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Notes to Accounts of Indo Count Industries Ltd.

Mar 31, 2017

1 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the separate financial statements requires management to make judgments, 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.

Judgments

In the process of applying the Company''s accounting policies, management has made judgments, which have the most significant effect on the amounts recognized in the financial statements.

Estimates and 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 consolidated 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 Group. Such changes are reflected in the assumptions when they occur.

Revaluation of property, plant and equipment

The Company has elected cost model for its PP& E and thus, the revaluation surplus existing as on the transition date under Indian GAAP has been derecognized in the retained earnings on the date of transition. Accordingly, depreciation on revaluation adjusted against revaluation surplus under Indian GAAP have been reversed under Ind AS and charged to statement of profit & loss.

Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

Defined benefit plans

The cost of the defined benefit plan and other post-employment benefits and the present value of such 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.

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 DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

‘Pursuant to the approval of Board of Directors and members of the Company, w.e.f. 15th November, 2016 (“Record Date”), an equity share of face value of ? 10 sub-divided into five equity shares of face value of ? 2 each.

(b) Terms / rights attached to equity shares

(i) The Company has only one class of equity shares having a par value of ? 2 each (31.03.2016 and 01.04.2015 of ? 10 each). Each holder of equity shares is entitled to one vote per share, the company declares and pays 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.

(ii) 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.

Nature and purpose of reserves: i) Capital Reserve:

Capital Reserve standing in books against capital subsidy received against establishing manufacturing unit.

ii) Capital Redemption Reserve:

Capital Redemption Reserve was created for redemption of Preference Shares as per requirement of provisions of Companies Act, 2013. The Company may issue fully paid bonus shares to its members out of the capital redemption reserve account.

iii) Securities Premium Reserve:

Securities premium reserve is created when shares issued at premium. The Company may issue fully paid up bonus shares to its members or can buy back of shares out of the security premium reserve account.

a) Secured by first pari-passu charge by way of mortgage of all immovable properties and by second pari-passu charge by hypothecation of all movable properties and current assets (save and except stocks and book debts and moveable’s of electronic division) both present and future. Loans (including amounts appearing in current maturities of long term debts of Rs, 200.00 lakhs, (31.03.2016 Rs, 988.94 lakhs, 01.04.2015 Rs, 2071.95 lakhs).

b) Secured against hypothecation of Vehicles acquired under Auto Loan Schemes.

c) Secured against machinery acquired, (including amount appearing in current maturity of long term debts Rs, 533.87 lakhs (31.03.2016 Rs, 568.08 lakhs, 01.04.2015 Rs, 441.22 lakhs).

‘Includes Rs, 85.00 lakhs provided to an Indian Subsidiary as margin money with banks in form of fixed deposit.

**Carrying amounts comprise of non-current and current provisions.

#Additional provision made during the year and reversal of unused amount are included in the respective head of accounts.

ii. Nature of provisions:

(a) Provision for export LC discounting represents the amount of export bills discounted with banks.

(b) Bank guarantee amount is held by banks by way of margin money in the form of fixed deposits, for various credit facilities.

(c) Provision for excise duty /customs duty / service tax represents the differential duty liability that is expected to materialize in respect of matters in appeal.

(d) Provision for litigation related obligations represents liabilities that are expected to materialize in respect of matters in appeal.

(e) Corporate Bank guarantee amount represents guarantee given to a foreign bank on behalf of a foreign subsidiary and to MSEB for power supply by way of margin money in the form of fixed deposits provided on behalf of an Indian subsidiary company.

* Includes Rs, 85.00 lakhs provided to an Indian Subsidiary as margin money with banks in form of fixed deposit.

(a) In terms of EPCG Licence issued, the Company has undertaken an export obligation for Rs, 53,669 lakhs, which is to be fulfilled over a period of 8 years. The Company has completed the export obligation to the extent of Rs, 47,719 lakhs till the year end, of which licenses of Rs, 38,722 lakhs redeemed by the DGFT and the application for redemption of license submitted for Rs, 8,997 lakhs. The export obligation for Rs, 5,950 lakhs is to be fulfilled over a period of 8 years.

(b) In terms of advance license obtained for import of raw materials the Company has undertaken an export obligation for USD 18.950 Mn., which is to be fulfilled over a period of 2 years. The Company has completed the obligation to the extent of USD 15.441 Mn. The license redeemed by the DGFT amounting to USD 12.708 Mn. The balance obligation of USD 3.508 Mn. is to be fulfilled over a period of 2 year.

(c) Under the package scheme of incentives of Government of Maharashtra for Mega Projects, the Company was eligible for VAT and Electricity duty refund benefits. However, if it contravenes any of the conditions of the scheme or eligibility certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon.

(d) No provision has been made in the accounts towards electricity duty on electricity generated for captive use during the period 01.04.2000 to 30.04.2005 amounting to Rs, 292.07 lakhs (31.03.2016 Rs, 292.07 lakhs,

01.04.2015 Rs, 292.07 lakhs) excluding interest, as the company has won the case against MSEDCL vide order number 2204 of 2007 dated 07.11.2009 of the Hon''ble High Court of Jurisdiction at Mumbai whereby it was decided that no such duty is payable. MSEDCL has taken up this matter before Supreme Court with condo nation of delay and matter is yet to be heard. As the matter is subjudice, the management feels that no provision is necessary.

2. RELATED PARTY DISCLOSURES

Related party disclosures as required by IND-AS 24 “Related Party Disclosures” are given below:

i) Key Management Personnel

1. Shri Anil Kumar Jain Executive Chairman

2. Shri Mohit Jain Managing Director (w.e.f. 09.05.2016)

3. Shri R. N. Gupta Joint Managing Director (upto 09.05.2016)

4. Shri K. R. Lalpuria Executive Director

5. Shri Kamal Mitra Director (Works)

6. Shri P. N. Shah Independent Director

7. Shri R. Anand Independent Director

8. Shri Dilip Thakkar Independent Director

9. Shri Prem Malik Independent Director

10. Shri Sushil Kumar Jiwarajka Independent Director

11. Dr. (Mrs.) Vaijayanti Pandit Independent Director

ii) Relatives of Key Management Personnel

1. Smt. G. D. Jain

2. Smt. Shikha Jain

iii) Parties where Control Exists

A. Subsidiaries

1. Pranavaditya Spinning Mills Ltd.

2. Indo Count Retail Ventures Pvt. Ltd.

3. Indo Count Global Inc., (USA)

4. Indo Count UK Ltd.; (United Kingdom)

B. Associates

1. Unic Consultants

2. A. K. Jain HUF

C. Others

1. Indo Count Foundation

3. It is management''s opinion that since the Company is exclusively engaged in the activity of manufacture of textile products which are governed by the same set of risks and returns. The same are considered to constitute a single reportable segment in the context of Indian Accounting Standard (IND AS) 108 on “Operating Segments” issued by the Institute of Chartered Accountants of India.

4. EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILITIES (CSR)

The particulars of expenditure are as follows:

a) Gross amount required to be spent by the Company during the year was Rs, 463.05 lakhs (previous year Rs, 237.11 lakhs).

Defined benefit plans:

Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 days salary for each completed year of service. Vesting occurs upon completion of five continuous years of service in accordance with Indian law.

The Company makes annual contributions to the Life Insurance Corporation of India, which is funded defined benefit plan for qualifying employees.

Leave Encashment benefit

The Company provides for leave encashment, a defined benefit retirement plan covering eligible employees. The Leave Encashment Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 12 days salary for each completed year of service, subject to maximum of 90 days till retirement.

The Company makes annual contributions to the Life Insurance Corporation of India, which is funded defined benefit plan for qualifying employees.

Expected contribution to the defined benefit plan for the next annual reporting period

(i) The actuarial valuation of plan assets and the present value of the defined benefit obligation were carried out at 31st March, 2017. The present value of the defined benefit obligation and the relate current service cost and past service cost, were measured using the Projected Unit Credit Method.

(ii) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

(iii) The salary escalation rate is arrived after taking into consideration the seniority, the promotion and other relevant factors, such as, demand and supply in employment market.

5. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS

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

a) Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to the short-term maturities of these instruments.

b) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2 : other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

6. 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.

The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies.

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. In order to optimize the Company''s position with regards to

interest income and interest expense and to manage the interest rate risk, treasury performs 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 is not exposed to significant interest rate risk as at the respective reporting dates.

Foreign Currency Risk

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales in overseas and purchases from overseas suppliers in various foreign currencies.

Foreign currency exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the respective currencies.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.

Credit Risk

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivables. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forward-looking information such as:

- Actual or expected significant adverse changes in business,

- Actual or expected significant changes in the operating results of the counterparty,

- Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations,

- Significant increase in credit risk on other financial instruments of the same counterparty,

- Significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit enhancements.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, they are recognized in profit or loss.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industrial practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on historical data, loss on collection on receivable is not material hence no additional provision considered.

During the year the Company has recognized loss allowance of '' Nil Under 12 months expected credit loss model.

No significant changes in estimation techniques or assumptions were made during the reporting period. Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company''s treasury department 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 Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

Maturity profile of financial liabilities

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

Capital Management

For the purposes of the Company''s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company''s Capital Management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

The company monitors capital using gearing ratio, which is total debt divided by total capital plus debt.

48. DETAILS OF LOANS GIVEN, INVESTMENTS MADE AND GUARANTEE GIVEN COVERED UNDER SECTION 186(4) OF THE COMPANIES ACT, 2013.

There are no loans given, covered under section 186(4) of the Companies Act, 2013, and investments made are given under the respective heads.

Corporate guarantee given by the Company in respect of loans as at 31st March, 2017:

49. FIRST-TIME ADOPTION OF IND AS

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

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on or after 31st March 2017, together with the comparative period data as at and for the year ended 31st March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1st April 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April 2015 and the financial statements as at and for the year ended 31st March 2016.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a) Leasehold land and buildings, and plant, were carried in the balance sheet prepared in accordance with Indian GAAP on the basis of valuations performed in earlier years . The Company has elected to regard those values as deemed cost at the date of the transition since they were broadly comparable to fair value.

b) Appendix C to Ind-AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind-AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has done the assessment of lease contracts based on conditions prevailing as at the date of transition.

c) The Company has elected to apply previous GAAP carrying amount of its investment in subsidiaries as deemed cost as on the date of transition to Ind AS.

Exception

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

a) Estimates

The estimates at 1st April, 2015 and 31st March, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences if any, in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- Impairment of financial assets based on expected credit loss model:

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at the transition date and as of 31st March, 2016.

b) Derecognition of financial assets and financial liabilities

The Company has elected to apply the derecognition requirements for financial assets and financial liabilities in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

c) Classification and measurement of financial assets

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

Footnotes to the reconciliation of equity as at 1st April, 2015 and 31st March, 2016 and profit or loss for the year ended 31st March 2016:

(a) Derivative instruments

The fair value of forward foreign exchange contracts is recognized under Ind AS, and was not recognized under Indian GAAP. The contracts, which were designated as hedging instruments under Indian GAAP, have been designated as at the date of transition to Ind AS as fair value hedging instrument of expected future sales for which the Company has firm commitments. The corresponding adjustment has been recognized as a separate component of current financial asset. On the date of transition, derivative asset was debited by '' 1,664.09 lakhs on 1st April, 2015 and net movement of '' 801.32 lakhs during the year ended on 31st March, 2016 was recognized in statement of profit & loss and subsequently taken to derivative asset.

(b) Defined benefit obligation

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind-AS, remeasurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the

AS proposed dividend is recognized as a liability in the period in which it is declared by the Company, usually when approved by shareholders in Annual General meeting, or paid.

Therefore, the dividend liability (proposed dividend) including dividend distribution tax liability amounting to '' 475.17 lakhs has been derecognized in the retained earnings as on date of transition.

(k) Cash Discount & claims paid

Under Indian GAAP, cash discount of Rs, 1,926.68 lakhs and claims paid of Rs, 301.11 lakhs were recognized as part of other expenses which has been adjusted against the revenue under Ind AS during the year ended 31st March, 2016.

(l) Interest component in revenue

Under Indian GAAP, invoice amounts were considered as revenue, irrespective of different credit terms with different customers adjusted against revenue under Ind AS during the year ended 31st March, 2016.

(m)Long Term Security Deposits

Under Indian GAAP the interest free security deposits, with fixed terms, were considered at cost basis. Under Ind-AS these financial assets have been adjusted to be carried at mortised cost, resulting in impact of the present value being treated as cost and the interest accrual recorded to restate the asset balance over its term.


Mar 31, 2016

1. CAPITAL WORK IN PROGRESS

Capital work in progress does not include capital advances Rs. 886.75 lac (previous year Rs. 884.53 lac).

2. Exceptional items represents recompense amount paid in respect of financial restructuring package as approved by Empowered Group of Corporate Debt Restructuring (CDR) on July 1, 2008. The company is out of CDR mechanism.

3. Related Party Disclosure:

Related party disclosures as required by AS - 18 "Related Party Disclosures" are given below:-

A. Relationship

i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and Managing Director

2. Shri R. N. Gupta - Joint Managing Director

3. Shri K.K. Lalpuria - Executive Director

4. Shri Kamal Mitra - Director (Works]

ii) Relatives of key management personnel

1. Smt. G.D.Jain

2. Smt. Shikha Jain

3. Smt. Neha Singhvi

4. Shri Mohit Jain

iii) Parties where control exists

A. Subsidiary

1. Pranavaditya Spinning Mills Ltd.

2. Indo Count Global Inc. (USA]

B. Associates

1. Margo Finance Ltd.

2. Unic Consultants

3. A.K.Jain HUF

4. It is managements opinion that since the company is exclusively engaged in the activity of manufacture of textile products which are governed by the same set of risks and returns. The same are considered to constitute a single reportable segment in the context of Accounting Standard on "Segment Reporting" issued by the Institute of Chartered Accountants of India.

5. Figures for the previous year have been regrouped / rearranged wherever considered necessary.

6. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.

7. Figures have been rounded off to the nearest Rs. lac.


Mar 31, 2015

1 SHARE CAPITAL

Terms / rights attached to equity shares

(i) The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share, The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Di- rectors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Com- pany, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. (i) The Shareholders of the Company in their Extra Ordinary General Meeting held on 17-11-2012 accorded their approval for issue

and allotment of 11,00,000 equity shares of Rs. 10/- each on preferential basis to promoter group companies. The allotment has been made on 10-04-2014.

(ii) The Shareholders of the Company in their Extra Ordinary General Meeting held on 11-09-2013 accorded their approval for issue and allotment of 28,98,300 equity share warrants at Rs. 17.25 each (including premium of Rs. 7.25 each) on preferential basis to promoter group . The Company alloted 28,98,300 equity shares at a premium of Rs. Rs. 7.25 each on 20-12-2014 and shall be subject to a lock-in period as specified under Regulation 78 of Chapter VII of the SEBI ICDR Regulations, 2009.

3. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

A. Contingent Liabilities

Rs. in lac

Particulars As at As at 31.05.2015 31.03.2014

i) Amount outstanding in respect of export 3,328.93 4,999.82 bills discounted under Export Letters of Credit (Since realised Rs. 1,427.53 lac, previous year Rs. 3,300.88 lac)

ii) Bank Guarantees * 699.74 427.59

iii) Claims against the company not acknowledged as debts against which payments made Rs. 34.22 180.96 384.80 lac (previous year Rs. 34.22 lac)

iv) CSR Expenses 76.84 -

v) Corporate guarantee given to a bank for 5,312.50 3,597.09 securing financial assistance to: - Foreign Subsidiary

*(a) The Company has given bank guarantee for Rs. 0.42 lac to DGFT on behalf of Pranavaditya Spinning Mills Limited, subsidiary company for duty free import of machines.

(b) In terms of EPCG Licence issued, the company has undertaken an export obligation for Rs. 42,042.03 lac, which is to be fulfilled over a period of 8 years. The company has completed the export obligation to the extent of Rs. 40,756.98 lac till the year end, of which licenses of Rs. 36,102.25 lac redeemed by the DGFT and the application for redemption of license submitted for Rs. 4,654.73 lac. The balance export obligation for Rs. 1,285.22 lac is to be fulfilled over a period of 8 years.

(c) In terms of advance license obtained for import of raw materials the company has undertaken an export obligation for USD 12.156 Mn. which is to be fulfilled over a period of 2 years. The company has completed the obligation to the extent of USD 11.942 Mn. The license redeemed by the DGFT amounting to USD 3.537 Mn. and application for redemption of license submitted for USD 8.405 Mn. The balance obligation of USD 0.214 Mn. is to be fulfilled over a period of 1 year.

(d) Under the package scheme of incentives of Government of Maharashtra for Mega Projects , the company is eligible for VAT and Electricity duty refund benefits for its home textiles and consumer durable goods divisions. However, if it contravenes any of the conditions of the scheme or eligibility certificate or certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon.

(e) No provision has been made in the accounts towards electricity duty on electricity generated for captive use during the period 01-04-2000 to 30-04-2005 amounting to Rs. 292.07 lac (previous year Rs. 292.07 lac) excluding interest, as the company has won the case against MSEDCL vide order number 2204 of 2007 dated 07-11-2009 of the Hon'ble High Court of Jurisdiction at Bombay whereby it was decided that no such duty is payable. MSEDCL has taken up this matter before Supreme Court with condonation of delay and matter is yet to be heard. As the matter is subjudice, the management feels that no provision is necessary.

b Commitments

Rs. in lac

Particulars As at As at 31.05.2015 31.03.2014

a) Estimated amount of contracts (net of advances) remaining to be executed on capital 3,181.27 2,066.10 account and not provided for

b) Letter of credits opened for which the 453.72 1,715.55 material has not yet been shipped

4. Based on reference of Union Bank Of India, the Lead Bank, a financial restructuing package was approved by Empowered Group of Corporate Debt Restructuring (CDR-EG) on July 01, 2008 being the COD of CDR.

The CDR-EG approved the exit of the Company from CDR Mechanism w.e.f. April 01, 2014 in their meeting held on March 26, 2015. Therein, the CDR-EG has accepted total recompense amount of Rs. 2,446.23 lac (net of concessions) as certified by the Concurrent Auditor appointed by the CDR lenders vide their certificate dated February 21, 2015 for nine lenders. In addition, for two lenders, Company settled their dues in January 2015 by paying ' 128.13 lac.

The Company has paid recompense amount (net of concessions agreed by the lenders) shown under Exceptional items. Consequently, the Company is out of CDR mechanism.

5. Related Party Disclosure:

Related party disclosures as required by AS - 18 "Related Party Disclosures" are given below:-

A. Relationship

i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and Managing Director

2. Shri R. N. Gupta - Joint Managing Director

3. Shri K. R. Lalpuria - Executive Director

4. Shri Kamal Mitra - Director (Works)

ii) Relatives of key management personnel

1. Smt. G.D. Jain

2. Smt. Shikha Jain

3. Smt. Neha Singhvi

4. Shri Mohit Jain

iii) Parties where control exists

A. Subsidiary

1. Pranavaditya Spinning Mills Ltd.

2. Indo Count Global Inc. ( USA)

B. Associates

1. Margo Finance Ltd.

2. Unic Consultants

3. A.K. Jain HUF

6. Effective 1st April, 2014, the company has revised its estimated useful life of fixed assets, wherever appropriate, on the basis of useful life specified in Schedule II of the Companies Act, 2013. The carrying amount as on 1st April, 2014 is depreciated over the revised remaining useful life. As a result of these changes, the depreciation charged for the period ended 31st March, 2015 is lower by Rs. 434.93 lac and the effect relating to the period prior to 1st April, 2014 is Rs. 88.52 lac (net of deferred tax asset of Rs. 42.52 lac) which has been adjusted against opening balance of retained earnings.

7. The Company has not recovered Rs. 158.54 lac (net of Rs. 30.00 lac) for the year 2013-14 from M/S Unic Consultants agaist excess commission disallowed by the Company Law Board vide their order dated 13th August, 2014. The Company has made fresh application on 23rd March, 2015 for review of their earlier order for allowability of the excess amount paid. Out of current year's commission, the Company has retained the above excess amount, pending review by Ministry of Corporate Affairs.

8. Figures for the previous year have been regrouped / rearranged wherever considered necessary.

9. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.

10. Figures have been rounded off to the nearest Rs. in lac.


Mar 31, 2014

1.Terms / rights attached to equity shares

(i) The Company has only one class of equity shares having a par value of Rs 10/- per share. Each holder of equity shares is entitled to one vote per share, The company declares and pays dividends 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.

(ii) 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.

2. (i) The Shareholders of the Company in their Extra Ordinary General Meeting held on 17-11-2012 accorded their approval for issue and allotment of 11,00,000 equity shares of Rs 10/- each on preferential basis to promoter group companies. However, allotment will be made on receipt of approval for the same from Stock Exchanges. Pending approval, the amount has been reflected under Share Application Money Pending Allotment.

(ii) The Shareholders of the Company in their Extra Ordinary General Meeting held on 11-09-2013 accorded their approval for issue and allotment of 28,98,300 equity share warrants ot Rs 17.25 each (including premium of Rs 7.25 each) on preferential basis to promoter group . However, allotment will be made on receipt of approval for the same from Stock Exchanges. Pending approval, the amount has been reflected under Warrant Application Money Pending Allotment.

3.a) Based on reference of Union Bank of India, the Lead Bank, a financial restructuring package was approved by Empowered Group of Corporate Debt Restructuring (CDR-EG).

While the company had given effect of the restructuring package in its books of account, banks have continued to raise demand notices for interest payment at the rate of interest charged prior to the sanction of restructuring package.

The company has taken up the matter with the banks and accordingly the resultant difference in interest (which is still under reconciliation / determination) between the demand notice received from banks and as per company''s books of account, has not been provided, as the liability is not payable.

b) Secured inter se on pari-passu basis by way of mortgage of all immovable properties and hypothecation of all movable properties (save and except stocks and book debts and moveables of electronic division) both present and future. Loans (including current maturities of long term debts) of Rs 11,736.29 lac (previous year Rs 15,764.11 lac) are additionally secured by personal guarantee of the Managing Director. The term loans are further secured by way of first charge on the existing fixed assets of a Indian Subsidiary Company.

c) Secured against third charge on the fixed assets of the company. Loans (including current maturities of long term debts) of Rs 1,802.99 lac (previous year Rs 2,434.72 lac) are additionally secured by personal guarantee of the Managing Director. The demand term loans are further secured by way of second charge on the existing fixed assets of a Indian Subsidiary Company.

4. DEFERRED TAX ASSETS

As required under Accounting standard (AS-22), ''Accounting for taxes on income'' issued by the Institute of Chartered Accountants of India, the Company is required to account for deferred taxation while preparing its accounts.

5. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

A. Contingent Liabilities [Rs in lac] Particulars As at 31.03.2014 As at 31.03.2013 i) Amount outstanding in respect of export bills discounted under Export Letters of Credit (Since realised Rs 3,300.88 lac, previous year Rs 6,100.46 lac) 4,999.82 7,469.84 ii) Bank Guarantees * 427.59 368.25 iii) Claims against the company not acknowledged as debts 333.53 12.38 iv) Corporate guarantee given to a bank for securing financial assistance to subsidiary company - Indian Subsidiary - 200.00 - Foreign Subsidiary 3,597.09 -

(a) Includes bank guarantee given by the company for Rs 4.11 lac to DGFT on behalf of Pranavaditya Spinning Mills Limited, subsidiary company for duty free import of machines.

(b) In terms of EPCG Licence issued, the company has undertaken an export obligation for Rs 39,174.43 lac, which is to be fulfilled over a period of 8 years. The company has completed the obligation to the extent of Rs 30,246.54 lac and license redeemed by the DGFT. The export obligation for Rs 8,927.89 lac is to be fulfilled over a period of 8 years.

(c) In terms of advance license obtained for import of raw materials the company has undertaken an export obligation for USD 12.37 Mn. which is to be fulfilled over a period of 2 years.The company has completed the obligation to the extent of USD 9.13 Mn. and license redeemed by the DGFT. The balance obligation of USD 3.24 Mn. is to be fulfilled over a period of 1 year.

(d) Under the package scheme of incentives of Government of Maharashtra for Mega Projects , the company is eligible for VAT and Electricity duty refund benefits for its home textiles and consumer durable goods divisions. However, if it contravenes any of the conditions of the scheme or eligibility certificate or certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon.

(e) No provision has been made in the accounts towards electricity duty on electricity generated for captive use during the period 01-04-2000 to 30-04-2005 amounting to Rs 292.07 lac (previous year Rs 292.07 lac) excluding interest, as the company has won the case against MSEDCL vide order number 2204 of 2007 dated 07-11-2009 of the Hon''ble High Court of Jurisdiction at Bombay whereby it was decided that no such duty is payable. MSEDCL has taken up this matter before Supreme Court with condonation of delay and matter is yet to be heard. As the matter is subjudice, the management feels that no provision is necessary.


Mar 31, 2013

1. FORWARD CONTRACTS

a) The company has outstanding foreign currency related derivative contracts in the form of options for helping its business related exposure which are not speculative in nature. The contracts have long dated tenor with multiple contigent / uncertain events. As such ascertainment of fair value of these contracts is not feasible. However , banks estimate the total mark to market (MTM) of all outstanding contracts at approx. loss of Rs.Nil as at 31-03-2013, ( previous year loss of Rs.2,409 lac). The management is of the opinion that the determination and crystalisation of liability is dependant upon the outcome of uncertain future events or actions, not wholly within the control of the Company. As adoption of AS-30 is presently not mandatory, the estimated MTM loss of Rs.Nil for the year ended 31-03-2013 (previous year loss of Rs.2,409 lac) has not been provided.

b) Outstanding derivatives instruments as at 31-03-2013 entered by the Company :-

2. Related Party Disclosure:

Related party disclosures as required by AS - 18 "Realted Party Disclosures" are given below:- A. Relationship

i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and Managing Director

2. Shri R. N. Gupta - Joint Managing Director

3. Shri K.K. Lalpuria - Execitive Director

4. Shri Kamal Mitra - Director (Works) ii) Relatives of key management personnel

1. Smt. G.D. Jain

2. Smt. Shika Jain

3. Ms. Neha Singhvi

4. Shri Mohit Jain

iii) Parties where control exists A. Subsidiary

1. Pranavaditya Spinning Mills Ltd.

2. Indo Count Global Inc. ( USA) B Associates

1. Margo Finance Ltd.

2. Indocount Securities Ltd.

3. Rini Investment and Finance Pvt. Ltd.

4. Sky Rise Properties Pvt. Ltd.

5. Unic Consultants

6. Yarntex Exports Ltd.

7. A.K. Jain HUF

3. Figures for the previous year have been regrouped / rearranged wherever considered necessary.

4. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amout at which they are stated, if realised in the ordinary course of business and provision for all known liabilities has been adequetly made in the accounts.

5. Figures have been rounded off to the nearest rupee in lac


Mar 31, 2012

A) Based on reference of Union Bank of India, the Lead Bank, a financial restructuring package was approved by Empowered Group of Corporate Debt Restructuring (CDR-EG).

While the company had given effect of the restructuring package in its books of account, banks have continued to raise demand notices for interest payment at the rate of interest charged prior to the sanction of restructuring package.

The company has taken up the matter with the banks and accordingly the resultant difference in interest (which is still under reconciliation / determination) between the demand notice received from banks and as per company's books of account, has not been provided, as the liability is not payable.

b) Secured inter se on pari-passu basis by way of mortgage of all immovable properties and hypothecation of all movable properties (save and except stocks and book debts and moveables of electronic division) both present and future. Loans (including current maturities of long term debts) of Rs. 18,339.53 lacs (previous year Rs. 20,745.38 lacs) are additionally secured by personal guarantee of the Managing Director.

c) Secured against third charge on the fixed assets of the company. Loans (including current maturities of long term debts) of Rs. 2,793.25 lacs (previous year Rs. 3,185.97 lacs) are additionally secured by personal guarantee of the Managing Director.

d) Secured against hypothecation of Vehicles acquired under Auto Loan Schemes.

e) The term loans are further secured by way of first / second charge on the existing fixed assets of a subsidiary company. Further, the company has pledged 72,16,512 equity shares held by it in a subsidiary company, as per CDR stipulation. However, the company has complied all the stipulations of CDR terms and the pledged shares are yet to be released.

In terms of master restructuring agreement dated 30-03-2009, if the company commits a default in payment or repayment of three consecutive installment of principal amounts of the facilities or interest thereon or any combination thereof, then, the lenders shall have the right to convert, at their option, the whole of the outstanding amount of the facilities and /or 20% of rupee equivalent of the defaulted amount into fully paid-up equity shares of the company, at par, in the manner specified in a notice in writing to be given by the lenders to the company prior to the date on which the conversion is to take effect, which date shall be specified in the said notice.

Secured by hypothecation of Raw materials, Semi finished goods, Finished goods, Stores and Spares, Goods in transit and Book Debts of Spinning and Home textile divisions, and further secured by second charge on Fixed Assets both present and future and personally guaranteed by the Managing Director.

1. TRADE PAYABLES

(a) The names of small scale industrial undertakings to whom the company owes any sum together with interest and outstanding for more than thirty days: Saikrupa Industries

Payments against supplies from small-scale industries are made in accordance with agreed terms. Besides, there are no claims from the parties for interest on overdue payments.

(b) The company has not received any intimation from other suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

(c) Includes amount payable to a subsidiary Rs. 0.04 lac(previous year Rs. 0.04 lac ).

Includes

a) * (i) 10 shares of Rs. 50/-each of Arcadia Premises Co-operative Society Ltd.

b) # One vehicle costing Rs. 38.45 lac, is in the name of the Managing Director as a nominee of the Company.

c) The company revalued its land, buildings and plant & machinery (except for electronics division and 2 D.G. sets of spinning division ) as on 01 -10- 2008 based on the valuation made by an approved valuer. Accordingly, the original cost of such assets resulted in gross increase in the value of assets over their original cost by Rs. 15,092.28 lac , increase in depreciation upto 31-03-2012 on revaluation by Rs. 3,500.17 lac and thereby net revaluation reserve as at 31-03-2012 is Rs. 11,592.11 lac.

d) Revaluation of 2 D.G. sets of spinning division was carried out on 01 -04-2009 by an approved valuer.The revaluation resulted in a gross increase in the value of assets over their original cost by Rs. 1,238.07 lac. increase in depreciation up to 31 -03-2012 on revaluation by Rs. 309.40 lac and thereby net revaluation reserve as at 31-03-2012 is Rs. 928.67 lac.

2. CAPITAL WORK IN PROGRESS

Capital work in progress does not include capital advances Rs. 54.10 lac (previous period Rs. 13.15 lac).

3. DEFERRED TAX ASSETS

As required under Accounting Standard (AS-22), 'Accounting for taxes on income' issued by the Institute of Chartered Accounts of India, the Company is required to account for deferred taxation while preparing its accounts. The details of deferred tax assets / liabilities are as under:

Includes balance in current account with The Kolhapur Urban Co-operative Bank Ltd. Rs. 4.82 lac (previous year Rs. 0.88 lac ) maximum amount outstanding anytime during the year Rs. 5.49 lac (previous year Rs. 4.06 lac) and The Shamrao Vittal Co-operative Bank Rs. 2.83 lac (previous year Rs. 2.08 lac) , maximum amount outstanding anytime during the year Rs. 3.63 lac (previous year Rs. 3.95 lac)

** Includes receipts for Rs. 0.01 lac ( previous year Rs. 0.01 lac ) lodged with Sales Tax Department

4. CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for)

(a) Contingent Liabilities

Particulars [Rs. in lac]

As at 31-03-2012 As at 31-03-2011

i) Amount outstanding in respect of export bills 3,328.23 4,103.98 discounted under Export Letters of Credit (Since realised Rs. 3,152 lac, previous year Rs. 2,901.56 lac)

ii) Bank Guarantees * 697.04 673.92

iii) Claims against the company not acknowledged as debts 12.38 11.10

iv) Income Tax / Custom duty demands disputed in appeals - 21.13

v) Corporate guarantee given to a bank for securing financial assistance to subsidiary company 200.00 100.00

* The Company has given bank guarantee for Rs. 4.11 lac to DGFT on behalf of Pranavaditya Spinning Mills Limited, subsidiary company for duty free import of machines.

(b) In terms of EPCG Licence issued, the company has undertaken an export obligation for Rs. 30,510.02 lac, which is to be fulfilled over a period of 8 years. The company has completed the obligation to the extent of Rs. 26,857.99 lac and necessary application for redemption of license against which obligation is completed has been made to DGFT.

(c) In terms of advance license obtained for import of raw cotton the company has undertaken an export obligation for Rs. 1,702.62 lac which is to be fulfilled over a period of 2 years. The company has completed the obligation to the extent of Rs. 1,669.33 lac

(d) Under the package scheme of incentives of Government of Maharashtra for Mega Projects , the company is eligible for VAT and Electricity duty refund benefits for its home textiles and consumer durable goods divisions However, if it contravenes any of the conditions of the scheme or eligibility certificate or certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon

(e) Commitments

* Includes tax deducted at source Rs. 0.35 lac ( previous year Rs. 1.01 lac) Includes tax deducted at source Rs. 2.08 lac, ( previous year Rs. 2.79 lac)

(a) Includes operating lease:

i. The company has entered into lease arrangements , for renting specified machinery at a rent of Rs. 2.23 lac per month for a period of 120 months and are renewable at the option of the lessee after the end of the term.

* Includes purchased from a subsidiary company Rs. 549.39 lac (previous year Rs. 526.31 lac)

5. EMPLOYEE BENEFITS EXPENSE

* Includes a sum of Rs. 96.54 lac paid to Managing Director and Executive Director as per sanction of shareholder It exceeds by Rs. 48.54 lac as per Schedule XIII of Companies Act 1956 due to inadequacy of profit. The company is the process of applying to Company Law Board / shareholders for approval of the excess remuneration paid .

6. OTHER EXPENSES

(b) Includes payment to auditors

7. FORWARD CONTRACTS

a) The company has outstanding foreign currency related derivative contracts in the form of options for helping its business related exposure which are not speculative in nature. The contracts have long dated tenor with multiple contigent / uncertain events. As such ascertainment of fair value of these contracts is not feasible. However, banks estimate the total mark to market (MTM) of all outstanding contracts at approx. Rs. 2,409 lacs as at 31-03- 2012, (previous year Rs. 607 lac). The management is of the opinion that the determination and crystalisation of liability is dependant upon the outcome of uncertain future events or actions, not wholly within the control of the Company. As adoption of AS-30 is presently not mandatory, the estimated MTM loss of Rs. 2,409 lac for the year ended 31 -03-2012 (previous year Rs. 607 lac) has not been provided.

b) Outstanding derivatives instruments as at 31 -03-2012 entered by the Company :-

8. RELATED PARTY DISCLOSURES:

Related party disclosures as required by AS -18 "Related Party Disclosures" are given below: - A. Relationship

(i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and Managing Director

2. Shri R. N. Gupta - Joint Managing Director

3. Shri K. K. Lalpuria - Executive Director

4. Shri Kamal Mitra - Director (Works) (ii) Relatives of key management personnel

1. Smt.G. D.Jain

2. Smt.Shikha Jain

3. Ms. NehaJain

4. Shri MohitJain

(iii) Parties where control exists A. Subsidiary

1. Pranavaditya Spinning Mills Ltd.

2. Indocount Global Inc. (USA)

B. Associates

1. Margo Finance Ltd.

2. Indocount Securities Ltd.

3. Rini Investment and Finance Pvt. Ltd.

4. Sky Rise Properties Pvt. Ltd.

5. Unic Consultants

6. Yarntex Exports Ltd.

7. A. K. Jain

10. Figures for the previous year have been regrouped / rearranged wherever considered necessary.

11. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities has been adequetly made in the accounts.

12. Figures have been rounded off to the nearest rupees in lac.

13. Additional Information (Pursuant to the provisions of Part II and Part IV of Schedule VI to the Companies Act 1956 a) The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O.301 ( E) dated 8th February,2011 issued under Section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profit and loss account. The Company being an 'export oriented company' in entitled to the exemption. Accordingly, disclosures mandated by paragraph 3(i)(a), 3(ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.


Mar 31, 2011

As at As at 31-03-2011 31-03-2010 (Rs. in (Rs. in lac) lac)

1. Contingent liabilities not provided for in respect of -

(i) Amount outstanding in respect of export bills discounted 4,103.98 2,641.38 under Export Letters of Credit (Since realized Rs. 2,901.56 lac, previous year Rs. 1,401.71 lac)

(ii) Bank Guarantees * 673.92 389.79

(iii) Claims not acknowledged as 11.10 10.78 debts

(iv) Income tax/Custom Duty demands 21.13 30.69 disputed in appeals

(v) Corporate guarantee given to a 100.00 100.00 bank for securing financial a ssistance to subsidiary Company.

* The Company has given bank guarantee for Rs. 4.11 lac to DGFT on behalf of Pranavaditya Spinning Mills Limited, Subsidiary Company for duty free import of Machines.

2. (b) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

3 (a) In terms of EPCG Licence issued, the Company has undertaken an export obligation for Rs. 378.12 lac, which is to be fulfilled over a period of 8 years. The Company has already completed this obligation and necessary application for redemption of license is being made to DGFT.

(b) In terms of advance license obtained for import of raw cotton the Company has undertaken an export obligation for Rs. 1,702.62 lac which is to be fulfilled over a period of 2 years.

4. Under the package scheme of incentives of Government of Maharashtra for Mega Projects, the Company is eligible for VAT and Electricity duty refund benefits for its home textiles and consumer durable goods divisions. However, if it contravenes any of the conditions of the scheme or eligibility certificate or certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon.

5. Shareholders of the Company in their extra ordinary general meeting held on 26-03-2011 accorded their approval for allotment of 25,00,000 - 4% Non Cumulative Preference shares of Rs. 10/- each on Preferential basis to promoter group companies. However allotment will be made on receipt of approval for the same from various authorities. Pending approval, the amount received has been reflected under Share Application Money pending allotment.

6. The 10 % Privately Placed Secured Redeemable Non-Convertible Debentures are redeemable in 36 quarterly Installments beginning from 30-06-2009.

7. Based on reference of Union Bank of India, the Lead Bank, a financial restructuring package was approved by Empowered Group of Corporate Debt Restructuring (CDR-EG).

While the Company had given effect of the restructuring package in its books of accounts, banks have continued to raise demand notices for interest payment at the rate of interest charged prior to the sanction of restructuring package.

The Company has taken up the matter with the banks and accordingly the resultant difference in interest (which is still under reconciliation /determination) between the demand notice received from banks and as per Company's books of account, has not been provided, as the liability is not payable.

8. (a) In respect of various term loan / working capital

facilities availed by the Company, the lenders have first/second / third pari passu charge on fixed assets of the Company.

(b) The term loans are to be further secured by way of first / second charge on the existing fixed assets of Pranavaditya Spinning Mills Ltd., subject however to necessary approvals.

Pending creation of permanent security, the Company has pledged 72,16,512 equity shares held by it in Pranavaditya Spinning Mills Ltd., as per CDR stipulation.

9. In terms of master restructuring agreement dated 30-03-2009, if the Company commits a default in payment or repayment of three consecutive installment of principal amounts of the facilities or interest thereon or any combination thereof, then, the lenders shall have the right to convert, at their option, the whole of the outstanding amount of the facilities and /or 20% of rupee equivalent of the defaulted amount into fully paid-up equity shares of the Company, at par, in the manner specified in a notice in writing to be given by the lenders to the Company prior to the date on which the conversion is to take effect, which date shall be specified in the said notice.

10. (a) The Company revalued its land, buildings and

plant & machinery (except for electronics division and 2 D. G. sets of spinning division ) as on 01- 10-2008 based on the valuation made by an approved valuer. Accordingly, the original cost of such assets resulted in gross increase in the value of assets over their original cost by Rs. 15,092.28 lac, increase in depreciation upto the date of revaluation by Rs. 504.49 lac, and thereby net increase in replacement cost by Rs. 14,587.79 lac. The net increase in the value of such land, building and plant & machinery had been credited to revaluation reserve account.

(b) Revaluation of 2 D. G sets of spinning division was carried out on 01-04-2009 by an approved valuer.The revaluation resulted in a gross increase in the value of assets over their original cost by Rs. 1,238.07 lac, Increase in depreciation upto 31 -03-2009 by Rs. 65.37 lac and thereby net increase in replacement cost by Rs. 1,172.70 Lac which has been taken as increase in the value of plant & machinery as on 01-04-2009 by creating a revaluation reserve to that extent.

11. In the opinion of the management, the current assets, loans and advances are expected to realize at least the amount at which they are stated, if realized in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.

12 v) Actuarial assumptions 1994-96 (duly modified) Gratuity & Leave encashment Valuation method Projected Unit Credit Method Mortality Table (LIC) 1994-96 (ultimate) Discount rate (per annum) 8% Rate of Increase in Salaries 4%

The estimates of rate of future salary increase takes account of inflation, seniority, promotion and other relevant factors on long term basis. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of liability. The above information is certified by the actuary.

13. (a) The Company has outstanding foreign currency related derivative contracts in the form of options for hedging its business related exposure which are not speculative in nature. The contracts have long dated tenor with multiple contingent/ uncertain events. As such ascertainment of fair value of these contracts is not feasible. However, banks estimate the total mark to market (MTM) of all outstanding contracts at approx Rs. 607 lac as at 31 -03-2011 (Previous year Rs. 1,619 lac). The management is of the opinion that the determination and crystallization of liability is dependent upon the outcome of uncertain future events or actions, not wholly within the control of the Company. As adoption of AS-30 is presently not mandatory, the estimated MTM loss of Rs. 607 lac for the year ended 31-03-2011 (previous year Rs. 1,619 lac) has not been provided.

14. Operating Lease:

(a) As Lessor:

i. The Company has entered into lease arrangements, for renting specified machinery at a rent of Rs. 1.68 lac per month for a period of 120 months and are renewable at the option of the lessee after the end of the term.

15. Related party disclosures:

Related party disclosures as required by AS - 18 "Related party disclosures" are given below: -

A. Relationship

(i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and managing Director

2. Shri R.N. Gupta - Joint managing Director

3. Shri K. R. Lalpuria - Executive Director (w.e.f-11.11.2010)

4. Shri Kamal Mitra - Director (Works)

(ii) Relatives of key management personnel

1. Smt. G. D. Jain

2. Smt. Shikha Jain

3. Miss Neha Jain

4. Shri Mohit Jain

(iii) Parties where control exists

A. Subsidiary

1. Pranavaditya Spinning Mills Ltd.

B. Associates

1. Margo Finance Ltd. (Formerly Indocount Finance Ltd.)

2. Indocount Securities Ltd.

3. Rini Investment & Finance Pvt. Ltd.

4. Sky Rise Properties Pvt. Ltd.

5. Unic Consultants

6. Yarntex Exports Ltd.

16. Previous years figures have been regrouped and / or rearranged wherever considered necessary.

17. Figures have been rounded off to the nearest rupees in lac.

18. b) Computation of net profit for calculation of managerial remuneration U/s. 349 of the Companies Act, 1956 has not been enumerated since no commission is paid / payable to the managing Director.

19. a) Sundry debtors include debts due from the subsidiary Company Rs. 86.26 lac (Previous year Rs. Nil)

b) Sundry creditors include amount due to the subsidiary Company Rs. 86.73 lac (Previous year Rs. 56.61 lac)

20. The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O.301 (E) dated 8th February, 2011 issued under Section 211 (3) of the Companies Act,1956 has exempted certain classes of companies from disclosing certain information in their profit and loss account.The Company being an 'export oriented Company' is entitled to the exemption. Accordingly.disclosures mandated by paragraph 3(i)(a), 3(ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.


Mar 31, 2010

As at 31-03-2010 As at 31-03-2009 (Rs. in lac) (Rs. in lac)

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) -- 52.30

2. Contingent liabilities not provided for in respect of -

(i) Amount outstanding in respect of export bills discounted under Export Letters of Credit (Since realized Rs.1,401.71 lac, previous year Rs. 1,128.56 lac) 2,641.38 2,457.48

(ii) Bank Guarantees 389.79 213.03

(iii) Claims not acknowledged as debts 10.78 12.35

(iv) Income tax/Custom Duty demands disputed in appeals 30.69 58.31

(v) Export obligation against import of capital goods under EPCG Scheme NIL 19,367.77

(vi) Corporate guarantee given to a bank for securing financial assistance to subsidiary Company. 100.00 NIL

3. (a) The names of small scale industrial undertakings to whom the Company owes any sum together with interest and outstanding for more than thirty days: Saikrupa Industries 2.33 2.33

Payments against supplies from small-scale industries are made in accordance with agreed terms. Besides, there are no claims from the parties for interest on overdue payments.

(b) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

4. (a) In terms of EPCG Licence issued, the Company has undertaken an export obligation for Rs. 32,820.19 lac, which is to be fulfilled over a period of 8 years.

(b) In terms of advance licence obtained for import of raw cotton the Company has undertaken an export obligation for Rs.24.00 lac which is to be fulfilled upto 01 -05-2009. The Company has already completed this obligation and necessary application for redemption of license is being made to DGFT.

5. Under the package scheme of incentives of Government of Maharashtra for Mega Projects , the Company is eligible for VAT and Electricity duty refund benefits for its home textiles and consumer durable goods divisions. However, if it contravenes any of the conditions of the scheme or eligibility certificate or certificate of entitlement or agreement, it shall repay forthwith the entire benefits drawn / availed along with interest thereon together with costs, charges and expenses thereon.

6. The shareholders of the Company in their extra ordinary general meeting held on 25.03.2010 accorded their approval for allotment of 2166667 equity shares of Rs.10/- each at a premium of Rs.5/- per share on preferential basis to promoter group companies. However, allotment will be made on receipt of approval for the same from NSE. Pending approval, the amount received has been reflected under Share Application Money pending allotment.

7. The 10% (Previous year 8.50%) Privately Placed Secured Redeemable Non-Convertible Debentures are redeemable in 36 quarterly installments beginning from 30-06-2009.

8. In respect of Rupee Term Loan of Rs. 750 lac availed from SICOM Ltd. (SICOM) under Technology Upgradation Fund Scheme (TUFS) SICOM has stipulated that the Company shall not declare any dividend unless it has paid to SICOM installments of interest and principal amount and SICOM shall have the right to restrain the Company from declaring any equity dividend more than 15% or the average of dividend paid in three preceding years, whichever is higher.

9. Based on reference of Union Bank of India, the Lead Bank, a financial restructuring package was approved by Empowered Group of Corporate Debt Restructuring (CDR-EG).

While the Company had given effect of the restructuring package in its books of accounts, banks are continuing to raise demand notices for interest payment at the rate of interest charged prior to the sanction of restructuring package.

The Company has taken up the matter with the banks and accordingly the resultant difference in interest (which is still under reconciliation /determination) between the demand notice received from banks and as per Companys books of account, has not been provided, as the liability is not payable.

10. (a) In respect of various term loan / working capital facilities availed by the Company, the lenders have first/ second / third pari passu charge on fixed assets of the Company.

(b) The term loans are to be further secured by way of first / second charge on the existing fixed assets of Pranavaditya Spinning Mills Ltd., subject however to necessary approvals.

Pending creation of permanent security, the Company has pledged 72,16,512 equity shares held by it in Pranavaditya Spinning Mills Ltd., as per CDR stipulation.

11. In terms of master restructuring agreement dated 30-03-2009, if the Company commits a default in payment or repayment of three consecutive installment of principal amounts of the facilities or interest thereon or any combination thereof, then, the lenders shall have the right to convert, at their option, the whole of the outstanding amount of the facilities and /or 20% of rupee equivalent of the defaulted amount into fully paid-up equity shares of the Company, at par, in the manner specified in a notice in writing to be given by the lenders to the Company prior to the date on which the conversion is to take effect, which date shall be specified in the said notice.

12. (a) The Company revalued its land, buildings and plant and machinery (except for electronics division and 2

D.G. sets of spinning division) as on 01-10-2008 based on the valuation made by an approved valuer.

Accordingly, the original cost of such assets resulted in gross increase in the value of assets over their original cost by Rs. 15,092.28 lac, increase in depreciation upto the date of revaluation by Rs.504.49 lac and thereby net increase in replacement cost by Rs. 14,587.79 lac. The net increase in the value of such land, building and plant and machinery had been credited to revaluation reserve account.

(b) Revaluation of 2 D.G. sets of spinning division was carried out on 01-04-2009 by an approved valuer.The revaluation resulted in a gross increase in the value of assets over their original cost by Rs.1,238 lac. increase in depreciation up to 31-03-2010 by Rs 65.37 lac and thereby net increase in replacement cost by Rs.1,172.70 lac which has been taken as increase in the value of plant and machinery as on 01.04.2009 by creating a revaluation reserve to that extent.

13. In the opinion of the management, the current assets, loans and advances are expected to realize at least the amount at which they are stated, if realized in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.

14. Deferred tax assets has been recognized . The management is of the opinion that there will be sufficient profit in future against which the deferred tax asset will be fully realized.

15. (a) The Company has outstanding foreign currency related derivative contracts in the form of options for hedging its business related exposure which are not speculative in nature. The contracts have long dated tenor with multiple contingent/ uncertain events. As such ascertainment of fair value of these contracts is not feasible. However, banks estimate the total mark to market (MTM) of all outstanding contracts at approx Rs.1,619 lac as at 31-03-2010 ( Previous year Rs.4,835 lac).The management is of the opinion that the determination and crystallization of liability is dependent upon the outcome of uncertain future events or actions, not wholly within the control of the Company. As adoption of AS-30 is presently not mandatory, the estimated MTM loss of Rs.1,619 lac for the year ended 31-03-2010 (previous year Rs. 4,835 lac) has not been provided.

16. Operating Lease:

(a) As Lessor:

i. The Company has entered into lease arrangements , for renting specified machinery at a rent of Rs.75,000/- per month for a period of 120 months and are renewable at the option of the lessee after the end of the term.

17. Related Party Disclosures

Related party disclosures as required by AS - 18 "Related party disclosures" are given below: - A. Relationship

(i) Key management personnel

1. Shri Anil Kumar Jain - Chairman and Managing Director

2. Shri R. N. Gupta - Joint Managing Director

3. Shri D. M. Pradhan - Director (Marketing) ( upto 30.06.2009)

4. Shri Kamal Mitra - Director (Works) (ii) Relatives of key management personnel

1. Smt. G.D. Jain

2. Smt. Shikha Jain

3. Miss Neha Jain

4. Shri Mohit Jain

(iii) Parties where control exists

1. Margo Finance Ltd. (Formerly Indocount Finance Ltd.)

2. Indocount Securities Ltd.

3. Rini Investment and Finance Pvt. Ltd.

4. Pranavaditya Spinning Mills Ltd.

5. Skyrise Properties Pvt. Ltd.

6. Unic Consultants

7. Yarntex Exports Ltd.

18. Previous years figures have been regrouped and / or rearranged wherever considered necessary.

19. Figures have been rounded off to the nearest lac rupees.

20. a) Sundry debtors include debts due from the subsidiary Company Rs. Nil (Previous year Rs. 65.38 lac) b) Sundry creditors include amount due to the subsidiary Company Rs. 56.61 lac (Previous year Rs. Nil)

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