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Notes to Accounts of Morarjee Textiles Ltd.

Mar 31, 2018

1. Company Overview

Morarjee Textiles Limited ("the Company") is a public limited company, incorporated and domiciled in India which mainly deals in manufacture of yarn and fabric. The registered office of the Company is located at 2, Peninsula Spenta, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013. The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The standalone financial statements for the year ended 31st March, 2018 were approved by the Board of Directors and authorised for issue on 24th May, 2018.

i) The Company had classified the investment as current under the Previous GAAP, on account of intention to sell. However, the said investment has been reclassfied to non-current, as it does not meet the criteria laid down under Ind AS 105 "Non-current Assets Held for Sale", for classification as ''Held for Sale''.

ii) The Company has elected to treat fair value at the date of transition to Ind AS as deemed cost of the investment and the said deemed cost will be carrying value for subsequent measurement less impairment if any.

C) Terms / rights attached to Equity Shares

Each equity share of Company has a par value of Rs. 7/- as at 31st March, 2018 (Rs.7/- as at 31st March, 2017, Rs.7/- as at 1st April, 2016). Each holder of equity share is entitled to one vote per share. All shares rank pari passu with regard to dividend and repayment of capital. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Nature and Purpose of Reserve:

a) General Reserve

General Reserve has been created on account of the Schemes of Amalgamation, Demerger and Capital Restructing carried out in the past and transfer of net profit before declaring dividend, pursuant to the earlier provisions of the Companies Act, 1956. Such transfer of net profit to general reserve is not required under the Companies Act, 2013.

b) Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

2 Transition to Ind AS

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

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

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

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

a Mandatory Exceptions

i Estimates

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

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

ii Classification and Measurement of Financial Assets

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

b Optional Exemptions from Retrospective Application

i Deemed Cost

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

ii Designation of Previously Recognised Financial Instruments

The Company has irrevocably designated its investment in Equity Instruments (other than investments in joint ventures) at fair value through other comprehensive income on initial recognition, on the basis of facts and circumstances existing on the date of transition to Ind AS.

iii Investments in Joint Ventures

The Company has elected to apply the Previous GAAP carrying amount of its investments in one of the two joint ventures as deemed cost as on the date of transition to Ind AS. As regards investment in another joint venture, the Company has elected to apply its fair value at the date of transition to Ind AS as its deemed cost on that date.

vi Explanatory Notes

a Processing charges on borrowings (earlier capitalised) Rs.269.58 lakhs (Rs.278.89 lakhs as at 1st April, 2016) have been accounted for under Ind AS 109 as per Effective Interest Rate (EIR) and Government Grant (earlier reduced from cost of PPE) of Rs.2,638.34 lakhs (Rs. 1099.65 lakhs as at 1st April, 2016) has been accounted for under Ind AS 20 as per Income Approach. As a result, PPE together with Capital Work-in-Progress increased by Rs.2,368.76 lakhs (''820.76 lakhs as at 1st April, 2016). Unamortised government grant has been carried as a non-current liability of Rs.2,528.26 lakhs (''1054.92 lakhs as at 1st April, 2016) and a current liability of Rs.109.78 lakhs (Rs. 44.72 lakhs as at 1st April, 2016). The resultant amortisation and incremental depreciation amounted to Rs.88.87 lakhs and Rs.79.55 lakhs, respectively. b The Company had classified the investment as current under the Previous GAAP, on account of intention to sell. However, the said investment has been reclassfied to non-current, as it does not meet the criteria laid down under Ind AS 105 "Non-current Assets Held for Sale", for classification as ''Held for Sale''. Investment in this Joint Venture has been fair valued on the transition date, pursuant to optional exemption under Ind AS 101, reducing its carrying value by Rs.365.70 lakhs. c Long-term security deposit has been measured at amorised cost, resulting into reduction in its carrying value by Rs.25.19 lakhs (Rs. 33.85 lakhs as at 1st April, 2016). Unwinding effects have been credited as interest income Rs.8.65 lakhs and corresponding charge of Rs.9.67 lakhs in selling and other expenses. d MAT credit entitlement of Rs.2,924.34 lakhs (Rs. 2,650.58 lakhs as at 1st April, 2016) has been reclassified to deferred tax liability. Increase in deferred tax liability on account of transition to Ind AS amounts to Rs.998.34 lakhs (Rs. 1,119.44 lakhs as at 1st April, 2016). e The Company recognised provision for doubtful debts as per Expected Credit Loss (ECL) model, amounting to Rs.307.00 lakhs (Rs. 76.00 lakhs as at 1st April, 2016). Provision for the year ended 31st March, 2017 is Rs.231.00 lakhs shown under selling and other expenses. f Accounting of processing fees on borrowings as per EIR Rs.172.16 (Rs. 157.51 lakhs as at 1st April, 2016) and unamortised prepaid expenses are Rs.24.19 lakhs (Rs. 33.85 lakhs as at 1st April, 2016) in respect of long-term security deposit.

g Retrospective restatement of provision for expenses as per Ind AS 8.

h Effect of processing fees to be amortised in respect of current maturities of long-term borrowings as per EIR Rs.122.27 (Rs.84.21 lakhs as at 1st April, 2016) and preference dividend and distribution tax thereon treated as finance cost Rs.222.66 lakhs (Rs.222.66 lakhs as at 1st April, 2016). Reversal of equity dividend as recognised under Previous GAAP Rs.612.20 lakhs as at 1st April, 2016.

i Incentives to customers Rs.127.43 lakhs have been reclassified from Selling Expenses to net off with Revenue from Operations.

j Reclassification of actuarial gain / loss on defined benefit obligation from Employee Benefits Expense to Other Comprehensive Income, of Rs.22.68 lakhs and deferred tax thereon Rs.7.85 lakhs. k Impact on account of computation of interest on borrowings (including preference share capital) at amortised cost, based on Effective Interest Rate (EIR) Method. l Government Grant (earlier reduced from cost of PPE) of Rs.1,627.56 lakhs for the year ended 31st March, 2017 has been accounted for under Ind AS 20 as per Income Approach and other Ind AS reclassification adjustments.

(B) Defined Benefit Plan ( Gratuity and other Long - term Employee Benefits ( Leave Encashment)

The Company provides for gratuity for employees in India as per the payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement / termination is the employees last drawn basic salary per month computed proportionately for 15 days basic salary multiplied for the number of the years of service. The gratuity plan is not funded and payout is done by company on resignation / retirement of employees.

A description of methods used for sensitivity analysis and its limitations:

Sensitivity analysis is performed by varying a single parameter while keeping all the other parameters unchanged. Sensitivity analysis fails to focus on the interrelationship between underlying parameters. Hence, the results may vary if two or more variables are changed simultaneously.

The method used does not indicate anything about the likelihood of change in any parameter and the extent of the change if any.

h) Average outstanding term of obligations as at valuation date is 9.57 years

Note : Above disclosures with respect to employee benefits have been made to the extent of availability of date, as per actuarial valuation report

These cash movements are included within the following lines in the Statement of Cash Flows:

i. Proceeds from Long-term Borrowings

ii. Repayment of Long-term Borrowings

iii. Increase/ (Decrease) in Short-term Borrowings

3 Disclosure under Micro, Small and Medium Enterprises Act, 2006

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2018. This information as required to be disclosed under the Micro, Small and Medium Enterprises

4 Leases

Lease payments recognised in the Statement of Profit and Loss is Rs.605.90 lakhs (Previous year Rs.606.68 lakhs)

Future minimum lease rentals payable under non - cancellable operating lease agreements, in respect of assets taken on operating lease:

General Terms of Lease Rentals:

i. Lease rentals are charged on the basis of agreed terms.

ii. Assets are given on lease for a period ranging between 3 years to 5 years.

iii. The lease agreements can be renewed on mutually agreed terms with the lessee.

5 Capital Management

a) Risk Management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

6 Financial Risk Management Risk Management Framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

A. Credit risk

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

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 through 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.

The Company measures the expected credit loss of trade receivables from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.

ii Investments other than Investments in Joint Ventures

There is investment of Rs.0.89 lakh (Rs.0.89 lakh as at 31st March, 2017 and 1st April, 2016) and no impairment has been recognised on such investments.

iii Cash and Bank Balances

The Company held cash and bank balance with credit worthy banks of Rs.559.77 lakhs at March 31, 2018 (March 31, 2017 Rs.136.92 lakhs, April 1, 2016 Rs.825.03 lakhs). The credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks where credit risk is largely perceived to be extremely insignificant.

iv Loans

No impairment in respect of loans was necessary during the current as well as prior years.

B. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Management monitors rolling forecasts of the Company''s liquidity position on the basis of expected cash flows. The Company manages its liquidity risk by preparing periodic cash flow projections to monitor liquidity requirements. In addition, the Company monitors the Balance Sheet liquidity ratios against internal and external regulatory requirements and maintains debt financing plans.

Maturity Pattern of Financial Liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments.

C Market Risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.

i Currency Risk

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales to overseas customers and purchases from overseas suppliers in various foreign currencies. Foreign currency exchange rate exposure is partly balanced by purchasing of goods in the respective currencies.

ii Interest rate Risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

Exposure to Interest Rate Risk

In order to optimise the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, the Company performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. According to the Company, interest rate risk exposure is only for floating rate borrowings. The interest rate profile of the Company''s interest-bearing financial instruments as reported to the Management of the Company is as follows.

Interest rate sensitivity

a) Fair Value Sensitivity Analysis for Fixed-rate Instruments

The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

b) Cash Flow Sensitivity Analysis for Variable-rate Instruments

A reasonably possible change of 25 basis points in interest rates at the reporting date would have increased / (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables in particular foreign currency exchange rates remain constant.

B) Fair Value Hierarchy

Fair values of all financial intruments mentioned in Note no. 45(A) above belong to Level 3 Fair Value Hierarchy.

Carrying amounts of financial instruments such as cash and cash equivalents, other bank balances, trade receivables, loans, borrowings, trade payables and other financial assets and liabilities at 31st March 2018, 31st March 2017 and 1st April 2016 reasonably approximate their respective fair values.

7 Segment Reporting

Based on the "management approach" as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker (CODM) evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators of business the segment/s in which the Company operates. The Company is primarily engaged in the business of Textile Products which the Management and CODM recognise as the sole business segment. Hence, disclosure of segment-wise information is not required and accordingly not provided.

8 Corporate Social Responsibility Expenditure (CSR)

Disclosure as required under Section 135 of Companies Act, 2013, read with Companies (Corporate Social Policy) Rules, 2014 is as under:

a) Gross amount required to be spent by the Company during the year Rs.53.93 lakhs (Previous year Rs.60.03 lakhs)

b) CSR expenditure incurred during the year:

The Company undertakes its Corporate Social Responsibility (CSR) activities through Urvi Ashok Piramal Foundation. The foundation operates in areas of health, vocational skill training, environment and education. The Company has contributed Rs.100.00 lakhs (Previous year Rs.60.03 lakhs) to the foundation for undertaking CSR activities as defined under CSR rules.

9 Previous year figures have been regrouped / reclassified wherever necessary to conform to current year''s classification.

Mar 31, 2017

C) Terms / rights attached to Equity Shares

Each Equity Share of Company has a par value of Rs, 7/- as at 31^st March, 2017 (Previous year Rs, 7/- per share). Each holder of equity share is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

D) Terms / rights attached to Preference Shares 5% Redeemable Cumulative Non- Convertible Preference Shares of Rs, 100/- each, redeemable anytime between 15^th November 2014 and 15^th November, 2019 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

9% Redeemable Cumulative Non- Convertible Preference Shares of Rs, 100/- each, redeemable anytime between 4^th June, 2017 and 3^rd December, 2020 after period of 18 months from the date of its renewal, i.e. 3^rd December, 2015 at the option of the Trust. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

a) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs, 5400 lacs (Previous year Rs,6900 lacs) (Secured by a 1^st pari passu charge on G2 plot and company''s moveable assets on G2 plot excluding assets specifically charged to other lenders and 2^nd pari passu charge on G1 plot and company''s moveable assets on G1 plot at butibori, Nagpur and 2nd pari passu charge over movable assets on G1 plot at Butibori , Nagpur specifically charged to other lenders )

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs, 5400 lacs repayble in 12 quarterly installments (excluding current maturities)

b) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs, 14928.32 lacs (Previous year Rs, 10907.43 lacs)

(Secured by a 1st charge on project assets and mortgage charge on the land at G1 plot and 2nd pari passu charge with other lenders on land and building at G-2 and on the existing plant and machinery and 2nd pari passu charge on the existing current assets of the company at Butibori, Nagpur longwith existing lenders)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs, 14928.32 lacs repayable in 18 quarterly installments effective from 01.05.2017 (excluding current maturities)

c) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs, Nil lacs (Previous year Rs, 53.54 lacs)

(Secured by specific exclusive charge on the movable fixed assets purchased through the said loan and second pari passu charge on current assets viz Raw Materials, stock-in-Process, Finished Goods both present and future of company''s plant at Butibori, Nagpur.

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs,. Nil lacs (Previous year Rs, 53.54 lacs) (excluding current maturities)

d) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs, 87.73 lacs (Previous year Rs, 133.57 lacs)

(Secured by specific (exclusive) charge on the movable fixed assets of the company)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs, 38.82 lacs repayable in 20 monthly installments (excluding current maturities)

- Loan of Rs, 36.68 lacs repayable in 35 monthly installments (excluding current maturities)

- Loan of Rs, 12.24 lacs repayable in 23 monthly installments (excluding current maturities)

e) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs, 2790 lacs (Previous year Rs, 2940 lacs)

(Secured by a 1st pari passu charge on G2 plot and company''s moveable assets on G2 plot excluding assets specifically charged to other lenders and 2nd pari passu charge on G1 plot and company''s moveable assets on G1 plot at Butibori, Nagpur and 2nd pari passu charge over movable assets on G1 plot at Butibori, Nagpur specifically charged to other lenders)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs, 2790 lacs repaybale in 17 quarterly installments (excluding current maturities)

f) Terms of Repayment for Long Term Unsecured borrowings :

- Loan of Rs, 1125 lacs (Previous year Rs, 2625 lacs) repaybale in 3 quarterly installments (excluding current maturities) One of the promotor director has given personal guarantee for the above unsecured loan

- Loan of Rs, 4231 .09 lacs (Previous year Rs, 667.34 lacs ) repaybale in 20 quarterly installments effective from 30.06.2018

g) The interest rate on the above is in the range from 11.60% to 14.85% per annum

h) Default in repayment of principal and interest - Nil

1. A) In the financial year 2012-13, the Board of Directors had passed a resolution to divest its stake from Just Textiles Ltd, a joint venture in which the Company holds 49% of equity. Since then, the Company is making continuous efforts to divest. Accordingly, Just Textiles Ltd financial statements are not consolidated with the financial statements of the Company.

Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Ltd. (hereinafter referred to as JV) are as follows:

a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

b) The Company''s share of capital commitments of the JV as at 31st, March, 2017 is Rs, Nil (Previous year Rs,.Nil)

c) The Company''s share of contingent liabilities of the JV as at 31st, March, 2017 is Rs, 0.21 lacs. (Previous year Rs, 39.18 lacs)

d) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2017.

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafter referred to as JV) are as follows:

(a) The Propotion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni S.P.A.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2017.

(d) The Company''s share of contingent liabilities of the JV as at 31st, March, 2017 is Rs, Nil. (Previous year Rs, Nil)

2. List of Related Parties and Transactions during the year as required by Accounting Standard - AS 18 "Related Parties Disclosure".

A. Enterprises over which Directors/Key Management personnel excercise significant influence

Peninsula Land Ltd.

Ashok Piramal Management Corporation Ltd.

Morarjee Goculdas Spg. & Wvg. Co.Pvt.Ltd.

(Formerly Morarjee Legler Pvt.Ltd.)

Ashok G. Piramal Trust

Urvi Ashok Piramal Foundation

PMP Components Pvt Ltd

Integra Garment & Textiles Ltd.

(Formerly Five Star Mercantile Ltd)

Argento Home Products LLP

Rosewalk Enterprises Ltd.

B. Joint Ventures

Morarjee Castiglioni (India) Pvt. Ltd.

Just Textiles Ltd.

C. Key Management Personnel

Shri Harsh A. Piramal

Shri R. K. Rewari

Shri S. C. Kashimpuria

Shri Sanjeev Singh Sengar (w.e.f. 01.09.15)

D. Directors having significant influence over the Enterprise

Smt.Urvi A. Piramal Shri Mahesh S. Gupta

3. Interest includes Rs, 24.26 lacs on payment of advance tax for the financial year 2015-2016 (Previous year Rs, 0.56 lacs)

4. Earnings Per Share (Basic / Diluted)

5 The power & fuel cost of the previous year is net of write back of excess provision of earlier years of Rs, 393 lacs.

6 The Board of Directors at its meeting held on 15th May, 2017 have recommended a payment of dividend on preference shares amounting to Rs, 222.66 lacs including dividend distribution tax of Rs, 37.66 lacs. The Board has also recommended dividend of Rs, 1.40 (Rupees One and Paise Fourty Only) per equity shares of face value of Rs,7/- each for the financial year ended 31st March, 2017 thereby amounting to Rs, 612.20 lacs including dividend distribution tax of Rs, 103.55 lacs. The above dividends are subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognized as a liability.

7 Previous year''s figures have been regrouped / reclassified wherever necessary.

Mar 31, 2016

(ii) Post-Employment Benefits:

(a) Defined contribution plans

Defined contribution plans are, Government administered Provident Fund Scheme and Government administered Pension Fund Scheme for all employees and Superannuation scheme for eligible employees. The Company''s contribution to defined contribution plans are recognized in the profit and loss account in the financial year to which they relate.

The interest to the beneficiaries every year is being notified by the Government.

(b) Defined benefit plans

(i) Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees, The Company makes a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment based on respective employee''s salary and tenure of employment with the company.

Liabilities with regard to gratuity are determined by actuarial valuation performed by an independent actuary at each balance sheet date using the Projected Unit Credit Method. The gratuity liability being unfunded, the company recognizes the obligation in balance sheet as liability in accordance with Accounting Standard 15 Employee Benefits. Actuarial Gain / Loss arising from experience adjustments and changes in actuarial assumptions are recognized in statement of Profit & Loss in period in which they arise.

(ii) Compensated Absences (Leave Encashment)

The Employees of the Company are entitled to compensated absences which are both accumulating (subject to maximum limit) and non accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation using the Projected Unit Credit Method on the additional amount expected to be paid or availed as a result of unused entitlement that has accumulated at balance sheet date. Expense on non accumulating compensated absences is recognized in the period in which absences occur.

1. Provision for Taxation

Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extant there is reasonable certainty of its realization. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realization.

Minimum Alternate Tax credit (MAT Credit) is recognized as an asset only when and to the extant there is a convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT Credit asset is written down to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.

2. Provisions and Contingencies

The company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.

3. Earnings per share

The basic and diluted earnings per share ("EPS") is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.

4. Proposed Dividend

Dividend if any recommended by the Board of Directors is provided for in the accounts, pending approval at the Annual General Meeting.

C) Terms / rights attached to Equity Shares

Each Equity share of Company has a par value of '' 7/- as at 31st March, 2016 (Previous year '' 7/- per share). Each holder of equity share is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

D) Terms / rights attached to Preference Shares

5. 5% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each, redeemable anytime between 15th Nov. 2014 and 15th November, 2019 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

6. 9% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each, redeemable anytime between 4th June, 2012 and 3rd December, 2015 has been extended for further period of 5 years from the due date of redemption i.e. 3rd December, 2015 , however, it is repayable after period of 18 months from the date of renewal , at the option of the Trust. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

a) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 6900 lacs (Previous year Rs. 7200 lacs)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs.6,900 lacs repayble in 16 quarterly installments (excluding current maturities)

b) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 10907.43 lacs (Previous year Rs. 66.50 lacs)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs.10907.43 lacs repayble in 22 quarterly installments effective from 01.05.2017

c) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 53.54 lacs (Previous year Rs.574.29 lacs)

(Secured by specific exclusive charge on the movable fixed assets purchased through the said loan and second pari passu charge on current assets viz Raw Materials, stock_in_Process, Finished Goods both present and future of companyâs plant at Butibori, Nagpur).

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 53.54 lacs (Previous year Rs. 574.28) repayable in 7 monthly installments (excluding current maturities)

d) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 133.57 lacs (Previous year Rs. 77.49 lacs)

(Secured by specific (exclusive) charge on the movable fixed assets of the company .)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 59.14 lacs repaybale in 32 monthly installments (excluding current maturities)

- Loan of Rs. 51.90 lacs repaybale in 47 monthly installments (excluding current maturities)

- Loan of Rs. 22.53 lacs repaybale in 35 monthly installments (excluding current maturities)

e) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs.2,940 lacs (Previous year Rs.NIL lacs)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 2,940 lacs repaybale in 22 quarterly installments (excluding current maturities)

f) Terms of Repayment for Long Term Unsecured borrowings :

- Loan of Rs. 2,625 lacs (Previous year Rs. Nil) repayable in 7 quarterly installments (excluding current maturities) One of the promoter director has given personal guarantee for the above unsecured loan

g) The interest rate on the above is in the range from 10.60% to 14.25% per annum

h) Default in repayment of principal and interest - Nil

** Secured by way of hypothecation of Current Assets of the company viz., Raw Materials, Stock- In - Process, Finished Goods, consumables, store and spares, book debts and other moveable both present and future and secured by pari passu second charge on company''s moveable assets including its moveable plant and machinery, spares, tools and accessories both present and future.

The interest rate on the above is in the range from 10.60% to 14.25% per annum.

-Default in repayment of principal and interest - Nil

* In previous year based on re-assessment of the balance useful life of Design and Archives (Intangible Assets) the company has fully provided for WDV of the same as of 01.01.2014 amounting to Rs. 143.00 lacs.

@ The addition of the Plant & Machinery of previous year is net of Rs. 154.90 lacs towards capital subsidy received from the Government.

7 There are no Micro , Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

8 The company is engaged in manufacture of textile products which is considered as the only reportable business segment.

9 The Company has taken assets on an operating lease basis. The lease rentals are payable on monthly & quarterly installments by the Company.

Lease payment recognized in profit & Loss account for the year is Rs. 16.93 lacs (Previous year Rs.12.49 lacs)

10 Employee Benefits:

(a) Short term employee benefits:

The liability towards short term employee benefits for the year ended 31st March, 2016 has been recognized in the Profit and Loss Account.

(b) Post - employment benefits:

11 A) In the financial year 2012-13, the Board of Directors had passed a resolution to divest its stake from Just Textiles Ltd, a joint venture in which the Company holds 49% of equity, Since then the company is making continuous efforts to divest. Accordingly, Just Textiles Ltd financial statements are not consolidated with the financial statements of the Company.

a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

b) The Company''s share of capital commitments of the JV as at 31st, March, 2016 is Rs. Nil (Previous year Rs. Nil)

c) The Company''s share of contingent liabilities of the JV as at 31st, March, 2016 is Rs. 74 lacs. (Previous year Rs. 74 lacs)

d) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2016.

(a) The Proportion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni S.P.A.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2016

(d) The Company''s share of contingent liabilities of the JV as at 31st, March, 2016 is Rs. Nil. (Previous year Rs.Nil)

12. Interest includes Rs. 0.56 lacs on payment of advance tax for the financial year 2014-15 (Previous Year Rs. 6.13 lacs)

13 During the Previous year, Morarjee International s.r.l, registered in Italy and wholly owned subsidiary (hereinafter referred to as subsidiary company) of the Company was liquidated on 23.02.2015 as per local jurisdiction. As per the liquidation order, the Company is not entitled to receive any amount against its investment in the subsidiary company. Thus, investment of the Company amounting to Rs. 5.61 lacs and liability (payable to subsidiary company) amounting to Rs. 6.72 lacs as on 23.02.2015 is knocked off and net gain of Rs. 1.11 lacs is shown as other income in the statement of Profit & Loss for the current year.

14 The power & fuel cost of the current year is net of write back of excess provision of earlier years of Rs. 393 lacs.

15 During the previous year, the Company had received interest subsidy under the TUF Scheme from the Maharashtra State Government, in view of which the Company had accrued interest subsidy of Rs. 263.90 lacs by crediting to interest account of previous year.

16 Previous year''s figures have been regrouped / reclassified wherever necessary.

Mar 31, 2015

A) Terms / rights attached to Equity Shares

Each Equity share of Company has a par value of Rs.7/- as at 31st March, 2015 (Previous year Rs. 7/- per share). Each holder of equity share is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

B) Terms / rights attached to Preference Shares

1. 5% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each, redeemable anytime between 15th November, 2014 and 15th November, 2019 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

2. 9% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each, redeemable anytime between 4th June, 2012 and 3rd December, 2015 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

a) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 7200 lacs (Previous year Rs. NIL lacs)

(Secured by a 1st charge on G2 plot and company''s moveable assets on G2 plot excluding assets specifically charged to other lenders and 2nd charge on G1 plot and company''s moveable assets on G1 plot at Butibori, Nagpur).

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 7200 lacs repayble in 20 quarterly installments (excluding current maturities)

b) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 66.50 lacs (Previous year Rs. NIL lacs)

(Secured by a 1st charge on G1 plot and the company''s movable assets on G1 plot and on movable assets specifically acquired from loan in G2 plot and 2nd charge on G2 plot and company''s moveable assets on G2 plot at Butibori, Nagpur).

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 66.50 lacs repayble in 22 quarterly installments effective from 01.05.2017

c) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. NIL lacs (Previous year Rs. 375.00 lacs)

(Secured by a 1st pari passu charge on the movable assets including its movable plant & machinery , spares, tools and accessories, secured by pari passu equitable mortgage on company''s immovable properties at Butibori, Nagpur and 2nd pari passu charge by way of hypothecation of current assets of the Company viz Raw Materials, Stock-in-Process, Finished Goods, Consumable Store and Spares, Book Debts and other movable both present and future).

d) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 574.29 lacs (Previous year Rs. 986.44 lacs)

(Secured by specific (exclusive) charge on the movable fixed assets and second pari passu charge on current assets viz Raw Materials, stock_in_Process, Finished Goods both present and future of company''s plant at Butibori, Nagpur).

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 574.28 lacs (Previous year Rs. 986.44) repaybale in 19 monthly installments (excluding current maturities)

e) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 77.49 lacs (Previous year Rs. NIL lacs)

(Secured by specific (exclusive) charge on the movable fixed assets of the company.)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 77.49 lacs repaybale in 44 monthly installments (excluding current maturities)

f) Terms of Repayment for Long Term Unsecured borrowings :

- Loan of Rs. Nil lacs (Previous year Rs. 5000 lacs) repaybale in 3 monthly installments.

- Loan of Rs. 1000 lacs (Previous year Rs. 2000 lacs) repaybale in 4 quarterly installments (excluding current maturities)

g) The interest rate on the above is in the range from 12.35% to 14.25 % per annum

h) Default in repayment of principal and interest - Nil

** Secured by way of hypothecation of Current Assets of the company viz.,Raw Materials, Stock- In - Process, Finished Goods, consumables , store and spares , book debts and other moveable both present and future and secured by pari passu second charge on company''s moveable assets including its moveable plant and machinery, spares, tools and accessories both present and future.

The interest rate on the above is in the range from 12.00% to 14.50 % per annum.

Default in repayment of principal & interest - Nil

2 Contingent Liability and commitments

A) Contingent Liability not provided for in respect of

31.03.2015 31.03.2014 Rs in Lacs Rs in Lacs

(i) Contingent Liability for bill discounted 237.75 981.61

(ii) The Excise & Sales Tax department has raised claims on the company The company has 2,539.97 2570.46 disputed the same with the appropriate authority.

(iii) Claim against the company not acknowledged 1,344.40 1,344.40 as debts

B) Commitments

(i) Bank Guarantees 685.48 853.05

(ii) Estimated amount of contracts remaining to be executed on capital accounts and 4,311.47 79.20 not provided

(iii) Open Letters of credit 116.81 218.17

3 There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

4 The company is engaged in manufacture of textile products which is considered as the only reportable buisness segment.

5 The Company has taken vehicles on an operating lease basis for a period of 48 months. The lease rentals are payable on monthly instalments by the Company.

Future minimum lease rentals payable as per the lease agreements:

Lease payment recognised in profit & Loss account for the year is Rs. 12.49 lacs (Previous year Rs. 10.86 lacs)

6 Employee Benefits:

(a) Short term employee benefits:

The liability towards short term employee benefits for the year ended 31st March, 2015 has been recognised in the Profit and Loss Account.

(b) Post - employment benefits:

The following disclosures are made in accordance with AS 15 (Revised) pertaining to Defined Benefit Plans:

7 A) In the financial year 2012-13, the Board of Directors have passed a resolution to divest from Just Textiles Ltd, a joint venture in which the Company holds 49% stake. Accordingly, Just Textiles Ltd financial statements are not consolidated with the financial statements of the Company.

Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Ltd. (hereinafter referred to as JV) are as follows:

(a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

(b) The Company''s share of capital commitments of the JV as at 31st, March, 2015 is Rs. Nil (Previous year Rs..Nil)

(c) The Company''s share of contingent liabilities of the JV as at 31st, March, 2015 is Rs. 74 lacs. (Previous year Rs.74 lacs)

(d) No contingent liabilities and capital commitments have been incurred as at 31st March, 2015 in relation to the Company''s interest in the JV alongwith the other venture. (Previous year Rs. Nil)

(e) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2015.

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafter referred to as JV) are as follows:

(a) The Propotion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni S.P.A.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2015

(c) The Company''s share of capital commitments of the JV as at 31st, March, 2015 is Rs. Nil .(Previous year Rs. Nil)

(d) The Company''s share of contingent liabilities of the JV as at 31st, March, 2015 is Rs. Nil. (Previous year Rs. Nil)

(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2015 in relation to the Company''s interest in the JV alongwith the other venture. (Previous year Rs. Nil)

8 As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/Key Management personal excercise significant influence

Peninsula Land Ltd.

Ashok Piramal Management Corporation Ltd.

Morarjee Goculdas Spg. & Wvg. Co. Pvt. Ltd.

(Formerly Morarjee Legler Pvt. Ltd.)

Ashok G. Piramal Trust

Urvi Ashok Piramal Foundation

PMP Components Pvt Ltd.

Integra Garment & Textiles Ltd. (Formerly Five Star Mercantile Ltd.)

Argento Home Products LLP

B. Subsidary Company

Morarjee International s.r.l. (Refer note no. 39)

C. Joint Ventures

Morarjee Castiglioni (I) Pvt.Ltd.

Just Textiles Ltd.

D. Key Management Personnel

Shri Harsh A. Piramal

Shri R. K. Rewari

Shri S. C. Kashimpuria

Ms. Karina Vaz (Resigned w.e.f. 01.04.15)

E. Directors having significant influence over the Enterprise

Smt. Urvi A. Piramal Shri Mahesh S. Gupta

9 Interest includes Rs. 6.13 lacs on payment of advance tax for the financial year 2013-2014 & 2014-15. (Previous year Rs. 24.07 lacs)

10 During the current year, Morarjee International s.r.l, registered in Italy and wholly owned subsidiary (hereinafter referred to as subsidiary company) of the Company was liquidated on 23.02.2015 as per local jurisdiction. As per the liquidation order, the Company is not entitled to receive any amount against its investment in the subsidiary company. Thus, investment of the Company amounting to Rs. 5.61 lac and liability (payable to subsidiary company) amounting to Rs. 6.72 lac as on 23.02.2015 is knocked off and net gain of Rs. 1.11 lac is shown as other income in the statement of Profit & Loss for the current year.

11 During the current year, the Company has started to receive interest subsidy under the TUF Scheme from the Maharashtra State Government, in view of this the Company has accrued interest subsidy of Rs. 263.90 lacs by crediting to interest account. (Includes Rs. 190.71 lacs for earlier year)

12 Previous year''s figures have been regrouped / reclassified wherever necessary.

Mar 31, 2014

A) Terms / rights attached to Equity Shares

Each Equity shares of Company has a par value of Rs. 7/- as at 31st March, 2014 (Previous year Rs. 7/- per share). Each holder of equity shares is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

B) Terms / rights attached to Preference Shares

1. 5% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each, Redeemable anytime between 15th Nov. 2014 and 15th November, 2019 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

2. 9% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each, Redeemable anytime between 4th June, 2012 and 3rd December, 2015 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

a) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 375.00 lacs (Previous year Rs. 2,925 lacs)

(Secured by a 1st pari passu charge on the movable assets including its movable plant & machinery, spares, tools and accessories, secured by pari passu equitable mortgage on company''s immovable properties at Butibori, Nagpur and 2nd pari passu charge by way of hypothecation of current assets of the Company viz Raw Materials, Stock-in-Process, Finished Goods, Consumable Store and Spares, Book Debts and other movable both present and future in respect of Rs. 375.00 lacs (Previous year Rs. 2,925 lacs)

Terms of Repayment for Long Term Secured borrowings :

* Loan of Rs. 375 lacs repayble in 1 quarterly installment (excluding current maturities)

b) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 986.44 lacs (Previous year Rs. 1,262.21 lacs)

(Secured by specific (exclusive) charge on the movable fixed assets and second pari passu charge on current assets viz Raw Materials, stock-in-Process, Finished Goods both present and future of company''s plant at Butibori, Nagpur in respect of Rs. 986.44 lacs) (Previous year Rs. 1,262.21 lacs)

Terms of Repayment for Long Term Secured borrowings :

* Loan of Rs. 986.44 lacs repaybale in 32 monthly installments (excluding current maturities)

c) Terms of Repayment for Long Term Unsecured borrowings :

* Loan of Rs. 5,000 lacs repaybale in 3 monthly installments w.e.f. April 2015

* Loan of Rs. 2,000 lacs repaybale in 8 quarterly installments w.e.f. June 2015

d) The interest rate on the above is in the range from 11% to 14.75% per annum.

e) Default in repayment of principal and interest - Nil

1. Contingent Liability and commitments

A) Contingent Liability not provided for in respect of

31.03.2014 31.03.2013 Rs. in Lacs Rs. in Lacs

i Contingent Liability for bill discounted 981.61 1,657.62

ii The Excise department has raised 2,570.46 2,477.80 claims on the company The company has disputed the same with the appropriate authority.

iii Claim against the company not acknowledged as debts 1,344.40 1,344.40

B) Commitments

i Bank Guarantees 853.05 626.03

ii Estimated amount of contracts remaining to be executed on capital 79.20 91.37 accounts and not provided

iii Open Letters of credit 218.17 348.45

2. The company is engaged in manufacture of textile products which is considered as the only reportable business segment.

3. A) In the previous year The Board of Directors have passed a resolution to divest from Just Textiles Ltd, a joint venture in which the Company holds 49% stake. Accordingly, Just Textiles Ltd financial statements are not consolidated with the financial statements of the Company.

Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Limited (hereinafter referred to as JV) are as follows:

(a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

(b) The Company''s share of capital commitments of the JV as at 31st, March, 2014 is Rs. Nil (Previous year Rs. Nil)

(c) The Company''s share of contingent liabilities of the JV as at 31st, March, 2014 is Nil. (Previous year Rs. Nil)

(d) No contingent liabilities and capital commitments have been incurred as at 31st March, 2014 in relation to the Company''s interest in the JV alongwith the other venture. (Previous year Nil )

(e) The aggregate amount of assets, liabilities, income & expenses related to the company''s interest in the JV as at 31st March, 2014.

4. As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/Key Management personnel excercise significant influence

Penninsula Land Limited Ashok Piramal Management Corporation Limited Morarjee Goculdas Spg. & Wvg. Co. Private Limited (Formerly Morarjee Legler Private Limited) Peninsula Facility Management Services Limited Ashok G. Piramal Trust Urvi Ashok Piramal Foundation PMP Components Private Limited Integra Garments & Textiles Limited (Formerly Five Star Mercantile Limited)

B. Subsidary Companies

Morarjee International s.r.1.

C. Joint Ventures

Morarjee Castiglioni (I) Private Limited Just Textiles Limited

D. Key Management Personnel

Mr. Harsh A. Piramal Mr. R. K. Rewari

5. Includes Interest of Rs. 24.07 lacs on payment of advance tax for the financial year 2012-2013. (Previous year Rs. 1.79 lacs)

6. Previous yearÂs figures have been regrouped / reclassified wherever necessary.

Mar 31, 2013

1 A) Contingent Liability not provided for in respect of

31.03.2013 31.03.2012 Rs. in Lacs Rs. in Lacs

i Contingent Liability for bill discounted 1,657.62 1,757.86

ii Dividend on Redeemable Cumulative Non Convertible Preference 498.18

shares together with dividend Tax

iii The Excise department has raised claims on the company 2477.80 2477.70

The company has disputed the same with the appropriate authority.

iv Claim against the company not acknowledged as debts 1344.40 Â

B) Commitments

i Bank Guarantees 626.03 436.58

ii Estimated amount of contracts remaining to be executed on capital 91.37 446.86 accounts and not provided

iii Open Letters of credit 348.45 276.94

2 Demerger of Garment Undertaking of the Company

A. During the previous year (F.Y. 2011-12), The Composite Scheme of Arrangement and Amalgamation (''Scheme'') under Sections 391 to 394 read with Sections 100 to 103 and other applicable provisions of the Companies Act, 1956 between the Company, Five Star Mercantile Limited (''FSML'') and Morarjee Holding Private Limited (''MHPL'') and their respective shareholders, has been sanctioned by the Honorable High Court of Judicature at Bombay vide its Order dated 29th June 2012 and has been made effective on fling of the certifed copies of the Order of the court on 17th July, 2012 (''Effective date'')

B In accordance with the scheme :

The difference between the book value of assets and the book value of liabilities transferred of the Integra Division, after adjusting the amount of investments held by the Company in FSML shall, be adjusted to the General Reserve Account of the company.

C) Further, pursuant to the scheme, the equity share capital of the Company shall stand reduced by 30%. Accordingly, the face value and the paid up value per equity share of the company shall, without any application or deed, stand reduced by Rs. 3/- without any payments to the holders of such equity shares of the Company. Simultaneously with the reduction of the paid up value of the equity shares of the company, an equivalent amount to capital reduction shall be credited to General Reserve Account of the Company.

D) The carrying amounts of the total assets and liabilities of Integra division transferred to FSML and the amount adjusted in General reserve account is as under:

3 There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identifed on the basis of information available with the Company.

4 The accumulated deferred tax assets of the company has not provided in the books of accounts due to virtual uncertainty of realisation of such assets.

5 The company is engaged in manufacture of textile products which is considered as the only reportable business segment.

6 Employee Benefts:

(a) Short term employee benefts:

The liability towards short term employee benefts for the year ended 31st March, 2013 has been recognised in the Proft and Loss Account.

(b) Post - employment benefts:

The following disclosures are made in accordance with AS 15 (Revised) pertaining to Defnd Beneft Plans:

Summary of the Acturial Assumptions :- Discount Rate 8.10% Note :

The estimates of future salary increases, considered in acturial valuation, takes into account the infation,seniority , promotion and other relevant factors.

7 During the previous year the company has sold 10,20,000 Equity Share of one of it''s subsidiary, Mens Club s.p.a., Italy, which was under voluntary liquidation.

8 Pending fnal settlement of insurance claim, the loss caused in the fre incurred in May, 2011 in a portion of one of its manufacturing unit at Nagpur, has been shown as claim receivable, net of adhoc payment receipt. On fnal settlement the difference in loss and actual claim received will be accounted for.

9 The Company has taken vehicles on an operating lease basis for a period of 48 & 60 months. The lease rentals are payable on monthly instalments by the Company.

10 A) The Board of Directors have passed a resolution to divest from Just Textiles Limited, a joint venture in which the Company holds 49% stake.

Accordingly, Just Textiles Limited fnancial statements are not consolidated with the fnancial statements of the Company, and accordingly for opening balance of Reserves , inventory etc have been adjusted in the consolidated fnancial statements of current year.

Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Limited (hereinafter referred to as JV) are as follows:

(a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2013

(c) The Company''s share of capital commitments of the JV as at 31st, March, 2013 is Rs. Nil (Previous year Rs.Nil)

(d) The Company''s share of contingent liabilities of the JV as at 31st, March, 2013 is Nil. (Previous year Rs.Nil)

(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2013 in relation to the Company''s interest in the JV alongwith the other venture. (Previous year Nil )

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafter referred to as JV) are as follows:

(a) The Proportion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni S.P.A.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2013

(c) The Company''s share of capital commitments of the JV as at 31st, March, 2013 is Rs. Nil .(Previous year Nil)

(d) The Company''s share of contingent liabilities of the JV as at 31st, March, 2013 is Nil. (Previous year Nil)

(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2013 in relation to the Company''s interest in the JV alongwith the other venture. (Previous year Nil)

11 As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/Key Management personnel excercise signifcant infuence

Penninsula Land Limited

Ashok Piramal Management Corporation Limited

Morarjee Goculdas Spg. & Wvg. Co.PrivateLimited (Formerly Morarjee Legler Private Limited)

Peninsula Facility Management Services Limited

Ashok G. Piramal Trust

Urvi Ashok Piramal Foundation

PMP Components Private Limited

Integra Garments & Textiles Limited (Formerly Five Star Mercantile Limited)

B. Subsidary Companies Morarjee International s.r.l.

C. Joint Ventures

Morarjee Castiglioni (I) Private Limited Just Textiles Limited

D. Key Management Personnel Mr.Harshvardhan A. Piramal Mr. R. K. Rewari

12 During the fnancial year, the company has entered into an agreement with M/s. Integra Garments and Textiles Limited (previously known as Five star Mercantile Limited) to recover it''s old outstanding amount of Rs. 3749.51 lacs. As per the terms of the agreement; considering the current fnancial constraints, and liquidity position of the borrower, interest amount of Rs. 422 lacs has not been charged to them and the principle amount of Rs. 3749.51 lacs has been recovered in full.

13 Previous year''s fgures have been regrouped / reclassifed wherever necessary.

Mar 31, 2012

Note 2 : Share Capital

a) Terms / rights attached to Equity Shares

Each Equity shares of Company has a par value of Rs. 7/- as at 31st March, 2012 (Previous year Rs. 10/- per share). Each holder of equity shares is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

b) Terms / rights attached to Preference Shares

1) 5% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each , Redeemable anytime between 15th November, 2014 and 15th November, 2019 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

2) 9% Redeemable Cumulative Non- Convertible preference Shares of Rs. 100/- each (Redeemable anytime between 4th June 2012 and 3rd December, 2015 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

a) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 6019.90 lacs (Previous year Rs. 8981.07 lacs)

Nature of Security

(Secured by a 1st pari passu charge on the movable assets including its movable plant & machinery , spares, tools and accessories, secured by pari passu equitable mortgage on company's immovable properties at Butibori, Nagpur and 2nd pari passu charge by way of hypothecation of current assets of the Company viz Raw Materials, Stock-in-Process, Finished Goods, Consumable Store and Spares, Book Debts and other movable both present and future in respect of Rs. 6019.90 lacs (Previous year Rs. 8981.07 lacs)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 700 lacs repaybale in balance 7 quarterly instalments (excluding current maturities)

- Loan of Rs. 444.90 lacs repayable in balance 2 quarterly instalments (excluding current maturities)

- Loan of Rs. 3375 lacs repaybale in 9 quarterly instalments (excluding current maturities)

- Loan of Rs. 1500 lacs repaybale in 6 quarterly instalment (excluding current maturities)

b) Nature of Security and Terms of Repayment for Long Term Secured Borrowings of Rs.696.17 lacs (Previous year Rs. Nil lacs)

Nature of Security

(Secured by specific (exclusive) charge on the movable fixed assets and second pari passu charge on current assets viz Raw Materials, stock_in_Process, Finished Goods both present and future of compnay's plant at Butibori, Nagpur in respect of Rs. 696.17 lacs) (Previous year Rs. NIL lacs)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 696.17 lacs repaybale in 60 monthly instalments.

c) Nature of Security for Long Term Secured Borrowings of Rs. Nil lacs (Previous year Rs. 1285.67 lacs)

(Secured by a 1st charge on the present and future movable and immovable fixed assets at Bangalore, Karnataka of the Company in respect of Rs. Nil lacs (Previous year Rs. 1285.67 lacs)

d) Terms of Repayment for Long Term Unsecured borrowings :

- Loan of Rs. 5000 lacs repaybale in 3 monthly instalments w.e.f. April, 2013.

1 (a) Contingent Liability not provided for in respect of

31.03.2012 31.03.2011 Rs. In Lacs Rs. In Lacs

i Bank Guarantees 436.58 203.92

ii Contingent Liability for bill discounted 1,757.86 998.82

iii Dividend on Redeemable Cumulative Non Convertible 498.18 283.17 Preference shares together with dividend Tax

(b) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 446.86 lacs (Previous year (Rs.373.54 lacs)

(c) The Excise department has raised claims on the company for Rs.2477.70 lacs (previous year Rs.2547.19 lacs). The company has disputed the same with the appropriate authority.

2 Demerger of Garment Undertaking of the Company

A The Composite Scheme of Arrangement and Amalgamation ('Scheme') under Sections 391 to 394 read with Sections 100 to 103 and other applicable provisions of the Companies Act, 1956 between the Company, Five Star Mercantile Ltd ('FSML') and Morarjee Holding Private Limited ('MHPL') and their respective shareholders, has been sanctioned by the Honorable High Court of Judicature at Bombay vide its Order dated 29th June 2012 and has been made effective on filing of the certified copies of the Order of the court on 17th July, 2012 ('Effective date')

B The Scheme, inter alia, provides for the demerger of Integra Division of the Company pertaining to garment manufacturing business alongwith its investments in MHPL into FSML with Appointed Date as April 01, 2011. Under the same composite scheme, MHPL would be merged with FSML with Appointed Date as January 01, 2012.

C In accordance with the scheme :

a) Integra Division pertaining to Garment Manufacturing Undertaking has been transferred by the Company to FSML on a going concern basis.

b) As a consideration:

- One fully paid Equity Share of Rs.3 each of FSML shall be issued and allotted for every one fully paid Equity Share of Rs. 10 each held in the Company;

- One fully paid 5% Redeemable Cumulative Non-Convertible Preference Shares of Rs. 1 each of FSML shall be issued and allotted for every 10 fully paid 5% Redeemable Cumulative Non-Convertible Preference Shares of Rs. 100 each held in the Company; and

- One fully paid 9% Redeemable Cumulative Non-Convertible Preference Shares of Rs.1 each of FSML shall be issued and allotted for every 10 fully paid 9% Redeemable Cumulative Non-Convertible Preference Shares of Rs. 100 each held in the Company.

c) The difference between the book value of assets and the book value of liabilities transferred of the Integra Division, after adjusting the amount of investments held by the Company in FSML shall, be adjusted to the General Reserve Account of the company.

d) Further, pursuant to the scheme, the equity share capital of the Company shall stand reduced by 30%. Accordingly, the face value and the paid up value per equity share of the company shall, without any application or deed, stand reduced by Rs. 3/- without any payments to the holders of such equity shares of the Company. Simultaneously with the reduction of the paid up value of the equity shares of the company, an equivalent amount to capital reduction shall be credited to General Reserve Account of the Company.

E Since the treatment of the aforesaid scheme is given effect in the current year, the figures for the current year to that extent are not comparable with those of the previous year.

3 Discontinuing operations

The Company has transferred the Garment Manufacturing Division/Unit having its Manufacturing Facility at Bangalore by way of Demerger as per high court order dated 29th June, 2012.

The following statement shows the revenue and expenses of the discontinued operation -

4 There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

5 The accumulated deferred tax assets of the company has not provided in the books of accounts due to virtual uncertainty of realisation of such assets.

6 The company is engaged in manufacture of textile products which is considered as the only reportable business segment.

7 Employee Benefits:

(a) Short term employee benefits:

The liability towards short term employee benefits for the year ended 31st March, 2012 has been recognised in the Profit and Loss Account.

(b) Post - employment benefits:

The following disclosures are made in accordance with AS 15 (Revised) pertaining to Defind Benefit Plans:

The estimates of future salary increases, considered in acturial valuation, takes into account the inflation, seniority, promotion and other relevant factors.

8 During the year company has sold 10,20,000 Equity Share of one of it's subsidiary, Mens Club s.p.a., Italy, which was under voluntary liquidation.

9 Looking into the financial strength of Fivestar Mercantile Ltd, the Company has not accounted for an interest income of Rs. 220.76 lacs on the advances receivable from them.

10 Pending final settlement of insurance claim, the loss caused in the fire incurred in May,2011 in a portion of one of its manufacturing unit at Nagpur, has been shown as claim receivable, net of adhoc payment receipt. On final settlement the difference in loss and actual claim received will be accounted for.

11 During the previous year, the Company issued 15,00,000 9% Redeemable Non Cumulative Non Convertible Preferance Shares of Rs. 100/- each

12 The Company has taken vehicles on an operating lease basis for a period of 48 & 60 months. The lease rentals are payable on monthly instalments by the Company.

13 A) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Ltd. (hereinafter referred to as JV) are as follows:

(a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company's interest in the JV as at 31st March, 2012

(c) The Company's share of capital commitments of the JV as at 31st, March, 2012 is Rs. Nil (Previous year Rs. Nil)

(d) The Company's share of contingent liabilities of the JV as at 31st, March, 2012 is Nil. (Previous year Rs. Nil)

(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2012 in relation to the Company's interest in the JV alongwith the other venture. (Previous year Nil)

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafter referred to as JV) are as follows:

(a) The Propotion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni S.P.A.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company's interest in the JV as at 31st March, 2012

(d) The Company's share of contingent liabilities of the JV as at 31st, March, 2012 is Nil. (Previous year Nil)

(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2012 in relation to the Company's interest in the JV alongwith the other venture. (Previous year Nil)

14 The Trade receivable include Rs. Nil lacs (Previous year Rs. 12.89 lacs) due from subsidiary companies.

15 During the previous year, securities Premium amount has been adjusted pursuant to the order from the Hon'ble Bombay High Court of the Capital Reduction Scheme under Section 100 -103 read with Section 78 of the Companies Act, 1956 for setting off the debit balance of the Profit & Loss Account to the extent and against the balance of Rs. 4158.73 lacs lying to the credit of Securities Premium Account. The Reduction of the Capital has been registered by Registrar of Companies, Maharashtra on 10th March, 2011

16 As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/Key Management personal excercise significant influence

Penninsula Land Ltd.

Ashok Piramal Management Corporation Ltd.

Morarjee Goculdas Spg. & Wvg. Co. Pvt.Ltd.

(Formerly Morarjee Legler Pvt. Ltd.)

Peninsula Facility Management Services Ltd.

Ashok G. Piramal Trust

Urvi Ashok Piramal Foundation

PMP Auto Component Pvt. Ltd.

Five Star Mercantile Ltd

B. Subsidary Companies

Morarjee International s.r.l.

Mens Club s.p.a. (sold during the year)

C. Joint Ventures

Morarjee Castiglioni (I) Pvt.Ltd.

Just Textiles Ltd.

D. Key Management Personnel

Mr.Harshvardhan Piramal

Mr. R. K. Rewari

17 Previous year's figures have been regrouped / reclassified wherever necessary.

Mar 31, 2011

1. a) Contingent Liability not provided for in respect of 31.03.2011 31.03.2010 Rs. In Lacs Rs. In Lacs

i. Bank Guarantees 203.92 357.94

ii. Contingent Liability for bill discounted 998.82 183.46

iii. Dividend on Redeemable Cumulative Non Convertible Preference 283.17 175.50 shares together with dividend Tax

b) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs.373.54 lacs (Previous year (Rs.Nil lacs)

c) The Excise department and Income Tax department has raised claims on the Company for Rs.2547.19 lacs and Rs.Nil lacs (previous year Rs.2511.82 & 167.75 lacs) respectively. The Company has disputed the same with the appropriate authority.

3. The figures for the current financial year are not comparable with the previous financial year because the previous year includes financials of Integra division for only three months i.e., from 1st January 2010 to 31st March 2010 as Integra division got amalgamated with the Company with effect from 1st January 2010.

9. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

10. The accumulated deferred tax assets of the Company has not provided in the books of accounts due to virtual uncertainty of realisation of such assets.

11. The Company is engaged in manufacture of textile products which is considered as the only reportable business segment.

12. Employee Benefits:

a) Short term employee benefits:

The liability towards short term employee benefits for the year ended 31st March, 2011 has been recognised in the Profit and Loss Account.

b) Post - employment benefits:

The following disclosures are made in accordance with AS 15 (Revised) pertaining to Defind Benefit Plans:

Note :

1. The estimates of future salary increases, considered in acturial valuation, takes into account the inflation,seniority, promotion and other relevant factors.

2 . Comparative values of defned benefit plans for the past four financial years as required by AS-15 (Revised) are not provided, being March 2008 first year of adoption of the standard.

13. Till date no options under the Employees Stock Option Plan has been exercised by any of the eligible employees. Considering the present market price of the Equity Share of the Company it is unlikely that the options will be exercised in future also and accordingly the options granted under the Plan are not treated as potential equity shares as defned in Accounting Standard -20 "Earning Per Share" and thus no impact of dilution on EPS is considered.

14. During the year, the Company issued 15,00,000 9% Redeemable Cumulative Non Convertible Preferance Shares of 100/- each.

15. In the previous year, the Company raised Rs.2724.43 lacs by issue of 1,81,62,886 fully paid equity shares of Rs.10/- each at a premium of Rs.5/- per equity share to the existing equity shareholders on rights basis. Post this issue the Companys share capital has increased to Rs.3633.24 lacs . The net proceeds from the Rights issue of equity shares of the Company afiter meeting issue expenses , have been used for repayment of debt.

16. The Company has taken vehicles on an operating lease basis for a period of 48 & 60 months. The lease rentals are payable on monthly installments by the Company.

17. A) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Ltd. (hereinafiter referred to as JV) are as follows:

a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

b) The aggregate amount of assets, liabilities, income and expenses related to the Companys interest in the JV as at 31st March, 2011

c) The Companys share of capital commitments of the JV as at 31st March, 2011 is Rs.Nil (Previous year Rs.Nil)

d) The Companys share of contingent liabilities of the JV as at 31st March, 2011 is Nil. (Previous year Rs.Nil)

e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2011 in relation to the Companys interest in the JV alongwith the other venture.

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafiter referred to as JV) are as follows:

a) The Proportion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni S.P.A.

b) The aggregate amount of assets, liabilities, income and expenses related to the Companys interest in the JV as at 31st March, 2011

c) The Companys share of capital commitments of the JV as at 31st, March, 2011 is Rs.Nil .(Previous year Nil)

d) The Companys share of contingent liabilities of the JV as at 31st, March, 2011 is Nil. (Previous year Nil)

e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2011 in relation to the Companys interest in the JV alongwith the other venture. (Previous year Nil)

18. The Sundry Debtors include Rs. 12.89 lacs (Previous year Rs. 34.43 lacs) due from subsidiary companies.

19. Securities Premium amount has been adjusted pursuant to the order from the Honble Bombay High Court of the Capital Reduction Scheme under Section 100 -103 read with Section 78 of the Companies Act, 1956 for setting off the debit balance of the Profit & Loss Account to the extent and against the balance of Rs.4158.73 lacs lying to the credit of Securities Premium Account. The Reduction of the Capital has been registered by Registrar of Companies , Maharashtra on 10th March, 2011.

20. As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/Key Management Personnel excercise significant influence

Peninsula Land Ltd.

Ashok Piramal Management Corporation Ltd.

Morarjee Goculdas Spg. & Wvg. Co.Pvt.Ltd. (Formerly Morarjee Legler Pvt.Ltd.)

Peninsula Facility Management Services Ltd.

Ashok G. Piramal Trust

B. Subsidary Companies

Morarjee International s.r.l.

Integra Apparels & Textiles Limited (previous year upto 31.12.2009)

Mens Club s.p.a.

C. Joint Ventures

Morarjee Castiglioni (I) Private Limited

Just Textiles Limited

D. Key Management Personnel

Mr. Harshvardhan Piramal

Mr. P.K.Gothi (previous year up to 31.12.2009)

Mr. R. K. Rewari

Mr. R Krishna Kumar (previous year up to 26.02.2010)

E Relatives of Key Management Personnel

Mrs.Jayashree Krishnakumar (previous year up to 26.02.2010)

22. Previous years figures have been regrouped / reclassified wherever necessary.

Mar 31, 2010

1. a) Contingent Liability not provided for in respect of 31.03.2010 31.03.2009 Rs. In Lacs Rs. In Lacs

i. Bank Guarantees 357.94 440.99

ii. Corporate Guarantee -- 5,450.00

iii.Contingent Liability for bill discounted 183.46 433.72

iv. Dividend on Redeemable Cumulative Non Convertible Preference 175.50 117.00 shares together with dividend Tax

b) The Excise department and Income Tax department have raised claims on the Company for Rs. 2,511.82 lacs and Rs. 167.75 lacs (Previous Year Rs. 1,663.24 & Nil lacs) respectively. The Company has disputed the same with the appropriate authorities.

2. The Honble High Court of Karnataka at Bangalore vide its order dated 27th August, 2010 sanctioned the Scheme of Amalgamation of Integra Apparels & Textiles Ltd (Integra) a 100% subsidiary of the Company engaged in the business of manufacturing of garments, with the Company as per the provisions of Sections 391 to 394 of the Companies Act, 1956. Since Integra was a 100% subsidiary company, no shares were issued pursuant to the Scheme of Amalgamation.

The Appointed Date of Scheme of Amalgamation was 1st January 2010, being the date on which the entire business including all assets and liabilities of Integra has been transferred to the Company.

The amalgamation has been accounted under purchase method of accounting. Consequently, the assets and liabilities of Integra taken over by the company are recorded at the fair values of Rs. 47.11 crores and Rs. 70.09 crores respectively. Investments of Rs. 25.97 crores made by the company in Integra would stand extinguished as a result of the amalgamation. Further, as per the Scheme of the Amalgamation and in the opinion of the Board, revision in the assets of the Transferee Company would be Rs. 54.94 crores.

Net amount arrived afiter adjusting the above is Rs. 5.99 crores which has been transferred to the General Reserve in terms of the Scheme of Amalgamation approved by the Honble High Court.

Consequently, the fgures for the previous fnancial year are not comparable with the current year.

3. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identifed on the basis of information available with the Company. The names are as follows :

Suresh Polymers Pvt. Limited, Bindal Packagings, RSA Industries Pvt. Ltd., Shirish Polychem Pvt. Limited, AGS Infotech Pvt. Ltd., Bajrang Spiropack Pvt. Ltd., Nova Transfers Pvt. Ltd., Valkal Concepts Pvt. Ltd., Giriraj Packing, Bharat Packing, New Tech Packing, Afson Packing Co., Cardboard & Packing Co. (Mysore) Pvt. Ltd. & Krishna Packing.

4. The accumulated deferred tax assets of the Company has not provided in the books of accounts due to virtual uncertainty of realisation of such assets.

5. The Company is engaged in manufacture of textile products which is considered as the only reportable business segment.

6. Employee Benefits:

a) Short term employee benefits:

The liability towards short term employee benefits for the year ended 31st March, 2010 has been recognised in the profit and Loss Account.

7. Till date no options under the Employees Stock Option Plan has been exercised by any of the eligible employees. Considering the present market price of the Equity Share of the Company, it is unlikely that the options will be exercised in future also and accordingly the options granted under the Plan are not treated as potential equity shares as defned in Accounting Standard -20 "Earning Per Share" and thus no impact of dilution on EPS is considered.

8. During the year ended 31st March, 2010, the Company raised Rs. 2,724.43 lacs by issue of 1,81,62,886 fully paid equity shares of Rs. 10/- each at a premium of Rs. 5/- per equity share to the existing equity shareholders on rights basis. Post this issue the Companys share capital has increased to Rs. 3,633.24 lacs . The net proceeds from the Rights issue of equity shares of the company afiter meeting issue expenses, have been used for repayment of debt.

9. The Company has taken vehicles on an operating lease basis for a period of 48 & 60 months. The lease rentals are payable on monthly instalments by the Company.

10. A) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Limited (hereinafiter referred to as JV) are as follows:

a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

c) The Companys share of capital commitments of the JV as at 31st March, 2010 is Rs. Nil (Previous year Rs. Nil)

d) The Companys share of contingent liabilities of the JV as at 31st March, 2010 is Nil. (Previous year Rs.Nil)

e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2010 in relation to the Companys interest in the JV alongwith the other venture.

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafiter referred to as JV) are as follows:

a) The Proportion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni s.p.a.

c) The Companys share of capital commitments of the JV as at 31st March, 2010 is Rs. Nil. (Previous year Nil)

d) The Companys share of contingent liabilities of the JV as at 31st March, 2010 is Nil. (Previous year Nil)

e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2010 in relation to the Companys interest in the JV alongwith the other venture. (Previous year Nil)

12. The Sundry Debtors include Rs. 34.43 lacs (Previous year Rs. 196.79 lacs) due from subsidiary companies.

13. As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/key Management personnel excercise signifcant infuence

Peninsula Land Limited

Ashok Piramal Management Corporation Limited Morarjee Goculdas Spg. & Wvg. Private Limited (Formerly Morarjee Legler Private Limited) Peninsula Facility Management Services Limited

B. Subsidary Companies

Morarjee International s.r.l.

Integra Apparels & Textiles Limited (up to 31.12.2009)

Mens Club s.p.a.

C. Joint Ventures

Morarjee Castiglioni (I) Private Limited Just Textiles Limited

D. Key Management Personnel

Mr. Harshvardhan A. Piramal Mr. P. K. Gothi (upto 31.12.2009) Mr. R. K. Rewari (from 02.02.2010) Mr. R Krishna Kumar (upto 26.02.2010)

E Relatives of Key Management Personnel

Mrs. Jayashree Krishnakumar (upto 26.02.2010)

14. Previous years figures have been regrouped / reclassified wherever necessary.

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