inventories of work-in-progress, stock-in-trade and finished goods in the Statement of Profit and Loss.

The Company has issued only one class of shares referred to as Equity Shares having a par value of Rs.00/-. Each holder of Equity Shares is entitled to one vote per share.

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.

9,58,708 Equity Shares of Rs.00/- each are allotted on 27th June 2011 as fully paid up without payment being received in cash pursuant to the scheme of Amalgamation Sanctioned by the High Court of Bombay dated 1st April 2011.

Note 3.1: Details of terms and conditions of repayment and security provided for in respect of the Long- Term Borrowings as follows:

(a) Term Loan from Axis Bank is payable in 60 monthly installments of Rs.40.80 Lakhs each commencing from 31st May, 2015. Interest rate is base rate 2.75% i.e. 11.70%.

(b) Security :

Primary Security :

(i) The above Term Loan is secured by first charge on Factory Land , Building & Other Structures and Plant & Machinery (Present & Future) of the company’s Textile Unit at Plot no. D-1, MIDC Industrial Area, Village - Taswade, Tal-Karad, Satara

Collateral Security:

(ii) Second charge on all the Stocks, Book Debts (Present & Future) & Other Current Assets.

Note 4. 1 : Details of terms and conditions of repayment and security provided for in respect of the Short- Term Borrowings as follows:

(a) Secured Loan from HDFC Bank :Interest rate is MCLR 2.85% i.e. 11.1% for Cash Credit and 7.25% on packing credit

(b) Security :

Primary Security :

(i) The above Loan is secured by first charge on all the Stocks, Book Debts (Present & Future) & Other Current Assets Collateral Security :

(ii) Second Charge on Plant & Machinery (Present & Future) of the Company’s Textile Unit at Plot no. D-1, MIDC Industrial Area, Village - Taswade, Tal-Karad, Satara.

III. There was an incident of fire in the month of December 2016 in one of the production departments causing damage to stocks of value Rs.48.60 lakhs. The incident also led to certain damage to machinery and infrastructure entailing repairs at an estimated expense of Rs.037.84 lakhs. The Company has filed a claim for the amounts with the Insurance Company. Provision has been made aggregating to Rs.03.17 lakhs (in the financial statements for the year ended 31.03.2017 of Rs.9.32 lakhs and Rs.3.85 lakhs for the year ended 31.03.2018) for the loss to be borne by the Company. The same is shown an ‘Exceptional Item’. During the year, the Company has received an “on account” payment of Rs.77.31 lakhs. Adjustment, if any, in the final claim amount admitted by the Insurance Company will be accounted for as and when the same is settled.

IV. Investments :

The Investment of 42 Shares in Yeshwant Sahakari Sakhar Karkhana Ltd. (Society), are held in the names of two Directors of the Company, being its nominees, as required by the bye-laws of the Society.

V. The Company had entered into an Agreement with a Property Developer (Developer) in 1993 pursuant to which the development rights for construction of Residential Flats on the plot of Land belonging to the Company were transferred for consideration comprising of monetary compensation and allotment of specified constructed area to the Company subject to payment of the Cost of construction for such allotted area.

The settlement of accounts between the Company and the Developer under the said Agreement had been a subject of Arbitration since the year 2002 as there were claims and counter claims. The Company has made a provision of Rs.63.98 lakhs in the financial results for the year ended 31.03.2017, as the amount payable to the Developer in terms of the ‘Majority Arbitration Award’ dated October 20, 2016 and the same was presented as an ‘Exceptional Item’.

The property developer has challenged the said Arbitration Award in the Hon’ble Bombay High Court. As per legal advice, the Company does not consider that any further provision needs to be made in this regard.

VII. The Company has recognized interest subsidy, as per New Textile Policy 2012, as Other Income of Rs.221.47 lakhs on accrual basis for the period July, 2015 to 31^st March, 2018 (Including Rs.58.31 lakhs for the current year). The Government Resolution in this regard dated 12^th April, 2018 for release of subsidy is received for Rs.024.70 lakhs and for the balance ‘.96.77 lakhs is awaited.

VIII.Current Tax :

In view of losses for the year ended 31^st March 2018, no provision for Income Tax and Minimum Alternate Tax under Section 115JB of Income Tax Act, 1961 is required to be made.

X. Employee Benefits : As per Ind AS-19, “Employee Benefits", the disclosure of employee benefits is given below:

A. Defined Contribution Plans:

The Company has certain defined contribution plans, such as provident fund and superannuation plan for benefits of employees. Contributions are made to provident fund for employees at the rate of 12% of basic salary as per regulations. The Contribution are made to registered provident fund administered by the government. The obligation of the Company is Limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognized during the year towards defined contribution plan in Rs.010.23 lakhs( Previous year Rs.000.43 lakhs ).

B. Defined Benefit Plan

The company provides gratuity benefits to its employees as per the statute. Present value of gratuity obligation (Non-Funded) based on actuarial valuation done by an independent valuer using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for compensated absences (Non-funded) is recognized in the same manner as gratuity.

The estimates of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is extracted from the report obtained from Actuary.

B.6 There is no contribution under defined benefit plan in respect of Key Management Personnel.

B.7 Risks associated with defined benefit plan:

Gratuity is a defined benefit plan and company is exposed to the following Risks:

Interest rate risk: A fall in the discount rate which is linked to the Government Securities Rate will increase the present value of the liability requiring higher provision.

Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan’s liability.

Asset Liability Matching (ALM) Risk: The plan faces the ALM risk as to the matching cash flow. Company has to manage payout based on pay as you go basis from our own funds.

Mortality Risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

B.9 Expected future benefit payments:

The following is the maturity profile of the benefit expected to be paid for each of the next five years and the aggregate five years thereafter:

The Sensitivity analysis has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

C. Other long-term benefits:

The obligation for leave benefits (non-funded) is also recognised using the projected unit credit method and accordingly the long-term paid absence has been valued. The Liability towards leave encashment for the year ended 31^st March, 2018 as per actuarial valuation is Rs.96.65 lakhs ( P.Y.? 96.85 lakhs) (Including liability aggregating to Rs.07.58 lakhs in relation to employees who have resigned on or before 31^st March, 2018, which is reflected under other financial liabilities pending full and final settlement of their account)

XIV. The balances relating to Sundry Debtors, Sundry Creditors and Loans and Advances as on 31st March, 2018 are subject to confirmation and adjustments, if any on reconciliation of accounts. Since the extent to which these balances are subject to confirmation is not ascertainable, the resultant impact of the same on the accounts cannot be ascertained and the same will be adjusted in the accounts in the year in which reconciliation is completed.

XV. Financial Risk Management

Financial risk management objectives and policies

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s financial risk management policy is set by the Board of Directors. 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, 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 loans and borrowings.

A. Interest rate risk:

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company’s position with regards to interest income and interest expenses and to manage the interest rate risk, Board of Directors perform a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. The Company’s interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

B. Market Risk- Foreign Currency risk:

The Company has international operations and portion of the business is transacted in USD/EURO and consequently the Company is exposed to foreign exchange risk through its sales to foreign customers and purchases of goods and purchase of services from overseas suppliers.

C. Equity Price Risk

The company does not have material investment in equity instruments and hence equity price risk does not materially affect the company.

D. Liquidity Risk

The principal sources of liquidity of the Company are cash and cash equivalents, borrowings and the cash flow that is generated from operations. The Company believes that current cash and cash equivalents, tied up borrowing lines and cash flow that is generated from operations is sufficient to meet its requirements. Accordingly, liquidity risk is perceived to be low. The following table shows the maturity analysis of financial liabilities of the Company based on contractually agreed undiscounted cash flows as at the Balance Sheet date:

XVI. Capital risk management (a) Risk Management

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to its shareholders

The capital structure of the Company is based on management’s judgment of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

XVII. Financial Instrument:

The significant accounting policies, including the criteria of recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability, and equity instrument are disclosed in note 2.12 of the Ind AS financial statement.

(a) Financial assets and liabilities

The carrying value of financial instruments by categories as at 31^st March, 2018 are as follows:

Carrying amounts of cash and cash equivalents, trade receivables, loans and trade payable as at 31^st March, 2018, 31^st March, 2017 and 1^st April, 2016 approximate the fair value because of their short term nature. Difference between the carrying amount and fair values of other financial liabilities subsequently measured at amortized cost is not significant in each of the year’s presented.

Fair Value Hierarchy

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consist of the following three levels:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities.

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

Level 3: Inputs are not based on observable market data unobservable inputs. Fair value are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured on fair value on recurring basis (but fair value disclosures are required)

C. Material adjustments made during transition from previous GAAP to Ind AS

C.1 Proposed Dividend

Under the previous GAAP, dividend proposed by the board of directors after the balance sheet date but before the approval of the Financial Statements were considered as adjusting events and accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the Shareholders in the general meeting. Accordingly, the liability for proposed dividend as at 1^st April, 2016 included under the Provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity has been increased by an equivalent amount.

C.2 Security Deposit at Fair Value

Under Indian GAAP, the deposits are valued at cost less provision for impairment. Ind AS requires certain categories of financial assets and liabilities to be measured at amortized cost using the effective interest rate method. Deposit is a Financial Asset as the lease agreement gives a contractual right to the company to receive cash. Deposit satisfies the contractual cash flow characteristic test and it also satisfies the business model test as there is intention of holding to collect contractual cash flows. Thus the deposits given for rentals have to be valued at amortized cost.

C.3 Bank Borrowings recorded at fair value as per EIR method

Ind AS 109 requires borrowings and financial liabilities to be carried at amortised cost. Accordingly, any transaction cost incurred towards origination of borrowings is to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the statement of profit and loss over the tenure of the borrowing as part of the interest expense by applying the EIR method. Under Ind AS, loans are valued at present value as against cost in the previous GAAP. The difference between the present value and cost is recognised in the opening retained earnings.

C.4 Depreciation on Investment Property

As per Ind AS 40, investment property is also subject to depreciation. The company did not provide depreciation upto 1^st April, 2016 on investment property. Under Ind AS financials, the company has provided depreciation with retrospective effect.

C.5 Investments recorded at FVTPL

Investments in Debt Mutual Fund, i.e. Investment in HDFC MF and UTI MF, are recorded at FVTPL. In previous GAAP, the same was measured at cost.

C.6 Investments recorded at FVTOCI

Company’s investment in Siemens Ltd was earlier recognised at cost under previous GAAP. Under Ind AS 109, the same is recognised as FVTOCI.

C.7 Provision for ECL on Financial Assets

As per Ind AS 109, the financial assets are subject to expected credit loss. Under previous GAAP, there was no such provision. In compliance with Ind AS 109, the company has made provision of ECL on Trade Receivables following simplified approach.

C.8 Deferred Tax Adjustments on Ind AS Adjustments

Under Previous GAAP, deferred tax was recognized based on the profit and loss method. Under Ind-AS 12, deferred tax is recognized based on the balance sheet method for all differences between the accounting and tax base. Consequentially, deferred tax has been recognised for the adjustments made on transition to Ind AS, wherever applicable.

C.9 Disclosures as required by Indian Accounting Standard (Ind-AS) 101 First Time Adoption Standard:

The Company has adopted Ind AS with effect from 1st April, 2017 with comparatives being restated. Accordingly the impact of transition has been provided in the Opening Retained Earnings as at 1st April, 2016 and all the periods presented have been restated accordingly.

D. Exemptions availed on first time adoption of Ind AS 101:

On first time adoption of Ind AS, Ind AS 101 allows certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has availed the following exemptions:

a) Under Ind AS 109, at initial recognition of a financial asset, an entity may make an irrevocable election to present subsequent changes in the fair value of an investment in an equity instrument in other comprehensive income. Ind AS 101 allows such designation of previously recognized financial assets, as ‘fair value through other comprehensive income’ or ‘fair value through profit or loss’ on the basis of the facts and circumstances that existed at the date of transition to Ind AS.

Accordingly, the Company has designated its investments in certain equity instruments at fair value through other comprehensive income and fair value through profit or loss on the basis of the facts and circumstances that existed at the date of transition to Ind AS.

b) The Company has opted to continue with the carrying values measured under the previous GAAP, use that carrying value as the deemed cost for property, plant and equipment, intangible assets and Investment Property on the date of transition.

E. Mandatory Exemptions

The following mandatory exemptions have been applied in accordance with Ind AS 101 in preparing the financial statements:

a) Estimates:

(i) Impairment of financial assets based on the expected credit loss model; and

(ii) Investments in equity instruments carried as FVTPL or FVTOCI.

b) Classification and movement of financial assets and liabilities:

The Company has classified the financial assets and liabilities in accordance with Ind AS 109 on the basis of facts and circumstances that existed at the date on transition to Ind AS.

XIX. The Company’s financial statements were authorized for issue in accordance with a resolution of the Board of Directors on 16^th May, 2018 in accordance with the provisions of the Companies Act, 2013 and are subject to the approval of the shareholders at the Annual General Meeting.

XX. The figures in the financial statements are rounded off to the nearest lakhs and indicated in lakhs of Rupees.

XXI. Previous year’s figures have been regrouped/re-arranged wherever necessary in order to conform to those of the Current Year.

---

Mar 31, 2017

Note 1 : Share Capital

The Company has issued only one class of shares referred to as Equity Shares having a par value of '' 10/-. Each holder of Equity Shares is entitled to one vote per share.

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.

9,58,708 Equity Shares of Rs. 10/- each are allotted on 27th June 2011 as fully paid up without payment being received in cash pursuant to the scheme of Amalgamation Sanctioned by the High Court of Bombay dated 1st April 2011.

Reconciliation of No. of Shares outstanding at the beginning and at the end of the Year

Note 2: Details of terms and conditions of repayment and security provided for in respect of the Long- Term Borrowings as follows:

(a) Term Loan from Axis Bank is payable in 60 monthly installments of Rs.40.80 Lakhs each commencing from 31st May, 2015. Interest rate is base rate 2.75% i.e. 12.00%.

(b) Security :

Primary Security :

(i) The above Term Loan is secured by first charge on Factory Land , Building & Other Structures and Plant & Machinery (Present & Future) of the company''s Textile Unit at Plot no. D-1, MIDC Industrial Area, Village - Taswade, Tal-Karad, Satara

Collateral Security:

(ii) Second charge on all the Stocks, Book Debts (Present & Future) & Other Current Assets.

Note 3 : Details of terms and conditions of repayment and security provided for in respect of the Short- Term Borrowings as follows:

(a) Secured Loan from HDFC Bank : Interest rate is base rate 2% i.e. 11% for Cash Credit and 7.25% on packing credit

(b) Security :

Primary Security :

(i) The above Loan is secured by first charge on all the Stocks, Book Debts (Present & Future) & Other Current Assets

Collateral Security :

(ii) Second Charge on Plant & Machinery (Present & Future) of the Company''s Textile Unit at Plot no. D-1, MIDC Industrial Area, Village - Taswade, Tal-Karad, Satara.

I. Corporate Information :

Hindoostan Mills Limited (“The Company“) is a Public Limited Company, incorporated under the provision of the Companies Act, 1956 (as amended by the Companies Act, 2013). Its Shares is listed on Bombay Stock Exchange. The Company is engaged in the business of Manufacture and Sale of Fabric and Yarn, Technical Fabric and Refilling of Elastic Calender Bowls.

IV. There was an incident of fire in the month of December 2016 in one of the production departments causing damage to stocks of value Rs.48.60 lakhs. The incident also led to certain damage to machinery and infrastructure entailing repairs at an estimated expense of Rs.137.84 lakhs. The Company has filed a claim for the amounts with the Insurance Company. Provision has been made in the financial results for the Year ended 31.03.2017 of '' 9.32 lakhs for the minimum amount of loss to be borne by the Company, being 5% of the claim amount, as per policy terms. The same is shown as ''extraordinary item''. Adjustment, if any, in the final claim amount admitted by the Insurance Company will be accounted for as and when the same is settled.

V. The Memorandum of Settlement between Hindoostan Mills Limited and the Karad Taluka Girani Kamagar Sangh, Karad (Sangh) expired on 31^st December, 2015. The “Charter of Demands” has been submitted by the union to the Management. The negotiations between the Management and the Sangh are in progress and accordingly, the Company has made a provision on an estimated basis which will be adjusted in the year in which negotiations are concluded.

VI. Fixed Assets and Depreciation :

Consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing on or after 1^st April, 2014, the Company has re-worked depreciation with reference to the useful lives of Fixed Assets prescribed by Part ‘C’ of Schedule II to the Act. Where the remaining useful life of an Asset is nil, the carrying amount of the Asset after retaining the residual value, as at 1^st April, 2014 has been adjusted to the General Reserve. In other cases the carrying values have been depreciated over the remaining useful lives of the Assets and recognized in the Statement of Profit and Loss.

Since then, as per the amendment dated 20^th August, 2014, the useful life specified in Part C- of Schedule II has been defined to mean that if the cost of a Part of Asset is significant to the total cost of the Assets and useful life of that part is different from the useful life of the remaining Assets, useful life of that significant part shall be determined separately and depreciated accordingly.

In the opinion of the Management, the Company’s Assets are such that there are no significant parts thereof whose life is different than the useful life of the whole Asset (The management opinion on component accounting being technical in nature, the same is relied upon by the Auditors). Consequently, the Company has continued to provide depreciation in respect of all its Assets on the basis as was followed in the financial year 2014-15, i.e. based on useful lives of the respective Assets.

VII. Investments :

The Investment of 42 Shares in Yeshwant Sahakari Sakhar Karkhana Ltd. (Society), are held in the names of two Directors of the Company, being its nominees, as required by the bye-laws of the Society.

VIII. The Company had entered into an Agreement with a Property Developer (Developer) in 1993 pursuant to which the development rights for construction of Residential Flats on the plot of Land belonging to the Company were transferred for consideration comprising of monetary compensation and allotment of specified constructed area to the Company subject to payment of the Cost of construction for such allotted area.

The settlement of accounts between the Company and the Developer under the said Agreement had been a subject of Arbitration since the year 2002 as there were claims and counter claims. The Company has made a provision of Rs.63.98 lakhs, as the amount payable to the Developer in terms of the ‘Majority Arbitration Award’ dated October 20, 2016 and the same is included under an ‘Exceptional Item’.

The property developer has challenged the said Arbitration Award in the Hon’ble Bombay High Court. As per legal advice, the Company does not consider that any further provision needs to be made in this regard.

Note : Dues to Micro and Small enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Company and relied upon by the Auditors.

X. The Company has recognized interest subsidy, as per New Textile Policy 2012, as Other Income of Rs.163.47 lakhs on accrual basis for the period July, 2015 to 31^st March, 2017 (Including Rs.82.71 lakhs for the current Year). The Government Resolution in this regard for release of subsidy is awaited.

XI. Current Tax :

In view of losses for the year ended 31^st March 2017, no provision for Income Tax and Minimum Alternate Tax under Section 115JB of Income Tax Act, 1961 is required to be made.

Deferred Tax :

In accordance with Accounting Standard 22 on “Accounting for Taxes on Income” ( AS - 22) as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2016, Deferred Tax Assets consist of substantial amounts of carry forward losses and unabsorbed depreciation under the Income Tax Act, 1961. However, since the availability of sufficient future taxable income against which the said benefits can be set off is not possible to be ascertained with virtual certainty, the Deferred Tax Assets have not been recognized as a measure of abundant caution.

Note:

The estimates of rate escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in employment market. The above information is certified by the actuary.

B. Leave Encashment (Non Fund based) :

The liability towards leave encashment for the year ended 31^st March, 2017 as per actuarial valuation is Rs.96.85 lakhs (P.Y. Rs.86.56 lakhs), which has been duly provided for.

History of Defined benefit obligation, Asset values, Surplus / Deficit and Experience Gains / Losses

Notes:

a. The above excludes payment of Dividend.

b. Related Party information is as identified by the Company and relied upon by the Auditors.

c. The above figures are exclusive of Service Tax wherever applicable.

XX. The balances relating to Sundry Debtors, Sundry Creditors and Loans and Advances as on 31st March, 2017 are subject to confirmation and adjustments, if any on reconciliation of accounts. Since the extent to which these balances are subject to confirmation is not ascertainable, the resultant impact of the same on the accounts cannot be ascertained and the same will be adjusted in the accounts in the year in which reconciliation is completed.

XXI. The figures in the financial statements are rounded off to the nearest lakhs and indicated in lakhs of Rupees.

XXII. Previous year’s figures have been regrouped/re-arranged wherever necessary in order to conform to those of the Current Year.

---

Mar 31, 2016

Notes:

1 Cash and Cash equivalents denote Cash and Bank balances at the year end. Earmarked Balance with Banks includes Balance in Current Account for Unpaid Dividend & Employee Deposit.

2 The Cash flow Statement has been prepared under the "Indirect Method" as set out in Accounting Standard 3- ''Cash Flow Statement'' (AS -3) issued by the Institute of Chartered Accountants of India.

3 Direct Taxes paid (Net of refunds) is treated as arising from operating activities and is not bifurcated between investing and financing activities.

4 Previous year’s figures have been regrouped/re-arranged wherever necessary in order to conform to those of the Current Year.

a) The Company has issued only one class of shares referred to as Equity Shares having a par value of '' 10/-. Each holder of Equity Shares is entitled to one vote per share.

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.

9,58,708,Equity Shares of ''10/- each are alloted on 27th June 2011 as fully paid up without payment being received in cash pursuant to the scheme of Amalgamation Sanctioned by the High Court of Bombay dated 1st April 2011.

b) Reconciliation of No. of Shares outstanding at the beginning and at the end of the Year

Note 3.1: Details of terms and conditions of repayment and security provided for in respect of the Long- Term Borrowings as follows:

(a) Term Loan from Axis Bank is payable in 60 monthly installments of '' 40.80 Lakhs each commencing from 31st May, 2015. Interest rate is base rate 2.75% i.e. 12.25%.

(b) Security :

Primary Security :

(i) The above Term Loan is secured by first charge on Factory Land , Building & Other Structures and Plant & Machinery (Present & Future) of the company''s Textile Unit at Plot no. D-1, MIDC Industrial Area,Village - Taswade, Tal-Karad, Satara and

Collateral Security:

(ii) Second charge on all the Stocks, Book Debts (Present & Future) & Other Current Assets.

(iii) Investment in UTI Short Term Fund of Rs, 253.08 lakhs is kept in form of liquid security under Bank lien.

Note 5. : Details of terms and conditions of repayment and security provided for in respect of the Short- Term Borrowings as follows:

(a) Secured Loan from HDFC Bank :Interest rate is base rate 2% i.e. 11.85% for Cash Credit and 7.25% on packing credit

(b) Security :

Primary Security :

(i) The above Loan is secured by first charge on all the Stocks, Book Debts (Present & Future) & Other Current Assets and Collateral Security :

(ii) Second Charge on Plant & Machinery (Present & Future) of the Company''s Textile Unit at Plot no. D-1, MIDC Industrial Area,Village - Taswade, Tal-Karad, Satara.

Note:

The estimates of rate escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in employment market. The above information is certified by the actuary.

B. LEAVE ENCASHMENT (NON FUND BASED):

The liability towards leave encashment for the year ended 31^st March, 2016 as per actuarial valuation is Rs,86.56 lakhs (P.Y. '' 74.80 lakhs), which has been duly provided for.

XVIII.RELATED PARTY INFORMATION:

A. LIST OF RELATED PARTIES WITH WHOM TRANSACTION HAVE TAKEN PLACE DURING THE YEAR

Associates/Companies where Thackersey Moolji & Co., Delta Investments Ltd,

control exists_Parnakuti & Allied Estate Development Corporation_

Key Management Personnel Mr. Hrishikesh Thackersey - Executive Director (KMP) Mr. Abhimanyu Thackersey - Executive Director

Ms. Heena Shah - Chief Financial Officer

Mr. Devanand Mojidra - Company Secretary (Resigned on 6.10.2015)

Mr. Jagat Reshamwala - Company Secretary (w.e.f. 16.11.2015)

Relative of KMP_Mr. Jagdish Thackersey_

Notes:

a. The above excludes payment of Dividend.

b. In capacity of Director of Hindoostan Technical Fabrics Ltd. upto 10.10.2014.

c. Related Party information is as identified by the Company and relied upon by the Auditors.

d. The above figures are exclusive of Service Tax wherever applicable.

XIX. LEASES :

The Company has entered into lease agreement for its Research & Development unit premises. The future minimum rentals payable under Accounting Standard 19” Lease” (AS 19) as required to be disclosed are as follows:

XXI. The balances relating to Sundry Debtors, Sundry Creditors and Loans & Advances as on 31st March, 2016 are subject to confirmation and adjustments, if any on reconciliation of accounts. Since the extent to which these balances are subject to confirmation is not ascertainable, the resultant impact of the same on the accounts cannot be ascertained and the same will be adjusted in the accounts in the year in which finality is reached.

XXII The figures in the financial statements are rounded off to the nearest lakhs and indicated in lakhs of Rupees.

XXIII. Previous year’s figures have been regrouped/re-arranged wherever necessary in order to conform to those of the Current Year.

---

Mar 31, 2015

1 Cash and Cash equivalents denote Cash and Bank balances at the year end. Earmarked Balance with Bank includes Margin Money Deposit, Balance in Current Account for Unpaid Dividend and Employee Deposit.

2 The Cashflow Statement has been prepared under the "Indirect Method" as set out in Accounting Standard 3- 'Cash Flow Statement' (AS -3) issued by the Institute of Chartered Accountants of India.

3 Direct Taxes paid (Net of refunds) is treated as arising from operating activities and is not bifurcated between investing and financing activities

4 Previous year's figures have been regrouped/re-arranged wherever necessary in order to conform to those of the Current Year.

a) The Company has issued only one class of shares referred to as Equity Shares having a par value of Rs.10/-. Each holder of Equity Shares is entitled to one vote per share.

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 the proportion to the number of Equity Shares held by the shareholders.

9,58,708,Equity Shares of Rs.10/- each are alloted on 27th June 2011 as fully paid up without payment being received in cash pursuant to the scheme of Amalgamation Sanctioned by the High Court of Bombay dated 1st April 2011.

(a) Term Loan from Axis Bank is payable in 60 monthly installments of Rs. 40.80 Lakhs each commencing from 31st May, 2015. Interest rate is base rate 2.75% i.e. 12.90% as on 31.03.2015

(b) Security :

Primary Security :

(i) The above Term Loan is secured by first charge on Factory Land , Building & Other Structures and Plant & Machinery (Present & Future) of the company's Textile Unit at Plot no. D-1, MIDC Industrial Area,Village - Taswade, Tal-Karad, Satara and

Collateral Security:

(ii) Second charge on all the Stocks, Book Debts (Present & Future) & Other Current Assets.

(iii) Investment in UTI Fixed Income Fund Series XVIII of Rs. 250 lakhs (P. Y. Nil) is kept in form of liquid security under Bank lien.

(a) Secured Loan from HDFC Bank :Interest rate is base rate 2% i.e. 12% as on 31.03.2015 for Cash Credit and Libor 2.5 for Pre- Shippment Credit.

(b) Security :

Primary Security :

(i) The above Loan is secured by first charge on all the Stocks, Book Debts (Present & Future) and Other Current Assets Collateral Security :

(ii) Second Charge on Plant & Machinery (Present & Future) of the Company's Textile Unit at Plot no. D-1, MIDC Industrial Area,Yihage - Taswade, Tal-Karad, Satara.

II. CONTINGENT LIABILITIES IN RESPECT OF: Rs.in lakhs

Particulars Current Year Previous Year

A Claims against the Company not acknowledged as debts [including disputed demands of 711.91 695.44 Central Excise for Rs 116.07 (P.Y. Rs 116.07 lakhs), Sales Tax Rs 27.02 lakhs (P.Y Rs. 27.02 lakhs) and Works Contract Tax Rs. 21.14 lakhs (P.Y, Rs 36.03 lakhs)

B The Income-Tax demands in respect 49.44 49.44 of earlier years under dispute are pending in appeal before higher authorities.

C Demand for payment of electricity 228.20 228.20 duty by Government of Maharashtra matter resting with Supreme Court

D Concessional Custom duty on Machinery Imported 726.87 215.73

III. DEPRECIATION:

A. Consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing on or after 1st April, 2014, the Company has re-worked depreciation with reference to the useful lives of Fixed Assets prescribed by PART 'C' of Schedule II to the Act. Where the remaining useful life of an Asset is nil, the carrying amount of the Asset after retaining the residual value, as at 1st April, 2014 amounting to Rs. 58.59 Lakhs has been adjusted to the General Reserve. In other cases the carrying values have been depreciated over the remaining useful lives of the Assets and recognized in the Statement of Profit and Loss. As a result the charge for depreciation is higher by Rs. 200.91 Lakhs for the year ended 31st March 2015.

B. Net Block as on 31.03.2015 of Plant and Machinery includes Reeds amounting to Rs. 10.91 Lakhs (P.Y. Rs. 25.62 Lakhs). The Management based on internal technical evaluation has estimated useful life of Reeds as two years. Hence the Cost of Reeds are written off over a period of two years.

IV. The Board of Directors has recommended a Dividend of Rs.4/- per share on 1,664,548 Equity Shares of Rs. 10/- each aggregating to Rs. 79.90 lakhs (Inclusive of Dividend Distribution Tax of Rs.13.32 lakhs)

V. INVESTMENTS:

The Investment of 42 Shares in Yeshwant Sahakari Sakhar Karkhana Ltd. (Society), are held in the names of two Directors of the Company, being its nominees, as required by the bye-laws of the Society.

VI. Property under Development reflected as Stock-in-Trade was written down to Rs.1 lakh in the earlier year as a measure of prudence. The settlement of account is a matter of dispute between the company (owner) and developer and there are claims and counter claims. The matter has been referred to arbitration in 2002 which is pending resolution. Accordingly, impact of Arbitration Award will be recognised in the Books of accounts as and when finality in the matter is reached.

VII. Current Tax:

In view of losses for the year ended 31st March 2015, no provision for Income Tax and Minimum Alternate Tax under Section 115JB of Income Tax Act, 1961 is required to be made.

Deferred Tax :

In accordance with Accounting Standard 22 on "Accounting for Tax on Income" ( AS - 22) as prescribed under Section 133 of Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, Deferred Tax Assets consist of substantial amounts of carry forward losses and unabsorbed depreciation under the Income Tax Act, 1961. However, since the availability of sufficient future taxable income against which the said benefits can be set off is not possible to be ascertained with virtual certainty, the Deferred Tax Assets have not been recognized as a measure of abundant caution.

VIII. RELATED PARTY INFORMATION:

A. LIST OF RELATED PARTIES WITH WHOM TRANSACTION HAVE TAKEN PLACE DURING THE YEAR

Associates/Companies where control exists Thackersey Moolji & Co., Delta Investments Ltd., Art Leather Ltd., Bintex

Investments Ltd., Parnakuti & Allied Estate Development Corporation Key Management Personnel (KMP) Mr. Hrishikesh Thackersey - Executive Director

Mr. Abhimanyu Thackersey - Executive Director Ms. Heena Shah - Chief Financial Officer Mr. Devanand Mojidra - Company Secretary Relative of KMP Mr. Sudhir Thackersey

Mr. Raoul Thackersey Mr. Chandrahas Thackersey Mr. Jagdish Thackersey Mr. Khushaal Thackersey

Notes:

a. The above excludes payment of Dividend.

b. In capacity of Director of Hindoostan Technical Fabrics Ltd upto 10.10.2014.

c. Related Party information is as identified by the Company and relied upon by the Auditors.

d. The above figures are exclusive of Service Tax wherever applicable.

IX. LEASES

The Company has entered into lease agreement for its Research and Development unit premises. The future minimum rentals payable under Accounting Standard 19 "Lease" (AS 19) as required to be disclosed are as follows:

X. Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the Company. The CSR Activities fall within the guidelines referred under Section 135 and specified in Schedule VII of the Companies Act, 2013. During the year Company has made donation to Vithaldas Damodar Thackersey Charitable Trust amounting to Rs. 6.27 lakhs to carry out the said activities at Karad.

XI. The figures in Balance Sheet and Statement of Profit and Loss are rounded off to the nearest lakhs and indicated in lakhs of Rupees.

XII. Previous year's figures have been regrouped/re-arranged wherever necessary in order to conform to those of the Current Year.

---

Mar 31, 2014

I. CONTINGENT LIABILITIES IN RESPECT OF:

A Claims against the Company not acknowledged as debts [including disputed demands of Central Excise for Rs. 116.07 lakhs (P.Y. Rs. 116.07 lakhs), Sales Tax Rs. 27.02 lakhs (P.Y Rs. 78.90 lakhs) and Works Contract Tax Rs. 36.03 lakhs (P.Y. Rs. 36.03 lakhs)

B The Income-Tax demands in respect of earlier years under dispute are pending in appeal before higher authorities.

C Demand for payment of electricity duty by Government of Maharashtra matter resting with Supreme Court

D Concessional Custom duty on Machinery Imported

II. The Board of Directors has recommended a dividend ofRs. 10/- per share on 1,664,548 Equity Shares of Rs.10/- each aggregating to Rs. 199.74 lakhs (Inclusive of Dividend Distribution Tax ofRs. 33.29 lakhs)

III. INVESTMENTS:

The Investment of 42 Shares in Yeshwant Sahakari Sakhar Karkhana Ltd.(Society), are held in the names of two Directors of the Company, being its nominees, as required by the bye-laws of the Society.

IV. Property under Development reflected as Stock-in-Trade was written down to Rs. 1 lakh in the earlier year as a measure of prudence. The settlement of account is a matter of dispute between the company (owner) and developer and there are claims and counter claims. The matter has been referred to arbitration in 2002 which is pending resolution. Accordingly, impact of Arbitration Award will be recognised in the Books of accounts as and when finality in the matter is reached.

V. Current Tax:

In view of carry forward losses under Income Tax Act 1961, no provision for Income Tax is required to be made. However, the company has provided for Minimum Alternate Tax under section 115JB of the Income Tax Act, 1961.

Deferred Tax :

In accordance with Accounting Standard 22 on "Accounting for Tax on Income" ( AS - 22) as prescribed by the Companies (Accounting Standards) Rules,2006 , Deferred Tax Assets consist of substantial amounts of carry forward losses and unabsorbed depreciation under the Income Tax Act, 1961. However, since the availability of sufficient future taxable income against which the said benefits can be set off is not possible to be ascertained with virtual certainty, the Deferred Tax Assets have not been recognized as a measure of abundant caution.

Note:

The estimates of rate escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in employment market. The above information is certified by the actuary.

B. LEAVE ENCASHMENT (NON FUND BASED):

The liability towards leave encashment for the year ended 31st March, 2014 as per actuarial valuation is Rs. 62.20 lakhs (P.Y. Rs. 45.20 lakhs), which has been duly provided for.

VI. RELATED PARTY INFORMATION:

A. LIST OF RELATED PARTIES WITH WHOM TRANSACTION HAVE TAKEN PLACE DURING THE YEAR

Associates/Companies where control exists Thackersey Moolji & Co., Delta Investments Ltd., Art Leather Ltd.,

Bintex Investments Ltd.

Key Management Personnel (KMP)/ Relative of Mr.Chandrahas Thackersey

KMP

Mr.Raoul Thackersey

Mr.Hrishikesh Thackersey

Mr.Abhimanyu Thackersey

Mr.Sudhir Thackersey

Mr.Jagdish Thackersey

Mr.Khushaal Thackersey

Notes:

a. The above excludes payment of Dividend.

b. Related Party information is as identified by the Company and relied upon by the Auditors.

c. The above figures are exclusive of Service Tax wherever applicable

VII. Leases

The Company has entered into lease agreement for its Research & Development unit premises. The future minimum rentals payable under Accounting Standard 19" Lease" (AS 19) as required to be disclosed are as follows:

VIII. The figures in Balance Sheet and Statement of Profit and Loss are rounded off to the nearest lakhs and indicated in lakhs of Rupees.

IX. a. The figures of the current year are consolidated figures due to the Amalgamation, hence not comparable with the previous year.

b. During the previous year, due to labour strike at the Company''s Karad Textile Plant, the manufacturing operations were suspended for three and a half months from August 18, 2012 to November 28, 2012. Therefore, the Company''s operating cycle during the previous year was a period of eight and a half months as against twelve months during the year under review, which reflects normal level of operations. As a result, certain items in the financial statements for the current year appear to be significantly higher than the corresponding figures for the previous year and therefore, the figures for the previous year are not strictly comparable to those of the current year.

c. Previous year''s figures have been regrouped/re-arranged wherever necessary in order to conform to those of the Current Year.

---

Mar 31, 2013

I. With a view to consolidate its manufacturing activities at one centralized place, the company has setup a new factory for manufacture of Calender Rolls at Karad, Maharashtra. The new factory has started functioning from December, 2012 and the Company has decided to shift its Roll manufacturing activities along with employees of Ambernath factory to the aforesaid new factory at Karad.

II. Reserves and Surplus as on 1 st April, 2009 included Reserve under Section 45 IC of Reserve Bank of India Act, aggregating to Rs. 48.47 lakhs. Since the Company is engaged in manufacturing activities, the Company is of the view that there is no obligation to maintain the Reserve and accordingly, the amount ofRs. 48.47 lakhs is transferred to Surplus.

III. The Board of Directors has recommended a dividend of Rs. 7.50 per share on 1,664,548 Equity Shares of Rs. 10/- each aggregating to Rs.145.09 lakhs (Inclusive of Dividend Distribution Tax of Rs. 20.251akhs)

IV. INVESTMENTS:

A. The investments in unquoted shares of Hindoostan Technical Fabrics Ltd., (Wholly owned subsidiary) have been acquired at par. Though their present book value is lower than their cost of acquisition, keeping in view their long term business synergies and potential, the management is of the opinion that no provision for fall in their values is required to be made.

B. The Investment of 42 Shares in Yeshwant Sahakari Sakhar Karkhana Ltd. (Society), are held in the names of two Directors of the Company, being its nominees, as required by the bye-laws of the Society.

V. Property under Development reflected as stock in trade was written down to Rs. 1 lakh in the previous year as a measure of prudence. The settlement of account is a matter of dispute between the Company (owner) and developer and there are claims and counter claims. The matter has been referred to arbitration in 2002 which is pending resolution. Accordingly, impact of Arbitration Award will be captured in the Books as and when it will be crystallized.

VI. The Company has granted interest free unsecured loan to its Subsidiary which is repayable on demand. Hence, although the loan is outstanding for more than twelve months as on 31st March, 2013, it is presented as Short Term Loan.

VII. During the year 2003-04, in terms of Sanctioned Scheme, the secured lenders dues were transferred to the SPVs in full settlement of their dues from the Company. All secured lenders except Union Bank of India (UBI) have released their charge on the assets of Karad unit. With respect to UBI, the charge will be released shortly.

VIII. Current Tax: In view of carry forward losses under Income Tax Act, 1961, no provision for Income Tax is required to be made. However, the Company has provided for Minimum Alternate Tax under section 115JB of the Income Tax Act, 1961.

Deferred Tax: In accordance with Accounting Standard 22 on "Accounting for Tax on Income" (AS - 22) as prescribed by the Companies (Accounting Standards) Rules,2006 , Deferred Tax Assets consist of substantial amounts of carry forward losses and unabsorbed depreciation under the Income Tax Act, 1961. However, since the availability of sufficient future taxable income against which the said benefits can be set off is not possible to be ascertained with virtual certainty, the Deferred Tax Assets have not been recognized as a measure of abundant caution.

B. LEAVE ENCASHMENT fNON FUND BASED):

The liability towards leave encashment for the year ended 31st March, 2013 as per actuarial valuation is Rs. 45.20 lakhs (Includes Rs. 0.79 lakh due to workers pending settl ement of account) (P.Y. Rs. 49.59 lakhs), which has been duly provided for.

IX.The figures in Balance Sheet and Statement of Profit and Loss are rounded off to the nearest lakhs and indicated in lakhs of Rupees.

X.Previous Year''s figures have been regrouped wherever necessary.

---

Mar 31, 2012

I. ContIngent LIaBILItIes In ResPeCt oF:

A The Income-Tax demands in respect of earlier years under dispute are pending in appeal 131.47 3.12 before higher authorities.

B Claims against the Company not acknowledged as debts [including disputed demands 748.45 748.85 of Central Excise for Rs.116.07 lakhs (P.Y. Rs.116.07 lakhs), Sales Tax Rs.78.90 lakhs (P.Y Rs. 79.30 lakhs) and Works Contract Tax Rs. 36.03 lakhs (P.Y. Rs. 36.03 lakhs)

C Demand for payment of electricity duty by Government of Maharashtra matter resting with 228.20 228.20 Supreme Court

D Concessional Custom Duty on Machinery Imported 538.69 715.40

II. With a view to consolidate its manufacturing activities at one centralized place, the company has setup a new factory for manufacture of Calender Rolls at Karad, Maharashtra. The new factory has started functioning from December, 2012 and the Company has decided to shift its Roll manufacturing activities along with employees of Ambernath factory to the aforesaid new factory at Karad.

III. Reserves and Surplus as on 1st April, 2009 included Reserve under Section 45 IC of Reserve Bank of India Act, aggregating to Rs. 48.47 lakhs. Since the Company is engaged in manufacturing activities, the Company is of the view that there is no obligation to maintain the Reserve and accordingly, the amount of Rs. 48.47 lakhs is transferred to Surplus.

IV. The Board of Directors has recommended a dividend of Rs. 7.50 per share on 1,664,548 Equity Shares of Rs. 10/- each aggregating to Rs.145.09 lakhs (Inclusive of Dividend Distribution Tax of Rs. 20.25lakhs)

V. InVestMents:

A. The investments in unquoted shares of Hindoostan Technical Fabrics Ltd., (Wholly owned subsidiary) have been acquired at par. Though their present book value is lower than their cost of acquisition, keeping in view their long term business synergies and potential, the management is of the opinion that no provision for fall in their values is required to be made.

B. The Investment of 42 Shares in Yeshwant Sahakari Sakhar Karkhana Ltd. (Society), are held in the names of two Directors of the Company, being its nominees, as required by the bye-laws of the Society.

VI. Property under Development refected as stock in trade was written down to Rs. 1 lakh in the previous year as a measure of prudence. The settlement of account is a matter of dispute between the Company (owner) and developer and there are claims and counter claims. The matter has been referred to arbitration in 2002 which is pending resolution. Accordingly, impact of Arbitration Award will be captured in the Books as and when it will be crystallized.

VII. The Company has granted interest free unsecured loan to its Subsidiary which is repayable on demand. Hence, although the loan is outstanding for more than twelve months as on 31st March, 2013, it is presented as Short Term Loan.

VIII. During the year 2003-04, in terms of Sanctioned Scheme, the secured lenders dues were transferred to the SPVs in full settlement of their dues from the Company. All secured lenders except Union Bank of India (UBI) have released their charge on the assets of Karad unit. With respect to UBI, the charge will be released shortly.

IX. Current tax: In view of carry forward losses under Income Tax Act, 1961, no provision for Income Tax is required to be made. However, the Company has provided for Minimum Alternate Tax under section 115JB of the Income Tax Act, 1961.

Deferred tax: In accordance with Accounting Standard 22 on ''Accounting for Tax on Income'' (AS - 22) as prescribed by the Companies (Accounting Standards) Rules,2006 , Deferred Tax Assets consist of substantial amounts of carry forward losses and unabsorbed depreciation under the Income Tax Act, 1961. However, since the availability of suffcient future taxable income against which the said benefts can be set off is not possible to be ascertained with virtual certainty, the Deferred Tax Assets have not been recognized as a measure of abundant caution.

---

Mar 31, 2011

1 a) The scheme of Amalgamation of The Hindoostan Spinning and Weaving Mills Limited (transferor company) with the Company (transferee company) has been sanctioned by the Hon'ble High Court of Bombay vide its Order dated 1st April,2011 with effect from 1st April,2010, being the appointed date. Accordingly, pursuant to the said Order all assets and liabilities (including reserves) of the said transferor Company have been recorded in the transferee Company at their respective book value.

b) The Amalgamation has been accounted for under the "Pooling of Interest Method" as prescribed by Accounting Standard (AS 14) "Accounting for Amalgamation" issued under the Companies (Accounting Standards) Rules, 2006 . The assets, liabilities and reserves of the transferor Company as at 1st April, 2010 have been taken over at their respective book values subject to adjustments as follows:-

i) A sum of Rs.26.50 lacs has been debited to Capital Reserve due to the cancellation of 28,00,044 equity shares held by the transferee company with the transferor company.

ii) A sum of Rs. 1102.51 lacs has been credited to Capital Reserve Account on account of reduction in the capital while issuing the shares to the shareholders of the transferor company as per the ratio prescribed in the Scheme of Amalgamation, which has been sanctioned by the Hon'ble High Court'of Bombay.

2 Contingent Liabilities in respect of: Previous Year

Rupees Rupees In lac In lac

(a) The Income-tax demands in respect of 210.01 - earlier years under dispute and are pending in appeal before higher authorities. In respect of some of the assessment years, the higher authorities have decided the matters fully/partially in favour of the company and are pending before the assessing officer for giving effect thereto

(b) Claims against the Company not 763.75 132.31 acknowledged as debts [including disputed demands of Central Excise for Rs. 136.44 lakhs (P. Y - Nil),Sales Tax under Works Contract Act Rs. 111 lacs (P. Y. - Rs. 111 lacs)

(c) Government of Maharashtra had served - - a demand notice for payment of electricity duty @ P15/Unit on power consumption generated in the company's captive power plant at Karad for the period: 1.4.2000 to 30.4.2005, together with penal interest thereon amounting to Rs.228.20 lakhs. The company's writ petition against this levy was decided by the Bombay High Court on 7.11.2009 in favour of the company. The State of Maharashtra has however filed a special leave petition (SLP) in the Supreme Court of India, challenging the High Court order.

3 a) The Investment of 42 Shares in Yeshwant Sahakari Sakhar Karkhana Ltd., are held in the names of two Directors of the Company, being its nominees, as required by the bye-laws of the Society. Yeshwant Sahakari Sakhar Karkhana in the earlier year appropriated the deposits /amount payable to the company towards the increased cost of face value of shares and issued the certificate of holding.

b) During the year the Company had sold 3,50,000 Equity shares of Lexicon Finance Limited which was acquired by the earstwhile subsidiaries of the Company during the year 1994-95. The said Company has not declared any dividend for the last several years and there is a substantial erosion in the net worth. Since the shares were not quoted, the Company had to sell the shares lower than the purchase cost as per the valuation report of a Chartered Accountant and accordingly inurred a loss of Rs.28 lacs.

4. The Property under Development refelected in stock in trade is valued at Rs.500 lakhs. The construction work of the residential complex has been completed but settlement of account is pending with the Developer.

Settlement of accounts is a matter of dispute between the Company (Owner) and Developer and there are claims and counter claims. The matter has been referred to arbitration, pending resolution since 2002.

As a measure of prudence, the Company has adopted a conservative approach and has written down the value of inventory by Rs.499 lac however reserving its claim in arbitration.

Accordingly , surplus if any will be accounted in the year in which the arbitration award is finalised.

5. The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act,2006 and hence the disclosures relating to amount unpaid as at the end of the year together with interest paid / payable as required under the said Act have not been furnished and therefore provision for interest,if any, on delayed payments, is not ascertainable at this stage.

6. During the year 2003-04,in terms of Sanctioned Scheme of the erstwhile The Hindoostan Spinning and Weaving Mills Ltd. secured lenders dues were transferred to the SPVs in full settlement of their dues from the company. All secured lenders except Union Bank of India (UBI) have released their charge on the assets of Karad unit. In respect of UBI, the SPV is yet to settle their dues and hence, they continue to hold the charge on the assets of the Karad Unit by way of equitable mortgage.

7. ( i) Deferred tax : In accordance with Accounting Standard (AS - 22) on Accounting for Tax on Income notified by the Companies (Accounting Standards) Rules,2006 , Deferred Tax Assets consist of substantial amounts of carry forward losses and unabsorbed depreciation under the Income Tax Act, 1961. However, since the availability of sufficient future taxable income against which the said benefits can be set off is not possible to be ascertained with virtual certainty, the Deferred Tax Assets have not been recognised as a measure of abundant caution.

(ii) Current Tax : In view of the unabsorbed Business Losses and Depreciation of the earlier years, provision for normal tax has not been made. However , Provision for Minimum Alternate Tax u/s 115 JB of the Income Tax Act on the Book Profit of the Company has been made for the year ended 3 lst March 2011.

8. Employee Benefits:

A Leave Encashment

The liability towards leave encashment for the year ended 3 lst March, 2011 as per acturial valuation is Rs.48.89 lacs which has been duly provided for.

9. Related Party Information:

Associates / companies where Capricon Realty Limited , control exists Bhishma Realty Limited ,Delta Investments Ltd, Thackersey Moolji & Co

Key Managerial Persons (KMP) Hrishikesh J.Thackersey

Abhimanyu J.Thackersey (Executive Directors)

Relative of Key Managerial Jagdish U.Thackersey Person

Subsidiary Company Hindoostan Technical Fabrics Ltd.

10. The figures of the current year are consolidated figures due to the Amalgamation, hence not comparable with the previous year.

11. The figures of the previous year have been reclassified, where ever necessary to correspond to the figures of the current year.

12. The amounts in Balance Sheet and Profit and Loss Account are rounded off to the nearest thousand and indicated in lac of Rupees.

---

Mar 31, 2010

1. Amalgamation of Six Wholly owned Subsidiaries with the Company:

a) The scheme of Amalgamation between 1) Assured Investments Limited, 2) Earnest Holdings Limited, 3) Prudential Holdings Limited, 4) Aristocrat Investments Limited, 5) Western Holdings Limited, 6) Sukta Investment Limited (wholly owned Subsidiaries of the Company) with the Company has been sanctioned by the Honble High Court of Bombay vide its Order dated 16th April,2010 with effect from 1st April,2009, being the appointed date. Accordingly, pursuant to the said Order all assets and liabilities of the said Six transferor Companies have been merged with the assets and liabilities of The Sirdar Carbonic Gas Company Limited, the transferee Company.

b) The Amalgamation has been accounted for under the "Pooling of Interest Method" as prescribed by Accounting Standard (AS 14) "Accounting for Amalgamation" issued under the Companies (Accounting Standards) Rules, 2006 . The assets, liabilities and reserves of the Six Subsidiaries as at 1st April, 2009 have been taken over at their respective book values subject to adjustments made as specified in the Scheme of Amalgamation. Accordingly Rs.9,12,682/- has been credited to the General Reserve.

c) Pursuant to the scheme referred to in (a) above, 12,018 equity shares held by the Three Subsidiaries in the Company have been cancelled, and thereby the Share Capital of the Company has been reduced from Rs.82,60,200/- divided into 82,602 Shares to Rs.70,58,400/- divided into 70,584 Shares on account of holding of Shares by the transferor Companies in the transferee Company. The inter company loans, advances, investments and other obligations between the transferor Company and the transferee Company have been cancelled.

d) The figures of the current year include figures of the Six Subsidiaries and are therefore, not comparable with those of the previous year,

2. Contingent liabilities:

Current Year Previous Year Rupees Rupees

(a) Sales tax demands under Works Contract Act for which the

Company has gone in appeal 1,10,99,508 1,10,99,508

(b) Claims against the Company not acknowledged as debts 21,31,652 21,31,652

3. Estimated amount of contracts remaining to be executed on capital account and not provided for amounts to Rs. Nil (Previous Year: Rs. Nil).

4. The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence the disclosures relating to amount unpaid as at the end of the year together with interest paid/payable as required under the said Act have not been furnished and provision for interest, if any, on delayed payments, is not ascertainable at this stage.

(b) Information about Secondary Business Segments

The geographical segmentation is insignificant, as exports are less than 10% of the Companys turnover.

(c) Notes:

i) The Company is organized into two main business segments, namely;

a) Manufacturing and refilling - of Elastic Calendar Bowls and other related activities.

b) Leasing - Represents leasing of Plant and Machinery and Business Centre Services.

ii) Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure and the internal financial reporting systems.

iii) Segment revenue, assets and liabilities includes respective amounts identifiable to each segments and amounts allocated on a reasonable basis.

iv) Figures in brackets are in respect of the previous year.

4. Related Party Disclosures:

A. Name and nature of relationship of the party where control exists Subsidiary companies: None

B. Parties with whom transactions have taken place:

(a) Subsidiary companies : None

(b) Associates:

i) The Hindoostan Spinning & Weaving Mills Limited ii) Delta Investments Limited

(c) Key Management Personnel (KMP):

i) Shri Chandrahas K. Thackersey - Chairman .

(d) Relative of Key Management Personnel:

i) Shri Sudhir K. Thackersey (brother)

ii) Smt. Nina S. (brothers wife)

5. Previous years figures have been regrouped wherever necessary.