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Notes to Accounts of Kamadgiri Fashion Ltd.

Mar 31, 2018

1. Corporate Information

Kamadgiri Fashions Limited (KFL) (“the Company”) is a public limited company, incorporated domiciled in India which mainly engaged in the business of manufacturing and job work in Textile Industry. The Company is listed on the Bombay Stock Exchange (BSE).

The registered office of the Company is located at B-104, “The Qube” M.V. Road, Marol, Andheri (East), Mumbai -400 059.

The financial statements for the year ended 31st March, 2018 were approved by the Board of Directors and authorised for issue on May 26, 2018.

(i) Terms/Rights Attached to Equity Shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company , the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.1 Term Loan from bank amounting of Rs. 400 Lakhs sanctioned during the FY 2014-2015 and end on FY 2018-2019. The Same is repayable in 60 Monthly installments of Rs. 6.67 Lakhs each along with interest. The Loan is secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Equipments.

Term Loan from bank amounting of Rs. 375 Lakhs sanctioned during the FY 2015-2016 and end on FY 2020-2021. The Same is repayable in 60 Monthly installments of Rs. 6.25 Lakhs each along with interest. The Loan is secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Equipments.

Term Loan from bank amounting of Rs. 250 Lakhs sanctioned during the FY 2017-2018 and end on FY 2022-2023. The Same is repayable in 60 Monthly installments of Rs. 4.17 Lakhs each along with interest. The Loan is secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Equipments.

The rate of interest on the above mentioned Term Loans ranges between 11.00 % p.a to 12.00 % p.a.

2.2 Vehicle loans taken from Toyata Financial services india ltd was carried interest @ 9.50% . The loan is repayable in 49 instalments of Rs. 0.32 Lakh including the interest, from the proceeding month of the approval letter, the loan is secured by hypothecation of specific vehicle.

3.1 Cash credit from banks is secured by hypothecation of present and future stock of raw materials, stock in process, finished goods, stores and spares, book debts, outstanding monies, receivable and carries interest @ 10.00% p.a to 12.00% p.a and the same is repayable on demand.

4.1 No Interest is paid / payable during the year to any enterprise registered under Micro Small and Medium Enterprises Development Act, 2006 ( MSMED). The above information has been determined to the extent such parties could be identified on the basis of the status of suppliers under MSMED.

The current service cost and the net interest expense for the year are included in the salaries,wages,bonus,gratuity etc. in note 30 “Employee Benefits expense”. The actuarial(gain)/loss on remeasurement of the net defined benefit liability is included in other comprehensive income.

Discount Rate, Salary Escalation Rate and Withdrawal Rate are significant actuarial assumptions. The change in the Present Value of Defined Benefit Obligation for a change of 100 Basis Points from the assumed assumption is given below:

(f) Major categories of plan assets

(g) The average expected future working life of members of the defined benefit obligation as at March 31, 2018 is 22.00 years (as at March 31, 2017: 26.89 years)

(h) Best Estimate of Contribution during the next year

The Best Estimate Contribution for the Company during the next year would be Rs. 113.28 Lakhs

5. Disclosure in respect of Operating Segments as per Ind AS 108

The company is engaged in manufacturing (in house and outsourced) fabrics,ready to wear garments, considering the overall nature, the management is of the opinion that the entire operation of the company falls under one segment i.e.Textiles and as such there is no separate reportable segment for the purpose of disclosure as required under Indian Accounting Standards (Ins AS 108) - Operating Segments.

6. Disclosure in respect of operating leases as per Ind AS 17 ‘Leases’

The Company has not entered any non-cancellable lease during the year. Lease rental expenses aggregating to Rs. 283.95 lakh (Previous Year Rs. 323.02 Lakhs) Recognised to Statement of Profit & Loss.

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

ii. Fair Value Measurement

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2 - The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.\

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

iii. Valuation technique used to determine fair value

Specific Valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis

iv. Valuation processes

The accouts and finance department of the company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports direclty to the chief financial officer (CFO) and the audit committte. Discussions of valuation processes and results are held between the CFO, AC and the valuation team regulary in line with the company’s reporting requirements.

7. Financial Risk Management

Risk Management Framework

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 managing board.

7.1 Market risk

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 and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including loans and borrowings, foreign currency receivables and payables.

The Company manages market risk through 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 and borrowing strategies.

7.1.1 Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk as at the respective reporting dates.

Sensitivity

Variable interest rate loans are exposed to Interest rate risk, the impact on profit or loss before tax may be as follows:

7.1.2 Foreign Currency Risk

The Company’s exposure to exchange fluctuation risk is very limited for its purchase from overseas suppliers in various foreign currencies. Foreign Currency Risk is risk that fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchanges rates. The Company entered into forward exchanges contract average maturity of 90-180 days to hedge against its foreign currency exposures relating to underlying liabilities firm commitments. The Company has not entered into any Derivatives instruments for trading and speculatives purposes.

Foreign exchange risk sensitivity:

1% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 1% change in foreign currency rates.

A positive number below indicates an increase in profit and negative number below indicates a decrease in profit. Following is the analysis of change in profit where the Indian Rupee strengthens and weakens by 10% against the relevant currency:

In management’s opinion, the sensitivity analysis is not representative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

7.2 Credit Risk

Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs. 7,030.18 lakhs and Rs. 5,150.10 lakhs as of March 31, 2018 and March 31, 2017 respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors and the Company’s historical experience for customers.

The average credit period on sale of goods is 90 to 180 days.

7.3 Liquidity Risk

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of 31st March 2018, The Company had a working capital of Rs. 2,325.54 lakhs including cash and cash equivalent of Rs. 18.92 Lakhs.

As of 31st March 2017, The Company had a working capital of Rs. 1,879.26 lakhs including cash and cash equivalent of Rs. 11.03 Lakhs.

7.3.1 Maturities of Financial Liablities

The table below anayse the Company’s financial liablities into relevent maturity grouping based on their contractual maturities. The amount disclosed in the tables are contractual undisclosed cash flow.

7.4 Capital Management

The Company manages its capital to ensure that Company will be able to continue as going concern while maximizing the return to shareholders by striking a balance between debt and equity. The capital structure of the Company consists of net debts (offset by cash and bank balances) and equity of the Company (Comprising issued capital, reserves, retained earnings). The Company is not subject to any externally imposed capital requirements except financial covenants agreed with lenders.

In order to optimize capital allocation, the review of capital employed is done considering the amount of capital required to fund capacity expansion, increased working capital commensurate with increase in size of business and also fund investments in new ventures which will drive future growth. The Chief Financial Officer (“CFO”) reviews the capital structure of the Company on a regular basis. As part of this review, the CFO considers the cost of capital and the risks associated with each class of capital.

8. Proposed Dividend

The Board of Directors, in its meeting held on May 26, 2018, have recommended a final dividend of Rs. 2 per equity share of Rs. 10/- each aggregating to Rs. 117.39 lakhs (excludings corporate dividend tax) for the financial year ended March 31, 2018. The recommendation is subject to the approval of shareholders at the Annual General Meeting to be held on September 15, 2018.

9. TRANSITION TO IND AS

As stated in Note no. 1(a)(i), the Company’s financial statements for the year ended 31st March, 2018 are the first annual financial statements prepared in compliance with Ind AS.

The adoption of Ind AS was carried out in accordance with Ind AS 101, using 1st April, 2016 as the transition date. Ind AS 101 requires that all Ind AS that are effective for the first Ind AS Financial Statements for the year ended 31st March, 2017, be applied consistently and retrospectively for all fiscal years presented.

All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and Previous Generally Accepted Accounting Principles (the Previous GAAP) as of the transition date have been recognised directly in equity at the transition date

In preparing these standalone financial statements, the Company has availed itself of certain exemptions and exceptions in accordance with Ind AS 101 as explained below:

A. Mandatory Exceptions

i. Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in with the Previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1st April, 2016 are consistent with the estimates as at the same date made in conformity with the Previous GAAP. The Company made estimates for following items in accordance with Ind AS at the transition date as these were not required under the Previous GAAP:

Impairment of financial assets based on Expected Credit Loss (ECL) Model

ii. Classification and Measurement of Financial Assets

As per Ind AS 101, the Company has assessed classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

iii. Impairment of Financial Assets

The Company has recognised loss allowance on trade receivables at the date of transition to Ind AS, based on ECL Model, considering significant increase in credit risk since the initial recognition of those receivables

B. Optional Exemptions from Retrospective Application Deemed Cost

The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised as of 1st April, 2016 , measured as per the Previous GAAP and use that carrying value as its deemed cost as of the transition date under Ind AS.

C. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

D. Notes to first-time adoption:

Note 1: Security deposits

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent.

Note 2: Borrowings

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense/ income by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred.

Note 3: Deferred tax

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

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.

Note 4: Investment property

Under the previous GAAP, investment properties were presented as part of non-current investments. Under Ind AS, investment properties are required to be separately presented on the face of the balance sheet. There is no impact on the total equity or profit as a result of this adjustment.

Note 5: Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend including DDT 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 included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

Note 6: Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year.

Note 7: Retained earnings

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

Note 8: Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans, foreign exchange differences arising on translation of foreign operations, effective portion of gains and losses on cash flow hedging instruments and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.

10 Previous year’s figures have been regrouped/rearranged wherever considered necessary to make them comparable with current year’s figure.


Mar 31, 2016

1. Additional Term loan from bank amounting to Rs.375 Lakh sanctioned during the financial year 2015-2016. The same is repayable in 60 Monthly instalments of Rs.6.25 Lakh each along with interest. The loan is secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries.

Term Loan of Rs.283.10 Lakh are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 43 equal monthly installments of Rs.6.67 Lakh each along with interest.

Term Loan of Rs.300 Lakh are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 30 equal monthly installments of Rs.10 Lakh each along with interest.

The rate of interest on the above mentioned Term Loans ranges between 12.50 % p.a to 12.75 % p.a.

2. Vehicle loans taken from bank was carried interest @ 10.35% p.a. The loan is repayable in 14 installments of Rs.13,892 along with the interest, from the preceding month of the approval letter, the loan is secured by hypothecation of specific vehicle.

3. The company is engaged in manufacturing (in house and outsourced) fabrics, ready to wear garments, considering the overall nature, the management is of the opinion that the entire operation of the company falls under one segment i.e. Textiles and as such there is no separate reportable segment for the purpose of disclosure as required under Accounting Standard - 17 segment reporting.

4. The Company has not entered into any non-cancelable lease during the year. Lease rental expense aggregating to Rs.255.86 Lakh (previous year Rs.194.59 Lakh) recognized in Statement of Profit & Loss

5. Previous year''s figures have been regrouped/rearranged wherever considered necessary to make them comparable with current year''s figure.


Mar 31, 2015

A. Company overview:-

Kamadgiri Fashion Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at BSE Limited in India. The Company is engaged in the manufacturing and job work in Textile Industries.

B) Terms/rights attached to equity shares :

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

i) Additional Term loan from bank amounting to Rs. 274.38 lacs sanctioned during the financial year 2014-2015. The same is repayable in 41 Monthly instalments of Rs. 6.67 Lacs each along with interest. The loan is secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries.

Term Loan of Rs. 420 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 42 equal monthly instalments of Rs. 10 Lacs each along with interest.

Term Loan of Rs. 45 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 9 equal monthly instalments of Rs. 5 Lacs each along with interest.

Term Loan of Rs. 1.06 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 1 equal monthly instalments of Rs. 1.06 Lacs each along with interest.

The rate of interest on the above mentioned Term Loans ranges between 12.00 % p.a to 14.00 % p.a.

ii) Vehicle loans taken from bank was carried interest @ 10.50%. The loan is repayable in 26 instalments of Rs. 45341 along with the interest, from the proceeding month of the approval letter, the loan is secured by hypothecation of specific vehicle.

iii) The Company has given premises on operating lease for a 99 year commencing from the 1st January 2007 which is non cancellable for 99 years. Interest free refundable deposit Rs. 63 lacs received by the Company, has been disclosed under unsecured loan as deposits.

*Cash credit from banks is secured by hypothecation of present and future stock of raw materials, stock in process, finished goods, stores and spares, book debts, outstanding monies, receivable and carries interest @ 11.25% p.a to 14.00% p.a and the same is epayable on demand

No Interest is paid / payable during the year to any enterprise registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED). The above information has been determined to the extent such parties could be identified on the basis of the status of suppliers under MSMED.

(a) In accordance with the provisions of Schdule II of the Act, In case of fixed assets which have completed their useful life as at 1st April, 2014, the carrying value (net of residual value) amounting to Rs. 40.05 lacs (net of deferred tax of Rs. 19.24 lacs) as a transitional provision has been recognised in the Retained Earnings.

Defined Benefit Plan

The employees ' gratuity fund scheme is unfunded. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to build up the final obligation.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

The above information is certified by the actuary.

* The details of the same is not received from actuary.

2 The company is engaged in manufacturing (in-house and outsourced) fabrics, ready to wear garments, Considering the overall nature, the management is of the opinion that the entire operation of the company falls under one segment i.e.Textiles and as such there is no separate reportable segment for the purpose of disclosure as required under Accounting Standard - 17 segment reporting.

3 CONTINGENT LIABILITIES AND OTHER COMMITMENTS (Rs. in Lacs)

Particulars 31st March 2015 31st March 2014

Contingent Liabilities

a) Claims against the company not acknowledged as debt 130.30 241.34

b) Guarantees 41.36 79.48

171.66 320.82

Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for _ _

b) Other commitments - pending obligation under EPCG scheme 373.47 318.00

373.47 318.00

TOTAL 545.13 638.82

* Dividend for the F.Y. 2013-2014 was declared in AGM held on 26th September 2014 and paid on 30th September 2014 31 Previous year's figures have been regrouped/rearranged wherever considered necessary to make them comparable with current year's figure.


Mar 31, 2014

Company Overview:-

Kamadgiri Fashion Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at Bombay Stock Exchange in India. The Company is engaged in the manufacturing and job work in textile industries.

Terms/rights attached to equity shares:

The Company has only one class of equity shares having a par value of $ 10 per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

i. Additional Term loan from bank amounting to $ 328.39 lacs sanctioned during the financial year 2013-2014. The same is repayable in 54 Monthly instalments of $ 10 Lacs each along with interest. The loan is secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries.

Term Loan of $ 105 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 21 equal monthly instalments of $ 5 Lacs each along with interest.

Term Loan of $ 14.26 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 13 equal monthly instalments of $ 1.10 Lacs each along with interest.

The rate of interest on the above mentioned Term Loans ranges between 12.50% p.a to 14.50% p.a.

ii. Vehicle loans taken from bank was carried interest @ 10.35% . The loan is repayable in 35 instalments of $ 39,857 along with the interest, from the proceeding month of the approval letter, the loan is secured by hypothecation of specific vehicle.

iii. The Company has given premises on operating lease for a 99 year commencing from the 1st January 2007 which is non cancellable for 99 years. Interest free refundable deposit $63 lacs received by the Company, has been disclosed under unsecured loan as deposits.

The company is engaged in manufacturing (in-house and outsourced) fabrics, ready to wear garments, Considering the overall nature, the management is of the opinion that the entire operation of the company falls under one segment i.e.Textiles and as such there is no separate reportable segment for the purpose of disclosure as required under

Previous year''s figures have been regrouped wherever considered necessary to make them comparable with current year''s figure.


Mar 31, 2013

A. Company Overview:-

Kamadgiri Fashion Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at Bombay Stock Exchange in India. The Company is engaged in the manufacturing and job work in textile industries.

1 The Company is engaged in manufacturing (in house and outsourced) fabrics, ready to wear garments, considering the overall nature, the management is of the opinion that the entire operation of the company falls under one segment i.e. Textiles and as such there is no separate reportable segment for the purpose of disclosure as required under Accounting Standard - 17 segment reporting.

''Dividend for the F.Y 2011-2012 was declared in AGM held on 18th September 2012 and paid on 22nd September 2012

2 CONTINGENT LIABILITIES AND OTHER COMMITMENTS (Rs. in lacs)

Particulars 31st March 2013 31st March 2012

Contingent Liabilities

a) Claims against the company not acknowledged as debt 454.70 378.34

b) Guarantees 79.48 79.48

534.18 457.82

Commitments

a) Estimated amount of contracts remaining to be executed on - Capital account and not provided for

b) Other commitments - pending obligation under EPCG scheme 33445 334.45

334.45 334.45

TOTAL 868.63 792.27

3 Previous year''s figures have been regrouped/rearranged wherever considered necessary to make them comparable with current year''s figure.


Mar 31, 2012

A. Company overview:-

Kamadgiri Fashion Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at Bombay Stock exchange in India. The Company is engaged in the manufacturing and job in textile industries.

a) Terms / rights attached to equity shares

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.

During the year ended 31st March 2012, the amount of per share divided recognized as distribution to equity shareholders was Rs. 0.50(31 st March 2011 :Rs.1.50).

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.

i) Term loan from bank was sanctioned during the financial year 2010-2011 and carries interest rate @13.75% . The loan is repayable in 66 months with 6 months moratorium repayable in 60 equal monthly installments of Rs. 18.60 Lacs each along with interest, from the last disbursement date. The loan is secured by equitable mortgage of Factory Land and Building hypothecation of Plant and Machineries and secured .

ii) Vehicle loan from bank was taken during the current financial year and carries interest @ 10.35%. The loan is repayable in 35 installments of Rs. 0.40 Lacs along with the interest, from the proceeding month of the approval letter, the loan is secured by hypothecation of specific vehicle.

iii) The Company has given premises on operating lease for a period of 99 years commencing from the 1 st January 2007 which is non cancellable for 99 years. Interest free refundable deposits Rs. 63 lacs received by the Company, has been disclosed under unsecured loans as deposits.

*Cash credit from banks is secured by hypothecation of present and future stock of raw materials, stock in process, finished goods, stores and spares, book debts, outstanding monies, receivable and carries interest @ 11.25% to 15.25 % and the same is repayable on demand

No interest is paid / payable during the year to any enterprise registered under Micro Small and Medium Enterprises Development Act, 2006 ( MSME) The above information has been determined to the extent such parties could be identified on the basis of the status of suppliers under MSME.

* Includes statutory dues, advances / deposits from customers and provisions for expenses

* Investment held in the shares of Jagruti Synthetics Limited, being of long term nature, is stated at cost of acquisition and no adjustment has been made in respect of diminution in the value of such investment.

** Includes advance to employees , advances to suppliers and right issue expenses.

* Pledged with bankers against margin money of Rs. 12.13 Lacs and against bank guarantee of Rs. 0.70 Lacs (31st March 2011 Margin money Rs. 9.21 Lacs and bank guarantee Rs. 20.80 Lacs)

* other non operating income includes Insurance claim received Rs. 9.43 Lacs (31st March 2011 Rs. 7.51 Lacs)

Defined Benefit Plan

The employees' gratuity fund scheme is unfunded . The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to build up the final obligation.

The obligation for leave encashment is recognized in the same manner as gratuity.

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

Experience adjustments have not been disclosed as details information was not received from the actuary.

1 RELATED PARTY DISCLOSURES:

As per Accounting Standard 18, the disclosures of transactions with the related parties are given below

2 The company is engaged in manufacturing (in house and outsourced) fabrics, ready to wear garments. Considering the overall nature, the management is of the opinion that the entire operation of the company falls under one segment i.e. Textiles and as such there is no separate reportable segment for the purpose of disclosures as required under Accounting Standard -17 Segment Reporting.

3 CONTINGENT LIABILITIES AND OTHER COMMITMENTS

(Rs. in Lacs)

31st March 2012 31st March 2011

(I) Contingent Liabilities

(a) Claims against the company not acknowledged as debt 378.34 145.55

(b) Guarantees 79.48 20.80

457.82 166.35

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for - 107.55

(b) Other commitments - Pending obligation under EPCG Scheme 334.45 334.45

334.45 442.00

792.27 608.35

4 As notified by Ministry of Corporate Affairs, Revised Schedule VI under the Companies Act, 1956 is applicable to the Financial Statements for the financial year commencing on or after 1st April 2011. Accordingly, the financial statements for the year ended 31st March 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of Revised Schedule VI.

* Dividend for the F.Y. 2010-11 was declared in AGM held on 23rd August 2011 and paid on 27th August 2011


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 12.75 lacs (Previous year Rs. 56.34 lacs).

2. Contingent Liabilities not provided for: (i) Tax matters in appeals-

For 2009-10 (Rs. in lacs) For 2008-09 (Rs. in lacs)

Income Tax 111.51 117.40

Sales Tax 31.04 31.80

(ii) Guarantees given by the bankers of the company amounting to Rs. 11.55 lacs against the fixed deposit of Rs. 8.28 lacs kept as margin money.

(iii) Liability, if any, arising on account of undertakings given by the company under EPCG scheme, pending fulfillment of export obligation approximately Rs. 334.45. lacs.

3. As per the information available with the company in response to the enquiries from all existing suppliers with whom Company deals, none of the suppliers are registered with The Micro, Small and Medium Enterprises Development Act, 2006.

4. Employee Benefits:

a) Defined Contribution Plan

b) Defined Benefit Plan

Leave Encashment: Provision for leave encashment has been made on actuarial valuation method which was, till earlier year, charged off at the undiscounted amount in the year in which the related service provided. Had the Company followed same policy for provision for Leave Encashment for employees, the provision for leave encashment would have been higher by Rs. 20.18 lacs including Rs. 14.21 Iacsfortheyear2009-2010.

Gratuity: The employees gratuity scheme is non - fund based. The present value of obligation is determined based on actuarial valuation 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 estimates of rates of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

5. Related Party Disclosure :

1. Names of related parties and description of relationships:

a) Parties having interest in voting power of the company that gives them significance influence over the Company:

i) Shri Pradip Kumar Goenka ii) Pantaloon Industries Limited

b) Key Management Personnel:

Shri Pradip Kumar Goenka - Chairman & Managing Director

Shri Lalit Kumar Goenka - Whole Time Director

Shri Abhay Kumar Kumat- Chief Executive Officer (w.e.f. 30.10.2009)

Relative of key Management Personnel:

Shri Tilak Goenka (Whole Time Director till 30.06.2009 and Director till 30.10.2009)

Smt. Jyoti Kumat

c) Enterprises over which parties mentioned in (a) and (b) above are exercising significant influence: i) Jagruti Synthetics Limited ii) Ananddeep Consultancy Services Private Limited iii) Spindraw Fibres Private Limited iv) Tritoma Hotels Private Limited

6. Natures of securities given for secured loans are as under:

(i) Term loans of Rs. 143.90 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of plant and machineries.

(ii) Motor car loan of Rs. 4.81 lacs is secured by hypothecation of specific vehicle.

(iii) Cash Credit of Rs. 1630.55 lacs and Letters of Credit of Rs. 22.32 lacs is secured by first pari passu charge on the entire current assets of the company underthe consortium arrangement.

(iv) Loans repayable within one year:

Term Loan Form Banks Rs. 133.72 lacs (RY. Rs. 171.14 lacs)

(v) The above loans are further secured by personal guarantee / collaterally as under:

- Term Loans and Cash Credit facilities mentioned in (i) and (iii) above - Chairman & Managing

Director and Chief Executive Officer and first charge over the fixed assets of the Company.

7. Amalgamation expenses were written off to General Reserve of the Transferee Company. This accounting treatment of the reserve has been prescribed in the Scheme. Had the Scheme not prescribed this treatment, this amount would have been debited to the profit and loss account for the year instead of General Reserve, having corresponding impact on the net profit for the year.

8. The Company operates in a single segment i.e. textile having same risk and return. Hence reporting as per AS-17 "Segment Reporting" is not applicable to the company.

9. Figures of the previous year have been regrouped, rearranged and recasted to make them comparable with the figures of the current year.

10. The Company has, on 1 st August 2009, made preferential allotment of 325000 warrants of Rs. 32/- each convertible, on exercising the conversion right within 18 months from the date of allotment, into one fully paid equity share of Rs. 10/-, on which the application money has been received @ Rs. 8/- per warrant.

11. Bank balance does not include Rs. 2.64 lacs (Rs. 2.49 lacs) lying in Dividend Accounts pertaining to financial year 2002-2003 to financial year 2008-2009 with Scheduled Banks in the current accounts.

12. In the financial statements, any discrepancies in any total and the sum of the amounts listed are due to rounding off.

13. Disclosure Under AS-19:

a) The Company has given premises on operating lease for a period of 99 years commencing from 1 st January, 2007 which is non cancellable for 99 years. Interest free refundable deposit Rs. 63.00 lacs received by the Company, has been taken under unsecured loans as security deposits. Other

b) The Company has taken various factory galas /machineries/shops under operating lease. These are not non-cancellable and for a period ranging between 11 months and/or above and are also renewable at the mutual consent at mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with agreed terms. The rent paid for the year as per agreements has been debited to profit and loss account.

14. Additional information pursuant to the provisions of paragraph 3,4C and 4D of part II of schedule VI of the Companies Act 1956, (Figures in the brackets indicate previous yearfigures).

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