Notes to Accounts of Nitin Spinners Ltd.

Mar 31, 2018

1 COMPANY INFORMATION AND SIGNIFICANT ACCOUNTING POLICY

A. Corporate Overview

Nitin Spinners Limited (the “Company”), incorporated on 15th October, 1992, is a Company domiciled in India and limited by shares (CIN: L17111RJ1992PLC006987). The address of the Company''s registered office is 16-17 Km. Stone, Chittor Road, Hamirgarh, and Bhilwara-(Raj 311025). The Company is engaged in manufacturing of Cotton Yarn and Knitted Fabrics. The Company is listed at National Stock Exchange of India Limited and at BSE Limited.

B. Basis of Preparation

1. Statement of Compliance

These Separate Financial Statements are prepared on Going Concern basis following Accrual basis of accounting and comply in all material aspects with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the extent applicable), applicable provisions of the Companies Act, 1956. These are Company''s first Ind AS compliant financial statements and Ind AS 101 ‘First Time Adoption of Indian Accounting Standards'' has been applied. For all periods up to and including 31st March, 2017, the Company prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India, accounting standards specified under Section 133 of the Companies Act, 2013, the Companies Act, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956. The Company followed the provisions of Ind AS 101 in preparing its Opening Ind AS Balance Sheet as on the date of transition, viz. 1st April, 2016. Some of the Company''s Ind AS accounting policies used in the opening Balance Sheet are different from its previous GAAP policies applied as at 31st March, 2016, accordingly the adjustments were made to restate the opening balance as per Ind AS. Therefore, as required by Ind AS 101, those adjustments were recognised directly through retained earnings as at 1st April, 2016. This is the effect of the general rule of the Ind AS 101 which is to apply Ind AS retrospectively.

An Explanation of how the transition to Ind AS 101 has affected the reported financial position, financial performance and cash flows of the Company is provided in Note No. 39.

2. Basis of Measurement/Use of Estimates

(i) The Financial Statements are prepared on accrual basis under the historical cost convention except certain financial assets and liabilities (including derivatives instruments) that are measured at fair value.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

(ii) The preparation of financial statements requires judgments, estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.

3. Functional and Presentation Currency

These financial statements are presented in Indian Rupees (INR), which is the Company''s functional currency. All financial information presented in INR has been rounded to the nearest Lacs (up to two decimals), except as stated otherwise.

4. Current and Non-current classification

The Company presents assets and liabilities in the Balance Sheet based on current/non-current classification.

An asset is current when it is:

- Expected to be realised or intended to sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realised within twelve months after the reporting period; or

- Cash or Cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period; or

- There is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as Non-Current.

Deferred Tax Assets/Liabilities are classified as non-Current.

d. Terms and Rights attached to Equity Shares:

The Company has only one class of equity shares having a par value of Rs. 10/- per share. The holders of the equity shares are entitled to dividends as declared from time to time and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

13.1. Security

(a) Term Loans of Rs. 35,909.30 Lacs (PY- Rs. 44,400.35 Lacs and 01.04.2016- Rs. 27,616.63 Lacs) are secured by way of first charge on all immovable and movable Property, Plant and Equipment (both present and future) and second charge on current assets. The term loan of Rs. 248.00 Lacs (PY- Rs. 1,181.25 Lacs and 01.04.2016- Rs. 1,781.25 Lacs) are secured by way of IIIrd charge on all immovable and movable Property, Plant and Equipment and current assets of the company. The term loans are also secured by personal guarantee of three directors.

(b) Vehicle Loans are secured by hypothecation of the specific vehicles.

13.2. Terms of Repayment

(a) Term loans of Rs. 324.77 Lacs in 3 variable quarterly instalments upto December, 2018, Rs. 112.53 Lacs in 7 equal quarterly instalments upto December, 2019, Rs. 14,650.00 Lacs in 20 variable quarterly instalments upto March, 2023 and Rs. 21,070.00 Lacs in 27 variable quarterly instalments upto December, 2024.

(b) Vehicle loan of Rs. 1.09 Lacs is repayable in 2 variable monthly instalments upto June, 2018 and Rs. 7.20 Lacs is repayable in 16 variable monthly instalments upto August, 2019.

17.1 Trade Payables include Rs. Nil (Previous Year f Nil) amount due to Micro & Small Enterprises as at 31st March, 2018. The figures have been disclosed on the basis of informations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the Company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

2 Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) f 8,824.45 (Previous Year - Rs. Nil).

b) The Company has an outstanding export obligation of approx. Rs. 32,153.36 Lacs (Previous Year - Rs. 53,349.87 Lacs), in respect of capital goods imported at the concessional rate of duty under Export Promotion Capital Goods Scheme, which is required to be met at different dates on or before 31.03.2023.

(ii) Dividend not recognised at the end of reporting period

In addition to the above dividends, at the year end the company''s Board of Directors have proposed the payment of final dividend of Rs. 1.20 (31st March, 2017- Rs. 1.20) per fully paid Equity Share. This proposed dividend is subject to the approval of the shareholders in Annual General Meeting. The total outgo towards the same will be Rs. 802.33 Lacs including Dividend Distribution Tax.

3. DISCLOSURE AS PER IND AS 19 “EMPLOYEE BENEFITS"

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 341.44 lacs (Previous Year Rs. 304.82 Lacs).

b) Defined Benefit Plan

(i) Gratuity

The Company makes payment to vested employees as per provisions of Payment of Gratuity Act, 1972. The provision of Gratuity liability as on the Balance Sheet date is done on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the Defined Benefits obligation and the related current service cost is measured using the Projected Unit Credit Actuarial Method at the end of Balance Sheet date by the Actuary.

(ii) Leave Encashment

The company provides benefit of leave encashment to its employees as per defined rules. The provision for liability for leave encashment as on date of Balance Sheet is recognised on the basis of Actuarial certificate.

(iii) The following table set out the status of Gratuity and Leave encashment plans as required under Ind AS-19

(h) The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market.

(i) The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

4. DISCLOSURE AS PER IND AS 107 “FINANCIAL INSTRUMENT DISCLOSURE"

i. Capital Management

“For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence. The management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure. The Company monitors capital using a gearing ratio, which is calculated by dividing Net Debt from the Equity. The Company includes within Net Debt, interest bearing loans and borrowings less cash and short-term deposits (including other bank balance) and under Equity, the Equity Share Capital plus other Equity (excluding Preference Share Capital) is considered.”

i. Financial Risk Management

The Company''s Financial Risk Management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management is set by the Managing Board.

Company is exposed to following risk from the use of its financial instrument:

-Credit Risk

-Liquidity Risk

-Market Risk

(a) Credit risk

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categories a loan or receivable for write off when a debtor fails to make contractual payments greater than 2 years past due. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

Provision for Expected Credit or Loss

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses:

The Company has assets where the counter-parties have sufficient capacity to meet the obligations and where the risk of default is very low. Accordingly, no loss allowance for impairment has been recognized.

(b) Financial assets for which loss allowance is measured using life time expected credit losses:

The Company provides loss allowance on trade receivables using life time expected credit loss and as per simplified approach.

Hedge Accounting Disclosures

The Cash Flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognized and accumulated under the heading of cash flow reserve will be reclassified to statement of profit and loss only when the hedged transaction affects the profit or loss or included as a basic adjustment to the non financial hedged item.

(b) Liquidity Risk

To replace net outflows due to unanticipated outflows. Liquidity risk is defined as the risk that the Company will not be able to settle of meet its obligations on time or at a reasonable price. The Company''s finance department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

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 always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

(c) Market Risk

Considering the company''s existing foothold/experience in the spinning sector, established & diversified client base, association with various international/domestic agents, it''s competent sales executives and an established marketing setup, it does not foresee any problem in marketing its additional production.

Since major portion will be sold in the export market company is confident of leveraging on its existing network of overseas buyers.

“Market Risk is the risk of loss of future earnings, fair values of 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 exchanges rates, equity prices and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, and other market changes. The Company manages market risk through a finance department, which evaluates and exercises independent control over the entire process of market risk management. The finance department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies.”

i) Interest Rate Risk

It is the risk where changes in market interest rates might adversely affect the company''s financial condition. The short term/immediate impact of changes in interest rates are on the company''s net interest income (NII). On a longer term, change in interest rate impact the cash flows on the assets, liabilities and off-balance sheet items, giving rise to a risk to the net worth of the company arising out of all reprising mismatches and other interest rate sensitive positions. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

ii) Foreign Exchange Risk

It is the risk that the company may suffer losses as a result of adverse exchange rates movements during a period in which it has an open position in an individual foreign currency. In addition, the company may also expose to the following risks on account of foreign exchange exposures as applicable.

Interest Rate Risk - Which arises from the maturity mismatches of foreign currency position

Settlement Risk - On account of risk of default of the counter parties.

The Company uses forward contracts to hedge its risk associated with fluctuation in foreign currency relating to foreign currency assets and liabilities, firm commitments and highly probable forecast transactions. The use of the aforesaid financial instruments is governed by the company''s overall Risk Management Strategy. The company does not use forward contracts and options for speculative purposes. The details of the outstanding forward contracts and unhedged currency exposure as at 31st March, 2018 is as under :

Foreign Currency sensitivity:

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EURO and GBP rates to the functional currency of respective entity, with all other variables held constant. The Company''s exposure to foreign currency changes for all other currencies is not material. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities.

5. DISCLOSURE OF CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per section 135 of Companies Act the company is required to spend in every financial year , at least 2% of the average net profits of the company made during the three immediately preceding financial year in accordance with its CSR policy.

A. Gross amount required to be spent by the Company during the year 2017-18 - Rs. 126.50 Lacs (Year 2016-17 - Rs. 114.53 Lacs)

B. Amount spent during the year on:

6. DISCLOSURE AS PER IND AS 101 “FIRST TIME ADOPTION OF IND AS" Transition to IND AS

These are the company''s first standalone financial statements prepared in accordance with Ind AS. The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31st March, 2018, the comparative information presented in these financial statements for the year ended 31st March, 2017 and 1st April, 2016. The effective date for Companies Ind AS Opening Balance Sheet is 1st April, 2016. (The date of transition to Ind AS)

First Time Adoption of Ind AS

These financial statements, for the year ended 31st March, 2018, are the first annual Ind AS financial statements, the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31st March, 2017, the Company prepared its financial statements in accordance with Accounting Standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March, 2018, together with the comparative period data as at and for the year ended 31st March, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 01st April, 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 01st April, 2016 and the previously published Indian GAAP financial statements as at and for the year ended 31st March, 2017

Optional Exemptions and Mandatory Exceptions

In the Ind AS opening balance sheet as at 1st April, 2016, the carrying amounts of assets and liabilities from the Previous GAAP as at 31st March, 2016 are generally recognized and measured according to Ind AS. However, for certain individual cases, Ind AS 101 “First-time Adoption of Indian Accounting Standards” provides for optional exemptions and mandatory exceptions to the general principles of retrospective application of Ind AS. The Company has made use of the following exemptions and exceptions in preparing its opening Ind AS balance sheet:

i) Deemed cost

As per Ind AS 101, para D7AA, a first-time adopter to Ind ASs may elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind ASs, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

ii) Borrowings

Ind AS 101 permits that if it is impracticable for an entity to apply retrospectively the effective interest method in Ind AS 109 ‘Financial Instruments'' the fair value of the financial liability at the date of transition to Ind AS shall be the new amortized cost of that financial liability at the date of transition to Ind AS.

iii) Classification and measurement of Financial Assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

iv) Derecognition of financial assets and financial liabilities

As per Ind AS 101, a first-time adopter shall apply the derecognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind ASs.

v) Estimates:

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP, unless there is objective evidence that those estimates were in error. Ind AS estimates as at 01st April, 2016 and 31st March, 2017 are consistent with the estimates as at the same date made in the conformity with previous GAAP.

Notes to First time adoption:

1. Property, Plant and Equipment:

“Earlier as per the company''s policy, the transaction costs relating to the loan borrowed from any bank/ financial institution is capitalized in the value of the assets. But as per Ind AS 109 “Financial Instruments”, any transaction cost on the amount of loan is to be amortized over the period of the loan respectively. Hence, the amount of Rs. 80.16 Lacs has been adjusted from the value of Property, Plant and Equipment and the same has been deffered over the term of loan. And has been booked under the “''''Other Non-Current Assets”''''.”

2. Capitalization of Stores and Spares

As per Indian GAAP, stores and spares have been booked in the Statement of Profit and Loss A/c in the year of consumption. But as per Ind AS, any stores and spares whose economic benefit flows towards the company and which have the economic useful life of more than 1 year will be considered as the part of Property, Plant and Equipment. Hence, the company has identified Rs. 1.80 Lacs on 31st March, 2017 and Rs. 3.78 Lacs on 01st April, 2016 as an item of Property, Plant and Equipment.

3. Fair Valuation of Forward Contracts:

Under previous GAAP, the forward contracts are shown as a part of disclosure and no further adjustments had been made for the same. Ind AS requires all forward contracts and derivatives to be measured at fair value at the reporting date and all changes in the fair value subsequent to the transition date to be recognized either in the Statement of profit and loss or Other Comprehensive Income (based on the category in which they are classified).

This has resulted in increase in other equity by Rs. Nil Lacs and Rs. 150.91 Lacs with corresponding increase in Derivative assets by Rs. Nil Lacs and Rs. 150.91 Lacs as at 1st April, 2016 and 31st March, 2017, respectively.

4. Deferred Tax

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

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

5. Proposed Dividend and Dividend Distribution tax

Under Previous GAAP, proposed dividends are recognized as a liability in the period to which they relate irrespective of the approval by shareholders. But under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the company (on approval of Shareholders in a general meeting) or paid. Therefore, the liability amounting Rs. 661.98 Lacs (PY- Rs. 551.65 Lacs) recorded under previous GAAP has been derecognized. The same is now recognized in Financial year 2017-18 (2015-16), when dividend was approved by shareholders.

6. Actuarial Gain or Loss on Defined Benefit Plans (Gratuity)

Both under Indian GAAP and Ind AS, the company recognized costs related to its post employment defined benefits plan on an actuarial basis. Under Indian GAAP the entire cost including actuarial gain/loss are charged to Statement of Profit and Loss A/c. Under Ind AS, the part of actuarial gain/loss are to be recognized in Other Comprehensive Income.

As a result, profit for the year ended 31st March, 2017 has increased by Rs. 20.51 Lacs (net of tax) with corresponding decrease in Other Comprehensive Income during the year.

7. Other equity

Retained earnings as at 01st April, 2016 has been adjusted consequent to the above Ind AS transition adjustments. Refer ‘Reconciliation of total equity as at 31st March, 2017 and 01st April, 2016'' as given above for details.

8. Amount lying in unpaid dividend account earlier classified as Cash and cash equivalents has been reclassified to Other Bank Balances in accordance with Ind AS 7-Statement of Cash Flows and Division II of Schedule III of Companies Act, 2013.

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Mar 31, 2017

ii) Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs, Nil (Previous Year - Rs, 17,396.11 Lacs).

b) The Company has an outstanding export obligation of approx. Rs, 53,349.87 Lacs (Previous Year - Rs, 28,215.24 Lacs), in respect of capital goods imported at the concessional rate of duty under Export Promotion Capital Goods Scheme, which is required to be met at different dates on or before 31st March, 2023.

2) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provisions for all known and determined liabilities are adequate and not in excess of the amount reasonably required.

3) Sundry Creditors include Rs, Nil (Previous Year Rs, Nil) amount due to Micro a Small Enterprises as at 31st March, 2017. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the Company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

4) Provision for current tax is net of MAT Credit Entitlement Rs, 1,272.59 Lacs (Previous Year - Rs, 223.75 Lacs)

5) The Company has spent a sum of Rs, 67.71 Lacs (Previous Year - Rs, 108.77 Lacs) on CSR activities as against Rs, 114.53 Lacs (Previous Year - Rs, 85.53 Lacs) as required under provisions of the Companies Act 2013.

6) Financial Derivative Instruments

The Company uses forward contracts to hedge its risk associated with fluctuation in foreign currency relating to foreign currency assets and liabilities, firm commitments and highly probable forecast transactions. The use of the aforesaid financial instruments is governed by the Company’s overall Risk Management Strategy. the Company does not use forward contracts and options for speculative purposes. The details of the outstanding forward contracts and unheeded currency exposure as at 31st March, 2017 is as under:

9) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees.

The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs, 304.82 Lacs (Previous Year Rs, 240.77 Lacs).

b) Defined Benefit Plan

(i) Gratuity

The Company makes payment to vested employees as per provisions of Payment of Gratuity Act, 1972. The provision of Gratuity liability as on the balance sheet date is done on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost is measured using the Projected Unit Credit Actuarial Method at the end of balance sheet date by Actuary.

(ii) Leave Encashment

The Company provides benefit of leave encashment to its employees as per defined rules. The provision for liability for leave encashment as on date of Balance Sheet is recognized on the basis of Actuarial certificate.

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market.

The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

10) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

11) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in Business of Textiles. Hence there is no separate business segments

(ii) The Company has its own power generation division mainly for captive use; therefore, it is not treated as a separate business segment.

12) RELATED PARTY DISCLOSURES

List of Related Parties with whom transactions have taken place:

(a) Key Management Personnel:

Name of Person Relationship

Shri R.L. Nolkha Chairman

Shri Dinesh Nolkha Managing Director

Shri Nitin Nolakha Executive Director

Shri P. Maheshwari Chief Financial Officer

Shri Sudhir Garg Company Secretary a GM (Legal)

(b) Relatives:

v,-i n -Miiv, Wife of Shri R.L. Nolkha,

Smt. Sushila Devi Nolkha ,, , _r„. ,,,,,,

Mother of Shri Dinesh Nolkha a Shri Nitin Nolakha

(c) Related Companies:

Redial Trading a Investment Private Limited

* Yarn Production includes 6,746.459 Tons. (Previous Year 6,333.601 Tons.) transferred for captive consumption

** Fabric Production includes 9.301 Tons. (Previous Year 0 Ton.) Transferred for captive consumption in Packing Department.

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Mar 31, 2016

B. ADDITIONAL INFORMATION

1) Contingent Liabilities & Commitments

i) Contingent Liabilities not provided for

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 17396.11 Lacs (Previous Year - Rs. 91.02 Lacs).

b) The company has an outstanding export obligation of appox. Rs. 28215.24 lacs (Previous Year - Rs. 25812.42 lacs), in respect of capital goods imported at the concessional rate of duty under Export Promotion Capital Goods Scheme, which is required to be met at different dates on or before 31.03.2021.

2) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realized in the ordinary course of business. The provisions for all known and determined liabilities are adequate and not in excess of the amount reasonably required.

3) Sundry Creditors include Rs. Nil (Previous Year Rs. Nil) amount due to Micro & Small Enterprises as at 31st March 2016. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

4) Provision for current tax is net of MAT Credit Entitlement Rs. 223.75 Lacs (Previous Year Rs.1126.56 Lacs)

5) Financial Derivative Instruments

The Company uses forward contracts to hedge its risk associated with fluctuation in foreign currency relating to foreign currency assets and liabilities, firm commitments and highly probable forecast transactions. The use of the aforesaid financial instruments is governed by the company’s overall Risk Management Strategy. The company does not use forward contracts and options for speculative purposes. The details of the outstanding forward contracts and unheeded currency exposure as at 31st March, 2016 is as under:

7) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 240.77 lacs (Previous Year Rs 185.15 Lacs).

B). Defined Benefit Plan

(I). Gratuity

The Company makes payment to vested employees as per provisions of Payment of Gratuity Act, 1972. The provision of Gratuity liability as on the balance sheet date is done on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost is measured using the Projected Unit Credit actuarial Method at the end of balance sheet date by Actuary.

The Present value of the obligation as recognized in the Balance Sheet:-

The company provides benefit of leave encashment to its employees as per defined rules. The provision for liability for leave encashment as on date of Balance Sheet is recognized on the basis of Actuarial certificate, as under:

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market.

The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

8) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

9) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(ii) The Company is engaged in textiles. Hence there are no separate business segments

(iii) The company has its own power generation division mainly for captive use; therefore it is not treated as a separate business segment.

(b) Secondary Segment reporting on the basis of geographical segment is as below:

Signature to Note 1 to 24

As per of our report of even date attached. For and on behalf of the Board

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Mar 31, 2015

1) CSR Expenditure

Amount spent on CSR activities during the year is charged to Statement of Profit & Loss, if the same is of revenue nature. If the expenditure is of such nature, which may give rise to a capital asset, the same is recognized in the Balance Sheet as "CSR Assets".

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 91.02 Lacs (Previous Year - Rs. 18038.70 Lacs).

b) The company has an outstanding export obligation of appox. Rs. 25812.42 lacs (Previous Year - 1136.64 lacs), in respect of capital goods imported at the concessional rate of duty under Export Promotion Capital Goods Scheme, which is required to be met at different dates on or before 31.03.2020.

2) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provisions for all known and determined liabilities are adequate and not in excess of the amount reasonably required.

3) Sundry Creditors include Rs. Nil (Previous Year Rs. Nil) amount due to Micro & Small Enterprises as at 31st March 2015. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

4) As per provisions of schedule II of the Companies Act 2013, depreciation amounting to Rs. 20.71 Lacs on fixed assets, whose remaining useful life is Nil as on 31st March 2014, has been included in depreciation for the year.

5) Provision for current tax is net of MAT Credit Entitlement Rs. 1126.56 Lacs (Previous Year - Rs. 834.29 Lacs)

6) The company has spent a sum of Rs. 23.64 lacs on CSR activities as against Rs. 49.33 lacs required as per provisions of the Companies Act, 2013.

7) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 185.15 lacs (Previous Year Rs 130.95 Lacs).

b) Defined Benefit Plan (i) Gratuity

The Company makes payment to vested employees as per provisions of Payment of Gratuity Act, 1972. The provision of Gratuity liability as on the balance sheet date is done on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost is measured using the Projected Unit Credit actuarial Method at the end of balance sheet date by Actuary.

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market.

The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

8) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

9) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in textiles. Hence there is no separate business segments

(ii) The company has its own power generation division mainly for captive use; therefore it is not treated as a separate business segment.

10) RELATED PARTY DISCLOSURES

List of Related Parties with whom transactions have taken place

(a) Key Management Personnel :-

Name of Person Relationship

Shri R.L. Nolkha, Chairman & Managing Director

Shri Dinesh Nolkha Managing Director

Shri Nitin Nolakha Executive Director

Shri P. Maheshwari Chief Financial Officer

Shri Sudhir Garg Company Secretary & GM (Legal)

(b) Relatives

Sushila Devi Nolkha Wife of Shri R. L. Nolkha,

Mother of Shri Dinesh Nolkha & Shri Nitin Nolakha

(c) Related Companies:-

Redial Trading & Investment Pvt. Ltd.

Singnature to Note 1 to 24

As per of our report of even date attached. For and on behalf of the Board

---

Mar 31, 2014

Explanations

1. Security

(a) Term Loans of Rs. 13385.49 Lacs crores are secured by way of first charge on all immovable and movable fixed assets (both present and future) and second charge on current assets . The term loan of Rs. 2831.25 Lacs are secured by way of third charge on all immovable and movable fixed assets and current assets of the company. The term loans are also secured by personal guarantee of three directors

(b) Vehicle Loan is secured by hypothecation of the specific vehicle

2. Terms of Repayment

(a) Term loans of Rs. 910.66 Lacs are repayable in 9 variable quarterly instalments upto 30th June 2016, Rs. 14813.23 Lacs in 19 variable quarterly instalments upto 31st December 2018 and Rs. 492.85 Lacs in 23 equal quarterly instalments upto 31st December 2019.

(b) Vehicle loan of Rs. 14.38 Lacs is repayable in 26 variable monthly instalments upto 7th May 2016, Rs. 22.28 Lacs in 27 variable monthly instalments upto 12th June 2016 and Rs. 11.71 Lacs in 36 variable monthly instalments upto 7th March 2017.

ADDITIONAL INFORMATION

1) Contingent Liabilities & Commitments

i) Contingent Liabilities not provided for

S.No. Particulars Current Year Previous Year (Rs. in lacs) (Rs. in lacs)

a. Disputed Liabilities not acknowledged as debts

- Cenvat, Service Tax and Custom Duty 804.91 814.99

b. Guarantees - Outstanding Bank Guarantees 315.59 129.59

c. Other money for which the company is contingently liable

- Bill Discounted with Bank 4667.93 4210.32

ii) Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 18038.70 Lacs (Previous Year – Rs. 15.93 Lacs).

b) The company has an outstanding export obligation of appox. Rs. 1136.64 lacs. (Previous Year – Rs. 2567.07 Lacs), in respect of capital goods imported at the concessional rate of duty under Export Promotion Capital Goods Scheme, which is required to be met at different dates on or before 31.03.2020.

2) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provisions for all known and determined liabilities are adequate and not in excess of the amount reasonably required.

3) Sundry Creditors include Rs. Nil (Previous Year Rs. Nil) amount due to Micro & Small Enterprises as at 31st March 2014. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

4) Provision for current tax is net of MAT Credit Entitlement Rs. 834.29 Lacs (Previous Year – Rs. 419.68 Lacs)

5) Exceptional item of Rs. 1473.83 lacs during previous year represent provision of liability for recompense interest pertaining to earlier years under CDR system.

8) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 130.95 lacs (Previous Year Rs 108.49 Lacs).

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Company makes provision of Gratuity liability as on the balance sheet date on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuation being carried out at each balance sheet date.

Reconciliation of the Present value of defined obligation and the fair value of the plan assets

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market.

The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

c) Other Long Term Employee Benefits

Leave Encashment obligation as on 31.03.2014 is Rs. 81.01 Lacs.

(Previous Year Rs. 68.73 lacs)

9) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

10) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in textiles. Hence there is no separate business segments

(ii) The company has its own power generation division mainly for captive use; therefore it is not treated as a separate business segment.

11) RELATED PARTY DISCLOSURES

Transactions with related party as identified by the management in accordance with Accountin Standard 18 " Related Party Disclosures" issued by The Institute of Chartered Accountants o India are as follows:- List of Related Parties with whom transactions have taken place :-

(a) Key Management Personnel :-

Name of Person Relationship

Shri R.L. Nolkha, Father of Shri Dinesh Nolkha &

Chairman & Managing Director Shri Nitin Nolkha

Shri Dinesh Nolkha, Managing Director Son of Shri R.L. Nolkha,

Brother of Shri Nitin Nolkha

Shri Nitin Nolkha, Executive Director Son of Shri R.L. Nolkha,

Brother of Shri Dinesh Nolkha

(b) Relatives :- Sushila Devi Nolkha

Wife of Shri R. L. Nolkha, Mother of Shri Dinesh Nolkha & Shri Nitin Nolakha

(b) Associates :- Redial Trading & Investment Pvt. Ltd

---

Mar 31, 2013

1) Contingent Liabilities not provided for

S. No. Particulars Current Period Previous Period (Rs. in lacs) (Rs. in lacs)

a. Bills discounted with Banks 4210.32 3669.94 b. Disputed Taxation matters for which no provision has been made :- Cenvat, Service Tax and Custom Duty 814.99 814.99

2) The estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 15.93 Lacs (Previous Year – Rs. 533.34 Lacs)

3) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

4) Sundry Creditors include Rs. Nil (Previous Year Rs. Nil) amount due to Micro & Small Enterprises as at 31st March 2013. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

5) The company has given proposal to exit from CDR system w.e.f. 31st July 2012. All the participating banks and CDR EG has accepted the company''s proposal and recommended the same to CDR Core Group. Pending CDR Core Group decision, a provision has been made for recompense amount of Rs. 1654.34 lacs as accepted and recommended by CDR EG. This amount includes Rs. 1473.83 lacs pertaining to period prior to 31.03.2012 and the same has been shown as exceptional item.

6) Financial Derivative Instruments

The Company uses forward contracts to hedge its risk associated with fluctuation in foreign currency relating to foreign currency assets and liabilities, firm commitments and highly probable forecast transactions. The use of the aforesaid financial instruments is governed by the company''s overall strategy. The company does not use forward contracts and options for speculative purposes. The details of the outstanding forward contracts as at 31st March, 2013 is as under :

7) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 108.49 lacs (Previous Year Rs 90.93 Lacs ) .

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Company makes provision of Gratuity liability as on the balance sheet date on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuation being carried out at each balance sheet date.

The Present value of the obligation as recognized in the Balance Sheet :-

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market. The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations. c) Other Long Term Employee Benefits

Leave Encashment obligation as on 31.03.2013 is Rs. 68.73 Lacs. (Previous Year Rs. 56.84 lacs)

8) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

9) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in textiles. Hence there is no separate business segments (ii) The company has its own power generation division mainly for captive use; therefore it is not treated as a separate business segment.

(b) Secondary Segment reporting on the basis of geographical segment is as below:

10) RELATED PARTY DISCLOSURES

Transactions with related party as identified by the management in accordance with Accounting Standard 18 " Related Party Disclosures" issued by The Institute of Chartered Accountants of India are as follows:- List of Related Parties with whom transactions have taken place :- (a) Key Management Personnel :- Name of Person Relationship Shri R.L. Nolkha, Father of Shri Dinesh Nolkha & Chairman & Managing Director Shri Nitin Nolkha Shri Dinesh Nolkha, Managing Director Son of Shri R.L. Nolkha,

Brother of Shri Nitin Nolkha Shri Nitin Nolkha, Executive Director Son of Shri R.L. Nolkha,

Brother of Shri Dinesh Nolkha (b) Relatives :- Sushila Devi Nolkha Wife of Shri R. L. Nolkha,

Mother of Shri Dinesh Nolkha & Shri Nitin Nolakha

---

Mar 31, 2012

Explanations

1. Term Loans of Rs.17448.36 Lacs crores are secured by way of first charge on all immovable and movable fixed assets (both present and future) and second charge on current assets . The term loan of Rs. 3405.00 Lacs are secured by way of IIIrd charge on all immovable and movable fixed assets and current assets of the company. The term loans are also secured by personal guarantee of three directors

2. Vehicle Loan is secured by hypothecation of the specific vehicle

3. Terms of Repayment

a) Term loans of Rs. 1705.80 Lacs are Repayable in 8 variable quartely Instalments up to 31st March 2014 (Applicable rate of interest 11% p.a.)

b) Term loans of Rs. 1345.16 Lacs are Repayable in 17 variable quarterly Instalments upto 30th June 2016 (Applicable rate of interest 11% p.a.)

c) Term loans of Rs. 14397.40 Lacs are Repayable in 27 variable quarterly Instalments upto 31st December 2018 (Applicable rate of interest 11% p.a.)

d) Term loans of Rs. 3405.00 Lacs are Repayable in 27 variable quarterly Instalments upto 31st December 2018 (Applicable rate of interest 8.36% p.a.)

e) Vehicle loans of Rs. 26.00 Lacs is Repayable in 50 variable monthly Instalments up to 7th May 2016 (Applicable rate of interest 10.40% p.a.)

1) Contingent Liabilities not provided for

(Rs. In Lacs)

S.No. Particulars Current Year Previous Year

a. Bills discounted with Banks 3669.94 4043.24

b. Dispute taxation matters for which no provision has been made

Cenvat, Service Tax and Custom Duty 814.99 794.63

2) The estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 533.34 Lacs (Previous Year - Rs. 163.79 Lacs)

3) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

4) Sundry Creditors include Rs. Nil (Previous Year Rs. Nil) amount due to Micro & Small Enterprises as at 31st March 2012. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

5) During the previous year ended on 31.03.2011 the company had recalculated depreciation for earlier years as per revised estimated useful life of these assets and therefore an amount of Rs. 2131.46 lacs had been provided as Depreciation for the earlier years and was shown as an exceptional item.

6) Financial Derivative Instruments

The Company uses forward contracts to hedge its risk associated with fluctuation in foreign currency relating to foreign currency assets and liabilities, firm commitments and highly probable forecast transactions. The use of the aforesaid financial instruments is governed by the company's overall strategy. The company does not use forward contracts and options for speculative purposes. The details of the outstanding forward contracts as at 31st March, 2012 is as under :

7) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 90.93 lacs (Previous Year Rs 78.92 Lacs ) .

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Company makes provision of Gratuity liability as on the balance sheet date on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuation being carried out at each balance sheet date.

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market. The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

c) Other Long Term Employee Benefits

Leave Encashment obligation as on 31.03.2012 is Rs. 56.84 Lacs.

(Previous Year Rs. 46.16 lacs)

8) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

9) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in textiles. Hence there is no separate business segments

(ii) The company has its own power generation division mainly for captive use; therefore it is not treated as a separate business segment.

---

Mar 31, 2011

1) Contingent Liabilities not provided for

(Rs. In Lacs)

S.No. Particulars Current Year Previous Year

a. Bills discounted with Banks 4043.24 3426.87

b. Counter Guarantees given in respect of Guarantees given by the Company's Banker 99.99 91.67

c. Disputed taxation matters for which no provision has been made.

VAT - 0.44

Entry Tax - 90.22

Cenvat, Service Tax and Custom Duty 794.63 71.81

2) The estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 163.79 Lacs (Previous Year – Rs. Nil)

3) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

4) Loans & Advances include due from officers of the Company Rs. Nil (Previous Year Rs. Nil). Maximum amount due at any time during the year from officers Rs. Nil (Previous Year Rs. Nil).

5) Sundry Creditors include Rs. Nil (Previous Year Rs. 4.77 lacs) amount due to Micro & Small Enterprises as at 31st March 2011. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

6) (a) Depreciation on Plant and Machinery (Other than Computers and Office Equipments) Electrical Installation and Power plant,upto last financial year, was provided on the basis of rates applicable to Continuous Process Plant (SLM) as provided in Schedule XIV of the Companies Act, 1956. During the year the company has reassessed estimated useful life of these fixed assets to 13 years and accordingly depreciation for the year has been provided. This change has resulted in higher depreciation of Rs. 538.73 for the year.

(b) The company has also recalculated depreciation for earlier years as per revised estimated useful life of these assets and therefore an amount of Rs. 2131.46 lacs has been provided as Depreciation for the earlier years and shown as an exceptional item.

7) The issue of applicability of Entry Tax in the State of Rajasthan is pending with the Hon'ble Supreme Court for final decision due to contrary decisions of two different benches of Hon'ble Rajasthan High Court. The Hon'ble Rajasthan High Court vide order dated 21.01.2011 directed to deposit 50% of the assessed Entry Tax liability. The Company has made a provision of Rs. 108.91 Lacs as Entry Tax liability up to March, 2011 and has also made payment of Rs. 19.27 lacs against this liability.

8) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 78.92 lacs (Previous Year Rs 66.98 Lacs ) .

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Company makes provision of Gratuity liability as on the balance sheet date on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuation being carried out at each balance sheet date.

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market.

The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

c) Other Long Term Employee Benefits

Present value of Leave Encashment obligation as on 31.03.2011 is Rs. 46.16 Lacs. (Previous Year Rs. 38.47 lacs). 12) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

9. SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in textiles. Hence there is no separate business segments

(ii) The company has its own power generation division mainly for captive use; therefore it is not treated as a separate business segment.

10) RELATED PARTY DISCLOSURES

Transactions with related party as identified by the management in accordance with Accounting Standard 18 " Related Party Disclosures" issued by The Institute of Chartered Accountants of India are as follows:-

List of Related Parties with whom transactions have taken place :-

(a) Key Management Personnel :-

Name of Person Relationship

Shri R.L. Nolkha, Father of Shri Dinesh Nolkha & Chairman & Managing Director Shri Nitin Nolkha Shri Dinesh Nolkha, Managing Director Son of Shri R.L. Nolkha Shri Nitin Nolkha, Executive Director Son of Shri R.L. Nolkha

(b) Associates :- Redial Trading & Investment Pvt. Ltd Ratan Lal Nolkha (HUF).

---

Mar 31, 2010

1) Contingent Liabilities not provided for (Rs. In Lacs)

S.No. Particulars Current Year Previous Year

a. Bills discounted with Banks 3426.87 2906.36

b. Counter Guarantees given in respect of

Guarantees given by the Companys Banker 91.67 Nil

c. Disputed taxation matter for which no provision has been made.

VAT 0.44 0.44

Entry Tax 90.22 43.30

Cenvat and Custom Duty 71.81 36.31



2) The estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. Nil (Previous Year - Rs. Nil)

3) In the opinion of the Board the Current Assets. Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

4) Loans & Advances include due from officers of the Company Rs. Nil (Previous Year Rs. Nil). Maximum amount due at any time during the year from officers Rs. Nil (Previous Year Rs. Nil).

5) Sundry Creditors include Rs. 4.77 lacs (Previous Year Rs. 8.91 lacs) amount due to Micro & Small Enterprises as at 31sl March 2010. The figures have been disclosed on the basis of confirmations obtained from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

6) During the year Company has allotted 50,00,000 Equity Shares of Rs. 10/- each, at par, aggregating to Rs. 5.00 Crores to the Promoters/ Promoters Group on preferential basis.

7) Exceptional items represent Rs Nil (Previous Year Rs 2926.47 lacs) being losses on Foreign Exchange Derivative Contracts.

8) Power and Fuel includes fuel consumed Rs. 693.62 lacs (Previous year Rs. 185.96 Lacs) for generation of power sold.

9) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs 66.98 lacs (Previous Year Rs 65.30 Lacs ).

c) Other Long Term Employee Benefits

Present value of Leave Encashment obligation as on 31.03.2010 is Rs. 38.47 Lacs. (Previous Year Rs. 37.60 lacs). 13) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year. 14.

10. DISCLOSURES UNDER ACCOUNTING STANDARDS

B) RELATED PARTY DISCLOSURES

Transactions with related party as identified by the management in accordance with Accounting Standard 18 " Related Party Disclosures" issued by The Institute of Chartered Accountants of India are as follows.- List of Related Parties with whom transactions have taken place :-

(a) Key Management Personnel :-

Name of Person Relationship

Shri R.L. Nolkha, Father of Shri Dinesh Nolkha &

Chairman & Managing Director Shri Nitin Nolkha

Shri Dinesh Nolkha, Managing Director Son of Shri R.L. Nolkha

Shri Nitin Nolkha, Executive Director Son of Shri R.L. Nolkha ,

(b) Associates :-

Redial Trading & Investment Pvt. Ltd Prasham Corporate Services (India)

Pvt. Ltd. Greenfield Securities Pvt. Ltd Dolphin Carrier Pvt Ltd.

Ratan Lai Nolkha (HUF) Dinesh Nolkha (HUF)