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Notes to Accounts of Kewal Kiran Clothing Ltd.

Mar 31, 2023

There are no capital work-in-progress, whose completion or cost compared to its original plan is overdue.

Amount capitalised under building block includes B287.24 lakhs (P.Y.: B527.83 lakhs) being the amount of capital expenditure incurred on self-constructed assets. Further such amount included under CWIP is aggregating to B Nil (P.Y.: B30.25 lakhs).

2.1.3 Building includes the value of 14,000 (P.Y.: 14,000) shares of B100 each in Synthofine Estate CHS Ltd and value of 10 (P.Y.: 10) shares of B50 each in Gautam Chemical Industrial Premises CHS Ltd.

2.1.4 Right to Use - Building includes building constructed on lease hold land having Gross block of B 226.65 lakhs (P.Y.: B 226.65 lakhs).

2.1.5 In the year 2014-15, the Company has acquired freehold land with integrated structures for a composite value whose conveyance is registered and municipal records updated. The value of the structure is determined based on estimated depreciated value of structures and the balance is considered as the value of the land. In respect of the land, the Company has undivided share in land. Also an insignificant portion of land is unlawfully occupied by an illegal occupant and the said occupant had raised some illegal structures which were demolished by the Municipal Corporation. The said illegal occupant has filed a suit in the Hon''ble High Court for his alleged claim in respect of the portion of the land illegally occupied by him. The Company has refuted the alleged claim of the illegal occupant and is defending the suit. The Company has filed an Eviction suit against the illegal occupant in the Hon''ble Small Causes Court. Both the said matters are sub-judiced. There is insignificant impact of these litigations on the financial position of the Company.

2.1.6 The Company does not have any proceedings initiated or are pending against it, for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

2.1.7 The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or investment property during the current or previous year.

2.2.1 The Company had invested in aggregate B 345.50 lakhs in Joint Venture “White Knitwear Private Limited” (WKPL). The WKPL had acquired land in Surat Special Economic Zone (SEZ) and constructed factory building for setting up of manufacturing unit for production of Knitwear Apparels for exports. However due to slowdown in International market, SEZ could not take off and most of the members of SEZ shelved their projects and approached to Gujarat Industrial Development Corporation (GIDC) and State and Central government for de-notification of SEZ.

Gujarat Industrial Development Corporation vide its circular No. GIDC/CIR/Distribution/Policy/13/05 dated 14.03.2013 has de-notified the SEZ and conceded the members to convert and use the erstwhile land in SEZ as Domestic Tariff Area (DTA) subject to fulfillment of conditions stated therein. WKPL vide its letter dated 04.04.13 has consented for de-notification of its plot of land and undertaken to complete the formal procedure for the same.

Post de-notification joint venture partners shall dispose of the Company/land and building and realise the proceeds to return it to joint venture partners.

No provision for impairment in the value of investment is considered necessary for the year ended March 2023 based on valuation of the underlying property in joint venture.

2.9.1 The working capital borrowings are secured by hypotication of inventory of the Company (refer note no 2.21).

2.9.2 The Company follows adequate accounting policy for writing down the value of Inventories towards slow moving, non-moving and surplus inventories. Write down of Inventories (Net of reversals) for the year B 320.00 lakhs (P.Y.: B 320.00 lakhs), this is included as part of cost of materials consumed and changes in inventory of finished goods, work-in-progress and stock in trade in statement of profit and loss. Inventory values shown above are net of the write down.

2.17.1 The Company has only one class of shares referred to as equity shares having a par value of B 10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian B The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. The remittance of dividend outside India is governed by Indian law on foreign exchange and is subject to applicable distribution taxes.

As per the Companies Act, 2013, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in the event of liquidation of the Company. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.17.4 In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, there are no preferential amounts inter se equity shareholders. The distribution will be in proportion to the number of equity shares held by the shareholders (After due adjustment in case shares are not fully paid up.)

2.17.5 For the period of five years immediately preceding the date as at which the Balance Sheet is prepared:

(i) No shares have been allotted as fully paid-up without payment being received in cash.

(ii) The Company issued and allotted 49,300,148 fully paid up Bonus Equity shares of B 10 each in the ratio of 4:1 (i.e. 4 Bonus Equity shares for every 1 existing equity share of the Company) to the shareholders who held shares on December 17, 2021 (Record date).

(iii) No shares have been bought back by the Company.

2.17.6 Sha res held by promoters as defined in the Companies Act, 2013 at the year end (refer note 2.60)

2.18.1

• Securities Premium: Securities Premium is credited when shares are issued at premium. It can be used to issue bonus shares, write-off equity related expenses like underwriting costs, etc.

• General Reserve: Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of the Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of the Companies Act, 2013.

• Retained Earnings: Retained Earnings are the profits the Company has earned till date, less any transfer to General Reserve, dividends or other distributions paid to the shareholders. The reserve can be utilised in accordance with the provisions of the Companies Act, 2013.

• Business Progressive fund: The Company has created “Business Progressive Fund” by appropriating a sum of B Nil (P.Y.: B Nil) lakhs out of its profits to maintain normal growth in sluggish market conditions and support superior growth for longterm. The said fund shall be for the purpose of launching & promoting new products, advertisement campaigns, promotional schemes and initial support to master stockiest and franchisees for development of retail business, reinforce existing channels of sales etc. The amount of fund is specifically earmarked and invested in liquid mutual funds or any other safe and highly liquid investments. The Company has made adequate provisions in accordance with Indian Accounting Standard (AS) -37 in normal course of business. INDAS-37 does not permit providing for expenses where present obligation does not exist or there is no fixed commitment.

Accordingly the Company has opted to create Business Progressive Fund. Further addition to the aforesaid fund shall be reviewed from time to time considering business environment and conditions and the income accrued from the fund. Any accretion to the investment shall be credited to Statement of Profit and Loss.

Maturity profile:

The average expected remaining life time of the plan members is 9 years (P.Y.: 8 years) as at the date of valuation. This represents the weighted average of the expected remaining lifetime of all plan participants.

The sensitivity analysis above has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

100% of the plan assets held by gratuity trust comprises of employees group gratuity scheme with Life Insurance Corporation of India. The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected rate of return on plan assets comprising of Insurance Policy with LIC of India is based on the historical results of returns given by LIC of India.

The Company expects to contribute B 200.00 lakhs to gratuity trust for contribution to LIC of India in financial year 2023-24.

b) Disclosure in respect of leave entitlement liability:

Leave entitlement is short-term benefit which is recognised as an expense at the un-discounted amount in the year in which the related service is rendered and disclosed under other financial liabilities.

c) Death in service benefit:

The Company has taken group term policy from an insurance Company to cover its obligation for death in service benefit given to eligible employees. The insurance premium of B 60.03 lakhs (P.Y.: B 43.62 lakhs) is recognised in Statement of Profit and Loss.

d) The Company contributes towards Employees Provident Fund, Employees State Insurance, National Pension Scheme and Labour Welfare Fund. The aggregate amount contributed and charged to Statement of Profit and Loss is B 594.46 lakhs (P.Y.: B 523.39 lakhs).

The Hon''ble Supreme Court of India (“SC”) by its order dated February 28, 2019, in the case of Surya Roshani Limited & others V/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Based on the same, the Company has changed its Salary Structure from April 1, 2019, but impact of the previous years is not ascertainable, since the retrospective date of applicability of the same is not yet clarified.

2.47: Leases - Ind AS 116:

a) As Lessee:

Effective April 1, 2019, the Company adopted Ind AS 116 and applied the standard to all lease contracts existing on April 1, 2019 using the modified retrospective method. Consequently, the Company recorded the lease liability at the present value of the lease payments discounted at the incremental borrowing rate and the right of use asset at an amount equal to lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet immediately before the date of initial application.

b) As Lessor:

The Company has given certain part of its property on operating lease. These lease arrangements are for a period of 9 years and cancellable solely at discretion of the lessees. Rental income from leasing of property of B 108.00 lakhs (P.Y.: B 104.70 lakhs) is recognised in the Statement of Profit and Loss. The initial direct cost (if any) is charged off to expenses in the year in which it is incurred.

The Company has not given any property under non-cancellable operating lease.

The above Provision has been grouped under the head ‘Current Provisions'' in Note 2.26.

The timing of the outflow is dependent on various aspects / fulfillment of conditions and occurrence of events. Such provisions are made based on the past experience and assessment of rates and taxes. However, it is most likely that outflow is expected to be within a period of one year from the date of Balance Sheet.

2.50: Contingent Liabilities:

a) Disputed demands in respect of income tax not acknowledged as debt by the Company of B 83.16 lakhs (P.Y.: B 47.51 lakhs). Future cash outflows in respect of above are dependent on outcome of matter under dispute.

In addition to the above, in respect of Assessment year 2005-2006, there was tax demand of B 68.94 lakhs (P.Y.: B 68.94 lakhs) which had been adjusted by the tax authorities against refund due to the Company in respect of other years. During F.Y. 2015-16, the Company had received favourable Order passed by the ITAT, Mumbai against which the Income Tax Department has filed the appeal before the Bombay High Court and was admitted dated November 27, 2021.

Future cash outflows in respect of above are dependent on outcome of matter under dispute.

b) The Company had in earlier years purchased capital assets under EPCG license against which the Company does not have any balance export obligation at the end of the year.

As at the year-end, amount of outstanding bonds executed by the Company in favour of customs authority aggregates to B Nil (P.Y.: B 700.24 lakhs).

c) Bank guarantees by the given bank on behalf of the Company of B 206.69 lakhs (P.Y.: B 95.62 lakhs).

d) The Company''s contingent liability and capital/other commitment in relation to joint venture B Nil (P.Y.: B Nil).

2.55: Fair Value Measurement:

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

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

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

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

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

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

2.56: Financial risk management objectives and policies:

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables, investments and cash & cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

a) Market Risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: (i) interest rate risk and (ii) currency risk. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings. The sensitivity analysis in the following sections relate to the position as at March 31, 2023 and March 31, 2022.

The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other postretirement obligations; provisions.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022.

i) 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''s exposure to the risk of changes in market interest rates relates primarily to the Company''s short-term debt obligations with floating interest rates. The Company has sufficient amount of liquid investments to mitigate the interest risk on its short-term debt obligations.

b) Credit risk:

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables). Also refer note 2.58(b) for details regarding customer concentration.

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 default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

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

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

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

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

Financial assets are written off when there are no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company.

Assets in the nature of Investment, security deposits, loans and advances are measured using 12 months expected credit losses (ECL). Balances with Banks is subject to low credit risk due to good credit rating assigned to these banks. Trade receivables are measured using lifetime expected credit losses.

Financial Assets for which loss allowances is measured using the Expected Credit Losses (ECL):

c) Liquidity risk:

The Company''s principal source 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.

As on March 31, 2023, the Company had working capital of B 40,072.38 lakhs (P.Y.: 135,255.74 lakhs) including cash and bank balance of B 17,039.45 lakhs (P.Y.: 119,180.16 lakhs) and current investments of B 12,692.95 lakhs (P.Y.: 111,847.95 lakhs).

The Company is not exposed to significant liquidity risk based on past performance and current expectations. The Company believes that the cash and cash equivalents, cash generated from operations and available un-drawn credit facilities, will satisfy its working capital needs, capital expenditure, investment requirements, commitments and other liquidity requirements associated with its existing operations, through at least the next twelve months.

Note: Investments in subsidiary and Joint Venture are valued at cost less impairment loss (if any) in accordance with Ind AS 27 ‘Separate Financial Statements'', consequently the same is not disclosed in maturity profile tabulated above.

The note below sets out details of the undrawn facilities that will be available for future operating facilities and to settle capital commitments of the Company:

2.57: Capital Management: a) Risk Management:

For the purposes of the Company''s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders.

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

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

2.58: Segment Reporting:

a) The Company is engaged in the business of manufacturing and marketing of apparels & trading of lifestyle accessories/ products. The Company is also generating power from Wind Turbine Generator. The power generated from the same is predominantly used for captive consumption. However, the operation of Wind Turbine Segment is within the threshold limit stipulated under IND AS 108 “Operating Segments” and hence it does not require disclosure as a separate reportable segment. As defined in Ind AS 108 ‘Operating Segments'', the Chief Operating Decision Maker evaluates the Company''s performance related to Apparels business and allocates resources based on an analysis of various performance indicators. Accordingly, Sale of Apparels is considered as only business segment.

b) The customer base of the Company is diverse with different distribution channels and store formats except in case of one customer where the concentration is greater than other parties.

2.63: Compliance with approved scheme(s) of arrangements:

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

2.64: Utilisation of Borrowed funds and Share premium:

a) During the year, the Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall: (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

b) During the year, the Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (i) directly or indirectly issued or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

2.65: Details of crypto currency or virtual currency:

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

2.66: Additional information as required by para 5 of General Instructions for preparation of Statement of Profit and Loss (other than already disclosed above) are either Nil or Not Applicable.

f) Refer note 2.58(b) for details regarding customer concentration.

2.69: The new Code on Social Security, 2020 has been enacted, which could impact the contributions by the Company towards Provident Fund, Gratuity and bonus. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. The Company will complete its evaluation and will give appropriate impact in the financial statements in the period in which the Code becomes effective and the related rules are published.

2.70: The Company has incorporated wholly-owned subsidiary company K-Lounge Lifestyle Limited on February 25, 2021 as per certificate of incorporation received by the Company. The Authorised Share Capital of the said subsidiary company is B 1,000.00 lakhs and paid-up Share Capital the said subsidiary company is B 500.00 lakhs. The Company has subscribed entire paid-up Share Capital of B 500.00 lakhs on April 19, 2021.

Further during the year, company has given loan (including accrued interest) of B 286.12 lakhs to its subsidiary company. The subsidiary company is yet to commence the business operation as on the date.

2.71: During the year the Company has regrouped / reclassified the following items and accordingly the prior year comparatives (including ratios) have also been reclassified / regrouped. These changes did not have any impact of the reported profit after tax and total equity:

a) Bank overdraft has been reduced from cash and cash equivalents in the cash flow statement and accordingly the cash and cash equivalent for previous year is B 14,464.13 lakhs as against B 19,123.98 lakhs (also refer note (i) to cash flow statement).

b) The Company has disclosed the right to return assets and refund liabilities separately effective current year under “Other Current Assets (refer note 2.16) and Other Current Liability (refer note 2.25)”. This was earlier forming part of provisions and inventories. (also refer note 1.12 (d)).


Mar 31, 2018

1. COMPANY OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES:

A. Corporate Information

Kewal Kiran Clothing Limited (“the Company”) is a Public Limited Company incorporated in India having its registered office at Mumbai, Maharashtra. The Company is engaged into manufacturing, marketing and retailing of branded readymade garments and finished accessories.

B. Statement of Compliance and Basis of Preparation

(i) Compliance with Ind AS

The financial statements are prepared in accordance with Indian Accounting Standards (“Ind AS”) as notified under the Companies (Indian Accounting Standards) Rules, 2015, the relevant provisions of the Companies Act, 2013 (“the Act”) and guidelines issued by the Securities and Exchange Board of India (“SEBI”), as applicable.

For all periods up to and including the year ended March 31, 2017, the Company had prepared its financial statements in accordance with Accounting Standards as specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 (“Previous GAAP”).

These financial statements for the year ended March 31, 2018 are the first financial statements that the Company has prepared in accordance with Ind AS. Refer Note 2.53 for information about how the transition from previous GAAP to Ind AS has affected the Company’s Balance sheet, Statement of profit & loss and Statement of cash flows.

(ii) Basis of Preparation and presentation

Basis of Preparation:

The financial statements have been prepared on a historical cost basis, except the following assets and liabilities which have been measured at fair value

- Certain financial assets and liabilities (refer accounting policy regarding financial instruments)

- Employee’s Defined Benefit Plan as per actuarial valuation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using another valuation technique. In determining the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date

Functional and Presentation Currency:

The financial statements are presented in Indian Rupees and all values are rounded to the nearest Lakh (INR 00,000), except otherwise indicated.

1) Property, Plant and Equipment:

Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life. The useful lives of the Company’s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

2) Estimation of Defined benefit obligation:

The costs of providing post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 ‘Employee benefits’ over the period during which benefit is derived from the employees’ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in Note 2.40

3) Sales Returns:

The Company accounts for sales returns accrual by recording an allowance for sales returns concurrent with the recognition of revenue at the time of a product sale. This allowance is based on the Company’s estimate of expected sales returns. The Company deals in various products and operates in various markets. Accordingly, the estimate of sales returns is determined primarily by the Company’s historical experience in the markets in which the Company operates.

4) Fair value measurement of Financial Instruments: Refer Note 2.50

5) Impairment

An impairment loss is recognised for the amount by which an asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount to determine the recoverable amount, management estimates expected future cash flows from each asset or cash generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Company’s assets. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

2.1.1 Building includes the value of 14,000 (P.Y.14,000) share of Rs.100 each in Synthofine Estate CHS Ltd and value of 10 (P.Y.10) share of Rs.50 each in Gautam Chemical Industrial Premises CHS Ltd.

2.1.2 Balance useful life of membership rights as at year end is Nil (P.Y. 12 months).

2.1.3 Building includes building constructed on lease hold land having Gross block of Rs.226.65 lakhs (P.Y. Rs.226.65 lakhs)

2.1.4 I n the year 2014-15, the company has acquired freehold land with integrated structures for a composite value whose conveyance is registered and municipal records updated. The value of the structure is determined based on estimated depreciated value of structures and the balance is considered as the value of the land. In respect of the land, the company has undivided share in land. Also an insignificant portion of land is unlawfully occupied by an illegal occupant and the said occupant had raised some illegal structures which were demolished by the Municipal Corporation during the year under review. The said illegal occupant has filed a suit in the Hon’ble High Court for his alleged claim in respect of the portion of the land illegally occupied by him. The company has refuted the alleged claim of the illegal occupant and is defending the suit. The Company has filed an Eviction suit against the illegal occupant in the Hon’ble Small Causes Court. Both the said matters are sub-judiced.There is insignificant impact of these litigations on the financial position of the company.

2.1.5 Amount capitalised under building block includes Nil (P.Y.198.40) being the amount of capital expenditure incurred on self-constructed assets.Further such amount included under CWIP is aggregating to Rs.851.49 lakhs (P.Y.Rs.491.15 lakhs).

Maturity profile

The average expected remaining lifetime of the plan members is 10 years (31st March, 2017: 11 years) as at the date of valuation. This represents the weighted average of the expected remaining lifetime of all plan participants.

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognized in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

100% of the plan assets held by gratuity trust comprises of employees group gratuity scheme with Life Insurance Corporation of India. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected rate of return on plan assets comprising of Insurance Policy with LIC of India is based on the historical results of returns given by LIC of India.

The Company expects to contribute Rs.50.00 lakhs (P.Y. Rs.175.00 lakhs) to gratuity trust for contribution to LIC of India in financial year 2018-19.

b) Disclosure in respect of leave entitlement liability:

Leave entitlement is short term benefit which is recognized as an expense at the un-discounted amount in the year in which the related service is rendered and disclosed under other current liabilities.

c) Death in service benefit:

The Company has taken group term policy from an insurance Company to cover its obligation for death in service benefit given to eligible employees. The insurance premium of Rs.20.59 lakhs (P.Y. '' Rs.18.93 lakhs) is recognized in Statement of Profit and Loss.

d) The Company contributes towards Employees Provident Fund, Employees State Insurance, National Pension Scheme and Labour Welfare Fund. The aggregate amount contributed and charged to Statement of Profit and Loss is Rs.430.64 lakhs (P.Y. Rs.395.54 lakhs).

2.2 Related Party Disclosure:

Disclosures as per Ind AS 24 - ‘Related Party Disclosures’ are given below:

a) Related Parties where i) control exists and ii) where significant influence exists (with whom transaction have taken place during the year).

Joint Ventures:

White Knitwear Private Limited

Enterprises where Key Management Personnel (KMP) and their relatives have significant influence:

Enlighten Lifestyle Limited

Smt. Jatnobai Karamchandji Ratanparia Chouhan Charitable Trust Lord Gautam Charitable Foundation Kewal Kiran Finance Private Limited

Key Management Personnel:

Kewalchand P. Jain Chairman & Managing Director Hemant P. Jain Whole-time Director

Dinesh P. Jain Whole-time Director

Vikas P. Jain Whole-time Director

Prakash A. Mody Independent Director

Nimish G. Pandya Independent Director

Yogesh A. Thar Independent Director

Drushti R. Desai Independent Director

Relatives / Other concerns of Key Management Personnel (In cases where transactions are there):

Shantaben P. Jain (Mother of Key Management Personnel)

Veena K. Jain (Wife of Kewalchand P. Jain.)

Lata H. Jain (Wife of Hemant P. Jain)

Sangeeta D. Jain (Wife of Dinesh P. Jain)

Kesar V. Jain (Wife of Vikas P. Jain)

Pankaj K. Jain (Son of Kewalchand P. Jain)

Hitendra H. Jain (Son of Hemant P. Jain)

Kewalchand P. Jain (HUF)

Hemant P. Jain (HUF)

Dinesh P. Jain (HUF)

Vikas P. Jain (HUF)

P.K. Jain Family Holding Trust

Pandya & Co. (Controlled by Mr. Nimish G. Pandya)

Bansi S. Mehta & Co. [Partnership Firm- Yogesh A. Thar and Drushti R. Desai (Partners)]

Employee Funds:

Kewal Kiran Clothing Limited - Employee Group Gratuity Scheme.

2.3 Operating Lease Arrangements:

Disclosure as per Ind AS- 17 - “Operating Lease” are given below:

a) As lessee:

Rental expenses of Rs.117.31 lakhs (P.Y. Rs.88.73 lakhs) under operating leases have been recognized in the Statement of Profit and Loss. It includes contingent lease rent of Rs.16.53 lakhs (P.Y. Rs.7.83 lakhs) based on revenue sharing model.

At Balance sheet date, minimum lease payments under non-cancellable operating leases fall due as follows:

The above figures include:

i. The agreements are executed for the periods of 33 to 108 months with a non-cancellable period at the beginning of the agreement ranging from 12 to 36 months and having a clause for extension of lease period.

ii. Lease rentals based on estimated date of commencement of lease in cases where the agreements / MOU’s have been entered into but the date of commencement of lease is dependent on the date of construction/renovation of premises and based on the commitment for delivery by lessors.

iii. The above-mentioned lease rentals include a lease the period of which is dependent on the occurrence of an event, the date of which is not ascertainable beyond five years. Hence, the lease rentals are considered up to a period of five years only.

iv. Lease rentals do not include common area maintenance charges and tax payable, if any.

v. The above details of lease rental obligation exclude the amounts payable by franchisee in accordance with the arrangement with them (a) not later than 1 year Rs.21.15 lakhs (P.Y. Rs.29.04 lakhs) (b) between 1 to 5 year Rs.88.49 lakhs (P.Y. Rs.103.04 lakhs) (c) more than 5 years Rs.3.97 lakhs (P.Y. Rs.31.94 lakhs).

b) As Lessor:

The Company has given certain part of its property on operating lease. These lease arrangements are for a period of 9 years and cancellable solely at discretion of the lessees. Rental income from leasing of property of Rs.89.51 lakhs (P.Y. Rs.6.09 lakhs) is recognized in the Statement of Profit and Loss. The initial direct cost (if any) is charged off to expenses in the year in which it is incurred.

The Company has not given any property under non -cancellable operating lease.

2.4 Disclosure regarding Derivative Instrument and Unhedged Foreign Currency Exposure:

There are no open derivatives / forward exchange contracts as at year end. The year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

The above Provision has been grouped under the head ‘Current Provisions’ in Note 2.21.

The timing of the outflow is dependent on various aspects / fulfillment of conditions and occurrence of events. Such provisions are made based on the past experience and assessment of rates and taxes. However, it is most likely that outflow is expected to be within a period of one year from the date of Balance Sheet.

2.5 Contingent Liabilities:

a) Disputed demands in respect of income tax not acknowledged as debt by the Company of Rs.20.77 lakhs (P.Y. Rs.20.77 lakhs).

I n respect of Assessment year 2005-2006, there was tax demand of Rs.68.94 lakhs (Rs.68.94 lakhs) which had been adjusted by the tax authorities against refund due to the Company in respect of other years. During F.Y. 2015-16, the Company had received favourable Order passed by the ITAT, Mumbai against which the Income Tax Department has filed the appeal before the Bombay High Court and is under pre-admission stage.

Future cash outflows in respect of above are dependent on outcome of matter under dispute

b) The Company has purchased capital assets under EPCG license against which the Company has a balance export obligation of Rs.1,130.28 lakhs (P.Y. 1,103.79 lakhs). Contingent liability, to the extent of duty saved in respect of EPCG is Rs.188.38 lakhs (P.Y. 183.97 lakhs). The balance export obligation to be fulfilled as per license is upto year 2021-2023.

As at the year-end, amount of outstanding bonds executed by the Company in favour of customs authority aggregates to Rs.805.68 lakhs (P.Y. Rs.880.65 lakhs). Out of these, bonds aggregating to Rs.176.04 lakhs (P.Y. Rs.180.40 lakhs) are under the process of discharge from custom authorities.

c) Bank guarantees issued by the Company of Rs.94.91 lakhs (P.Y. Rs.73.67 lakhs)

d) The company’s contingent liability and capital/other commitment in relation to joint venture '' Nil and '' Nil.

e) The Company has process in place to ascertain the impact of pending litigation.

Note: No outflow of resources is expected in respect of Para (b) and (c).

2.6 Estimated amount of contracts remaining to be executed on-

a) Capital Commitment- Capital Account and not provided for Nil (net of advances) (P.Y. Rs.72.74 lakhs).

b) Other commitments-

1. Advertisement contracts aggregating to Nil (Net of advances) (P.Y Rs.12.65 lakhs).

2. Purchase of Consumables- Rs.15.94 lakhs (P.Y. '' Nil)

3. Capital Contribution Commitment for investment in India Whizdom Fund (IWF) Nil (P.Y. Rs.50.00 lakhs).

Also Refer Note 2.42 in respect of minimum lease rental payment under non-cancellable operating lease.

The effective tax rate is 32.52% (F.Y. 2016-17, 31.12%).

2.7 Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, the company has spent on Corporate Social Responsibility as per its CSR policy.

a) Gross amount required to be spent by the company during the year is Rs.193.33 lakhs (P.Y. Rs.191.20 lakhs)

Note: 1 Figures in brackets represents corresponding amount of previous year.

Note: 2 Cash flow from operating activities includes CSR amounting to Rs.247.00 lakhs (P.Y. Rs.191.35 lakhs)

c) Refer note no. 2.41 for transactions with related parties

2.8 Particulars of Loans, Guarantees or Investments pursuant to section 186(4) of the Companies Act, 2013-

2.9 Fair Value Measurement:

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

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

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

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

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

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

2.10 Financial risk management objectives and policies:

The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade and other receivables, investments, and cash & cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: (i) interest rate risk and (ii) currency risk. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings. The sensitivity analysis in the following sections relate to the position as at 31st March, 2018 and 31st March, 2017.

The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other postretirement obligations; provisions.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31st March, 2018 and 31st March, 2017.

(i) Interest rate risk

I nterest 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’s exposure to the risk of changes in market interest rates relates primarily to the Company’s short term debt obligations with floating interest rates. The Company has sufficient amount of liquid investments to mitigate the interest risk on its short term debt obligations.

Interest rate sensitivity-

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings taken at floating rates. With all other variables held constant, the Company’s profit / (loss) before tax is affected through the impact on floating rate borrowings, as follows:

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company transacts business in local currency and in foreign currency, primarily in USD. The Company’s trade receivables in foreign currency as at 31st March, 2018 is Rs.384.05 lakhs (P.Y. Rs.115.62 lakhs).

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in rate of USD, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign currency changes for all other currencies is not material.

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

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 default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i. Actual or expected significant adverse changes in business,

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

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

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

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

Financial assets are written off when there are no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company.

Assets in the nature of Investment, security deposits, loans and advances are measured using 12 months expected credit losses(ECL). Balances with Banks is subject to low credit risk due to good credit rating assigned to these banks. Trade receivables are measured using life time expected credit losses.

Financial Assets for which loss allowances is measured using the Expected Credit Losses (ECL):

The Ageing analysis of Account receivables has been considered from the date the invoice falls due-

No Significant changes in estimation techniques or assumptions were made during the year

c) Liquidity risk

The Company’s principal source 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.

As on 31st March, 2018, the Company had working capital of Rs.18,535.43 lakhs (P.Y. Rs.16,736.16 lakhs) including cash and cash equivalents of Rs.6,154.29 lakhs (P.Y. Rs.6,556.03 lakhs) and current investments of Rs.9,329.67 lakhs (P.Y. Rs.7,582.84 lakhs)

Maturity patterns of the Financial Liabilities of the Company at the reporting date based on contractual undiscounted payment-

2.11Capital Management

(a) Risk Management

For the purposes of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders.

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

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

The Company monitors capital using Net debt-equity ratio, which is Net debt (i.e. total debt less cash & cash equivalents and current investments) divided by total equity.

2.12 First- time adoption of Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS.

The Company has adopted Ind AS notified by the Ministry of Corporate Affairs with effect from 01st April, 2017, with a transition date of 01st April, 2016. Ind AS 101-First-time Adoption of Indian Accounting Standards requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements which is for the year ended 31st March, 2018 for the company, be applied retrospectively and consistently for all financial years presented. Consequently, in preparing these Ind AS financial statements, the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as explained below. The resulting difference in the carrying values of the assets and liabilities as at the transition date between the Ind AS and Previous GAAP have been recognized directly in equity.

Set out below are the Ind AS 101 optional exemptions availed as applicable and exceptions applied in the transition from previous GAAP to Ind AS.

A. Optional Exemptions availed

(a) Deemed Cost

The Company has opted paragraph D7AA and accordingly considered the carrying value of property, plant and equipment and Intangible assets as deemed cost as at the transition date.

(b) Investments in joint ventures

The Company has opted para D14 and D15 and accordingly considered the Previous GAAP carrying amount of Investments as deemed cost as at the transition date.

(c) Designation of previously recognised financial instruments

Paragraph D19B of Ind AS 101 gives an option to an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The company has opted to apply this exemption for its investment in equity Investments.

B. Applicable Exceptions

(a) 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 accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).

Ind AS estimates as at 01st April, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in listed equity instruments carried at FVOCI;

- Investment in mutual funds carried at FVTPL; and

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

(b) Classification and measurement of financial assets As required under Ind AS 101 the company has assessed the classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

C. Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS as required under Ind AS 101:

I. Reconciliation of Balance sheet as at 01st April, 2016 (Transition Date)

II. A. Reconciliation of Balance sheet as at 31st March, 2017

B. Reconciliation of Total Comprehensive Income for the year ended 31st March, 2017

III. Reconciliation of Statement of Cash flow for the year ended 31st March, 2017

IV. Reconciliation of Equity as at 31st March, 2017 & 01st April, 2016

The presentation requirements under Previous GAAP differs from Ind AS, and hence, Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The Regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.

A. Property, Plant and Equipment: The leasehold land having carrying value of Rs.210.16 lakhs as on 31st March, 2017 (01st April, 2016- Rs.213.22 lakhs) was classified as PPE under the previous GAAP, the same has been reclassified as “other non-current assets” under Ind AS in terms of the agreement. Depreciation of Rs.3.06 lakhs in respect to the above asset has been classified under “Manufacturing & operating expenses” under Ind AS.

Intangible Assets having carrying value of Rs.4.68 lakhs as at 31st March, 2017 (01st April, 2016- Nil) were reclassified as ‘Tangible Assets’ under PPE.

The Company has given part of the premises under operating lease during the financial year 2016-17. The same was classified as PPE under previous GAAP The carrying value of the above premises as on 31st March, 2017 of Rs.160.35 lakhs (01st April, 2016- Nil) have been reclassified as “Investment Properties” during the F.Y. 2016-17.

B. Investments:

The Company has designated all investments in mutual funds (classified under non-current investments, current investments, and cash & cash equivalents) at fair value through profit or loss (FVTPL) and investment in equity shares other than Investment in Joint Venture at Fair Value through OCI. Ind AS requires FVOCI and FVTPL investments to be measured at fair value. At the date of transition to Ind AS, difference between the fair value of investment and IGAAP carrying amount has been recognised in Retained Earnings.

C. Non-Current Financial Assets & Non-Current Other Assets: Reclassification from non-current financial assets to non-current other assets

D. Inventories: Effect of margin on sales return where there is a right to return the goods on inventories of Rs.56.24 lakhs (01st April, 2016- Rs.44.82 lakhs.)

E. Cash & Cash Equivalents:

1. Reclassification of liquid investments from cash & cash equivalents to current investments.

2. Reclassification of bank balance other than cash & cash Equivalents as separate line item.

F. Loans, Other Current Financial & Non- Financial assets:

Reclassification effect of Loans into other current financial and non-financial assets.

G. Other Equity: Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was 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 of Rs.222.51 lakhs as at 01st April, 2016 included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

H. Other Long-Term Liabilities:

Reclassification from other non-current long term liabilities to current liabilities.

I. Current Provisions: Tax liabilities were earlier classified under “Current Provisions”, the same has been reclassified as ‘current tax liabilities’ as separate line item in the balance sheet under Ind AS.

J. Discounts, Incentives & Promotional Expenses: Under the previous GAAP, promotional expenses, discounts and incentives to the customers were shown as a part of selling and distribution expenses. Under Ind AS, revenue from sale of products are recognised at net of these expenses. Thus, revenue from operations under Ind AS has decreased by Rs.2,281.67 lakhs with a corresponding decrease in selling and distribution expenses.

Under the previous GAAP, professional fees to management franchisee of Rs.95.13 lakhs was part of administrative expenses, the same has been reduced from revenue from operations under Ind AS. Under the previous GAAP, the cash discount offered to customers on early payment was part of finance cost. Under Ind AS, the cash discount of Rs.199.57 Lakhs is reduced from the revenue from operations.

The difference of opening and closing effect of margin on sales return (where there is a right to return the goods) of Rs.11.42 lakhs is shown under ‘Change in inventories of finished goods, work in progress and stock in trade’ with the corresponding decrease in revenue from operations.

Under the previous GAAP, revenue from sale of goods was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty is presented on the face of the Statement of Profit and Loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31st March, 2017 by Rs.1059.49 Lakhs.

There is no impact in the total equity and profit due to above adjustments.

K. Fair value difference of Rs.1,115.86 lakhs on investments in mutual funds is recognized as ‘Other Income’.

L. Re-measurement on defined benefit plans - Under Ind AS, re-measurements 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 (OCI) instead of profit or loss. Under the previous GAAP, these re-measurements were forming part of the profit or loss for the year. As a result of this change, there is no impact on the total equity as at March 31, 2017.

2.13 Ind AS 115, Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach). The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 01, 2018.

The Company will adopt the standard on April 01, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is expected to be insignificant.

2.14 Additional information as required by para 5 of General Instructions for preparation of Statement of Profit and Loss (other than already disclosed above) are either Nil or Not Applicable.

2.15 Previous year figures are regrouped or rearranged wherever considered necessary.


Mar 31, 2017

1. ESTIMATED AMOUNT OF CONTRACTS REMAINING TO BE EXECUTED ON

a) Capital Account and not provided for Rs, 72.74 lakhs (net of advances) (P.Y. Rs, 308.76 lakhs).

b) Other commitments-Relating to Advertisement contracts aggregating to Rs, 12.65 lakhs (Net of advances) (P.Y Rs, 116.02 lakhs). Capital Contribution Commitment for investment in India Whizdom Fund (IWF) Rs, 50.00 lakhs (P.Y. Nil). Also Refer Note 2.42 in respect of minimum lease rental payment under non-cancellable operating lease.

* Information is disclosed to the extent available.

100% of the plan assets held by gratuity trust comprises of employees group gratuity scheme with Life Insurance Corporation of India. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected rate of return on plan assets comprising of Insurance Policy with LIC of India is based on the historical results of returns given by LIC of India.

The Company expects to contribute Rs, 175.00 lakhs (P.Y. Rs, 75.00 lakhs) to gratuity trust for contribution to LIC of India in financial year 2017-18.(Considering proposed increase in limit as per The Payment of Gratuity Act 1972.)

b) Disclosure in respect of leave entitlement liability:

Leave entitlement is short term benefit which is recognized as an expense at the un-discounted amount in the year in which the related service is rendered and disclosed under other current liabilities.

c) Death in service benefit:

The Company has taken group term policy from an insurance Company to cover its obligation for death in service benefit given to eligible employees. The insurance premium of Rs, 18.93 lakhs (P.Y. Rs, 11.81 lakhs) is recognized in Statement of Profit and Loss.

d) The Company contributes towards Employees Provident Fund, Employees State Insurance, National pension Scheme and Labour Welfare Fund. The aggregate amount contributed and charged to Statement of Profit and Loss is Rs, 395.54 lakhs (P.Y. Rs, 387.95 lakhs).

Note: As per the expert advisory opinion, electricity generated from Wind Turbine Generator and used for captive consumption is reduced from the electricity expenses in Statement of Profit and Loss but shown as segment revenue for the purpose of segment reporting as per AS-17 “Segment Reporting”.

*Segment Assets from outside India represents receivables from Export Sales (net of advances in relation to exports). In view of the interwoven / intermix nature of business and manufacturing facility, other information is not ascertainable

(Figures in bracket indicate previous year''s figures)

2. RELATED PARTY DISCLOSURE:

Disclosures as per Accounting Standard (AS-18) - ‘Related Party Disclosures'' are given below:

a) Related Parties where i) control exists and ii) where significant influence exists (with whom transaction have taken place during the year).

Joint Ventures:

White Knitwear Private Limited

Enterprises where Key Management Personnel (KMP) and their relatives have significant influence:

Enlighten Lifestyle Limited

Smt. Jatnobai Karamchandji Ratanparia Chouhan Charitable Trust Lord Gautam Charitable Foundation Kewal Kiran Finance Private Limited

Key Management Personnel:

Kewalchand P. Jain Chairman & Managing Director Hemant P. Jain Whole-time Director Dinesh P. Jain Whole-time Director

Vikas P. Jain Whole-time Director

Relatives / Other concerns of Key Management Personnel:

Shantaben P. Jain (Mother of Key Management Personnel)

Veena K. Jain (Wife of Kewalchand P. Jain.)

Lata H. Jain (Wife of Hemant P. Jain)

Sangeeta D. Jain (Wife of Dinesh P. Jain)

Kesar V. Jain (Wife of Vikas P. Jain)

Pankaj K. Jain (Son of Kewalchand P. Jain)

Hitendra H. Jain (Son of Hemant P. Jain)

Kewalchand P. Jain (HUF)

Hemant P. Jain (HUF)

Dinesh P. Jain (HUF)

Vikas P. Jain (HUF)

P.K. Jain Family Holding Trust

Employee Funds:

Kewal Kiran Clothing Limited - Employee Group Gratuity Scheme.

Note:

i) Figures in brackets represents corresponding amount of previous year.

ii) Above transactions exclude reimbursement of expenes

iii) In case of KMP under the Companies Act, 2013, managerial remuneration excludes gratuity provision as it is determined on actuarial basis for the company as a whole.

3. OPERATING LEASE ARRANGEMENTS:

Disclosure as per Accounting Standard (AS-19) - “Leases” are given below:

a) As lessee:

Rental expenses of Rs, 88.73 lakhs (P.Y. Rs, 73.01 lakhs) under operating leases have been recognized in the Statement of Profit and Loss. It includes contingent lease rent of Rs, 7.83 lakhs (P.Y. Rs, 3.79 lakhs) based on revenue sharing model.

The above figures include:

i. The agreements are executed for the periods of 33 to 108 months with a non-cancellable period at the beginning of the agreement ranging from 12 to 36 months and having a clause for extension of lease period.

ii. Lease rentals based on estimated date of commencement of lease in cases where the agreements / MOU''s have been entered into but the date of commencement of lease is dependent on the date of construction/renovation of premises and based on the commitment for delivery by lessors.

iii. The above-mentioned lease rentals include a lease the period of which is dependent on the occurrence of an event, the date of which is not ascertainable beyond five years. Hence, the lease rentals are considered up to a period of five years only.

iv. Lease rentals do not include common area maintenance charges and tax payable, if any.

v. The above details of lease rental obligation exclude the amounts payable by franchisee in accordance with the arrangement with them (a) not later than 1 year Rs, 29.04 lakhs (P.Y. Rs, 54.92 lakhs) (b) between 1 to 5 year Rs, 103.04 lakhs (P.Y. Rs, 125.20 lakhs)

(c) more than 5 years Rs, 31.94 lakhs (P.Y. Rs, 59.31 lakhs).

b) As Lessor:

Rental income from leasing of property of Rs, 6.09 lakhs (P.Y. Rs, 6.31 lakhs) is recognized in the Statement of Profit and Loss. The lease agreements are of cancellable nature. It includes contingent lease rent of Rs, Nil (P.Y. Rs, 1.93 lakhs) based on revenue sharing model, which is higher of fixed amount or percentage of revenue of lessee. The initial direct cost (if any) is charged off to expenses in the year in which it is incurred.

The Company''s share in the contingent liability and capital/other commitment of the Joint Venture are Rs, 7.31 lakhs (P.Y. Rs, 35.00 lakhs) and Rs, Nil (P.Y. Rs, Nil) - respectively. The CompanyRs,s share in contingent liability towards cumulative preference dividend including tax thereon of the Joint Venture aggregates to Rs, 210.69 lakhs (P.Y. Rs, 188.12 lakhs) which is payable to its joint venture partners.

The Company''s contingent liability and capital/other commitment in relation to joint venture Rs, Nil (P.Y. Rs, Nil) and Rs, Nil (P.Y. Rs, Nil).

* It comprises of rates & taxes.

The above Provision has been grouped under the head ‘Short Term Provisions'' in Note 2.8.

The timing of the outflow is dependent on various aspects / fulfillment of conditions and occurrence of events. Such provisions are made based on the past experience and assessment of rates and taxes. However, it is most likely that outflow is expected to be within a period of one year from the date of Balance Sheet.

4 CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act, 2013, the company has spent on Corporate Social Responsibility as per its CSR policy.

a) Gross amount required to be spent by the company during the year is Rs, 191.20 lakhs (P.Y. Rs, 183.61 lakhs)

b) Amount spent during the year on:

Note: 1 Figures in brackets represents corresponding amount of previous year.

Note: 2 Cash flow from operating activities includes CSR amounting to Rs, 191.35 lakhs (P.Y. Rs, 184.46 lakhs)

c) Refer note no. 2.41 for transactions with related parties

5. ADDITIONAL INFORMATION AS REQUIRED BY PARA 5 OF GENERAL INSTRUCTIONS FOR PREPARATION OF STATEMENT OF PROFIT AND LOSS (OTHER THAN ALREADY DISCLOSED ABOVE) ARE EITHER NIL OR NOT APPLICABLE.

* Considering impracticability and the nature of industry in which the Company operates, denomination wise details are not readily available. Auditors have relied on the information/representation provided by the management.

6. PREVIOUS YEAR FIGURES ARE REGROUPED OR REARRANGED WHEREVER CONSIDERED NECESSARY.

NOTICE OF 26TH ANNUAL GENERAL MEETING


Mar 31, 2016

1. ''The Company has given part of the premises under operating lease. The gross carrying amount, accumulated depreciation at the balance sheet date and depreciation recognized in Statement of Profit and Loss for the year of said premises is Rs. 22.84 lakhs, Rs. 6.36 lakhs and Rs. 6.21 lakhs respectively (P.Y. Rs. 191.40 lakhs, Rs. 58.99 lakhs and Rs. 5.47 lakhs).

2. Building includes the value of 14,000 (P.Y.14,000) share of Rs. 100 each in Synthofine Estate CHS Ltd and value of 10 (P.Y.Nil) share of Rs. 50 each in Gautam Chemical Industrial Premises CHS Ltd.

3. Balance useful life of software (Tukacad Professional Edition software) as at year end is Nil (P.Y. 9 months). Balance useful life of membership rights as at year end is 36 months (P.Y. 48 months).

4. During the previous year 2014-15, the Company had realigned its depreciation policy in accordance with Schedule II to Companies Act, 2013. Consequently w.e.f. 1st April 2014 :

(a) the carrying value of assets acquired prior to 1st April 2014 is now depreciated over its revised remaining useful life;

(b) where the remaining useful life of the asset is nil as on 1st April 2014, carrying value of assets has been adjusted against opening reserves (net of deferred tax of Rs. 18.45 lakhs) amounting to Rs. 35.82 lakhs in accordance with transitional provision of Schedule II;

(c) on account of above change, depreciation charged to Statement of Profit and Loss for year 2014-2015 is lower by Rs. 139.18 lakhs.

5. In the previous year 2014-15, the Company had acquired freehold land with integrated structure for a composite value whose conveyance is registered and municipal records (property card) is in the process of updation. The value of structure is determined based on estimated depreciated value of structures and the balance is considered as the value of land. In respect of land, the Company has an undivided share in land. Also an insignificant portion of land is unlawfully occupied by an illegal occupant and the said occupant has raised some illegal structures for which the Municipal Corporation has served a demolition notices. The demolition notices are being contested, by the unlawful tenant, in an Appeal before the Hon''ble High Court and the matter remains subjudice as on date.

6. Contingent Liabilities:

a) Disputed demands in respect of income tax not acknowledged as debt - Rs. 15.74 lakhs (P.Y. Rs. 15.47 lakhs). Future cash outflows in respect of above are dependent on outcome of matter under dispute.

In respect of Assessment year 2005-2006 there was tax demand of Rs. 68.94 lakhs (Nil) which had been adjusted by the tax authorities against refund due to the company in respect of other years. During the year, the company has received favourable Order passed by the ITAT, Mumbai against which the Income Tax Department has filed the appeal before the Bombay High Court and is under pre-admission stage.

b) The Company has purchased capital assets under EPCG license against which the Company has a balance export obligation of Nil (P.Y. Rs. 63.37 lakhs). Contingent liability, to the extent of duty saved in respect of EPCG is Nil (P.Y. Rs. 10.56 lakhs).

Further, in respect of the above, outstanding bonds at the year-end executed by the Company in favour of customs authority aggregates to Rs. 251.00 lakhs (P.Y. Rs. 270.07 lakhs). Out of above, bonds aggregating to Rs. 112.57 lakhs (P.Y. Rs. 169.25 lakhs) are under the process of discharge from custom authorities.

c) Bank guarantees of Rs. 60.09 lakhs (P.Y. Rs. 65.47 lakhs).

d) Letter of Credit of Nil (P.Y. Rs. 78.75 lakhs).

Note: The Company does not expect any outflow of resources in respect of Para (b), (c) and (d).

7. Estimated amount of contracts remaining to be executed on-

a) Capital Account and not provided for Rs. 308.76 lakhs (net of advances) (P.Y. Rs. 129.34 lakhs).

b) Other commitments-Relating to Advertisement contracts aggregating to Rs. 116.02 lakhs (Net of advances) (P.Y Rs. 64.39 lakhs). Also Refer Note 2.42 in respect of minimum lease rental payment under non-cancellable operating lease.

100% of the plan assets held by gratuity trust comprises of employees group gratuity scheme with Life Insurance Corporation of India. Additional provision has been made for short fall between liability as per actuarial valuation and value of plan assets. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected rate of return on plan assets comprising of Insurance Policy with LIC of India is based on the historical results of returns given by LIC of India.

The Company expects to contribute Rs. 75.00 lakhs (P.Y. Rs. 125.00 lakhs) to gratuity trust for contribution to LIC of India in financial year 2016-17.

b) Disclosure in respect of leave entitlement liability:

Leave entitlement is short term benefit which is recognized as an expense at the un-discounted amount in the year in which the related service is rendered.

c) Death in service benefit:

The Company has taken group term policy from an insurance Company to cover its obligation for death in service benefit given to eligible employees. The insurance premium of Rs. 11.81 lakhs (P.Y. Rs. 7.50 lakhs) is recognized in Statement of Profit and Loss.

d) The Company contributes towards Employees Provident Fund, Employees State Insurance, National pension Scheme and Labour Welfare Fund. The aggregate amount contributed and charged to Statement of Profit and Loss is Rs. 387.95 lakhs (P.Y. Rs. 322.96 lakhs).

8. Segment Reporting :

a) Primary segment:

The Company is engaged in the business of manufacturing and marketing of Apparels & trading of Lifestyle Accessories/ Products. The Company is also generating power from Wind Turbine Generator. The power generated from the same is predominantly used for captive consumption. However, the operation of Wind Turbine Segment is within the threshold limit stipulated under AS - 17 "Segment Reporting" and hence it does not require disclosure as a separate reportable segment.

9. Operating Lease Arrangements:

Disclosure as per Accounting Standard (AS-19) - "Leases" are given below:

a) As lessee:

Rental expenses of Rs. 73.01 lakhs (P.Y. Rs. 113.89 lakhs) under operating leases have been recognized in the Statement of Profit and Loss. It includes contingent lease rent of Rs. 3.79 lakhs (P.Y. Rs. 7.67 lakhs) based on revenue sharing model.

The above figures include:

i. The agreements are executed for the periods of 33 to 108 months with a non-cancellable period at the beginning of the agreement ranging from 12 to 36 months and having a clause for extension of lease period.

ii. Lease rentals based on estimated date of commencement of lease in cases where the agreements / MOUs have been entered into but the date of commencement of lease is dependent on the date of construction/ renovation of premises and based on the commitment for delivery by lessors.

iii. The above-mentioned lease rentals include a lease the period of which is dependent on the occurrence of an event, the date of which is not ascertainable beyond five years. Hence, the lease rentals are considered up to a period of five years only.

iv. Lease rentals do not include common area maintenance charges and tax payable, if any.

v. The above details of lease rental obligation exclude the amounts payable by franchisee in accordance with the arrangement with them (a) not later than 1 year Rs. 54.92 lakhs (P.Y. Rs. 93.92 lakhs) (b) between 1 to 5 year Rs. 125.20 lakhs (P.Y. Rs. 139.27 lakhs) (c) more than 5 years Rs. 59.31 lakhs (P.Y. Rs. 84.12 lakhs).

b) As Lessor:

Rental income of Rs. 6.31 lakhs (P.Y. Rs. 19.04 lakhs) is recognized in the Statement of Profit and Loss. It includes contingent lease rent of Rs. 1.93 lakhs (P.Y. Rs. 5.24 lakhs) based on revenue sharing model, which is higher of fixed amount or percentage of revenue of lessee. There is no escalation clause and one of the lease agreement is cancelled during the current year. The initial direct cost (if any) is charged off to expenses in the year in which it is incurred.

10. Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, the company has spent on Corporate Social Responsibility as per its CSR policy.

a) Gross amount required to be spent by the company during the year is Rs. 183.61 lakhs (P.Y. Rs. 167.74 lakhs)

11. Additional information as required by para 5 of General Instructions for preparation of Statement of Profit and Loss (other than already disclosed above) are either Nil or Not Applicable.

12. Previous year figures are regrouped or rearranged wherever considered necessary


Mar 31, 2015

1. The company has given part of the premises along with amenities under operating lease. The gross carrying amount, accumulated depreciation at the balance sheet date and depreciation recognized in Statement of Profit and Loss for the year of said premises is ' 191.40 lakhs, Rs. 58.99 lakhs and Rs. 5.47 lakhs respectively (P.Y. Rs. 159.90 lakhs, Rs. 53.51 lakhs, and Rs. 5.60 lakhs).

2. Building includes the value of 14,000 (P.Y.14,000) share of Rs. 100 each in Synthofine Estate CHS Ltd and value of 10 (P.Y.NIL) share of Rs. 50 each in Gautam Chemical Industrial Premises CHS Ltd.

3. Balance useful life of software (Tukacad Professional Edition software) as at year end is Nil (P.Y. 9 months). Balance useful life of membership rights as at year end is 36 months (P.Y. 48 months).

4. During the quarter ended 30th June 2014, the Company had realigned its depreciation policy in accordance with Schedule II to Companies Act, 2013. Consequently w.e.f. 1st April 2014 :

(a) the carrying value of assets acquired prior to 1st April 2014 is now depreciated over its revised remaining useful life;

(b) where the remaining useful life of the asset is nil as on 1st April 2014, carrying value of assets has been adjusted against opening reserves (net of deferred tax of Rs. 18.45 lakhs) amounting to Rs. 35.82 lakhs in accordance with transitional provision of Schedule II;

(c) on account of above change, depreciation charged to Statement of Profit and Loss for year 2014-2015 is lower by Rs. 139.18 lakhs and depreciation for the year 2015-2016 would be lower by Rs. 94 lakhs for the assets held as at 1st April 2014.

5. The addition to freehold land represents land acquired with integrated structure for a composite value. The value of structure is determined based on estimated depreciated value of structures and the balance is considered as the value of land. In respect of land, the company has an undivided share in land. Also an insignificant portion of land is illegally occupied by the occupant and occupant has raised some illegal structure for which the Municipal Corporation has served a demolition notice.

6. CONTINGENT LIABILITIES

a) Disputed demands in respect of income tax not acknowledged as debt - Rs. 15.47 lakhs (P.Y. Rs. 68.94 lakhs). Future cash outflows in respect of above are dependent on outcome of matter under dispute.

b) The Company has purchased capital assets under EPCG license against which the Company has a balance export obligation of Rs. 63.37 lakhs (P.Y. Rs. 15.55 lakhs). Contingent liability, to the extent of duty saved in respect of EPCG is Rs. 10.56 lakhs (P.Y. Rs. 2.59 lakhs). The balance export obligation to be fulfilled as per license upto year 2020-2021.

Further, in respect of the above, outstanding bonds at the year-end executed by the Company in favour of customs authority aggregates to Rs. 270.07 lakhs (P.Y. Rs. 259.10 lakhs). Out of above, bonds aggregating to Rs. 169.25 lakhs (P.Y. Rs. 251.97 lakhs) are under the process of discharge from custom authorities.

c) Bank guarantees of Rs. 65.47 lakhs (P.Y. Rs. 95.22 lakhs)

d) Letter of Credit of Rs. 78.75 lakhs (P.Y. Nil)

Note: The Company does not expect any outflow of resources in respect of Para (b), (c) and (d).

7. ESTIMATED AMOUNT OF CONTRACTS REMAINING TO BE EXECUTED ON-

a) Capital Account and not provided for Rs. 129.34 lakhs (net of advances) (P.Y. Rs. 1,698.00 lakhs).

b) Other commitments-Relating to Advertisement contracts aggregating to Rs. 64.39 lakhs (Net of advances) (P.Y Rs. 41.00 lakhs). Also Refer Note 2.42 in respect of minimum lease rental payment under non-cancellable operating lease.

8. EMPLOYEE BENEFITS:

a) Disclosure in respect of leave entitlement liability:

Leave entitlement is short term benefit which is recognized as an expense at the un-discounted amount in the year in which the related service is rendered.

b) Death in service benefit:

The Company has taken group term policy from an insurance Company to cover its obligation for death in service benefit given to eligible employees. The insurance premium of Rs. 7.50 lakhs (P.Y. Rs. 3.73 lakhs) is recognized in Statement of Profit and Loss.

c) The Company contributes towards Employees Provident Fund, Employees State Insurance and Labour Welfare Fund. The aggregate amount contributed and charged to Statement of Profit and Loss is Rs. 322.96 lakhs (P.Y. is Rs. 251.15 lakhs).

9. RELATED PARTY DISCLOSURE

Disclosures as per Accounting Standard (AS-18) - 'Related Party Disclosures' are given below:

a) Related Parties where i) control exists and ii) where significant influence exists (with whom transaction have taken place during the year).

Joint Ventures

White Knitwear Private Limited

Enterprises where Key Management Personnel (KMP) and their relatives have significant influence:

Enlighten Lifestyle Limited (Formerly known as Kornerstone Retail Limited)

Smt. Jatnobai Karamchandji Ratanparia Chouhan Charitable Trust

Lord Gautam Charitable Foundation

Kewal Kiran Finance Private Limited

Key Management Personnel

Kewalchand P. Jain Chairman & Managing Director

Hemant P. Jain Whole-time Director

Dinesh P. Jain Whole-time Director

Vikas P. Jain Whole-time Director

Relatives / Other concerns of Key Management Personnel:

Shantaben P. Jain (Mother of Key Management Personnel)

Veena K. Jain (Wife of Kewalchand P. Jain.)

Lata H. Jain (Wife of Hemant P. Jain)

Sangeeta D. Jain (Wife of Dinesh P. Jain)

Kesar V. Jain (Wife of Vikas P. Jain)

Pankaj K. Jain (Son of Kewalchand P. Jain)

Hitendra H. Jain (Son of Hemant P. Jain)

Kewalchand P. Jain (HUF)

Hemant P. Jain (HUF)

Dinesh P. Jain (HUF)

Vikas P. Jain (HUF)

P.K. Jain Family Holding Trust

Employee Funds:

Kewal Kiran Clothing Limited - Employee Group Gratuity Scheme.

10. Following are the Key Managerial Personnel (KMPs)and their relative w.e.f. 01.04.2014 in accordance with the provisions of the Companies Act, 2013:

1. S. L. Kothari Chief Financial Officer

2. Abhijit Warange Company Secretary

3. Amita S Kothari Wife of S.L. Kothari

11. OPERATING LEASE ARRANGEMENTS

Disclosure as per Accounting Standard (AS-19) - "Leases" are given below:

a) As lessee:

Rental expenses of Rs. 113.89 lakhs (P.Y.Rs. 107.17 lakhs) under operating leases have been recognized in the Statement of Profit and Loss. It includes contingent lease rent of Rs. 7.67 lakhs (P.Y. Rs. 17.73 lakhs) based on revenue sharing model.

b) As Lessor:

Rental income of Rs. 19.04 lakhs (P.Y. Rs. 16.48 lakhs) is recognized in the Statement of Profit and Loss. It includes contingent lease rent of Rs. 5.24 lakhs (P.Y. Rs. 3.03 lakhs) based on revenue sharing model, which is higher of fixed amount or percentage of revenue of lessee. There is no escalation clause and the arrangement is mutually cancellable. The initial direct cost (if any) is charged off to expenses in the year in which it is incurred.

12. Additional information as required by para 5 of general instructions for preparation of statement of profit and loss (other than already disclosed above) are either Nil or Not applicable.

13. Previous year figures are regrouped or rearranged wherever considered necessary.


Mar 31, 2014

Not Available


Mar 31, 2013

1.1 Contingent Liabilities:

a) Disputed demands in respect of income tax not acknowledged as debt - Rs. 6,894,195 (P.Y. Rs. 9,648,192). Future cash outflows in respect of above are dependent on outcome of matter under dispute.

b) The Company had purchased capital assets under EPCG license against which export obligation is fulfilled. Further, in respect of the above, outstanding bonds at the year-end executed by the Company in favour of customs authority aggregating Rs. 32,429,895 (P.Y. Rs. 32,429,895) are under the process of discharge from custom authorities.

c) Bank guarantees of Rs. 9,395,420(P.Y. Rs. 8,457,672)

Note: The Company does not expect any outflow of resources in respect of Para b and c.

1.2 Estimated amount of contracts remaining to be executed on-

a) Capital Account and not provided for Rs. 160,900,000 (net of advances) (P.Y. Rs. 30,199,535).

b) Other commitments-Relating to Advertisement contracts aggregating to Rs. 1,600,000 (Net of advances) (P.Y Rs. 4,100,000). Also Refer Note 2.42 in respect of minimum lease rental payment under non-cancellable operating lease.

1.3 Employee Benefits:

a) Disclosure in respect of gratuity liability

100% of the plan assets held by gratuity trust comprises of employees group gratuity scheme with Life Insurance Corporation of India. Additional provision has been made for short fall between liability as per actuarial valuation and value of plan assets. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected rate of return on plan assets comprising of Insurance Policy with LIC of India is based on the historical results of returns given by LIC of India.

The Company expects to contribute Rs. 7,000,000 (P.Y. Rs. 4,000,000) to gratuity trust for contribution to LIC of India in year 2013-14.

b) Disclosure in respect of leave entitlement liability:

Leave entitlement is short term benefit which is recognised as an expense at the un-discounted amount in the year in which the related service is rendered.

c) Death in service benefit:

The Company has taken group term policy from an insurance company to cover its obligation for death in service benefit given to eligible employees. The insurance premium of Rs. 317,221 (P.Y. Rs. 366,500) is recognised in Statement of Profit and Loss.

d) The Company contributes towards Employees Provident Fund, Employees State Insurance and Labour Welfare Fund. The aggregate amount contributed and charged to Statement of Profit and Loss is Rs. 23,041,857 (P.Y. Rs. 20,205,502).

1.4 Segment Reporting:

a) Primary Segment:

The Company is engaged in the business of manufacturing and marketing of Apparels & trading of Lifestyle Accessories/Products. The Company is also generating power from Wind Turbine Generator. The power generated from the same is predominantly used for captive consumption. However, the operation of Wind Turbine Segment is within the threshold limit stipulated under AS - 17 "Segment Reporting" and hence it does not require disclosure as a separate reportable segment.

1.5 Related Party Disclosure:

Disclosures as per Accounting Standard (AS-18) - ''Related Party Disclosures'' are given below:

a) Related Parties where i) control exists and ii) where significant influence exists (with whom transaction have taken place during the year).

Joint Ventures:

White Knitwear Private Limited

Enterprises where Key Management Personnel (KMP) and their relative have significant influence:

Kornerstone Retail Limited

Smt. Jatnobai Karamchandji Ratanparia Chouhan Charitable Trust Lord Gautam Charitable Foundation

Key Management Personnel:

Kewalchand P. Jain Chairman & Managing Director Hemant P. Jain Whole-time Director

Dinesh P. Jain Whole-time Director

Vikas P. Jain Whole-time Director

Relatives / Other concerns of Key Management Personnel:

Shantaben P Jain (Mother of Key Management Personnel)

Veena K. Jain (Wife of Kewalchand P. Jain.)

Lata H. Jain (Wife of Hemant P. Jain)

Sangeeta D. Jain (Wife of Dinesh P. Jain)

Kesar V. Jain (Wife of Vikas P. Jain)

Pankaj K. Jain (Son of Kewalchand P. Jain)

Hitendra H. Jain (Son of Hemant P. Jain)

Arpita K. Jain (Daughter of Kewalchand P Jain)

Pukhraj K. Jain (HUF)

Kewalchand P. Jain (HUF)

Hemant P. Jain (HUF)

Dinesh P. Jain (HUF)

Vikas P. Jain (HUF)

P.K. Jain Family Holding Trust

Employee Funds:

Kewal Kiran Clothing Limited - Employee Group Gratuity Scheme.

1.6 Operating Lease Arrangements:

Disclosure as per Accounting Standard (AS-19) - "Leases" are given below:

a) As lessee:

Rental expenses of Rs. 17,379,517 (P.Y. Rs. 25,746,833) under operating leases have been recognised in the Statement of Profit and Loss. It includes contingent lease rent of Rs. 3,189,672 (P.Y. Rs. 3,465,089) based on revenue sharing model.

The above figures include:

i. The agreements are executed for the periods of 33 to 108 months with a non-cancellable period at the beginning of the agreement ranging from 12 to 36 months and having a clause for extension of lease period.

ii. Lease rentals based on estimated date of commencement of lease in cases where the agreements / MOU''s have been entered into but the date of commencement of lease is dependent on the date of construction/ renovation of premises and based on the commitment for delivery by lessors.

iii. The afore-mentioned lease rentals include a lease the period of which is dependent on the occurrence of an event, the date of which is not ascertainable beyond five years. Hence, the lease rentals are considered up to a period of five years only.

iv. Lease rentals do not include common area maintenance charges and tax payable, if any.

v. The above details of Lease Rental obligation exclude the amounts payable by franchisee in accordance with the arrangement with them (a) not later than 1 year Rs. 12,623,281 (P.Y. Rs. 9,535,550) (b) between 1 to 5 year Rs. 27,095,618 (P.Y. Rs. 25,414,833) (c) more than 5 years Rs. 579,179 (P.Y. Rs. 210,000).

b) As Lessor:

Rental income of Rs. 1,575,119 (P.Y. Rs. 1,681,578) is recognised in the Statement of Profit and Loss. It includes contingent lease rent of Rs. 375,119 (P.Y. Rs. 481,578) based on revenue sharing model, which is higher of fixed amount or percentage of revenue of lessee. There is no escalation clause and the arrangement is mutually cancellable. The initial direct cost (if any) is charged off to expenses in the year in which it is incurred.

1.7 Joint Venture Information:

Details as per Accounting Standard (AS) -27 "Financial Reporting of Interest in Joint Venture" are given below:

The Company''s share in the contingent liability and capital/other commitment of the Joint Venture are Rs. 3,500,000 (P.Y. Rs. Nil) and Rs. Nil (P.Y. Rs. Nil) - respectively. The Company''s share in contingent liability towards cumulative preference dividend including tax thereon of the Joint Venture aggregates to Rs. 11,652,000 (P.Y. Rs. 9,500,000) which is payable to its joint venture partners.

The Company''s contingent liability and capital/other commitment in relation to joint venture Rs. Nil (P.Y. Rs. Nil) and Rs. Nil (P.Y. Rs. Nil)

The current year figures are based on un-audited accounts of the joint venture and previous year figures given in bracket are based on the audited financial accounts of the joint venture.

1.8 Disclosure regarding Derivative Instrument and unhedged Foreign Currency Exposure:

The Company does not enter into any forward exchange contracts being derivative instruments, for trading, speculative or hedging purposes. The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

The above Provision has been grouped under the head ''Short Term Provisions'' in Note 2.8.

The timing of the outflow is dependent on various aspects/fulfillment of conditions and occurrence of events. Such provisions are made based on the past experience and assessment of rates and taxes. However, it is most likely that outflow is expected to be within a period of one year from the date of Balance Sheet.

1.9 Additional information as required by para 5 of General Instructions for preparation of Statement of Profit and Loss (other than already disclosed above) are either Nil or Not Applicable.

1.10 Previous year figures are regrouped or rearranged wherever considered necessary.


Mar 31, 2012

1.1.1 The company has given part of the premises along with amenities under operating lease. The gross carrying amount, accumulated depreciation atthe balance sheet date and depreciation recognized in Statement of Profit and Loss for the year of said premises is Rs 15,990,000, Rs 4,201,988, and Rs 620,421 respectively (RY. Rs 15,990,000, Rs 3,581,556, and Rs 653,075).

1.1.2 Balance useful life of software (Tukacad Professional Edition software) as on 31st March 2012 is 33 Months

1.1.3. Building includes Rs 1,400,000/- (RY. Rs 1,180,000) being the value of 14000 shares (RY. 11800 shares) ofRs 100 in Synthofine estate.

1.2 CONTINGENT LIABILITIES:

a) Disputed demands in respect of income tax not acknowledged as debt - Rs 9,648,192 (PY 9,648,192). Future cash outflows in respect of above are dependent on outcome of matter under dispute.

b) The Company has purchased capital assets under EPCG license against which the Company has a balance export obligation of Rs Nil (PY Rs 36,696,501). Contingent liability, to the extent of duty saved in respect of EPCG is Rs Nil (PY. Rs 6,550,908). Balance Export obligation was to be fulfilled as per license up to the year 2019. Further, in respect of the above, outstanding bonds at the year end executed by the Company in favour of customs authority aggregating Rs 32,429,895 (PY Rs 33,700,395) for which export obligation is pending / fulfilled but under the process of discharge from customs authorities. The export obligation fulfilled against these licenses aggregates to Rs 74,991,528 (PY. Rs 9,817,108).

c) Bank guarantees of Rs 8,457,672 (PY. Rs 3,219,244).

d) Guarantee of Rs Nil(PY Rs 16,602,758) given to Bank for securing overdraft facility to third party of the Company by creating lien on Fixed Deposits of Rs Nil (PY. Rs 27,892,641).

Note: The Company does not expect any outflow of resources in respect of Para b, c, and d.

1.3 ESTIMATED AMOUNT OF CONTRACTS REMAINING TO BE EXECUTED ON-

a) Capital Account and not provided for Rs 30,199,535 (net of advances) (PY Rs 5,446,435).

b) Other commitments-Relating to Advertisement contracts aggregating to Rs 4,100,000 (Net of advances) (PY Nil).Also Refer Note 2.42 in respect of minimum lease rental payment under non-cancellable operating lease 100% of the plan assets held by gratuity trust comprises of employees group gratuity scheme with Life Insurance Corporation of India. Additional provision has been made for short fall between liability as per actuarial valuation and value of plan assets. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected rate of return on plan assets comprising of Insurance Policy with LIC of India is based on the historical results of returns given by LIC of India.

The Company expects to contribute Rs 4,000,000 to gratuity trust for contribution to LIC of India in year 2012-13

b) Disclosure in respect of leave entitlement liability:

Leave entitlement is short term benefit which is recognised as an expense at the un-discounted amount in the year in which the related service is rendered.

c) Death in service benefit:

The Company has taken group term policy from an insurance company to cover its obligation for death in service benefit given to eligible employees. The insurance premium of Rs366,500 (PY Rs Nil) is recognised in Statement of Profit and Loss.

d) The Company contributes towards Employees Provident Fund, Employees State Insurance and Labour Welfare Fund. The aggregate amount contributed and charged to Statement of Profit and Loss is Rs20,205,502 (PY Rs 18,024,592).

1.4 SEGMENT REPORTING:

a) Primary Segment:

The Company is engaged in the business of manufacturing and marketing of Apparels & trading of Lifestyle Accessories. The Company is also generating power from Wind Turbine Generator. The power generated from the same is predominantly used for captive consumption. However, the operation of Wind Turbine Segment is within the threshold limit stipulated under AS - 17 "Segment Reporting" and hence it does not require disclosure as a separate reportable segment. The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

(Figures in bracket indicate previous year's figures)

*Segment Assets from outside India represents receivables from Export Sales (net of advances in relation to exports). In view of the interwoven / intermix nature of business and manufacturing facility, other information is not ascertainable.

1.5 OPERATING LEASE ARRANGEMENTS:

Disclosure as per Accounting Standard (AS-19) - "Leases" are given below:

a) As lessee:

Rental expenses of Rs 25,746,833 (PY. Rs 32,118,122) under operating leases have been recognised in the Statement of Profit and Loss. It includes contingent lease rent of Rs 3,465,089 (PY. Rs 2,408,718) based on revenue sharing model.

At balance sheet date, minimum lease payments under non-cancellable operating leases fall due as follows:

The above figures include:

i. The agreements are executed for the periods of 33 to 108 months with a non-cancellable period at the beginning of the agreement ranging from 12 to 36 months and having a clause for extension of lease period.

ii. Lease rentals calculated based on estimated date of commencement of lease in cases where the agreements / MoU's have been entered into but the date of commencement of lease is dependent on the date of construction/renovation of premises and based on the commitment for delivery by lessors.

iii. The afore-mentioned lease rentals include a lease the period of which is dependent on the occurrence of an event, the date of which is not ascertainable beyond five years. Hence, the lease rentals are considered up to a period of five years only.

iv. Lease rentals do not include common area maintenance charges and tax payable, if any.

v. The above details of Lease Rental obligation exclude the amounts payable by franchisee in accordance with the arrangement with them (a) not later than 1 year Rs9,535,550 (PY. Rs 7,111,142) (b) between 1 to 5 year Rs25,414,833 (PY. Rs 19,316,502) (c) more than 5 years Rs210,000 (RY. Rs 1,110,000).

b) As Lessor:

Rental income of Rs 1,681,578 (PY. Rs 1,609,667) is recognised in the Statement of Profit and Loss. It includes contingent lease rent of Rs 481,578 (PY Rs 409,667) based on revenue sharing model. There is no escalation clause and the arrangement is mutually cancellable. The initial direct cost (if any) is charged off to expenses in the year in which it is incurred.

The above Provision has been grouped under the head 'Short Term Provisions' in Note 2.8.

The timing of the outflow is dependent on various aspects/fulfillment of conditions and occurrence of events. Such provisions are made based on the past experience, However it is most likely that outflow is expected to be within a period of one year from the date of Balance Sheet.

1.6 These financial statements have been prepared in the format prescribed by the revised Schedule VI to the Companies Act, 1956. Previous year figures are regrouped or rearranged wherever considered necessary.


Mar 31, 2011

1. CONTINGENT LIABILITIES:

a. Disputed demands in respect of income tax not acknowledged as debt - Rs. 9,648,192 (P.Y Rs. 12,325,246). Future cash outflows in respect of above are dependent on outcome of matter under dispute.

b. The Company has purchased capital assets under EPCG license against which the Company has a balance export obligation of Rs. 36,696,501 (P.Y. Rs. 28,631,956). Contingent liability, to the extent of duty saved in respect of EPCG is Rs. 6,550,908 (P.Y. Rs. 3,151,492). Balance Export obligation to be fulfilled as per license up to the year 2019. Further, in respect of the above, outstanding bonds at the year end executed by the Company in favour of customs authority aggregating Rs. 33,700,395 (P.Y. Rs. 26,588,573) for which export obligation is pending / fulfilled but under the process of discharge from custom authorities.

c. The Company has fulfilled its export obligation with regards to certain EPCG License. However, the discharge from Custom authorities / DGFT is under process. The export obligation fulfilled against these licenses aggregates to Rs. 9,817,108 (P.Y. Rs. 18,601,084).

d. Bank guarantees of Rs. 3,219,244 (P.Y. Rs. 3,144,159).

e. Letter of Credit of Rs. Nil (P.Y. Rs. 5,722,649) discounted with Banks.

f. Guarantee of Rs. 16,602,758 (P.Y. Rs. 25,846,592) given to Bank for securing overdraft facility to third party of the Company by creating lien on Fixed Deposits of Rs. 27,892,641 (P.Y Rs.42,500,000).

Note: The Company does not expect any outflow of resources in respect of Para b, c, d and f

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided forRs. 5,446,435 (net of advances) (P.Y Rs. 6,001,300)

3. In March 2006, the Company made a public issue of its 3,100,037 equity share having face value of Rs. 10 each at a premium of Rs. 250/- per share. The aggregate fund raised by the issue was Rs. 733,459,620 (net of share issue expenses of Rs. 72,550,000). The entire proceeds raised from the issue have been fully utilised upto 31st March, 2010 as per revised objects approved by the shareholders of the Company.

4. INVESTMENT IN JOINT VENTURE:

The Company had invested in aggregate Rs. 34,550,000 (P.Y.Rs.34,550,000) in Joint Venture "White Knitwear Private Limited" (WKPL). WKPL had acquired land in Surat SEZ and created building for setting up of production unit for producing of knitwear apparels for exports. In view of the sluggish demand in international market, most of the members of SEZ shelved their projects and approached to central government for de-notification of SEZ. The management is hopeful that the SEZ would be de-notified soon. Post de- notification WKPL shall dispose of the land and building and realise the proceeds to return it to joint venture partners.

No provision for diminution in the value of investment is considered necessary in view of the value of underlying assets base of joint venture, however the Company as a matter of abundant precaution made provision towards its share of loss of Rs.600,000 (P.Y Rs.4,300,000) for the year ended 31st March, 2011 (cumulative share of loss aggregates to Rs.4,900,000 P.Y Rs.4,300,000) and provision is grouped under administrative & other expenses).

5. Interim Dividend includes Special Interim Dividend of Rs.6 per share (Face value of Rs.10 each) declared on 2nd April, 2011 and paid on 26th April, 2011 on the occasion of completion of 5 years of listing on the stock exchanges. Accordingly an amount of Rs.73,950,222 along with Dividend Distribution Tax of Rs.11,996,575 is shown under Schedule 11 as provisions.

b) Disclosure in respect of leave entitlement liability:

Effective current year, the Company has change its leave policy. Accordingly, Leave entitlement is short term benefit which is recognised as an expense at the un-discounted amount of the year in which the related service is rendered. Previous year, Long term leave entitlements was recognised as expense based on the actuarial valuation and the principal assumptions used in determining leave entitlement liability were same as those used for gratuity (Refer Note 10 - a of Schedule 21).

12. RELATED PARTY DISCLOSURE:

Disclosures as per Accounting Standard (AS-18) - 'Related Party Disclosures' are given below:

a) Related Parties where a) control exists and b) where significant influence exists (with whom transaction have taken place during the year).

Joint Ventures

White Knitwear Private Limited

Enterprises where Key Management Personnel and their relative have significant influence

Kornerstone Retail Limited

Smt. Jatnobai Karamchandji Ratanparia Chouhan Charitable Trust

Relatives / Other concerns of Key Management Personnel

Shantaben P Jain

Veena K. Jain

Lata H.Jain

Sangeeta D Jain

Kesar V. Jain

Pankaj K.Jain

Hitendra H.Jain

Aarpita K. Jain

Pukhraj K. Jain (HUF)

Kewalchand P. Jain (HUF)

Hemant P. Jain (HUF)

Dinesh P. Jain (HUF)

Vikas P. Jain (HUF)

PK. Jain Family Holding Trust

Key Management Personnel:

Kewalchand P. Jain Chairman & Managing Director

Hemant P. Jain Whole-time Director

Dinesh P. Jain Whole-time Director

Vikas P. Jain Whole-time Director

Employee Funds:

Kewal Kiran Clothing Ltd. - Employee Group Gratuity Scheme.

13.0PERATING LEASE ARRANGEMENTS:

Disclosure as per Accounting Standard (AS-19) - "Leases" are given below:

a) As lessee:

Rental expenses ofRs. 32,118,122 (P.Y. Rs. 42,154,500) under operating leases have been recognised in the profit and loss account. It includes contingent lease rent ofRs. 2,408,718 (P.Y. Rs. 781,669) based on revenue sharing model.

i) The agreements are executed for the periods of 33 to 108 months with a non-cancellable period at the beginning of the agreement ranging from 12 to 36 months and having a clause for extension of lease period.

ii) Lease rentals calculated based on estimated date of commencement of lease in cases where the agreements / MOU's have been entered into but the date of commencement of lease is dependent on the date of construction/renovation of premises and based on the commitment for delivery by lessors.

iii) The afore-mentioned lease rentals include a lease the period of which is dependent on the occurrence of an event, the date of which is not ascertainable beyond five years. Hence, the lease rentals are considered up to a period of five years only.

iv) Lease rentals do not include common area maintenance charges and tax payable, if any.

v) The above details of Lease Rental obligation exclude the amounts payable by franchisee in accordance with the arrangement with them (a) not later than 1 year Rs. 7,111,142 (P.Y. Rs. 5,210,928) (b) between 1 to 5 year Rs. 19,316,502 (P.Y Rs.18,285,345) (c) more than 5 years Rs.1,110,000 (P.Y.Rs.2,317,744)

b) As Lessor:

Rental income ofRs. 1,609,667 (P.Y Rs.1,359,602) is recognised in the Profit & Loss account. It includes contingent lease rent ofRs. 409,667 (P.Y. Rs. 434,602) based on revenue sharing model. The Company has given part of the premises along with amenities under operating lease. There is no escalation clause and the arrangement is mutually cancellable. The gross carrying amount, accumulated depreciation at the balance sheet date and depreciation recognised in Profit and Loss account for the year of said premises is Rs. 15,990,000, Rs. 3,581,556, and Rs. 653,075 respectively (P.Y. Rs. 15,990,000, Rs. 2,928,491, and Rs. 687,448).

16.Sundry debtors include Rs. 1,419 (PY Rs. 329,985) [maximum amount due during the year Rs. 1,123,629 (PY Rs. 945,169)] receivable from Kornerstone Retail Limited under same management.

17.Loans and advance includes Deposit of Rs. 324,000 for the premises taken on lease from the directors. (P.Y. Rs. 324,000) [Maximum amount due during the year Rs.324,000 P.Y Rs.324,000).

30.Previous year's figures are regrouped or rearranged wherever considered necessary.


Mar 31, 2010

1. Contingent Liabilities:

a. Disputed demands in respect of income tax not acknowledged as debt-Rs. 1^,325,246 (P.Y. Rs. 3,034,459). Figures exclude show cause notice, if any issued by the income tax department not considered in nature of demand.

b. Disputed demands in respect of Custom Duty against Advance License not acknowledged as debt - Rs. Nil (P.Y. Rs. 1,320,720)

c. The company has purchased capital assets under EPCG license against which the company has an export obligation of Rs. 24,815,075 (P.Y. Rs. 25,211,933). Contingent liability, to the extent of duty saved in respect of EPCG is Rs. 3,151,492 (P.Y. Rs. 3,151,492). Balance Export obligation to be fulfilled as per license up to the year 2015 / 2016. Further, in respect of the above outstanding bonds at the year end executed by the Company in favour of customs authority aggregating Rs. 26,003,573 (P.Y. Rs. 26,003,573) for which export obligation is pending / fulfilled but under the process of discharge from custom authorities.

d. Bank guarantees of Rs. 3,144,159 (P.Y. Rs. 3,941,109).

e. Letter of Credit of Rs. 5,722,649 (P.Y. Rs. Nil) discounted with Banks.

f. Guarantee (in the nature of First Loss Deficiency) to Bankers Rs. 25,846,592 (P.Y Rs. 12,914,720) against which Fixed Deposits of Rs. 42,500,000 are given as security for the current year and secured by pari-passu first charge on Stocks and Receivables for previous year.

Note: Future cash outflows in respect of (a) above is dependent on outcome of matter under dispute.

2. The company has fulfilled its export obligation with regards to certain EPCG License. However, the discharge from Custom authorities/DGFT is under process. The export obligation fulfilled against these licenses aggregates to Rs. 18,601,084 (P.Y Rs. 18,601,084).

3. Estimated amount of contracts remaining to be executed on Capital Account and not provided for - Rs.6,001,300 (net of advances) (P.Y. Rs. 25,671,603)

4. Secured Loans:

a. Term Loan was secured by first charge on specified immovable properties situated at Goregaon, Mumbai.

b. Foreign Currency Demand Loan was secured by pari-passu first charge on all movable properties (present and future) including stocks, Book debts, movable plant and machinery etc.

c. Working Capital Loans from banks are secured by pari-passu first charge on Stocks and receivables.

5. Investment in Joint Venture:

The company has invested aggregate Rs. 34,550,000 (P.Y. Rs. 30,400,000) in Joint Venture "White Knitwear Private Limited" (WKPL). WKPL had acquired land in Surat SEZ for setting up the manufacturing unit for knitwear apparels for export market. WKPL has not commenced its in-house commercial production. In view of the global economic situation, WKPL has decided to explore alternatives to utilize its assets. No provision for diminution in the value of investment is considered necessary in view of the value of underlying assets base of joint venture , however the company as a matter of abundant precaution made a provision of Rs. 4,300,000 (P.Y Rs. Nil) being Companys share of loss in the WKPL (Joint Venture).

6. Deposits grouped under Loans and Advances includes earnest money deposits of Rs. 3,485,398 (P.Y. Rs. 8,407,081) in respect of premises to be taken on lease and in respect of which there have been delays in handing over of possession by lessors. The company is taking necessary legal /persuasive action for recovery of the deposits. However, by way of abundant precaution, the management has provided a sum of Rs. 1,425,000 (P.Y. Rs. 346,000) towards possible non-recovery of deposits given.

7. Segment Reporting:

a. Primary Segment:

The Company is engaged in the business of manufacturing and marketing of Apparels & Apparel Accessories. The Company is also generating power from Wind Turbine Generator. The power generated from the same is predominantly used for captive consumption. However, the operation of Wind Turbine Segment is within the threshold limit stipulated under AS - 17 "Segment Reporting" and hence it does not require disclosure as a separate reportable segment.

8. Related Party Disclosure:

As per Accounting Standard (AS-18) - Related Party Disclosures as notified by the rules, the disclosures of the transactions with the related parties as defined in the accounting standard are given below:

a. Name of the enterprises having same Key Management Personnel and/or their relatives as the reporting enterprise:

Kewal Kiran Enterprises

Kewal Kiran Finance Private Limited

Kewal Kiran Realtors & Infrastructures Private Limited

Kewal Kiran Retail India Private Limited

Kornerstone Retail Limited

Karwa & Kewal Kiran Realtors

Raj & Karwa Kewal Kiran Realtors

Kewal Kiran Media & Communication Limited

Kalpvriksh Realtors & Infrastructures Private Limited (w.e.f 12.02.2010)

b. Joint Ventures

White Knitwear Private Limited

c. Relatives / Other concerns of Key Management Personnel: Shantaben P Jain

Veena K. Jain

Lata H. Jain

Sangeeta D. Jain

Kesar V. Jain

Pankaj K. Jain

Hitendra H. Jain

Aarpita K. Jain

Pukhraj K. Jain (HUF)

Kewalchand P. Jain (HUF)

Hemant P. Jain (HUF)

Dinesh P. Jain (HUF)

Vikas P. Jain (HUF)

P.K. Jain Family Holding Trust

d. Key Management Personnel:

Kewalchand P. Jain Chairman & Managing Director

Hemant P. Jain Whole-time Director

Dinesh P. Jain Whole-time Director

Vikas P. Jain Whole-time Director

9. Operating Lease Arrangements:

Pursuant to the Accounting Standard (AS-19) - "Leases" issued by the Institute of the Chartered Accountants of India, the following information is given:

a. As lessee:

Rental expenses of Rs. 43,671,529 (P.Y. Rs. 51,117,960) under operating leases have been recognized in the profit and loss account. It includes contingent lease rent of Rs. 781,669 (P.Y. Rs. 501,606) based on revenue sharing model.

The above figures include:

i. The agreements are executed for the periods of 33 to 108 months with a non-cancellable period at the beginning of the agreement ranging from 12 to 36 months and having a clause for extension of lease period.

ii. Lease rentals calculated based on estimated date of commencement of lease in cases where the agreements / MOUs have been entered into but the date of commencement of lease is dependent on the date of construction/renovation of premises and based on the commitment for delivery by lessors.

iii. The afore-mentioned lease rentals include a lease the period of which is dependent on the occurrence of an event, the date of which is not ascertainable beyond five years. Hence, the lease rentals are considered up to a period of five years only.

iv. Lease rentals do not include common area maintenance charges and tax payable, if any.

v. The above details of Lease Rental obligation exclude the amounts payable by franchisee in accordance with the arrangement with them (a) not later than 1 year Rs. 5,210,928 (P.Y. Rs. 11,633,898) (b) between 1 to 5 year Rs. 18,285,345 (P.Y. Rs. 35,579,020) (c) more than 5 years Rs. 2,317,744 (P.Y. Rs. 10,230,877)

b. As Lessor:

Rental income of Rs. 1,359,602 (P.Y. Rs. 579,646) is recognized in the Profit & Loss account. It includes contingent lease rent of Rs. 434,602 (P.Y. Rs. 459,646) based on revenue sharing model. The company has given part of the premises along with amenities under operating lease. There is no escalation clause and the arrangement is mutually cancellable. The gross carrying amount, accumulated depreciation at the balance sheet date and depreciation recognized in Profit and Loss account for the year of said premises is Rs. 15,990,000, Rs. 2,928,491, and Rs. 687,448 respectively.

10. Sundry debtors include Rs. 329,985 (P.Y. Rs. 245,207) [maximum amount due during the year Rs. 945,169 (P.Y. Rs. 349,089) receivable from Kornerstone Retail Limited under same management.

11. Loans and advance include Rs. 324,000 (P.Y. Rs. 324,000) [maximum amount due during the year Rs. 324,000 (P.Y. Rs. 324,000) due from directors in which directors are interested.

12. Previous years figures are regrouped or rearranged wherever considered necessary.

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