Notes to Accounts of Patspin India Ltd.

Mar 31, 2018

1 Corporate Information:

Patspin India Limited (‘the company'') is a Public Limited company incorporated and domiciled in India, and has its registered office at 3rd Floor,Palal Towers, Ravipuram, MG Road, Kochi -682016 Kerala State, India .The company has been incorporated under the provisions of Indian Companies Act and its equity shares are listed on the National Stock Exchange (NSE) and Bombay Stock Exchange(BSE) in India. The company is engaged mainly in the business of manufacture and Export of Fine and super fine combed cotton yarn.

ii Rights, preferences and restrictions attached to Equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for 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 of their shareholding.

Preference shares being Non-Cumulative and redeemable, i.e. there is contractual obligation to deliver cash at the time of redemption, accordingly these have been classified as financial liability as per Ind AS 32 “Financial Instrument Presentation”. Fair value of the liability component is the Present value of redeemable principal amount using the borrowing cost applicable to the Company. Subsequently, the financial liability is carried at amortised cost and Interest expenses has been recognised using the effective interest method on the amortised cost.

i Term Loan are secured by :

(i) Term loans from banks and financial institution, excluding corporate term loan from a bank of Rs. 1500 lacs (Outstanding as on 31.03.2018 Rs. 746.63 lacs,Previous year Rs. 937.45 lacs)(security for which is explained in Para 1(ii) below) and Term Loan from a financial institution of Rs. 2000 lacs (Outstanding as on 31.03.2018 Rs. 1054.50 lacs, Previous Year 1317.82 lacs) (security for which is explained in Para 1(iii) below), are secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all movable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company, subject to prior charges in favour of banks for working capital ranking pari passu, inter se (as mentioned in Note No 5, Para (i) and (ii)), and further secured by personal guarantee of two Directors of the Company.

(ii) Corporate term loan from a bank of Rs. 1500 lacs mentioned in para 1 (i) above is secured by way of hypothecation of moveable assets (excluding vehicle purchased on Finance lease basis) of the company, both present and future, has been secured by second charge by way of equitable mortgage on the immovable assets of the company, both present and future,and further secured by personal guarantee of two directors of the Company.

(iii) Term Loan from a financial institution of Rs. 2000 lacs is secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company,subject to prior charges in favour of banks for working capital ranking pari passu, inter se (as mentioned in Note No 5,Para (i) and (ii) below), and further secured by Corporate Guarantee from GTN Textiles Limited (Rs. 300 lacs) and GTN Enterprises Limited (Rs. 1700 lacs).

(iv) Finance lease obligations are relating to vehicles and are secured by hypothecation of respective vehicles.

i) Working Capital loans from banks are secured by first charge by way of hypothecation on current assets of the company and further secured by way of second charge over the immovable assets of the company both present and future and further secured by personal guarantee of two directors of the Company.

ii) Non-fund based limits sanctioned by the bankers are secured by extension of first charge on the current assets of the Company and further secured by second charge on the immovable properties of the company and personal guarantee of two directors of the company; Total amount outstanding at the end of the year is Rs. 5778.00 lacs (Previous year Rs. 4837.00 lacs).

* The ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprise as at reporting date has been made in the financial statements on information received and available with the Company and it has been relied upon by the auditors. Further, in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro,Small and Medium Enterprises Development Act,2006(“the MSMED Act) is not expected to be material. The company has not received any claim for interest from any supplier under the said Act.

The company had four wind mill undertakings and out of which one of the Wind Mill undertaking was sold during the previous year on slump sale basis and realised a profit of Rs. 491.97 lacs.During the current financial year the remaining three wind mill undertakings were also sold on slump sale basis and realised a profit of Rs. 1231.14 lacs as mentioned above

2. Employee Benefits Plan Gratuity:

In accordance with the applicable laws, the Company provides for Grauity, a defined benefit retirement plan (“The Gratuity Plan”) covering eligible employees. The Gratuity plan provides for a lump sum payment to vested employees on retirement (subject to the completion of 5 years of continues employment), death, inacpacitisation or termination of the employment are based on last drawn salary and tenure of employment.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the Gratuity Fund administered by Life Insurance Corporation of India, which is basically a year-on-year cash accumulation plan. Though company has not fully funded to LIC, adequate provision has been made in the Books of accounts. As part of the scheme the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance company, as part of the policy rules, makes payment of all gratuity settlements during the year subject to sufficiency of funds under the policy.

3. The accounts of certain Trade Receivables ,Trade payables, Loans and advances and Banks are subject to formal confirmations /reconciliations and consequent adjustments ,if any. The management does not expect any material difference affecting the current year''s financial statements on such reconciliation/adjustments.

4. In term of Ind AS-108 Operating Segments, the company operates materially only in one business segment viz., Textile industry and have its production facilities and all other assets located within India.

5. RELATED PARTY DISCLOSURES

Related Party Disclosures pursuant to Ind AS 24

(a) Names of Related parties and nature of relationship

i Associates:

1 GTN Textiles Limited

ii Companies under joint control as per para9(b)vi of IndAS

GTN Enterprises Limited

iii Key Management Personnel:

Shri Umang Patodia -Managing Director

Shri TRavindran -CFO

Shri Dipu George -Dy. Company secretary

iv Enterprises/Entities having “Common Key Management Personnel”:

1 Perfect Cotton Co.

2 Patcot & Co

3 Standard Cotton Corporation

v Relatives of Key Management Personnel:

Shri Binod Kumar Patodia - Father of Shri. Umang Patodia

6 CONTINGENT LIABILITY AND COMMITMENTS:

A COMMITMENTS

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

B CONTINGENT LIABILITY

1 Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 72.99 lacs (Previous year Rs. 36.36 lacs)

b) Sales Tax (VAT) : Rs. 146.45 lacs (Previous year ''146.45 lacs)

c) TANGEDCO has been charging electricity tax @ 5% on Demand Charges through their bills. This was challenged by a consumer in Hon''ble Supreme Court and Hon''ble Supreme Court has accepted the appeal on records. Liability towards the same Rs. 27.25 lacs (Previous year Rs. 15.17 lacs)

d) TANGEDCO has denied deemed demand benefit available for use of self generated thermal power received through group captive arrangement. This was challenged in Hon''ble Chennai High Court and the Hon''ble Hight court has given injunction with a condition to TANGEDCO to Charge only 50% till the matter is decided. Liability towards the same was Rs. 55.84 lacs .(Previous year Nil).

e) Disputed Income Tax demands Rs. 353.78 lacs (Previous year 353.78 lacs ) and interest there on Rs. 308.65 lacs (Previous year Rs. 308.65 lacs ),for the assessement year 2001-02 to 2005-06, matter was decided by the Hon''ble High Court of Kerala against the Company. The Company had gone on appeal before the Hon''ble Supreme Court of India and the appeals for the AY 2001-02 to 2004-05 were decided by SC in favour of the Company . The appeal for Assessement Year 2005-06 is still pending with Hon''ble Supreme court of India.The total Payments of Rs. 580.98 lacs (Previous year 580.98 lacs ) was made aganist the aforesaid demand is included in the loans and advances.

7. Corporate Guarantee :

7.1 The company has given Corporate Guarantee amounting to Rs. 389 lacs (Previous year Rs. 389 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs. 116.55 lacs as on 31^st March 2018 (Previous Year - Rs. 271.95 lacs).

7.2 The company has given Corporate Guarantee amounting to Rs. 175 lacs (Previous year Rs. 175 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Textiles Ltd and the outstanding amount thereof is Rs. 70 lacs as on 31^st March 2018 (Previous Year - Rs. 140 lacs).

8. The Company was sanctioned a Debt Restructuring Package under Corporate Debt Restructuring (CDR) Scheme on 12.10.2012 effective from 01.04.2012 for the loans availed from Banks/Financial Institutions,which was approved by CDR-EG and all the lenders.

The restructuring inter-alia envisages:

- Deferment / Rescheduling in payment of principle

- Refixation of interest rates on term loans

- Sanction of additional long term working capital term loan of Rs. 22.16 crores

- In lieu of sacrifice by the lenders, Preference Shares of Rs. 10.81 crores were allotted on 29.01.2013 to the banks/ financial institutions. The amount represents difference between the net present value (NPV) of the future cash flows towards repayment of principal and interest thereon as per the revised term and those payable as per the original terms.

- The Promoters to bring in contribution of Rs. 2.70 crores by way of Preference Shares. The said amount was brought into two phases of Rs. 1.35 Crores each on 7^th November, 2012 and 28^th November, 2013 respectively in line with CDR Scheme.

- GTN Textiles Limited (GTN), the main Promoter to pledge 72,86,405 Equity Shares of Rs. 10 each (51% of the shareholding in Patspin India Limited) in favour of Central Bank of India, the Monitoring Institution. GTN has since pledged the shares on 14.05.2013.

- The CDR lenders, with the approval of CDR EG, shall have the right to recompense the reliefs/ sacrifices/waivers extended by respective CDR lenders as per CDR guidelines

9. FINANCIAL RISKS MANAGEMENT

In the course of business, amongst others, the Company is exposed to several financial risks such as Credit Risk, Liquidity Risk, Interest Rate Risk, and Exchange Risk . These risks may be caused by the internal and external factors resulting into impairment of the assets of the Company causing adverse influence on the achievement of Company''s strategies, operational and financial objectives, earning capacity and financial position.

The Company has formulated an appropriate policy and established a risk management framework which encompass the following process.

- identify the major financial risks which may cause financial losses to the company

- assess the probability of occurrence and severity of financial losses

- mitigate and control them by formulation of appropriate policies, strategies, structures, systems and procedures

- Monitor and review periodically the adherence, adequacy and efficacy of the financial risk management system.

The Company enterprise risk management system is monitored and reviewed at all levels of management, Internal Auditors, Audit Committee and the Board of Directors from time to time.

Credit Risk

Credit Risk refers to the risks that arise on default by the counterparty on its contractual obligation resulting into financial loss to the company. The company may carry this Risk on Trade and other receivables, liquid assets and some of the non current financial assets.

In case of Trade receivables, the company has framed appropriate policy for extending credits period & limit to each customer based on their profile, financial position etc. The collections of trade dues are strictly monitored. In case of Export customers, even credit guarantee insurance is also obtained wherever required.

Company''s exposure to Credit Risk is also influenced by the concentration of risk from top five customers. The details in respect of the % of sales generated from the top customer and top five customers are given hereunder.

The credit risk on cash & cash equivalent, investment in fixed deposits, liquid funds and deposits are insignificant as counterparties are banks with high credit ratings assigned by the rating agencies of international repute.

Liquidity Risk

Liquidity Risk arises when the company is unable to meet its short term financial obligations.

The company maintains liquidity in the system so as to meet its financial liabilities .

Contractual maturities of financial liabilities are given as under:

Interest Rate Risk

Generally market linked financial instruments are subject to interest rate risk. The company does not have any market linked financial instruments both on the asset side as well liability side. Hence there no interest rate risk linked to market rates.

However the interest rate in respect of major portion of borrowings by the Company from the banks and financial institutions are linked with the MCLR / Base Prime lending rate of the respective lender. Any fluctuation in the same either on higher side or lower side will result into financial loss or gain to the company.

The amount which is subjected to the change in the interest rate is of Rs. 8372.47 lacs out of the total debt of Rs. 20689.97 Lacs

Based on the Structure of the debt as at year end, a half percentage point increase in the interest rate would cause an additional expense in the net financing cost of Rs. 41.86 Lacs on annual basis.

Foreign Currency Risk

The company is exposed to the foreign currency risk from transactions & translation. Transactional exposures are arising from the transactions entered in foreign currency. Management keeps a close watch of the maturity of the financial assets in foreign currency and payment obligations of the financial liabilities.

Based on one percentage point variations in the exchange rate, the profit before tax for the year based on the un hedged foreign currency transaction entered during the period will be effected by Rs. 33.15 Lacs

10. Capital risk management

The Company''s objectives when managing capital are to :

- create value for its shareholders and other stake holders, and

- maintain an optimal capital structure to reduce the cost of capital through a fair mix of equity with combination of short term/long term debt as may be appropriate.

The Company sets the amount of capital required on the basis of annual business and long-term operating plans which includes capital and other strategic investments. The Company''s intention is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business.

11. First time adoption of Ind AS

The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from 1^st April, 2017, with a transition date of 1^st April, 2016. The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements for the year ended 31^st March, 2018, be applied retrospectively and consistently for all financial years presented. However, in preparing these Ind AS financial statements, the Company has availed of certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity).

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

A. Optional Exemptions

(i) Deemed Cost

The Company has elected to continue with the carrying value of all of its plant and equipment and intangible assets recognised as of 1st April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date, except Freehold land for which the Company had adopted the revaluation model pursuant to the para 29 to 31 of Ind AS 16 and recognised revalued cost as its deemed cost as at 1st April 2016.

(ii) Designation of previously recognised financial instruments

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

(iii) De-recognition of financial assets and financial liabilities

The Company has applied the de-recognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after 1 April, 2016 (the transition date).

B. Mandatory Exceptions

(a) Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP The Company make estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at cost;

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

(b) 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.

C. Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:

(i) Reconciliation of Balance sheet as at April 1, 2016 (Transition Date)

(ii) A. Reconciliation of Balance sheet as at March 31, 2017

B. Reconciliation of Statement of total Comprehensive Income for the year ended March 31, 2017

(iii) A. Reconciliation of Equity as at April 1, 2016 and March 31, 2017

B. Reconciliation of Income Statement March 31, 2017

Notes to first time adoption:

a Property, plant and Equipment

In accordance with the option available under Ind AS 101-First time adoption of Indian Accounting Standards. the company has opted to continue with net carrying values of all Property, plant and Equipment as at 1^st April 2016(transition date ) as per the previous GAAP and use that as the Deemed cost excepting Freehold Land. The Company has adopted cost model as their accounting policy for subsequent measurement and recognition of Property, plant and equipment.

For Freehold Land, as per the provisions of Para 29 to 31 of the Ind AS 16, the company has adopted Revaluation model and has determined its fair value on the transition date of 1^st April 2016 on the basis of valuation report of external valuer and considered the same as its Deemed cost. The fair value of the land amounted to Rs. 5543.44 Lakhs (Cost Rs. 282.16 Lakhs) as at 1 April 2016. Impact of the fair value changes as on the date of transition, is recognised in opening reserves/separate component of other equity, as the case may be

b Deferred Tax

Under previous GAAP deferred tax was accounted using the income statement approach, on the timing differences between the taxable profit and accounting profits for the year. Under Ind AS, deferred tax is recognised following balance sheet approach on the temporary differences between the carrying amount of asset or liability in the balance sheet and its tax base.

c Defined benefits Liabilities:

Under Ind AS Re-measurements i.e. Actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in Other comprehensive income instead of profit and loss in previous GAAP

d In the previous GAAP outstanding forward exchange contracts covering the exchange risk on Export and Import transactions were not marked to market at the year-end. Under Ind As, the outstanding forward exchange contracts were re -measured based on the spot rates prevailing at the year-end and impact is recognised in the financial statements of the year.

e 5% and 0.01% Non-Cumulative Redeemable Preference Shares:

7,00,000 shares of Rs. 100 each of 5% Non-cumulative Redeemable Preference and 13,51,000 shares of Rs. 100 each of 0.01% Non-Cumulative Redeemable Preference Shares being Non-Cumulative and redeemable, i.e. there is contractual obligation to deliver cash at the time of redemption, accordingly the preference shares have been classified as financial liability as per Ind AS 32 “Financial Instruments: Presentation”. Fair value of the liability component is the Present value of redeemable principal amount using the borrowing cost applicable to the Company. Subsequently, the financial liability is carried at amortized cost and Interest expenses has been recognised using the effective interest method on the amortized cost.

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

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Mar 31, 2016

1. Rights, preferences and restrictions attached to shares

2. Equity Shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for 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 of their shareholding.

3. Term Loan are secured by :

4. Term loans from banks and financial institution, excluding corporate term loan from a bank of Rs. 1500 lacs (security for which is explained in Para 1(ii) below) and Term Loan from a financial institution of Rs. 2000 lacs (security for which is explained in Para 1(iii) below) , are secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company, subject to prior charges in favour of banks for working capital ranking pari passu, inter se (as mentioned in Note No 5 ,Para (i) and (ii)),and further secured by personal guarantee of two Directors of the Company.

5. Corporate term loan from a bank of Rs. 1500 lacs mentioned in para 1 (i) above is secured by way of hypothecation of moveable assets (excluding vehicle purchased on Finance lease basis) of the company, both present and future, has been secured by second charge by way of equitable mortgage on the immovable assets of the company, both present and future, and further secured by personal guarantee of two directors of the Company.

6. Term Loan from a financial institution of Rs. 2000 lacs is secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company, subject to prior charges in favour of banks for working capital ranking pari passu, inter se (as mentioned in Note No 5,Para (i) and (ii) below), and further secured by Corporate Guarantee from GTN Textiles Limited (Rs. 300 lacs) and GTN Enterprises Limited (Rs. 1700 lacs).

7. Finance lease obligations are relating to vehicles and are secured by hypothecation of respective vehicles.

8. Working Capital loans from banks are secured by:

Working Capital loans from banks are secured by first charge by way of hypothecation on current assets of the company and further secured by way of second charge over the immovable assets of the company both present and future and further secured by personal guarantee of two directors of the Company.

9. Non-fund based limits sanctioned by the bankers are secured by:

Non-fund based limits sanctioned by the bankers are secured by extension of first charge on the current assets of the Company and further secured by second charge on the immovable properties of the company and personal guarantee of two directors of the company; Total amount outstanding at the end of the year is Rs. 4047.00 lacs (Previous year Rs. 5242.00 lacs).

10. RELATED PARTY DISCLOSURES

Disclosure in respect of Related Parties pursuant to Accounting Standard -18 (a) List of Related Parties

(As identified by the Management)

Related parties with whom company entered in to transactions during the year

11. Associates:

12. GTN Textiles Limited

13. GTN Enterprises Limited

14. Key Management Personnel:

Shri Umang Patodia -Managing Director

15. Enterprises/Entities having “Common Key Management Personnel”

16. Perfect Cotton Co.

17. Patcot & Co

18. Purav Trading limited

19. Standard Cotton Corporation

20. Relatives of Key Management Personnel:

21 . Shri. Binod Kumar Patodia - Father of Shri. Umang Patodia

22. Shri. Ankur Patodia - Brother of Shri. Umang Patodia

23. Smt. Prabha Patodia - Mother of Shri. Umang Patodia

24. Smt. Swati Patodia - Sister-in-law of Shri. Umang Patodia

25. CONTINGENT LIABILITY AND COMMITMENTS: A COMMITMENTS

26 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Nil (Previous year Rs. Nil).

27. Outstanding Export Forward Contracts (not in the nature of derivatives ) as on 31 st March Rs.16 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US$ 7.41 lacs and Euro 9.23 lacs ( Previous Year US$ 41.81 lacs and Euro 3.00 lacs ) at average Exchange Rate of Rs. 68.52 /US$ and Rs. 75.80/Euro (Previous year Rs. 63.70/US$ and Rs. 70.22/Euro). The period covered under these contracts spreads over April 2016 to November 2016 (Previous Year April 2015 to February 2016). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2016 works out to Rs. 66.99 /US$ and Rs. 76.35/Euro (Previous year Rs. 63.84/US$ and Rs. 69.09/Euro ), resulting in notional gain of Rs. 6.24 lacs (Previous year notional loss of Rs. 2.28 lacs)

28. Outstanding Import Forward Contracts ( not in the nature of derivatives) as on 31st March 2016 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amounting to US$ 20.86 Lacs (Previous year US$ 4.61 Lacs) at average exchange rate of Rs. 68.01/US$ (Previous year Rs. 62.54/US$). The period covered under these contracts spreads over April 2016 to July 2016 (Previous year April 2015 to October 2015). The average exchange rate applicable for above period based on exchange rate on 31.03.2016 works out to Rs. 67.08/US$ (Previous year Rs. 62.96/US$), resulting a notional loss of Rs. 20.61 lacs (Previous year notional gain of Rs. 1.95 Lacs)

29. CONTINGENT LIABILITY

30. Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

31. Renewable energy purchase obligation on account of open access power procurement for Palakkad unit - Rs. 3.78 Lacs (Previous Year Rs. Nil)

32. TANGEDCO was not allowing the deemed demand benefit available for the use of self-generated thermal power purchased by the Company through group captive arrangement. Company filed a writ petition against this and got an interim injunction from Chennai High Court on 25.03.2015 wherein HC directed to pay 50% of the demand charges till the case is finally disposed of. Accordingly 50% of the demand charges for the period April to March 2016 amounting to Rs. 32.64 lacs has been paid and charged off in the power expenditure. Balance liability not provided in Books Rs. 32.64 lacs (Previous year Rs. Nil lacs)

33. TANGEDCO has been charging electricity tax @ 5% on Demand Charges through their bills. This was challenged by a consumer in Supreme Court and SC has accepted the appeal on records. Liability towards the same Rs. 3.09 lacs (Previous year Rs. Nil lacs)

34. Sales Tax (VAT) : Rs. 146.45 lacs (Previous year Rs. 147.56 lacs)

35. Market Committee Cess: Rs. 55.53 lacs (Previous year Rs. 49.23 lacs)

36. Disputed Income Tax demands Rs. 353.78 lacs (Previous year 353.78 lacs) and interest there on Rs. 308.65 lacs (Previous year Rs. 308.65 lacs), matter having been decided by the Hon’ble High Court of Kerala against the Company. The Company has gone for appeal before the Supreme Court of India and is hopeful of outcome in its favour. Payment there against Rs. 580.98 lacs (Previous year Rs. 546.58 lacs is included in the loans and advances with further commitment to pay Rs. 34.40 lacs in three monthly equal installments effective from 01.04.2015) .

37. Disputed amount of fiscal penalty imposed by Joint Director General of Foreign Trade Charging violation of condition of EPCG authorization Rs. Nil lacs (Previous Year- Rs. 288.89 Lacs). The Company has appealed to the Appellate Authority and the Appellate Authority decides the case in favour of the Company and issued Export obligation discharge Certificate.

38. Corporate Guarantee :

39. The company has given Corporate Guarantee amounting to Rs. 2113 lacs ( Previous year Rs. 2113 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs. 864 lacs as on 31st March 2016 ( Previous Year - Rs. 1226 lacs ).

40. The company has given Corporate Guarantee amounting to Rs. 175 lacs ( Previous year Rs. 175 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Textiles Ltd and the outstanding amount thereof is Rs. 210 lacs as on 31st March 2016 ( Previous Year - Rs. 263 lacs ).

41. Net loss / Gain on Foreign currency transaction and translation

The amount of net loss on foreign currency transaction and translation included in the other expenses amounts to Rs. 27.38 lacs (Previous year Rs. 314.73 lacs gain ).This includes gain on account of export Rs. 162.14 lacs (Previous Year Rs. 528.96 lacs gain), Loss on account of Import Rs. 182.68 lacs (Previous year Rs. 220.16 lacs loss ) and loss on account of cancellation of forward contracts Rs. 6.84 lacs (Previous Year Rs. 5.93 lacs gain )

42. a) In the opinion of the management, assets other than fixed assets and noncurrent investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

43. The accounts of certain Trade Receivables, Trade payables, Loans and advances and Banks are however, are subject to formal confirmations /reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current period''s financial statements on such reconciliation/adjustments.

44. In term of Accounting Standard -17, the company operates materially only in one business segment viz., Textile industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs. 31383.29 Lacs ( Previous year Rs. 31590.11 lacs) and within India sale of Rs. 16822.31 lacs ( Previous year Rs. 22540.56 Lacs)

45. The Company was sanctioned a Debt Restructuring Package under Corporate Debt Restructuring (CDR) Scheme on 12.10.2012 effective from 01.04.2012 for the loans availed from Banks/Financial Institutions, which was approved by CDR-EG and all the lenders.

The restructuring inter-alia envisages:

- Deferment / Rescheduling in payment of principal

- Refixation of interest rates on term loans

- Sanction of additional long term working capital term loan of Rs. 22.16 crores

- In lieu of sacrifice by the lenders, Preference Shares of Rs. 10.81 crores were allotted on 29.01.2013 to the banks/ financial institutions. The amount represents difference between the net present value (NPV) of the future cash flows towards repayment of principal and interest thereon as per the revised term and those payable as per the original terms. The said sacrifice will be amortized equally over a period of 9 years beginning from the FY 2013-14 and ending in the financial year 2021-22 being the last year of repayment of entire loans.

- The Promoters to bring in contribution of Rs. 2.70 crores by way of Preference Shares. The said amount was brought into two phases of Rs. 1.35 Crores each on 7th November, 2012 and 28th November, 2013 respectively in line with CDR Scheme.

- GTN Textiles Limited (GTN), the main Promoter to pledge 72,86,405 Equity Shares of Rs. 10 each (51% of the shareholding in Patspin India Limited) in favour of Central Bank of India, the Monitoring Institution. GTN has since pledged the shares on 14.05.2013.

- The CDR lenders, with the approval of CDR EG, shall have the right to recompense the reliefs/ sacrifices/waivers extended by respective CDR lenders as per CDR guidelines.

46. PREVIOUS YEAR’S FIGURES

Previous year''s figures have been regrouped /reclassified wherever necessary to conform to the current year’s presentation.

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Mar 31, 2015

(A) Rights, preferences and restrictions attached to shares

1) Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for 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 of their shareholding.

2) Preference Shares:

i 700000, 5% Non Cumulative preference shares of Rs 100 each were issued to promotors and their associates. The issue details are as follows.

(i) Term loans from banks and financial institution, excluding corporate term loan from a bank of Rs. 1500 lacs (security for which is explained in Para 1(ii) below) and Term Loan from a financial institution of Rs 2000 lacs (security for which is explained in Para 1(iii) below) , are secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company, subject to prior charges in favour of banks for working capital ranking pari passu, inter se (as mentioned in Note No 5 ,Para (i) and (ii)),and further secured by personal guarantee of two Directors of the Company.

(ii) Corporate term loan from a bank of Rs. 1500 lacs mentioned in para 1 (i) above is secured by way of hypothecation of moveable assets (excluding vehicle purchased on Finance lease basis) of the company, both present and future, has been secured by second charge by way of equitable mortgage on the immovable assets of the company, both present and future,and further secured by personal guarantee of two directors of the Company.

(iii) Term Loan from a financial institution of Rs 2000 lacs is secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vechicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company,subject to prior charges in favour of banks for working capital ranking pari passu,inter se (as mentioned in Note No 5,Para (i) and (ii) below),and further secured by Corporate Guarantee from two associates, GTN Textiles Limited (Rs 300 lacs) and GTN Enterprises Limited (Rs 1700 lacs).

(iv) Finance lease obligations are relating to vehicles and are secured by hypothecation of respective vehicles.

II The Maturity Profile of Secured Loans are as set out below:

i Working Capital limits from Banks are secured by:

Working Capital loans from banks are secured by first charge by way of hypothecation on current assets of the company and further secured by way of second charge over the immovable assets of the company both present and future and further secured by personal guarantee of two directors of the Company.

Non-fund based limits sanctioned by the bankers are secured by extension of first charge on the current assets of the Company and further secured by second charge on the immovable properties of the company and personal guarantee of two directors of the company; Total amount outstanding at the end of the year is Rs.5242.00 lacs (Previous year Rs.6121.73 lacs).

2. Related Party Disclosures

DISCLOSURE IN RESPECT OF RELATED PARTIES PURSUANT TO ACCOUNTING STANDARD -18 (a) List of Related Parties

(As identified by the Management)

Related parties with whom company entered in to transactions during the year. i. Associates

1. GTN Textiles Limited

2. GTN Enterprises Limited

ii Key Management Personnel:

Shri Umang Patodia - Managing Director

iii. Enterprises/Entities having "Common Key Management Personnel" :

1 Perfect Cotton Co.

2 Patcot & Co.

3 Purav Trading limited

4 Standard Cotton Corporation

iv. Relatives of Key Management Personnel:

1 Shri Binod Kumar Patodia - Father of Shri. Umang Patodia

2 Shri Ankur Patodia - Brother of Shri. Umang Patodia

3 Smt. Prabha Patodia - Mother of Shri. Umang Patodia

4 Smt.Swati Patodia - Sister-in-law of Shri. Umang Patodia

3 CONTINGENT LIABILITY AND COMMITMENTS:

A COMMITMENTS

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

2. Outstanding Export Forward Contracts (not in the nature of derivatives ) as on 31 st March '15 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US$ 41.81 lacs and Euro 3.00 lacs ( Previous Year US$ 19.89 lacs and Euro 5.89 lacs ) at average Exchange Rate of Rs 63.70 /US$ and Rs 70.22/Euro (Previous year Rs 62.54/US$ and Rs 88.78/Euro). The period covered under these contracts spreads over April 2015 to February 2016 (Previous Year April 2014 to September 2014). The average Exchange Rate applicable for the above period based on

exchange rate on 31.03.2014 works out to Rs 63.84 /US$ and Rs 69.09/Euro (Previous year Rs 55.32/US$ and Rs 70.62/Euro ), resulting in notional loss of Rs 2.28 lacs (Previous year notional gain of Rs 46.75 lacs)

3. Outstanding Import Forward Contracts ( not in the nature of derivatives) as on 31st March 2015 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amounting to US$ 4.61 Lacs (Previous year US$ 9.76 Lacs) at average exchange rate of Rs.62.54/US$ (Previous year Rs.63.34/US$) . The period covered under these contracts spreads over April 2015 to October 2015 (Previous year April 2014 to June 2014). The average exchange rate applicable for above period based on exchange rate on 31.03.2014 works out to Rs.62.96/US$ (Previous year Rs.54.88/ US$), resulting a notional gain of Rs.1.95 lacs (Previous year notional loss of Rs.23.39 Lacs)

B CONTINGENT LIABILITIES

1. Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. Nil lacs (Previous year Rs. 254.14 lacs)

b) Sales Tax (VAT) : Rs 147.56 lacs (Previous year Rs.150.22 lacs)

c) Market Committee Cess: Rs. 49.23 lacs (Previous year Rs.41.90 lacs)

d) Disputed Income Tax demands Rs 353.78 lacs (Previous year 353.78 lacs ) and interest there on Rs 308.65 lacs (Previous year Rs 308.65 lacs ), matter having been decided by the Hon'ble High Court of Kerala against the Company. The Company has gone for appeal before the Supreme Court of India and is hopeful of outcome in its favour.Payment there against Rs 546.58 lacs (Previous year 408.58 lacs ) is included in the loans and advances,with further commitment to pay Rs 34.40 lacs in three monthly equal instalments effective from 01.04.2015 (Previous Year Rs 174.40 lacs in fifteen equal instalments effective from 01.04.2014)

e) Disputed amount of fiscal penalty imposed by Joint Director General of Foreign Trade Charging for violation of condition of EPCG authorization Rs 288.89 lacs (Previous Year-Nil) .The Company has appealed to the Appellate Authority. Meanwhile, Hon'ble High Court of Kerala has ordered to maintain status quo till the matter is decided by the appellate authority. The company is hopeful of outcome in its favour.

The Company's pending litigation comprise mainly of above taxes and duties.The Company has reviewed all its pending litigations and proceedings and has made adequate provision,whereever required and disclosed the contingent liabilities, whereever applicable in its financial statements. The Company doesn't reasonably expect these proceedings to have material impact on its financial statements.

4. Corporate Guarantee :

4.1 The company has given Corporate Guarantee amounting to Rs.2113 lacs ( Previous year Rs.2113 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs.1226 lacs as on 31st March 2015 ( Previous Year - Rs. 1538 lacs ).

4.2 The company has given Corporate Guarantee amounting to Rs.175 lacs ( Previous year Rs.175 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Textiles Ltd and the outstanding amount thereof is Rs.263 lacs as on 31st March 2015 ( Previous Year - Rs. 295 lacs ). All the investments made, loans and advances given and gurantees provided are for business purposes.

5. Net loss / Gain on Foreign currency transaction and translation

The amount of net gain on foreign currency transaction and translation included in the other expenses amounts to Rs 314.73 lacs (Previous year Rs 365.77 lacs loss ).This includes gain on account of export Rs 528.96 lacs (Previous Year Rs 129.90 lacs gain), Loss on account of Import Rs.220.16 lacs (Previous year Rs 457.86 lacs loss) and GAIN on account of cancellation of forward contracts Rs.5.93 lacs (Previous Year Rs 37.81 lacs loss).

6. a) In the opinion of the management, assets other than fixed assets and non current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated. b) The accounts of certain Trade Receivables ,Trade payables, Loans and advances and Banks are however,are subject to formal confirmations /reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current period's financial statements on such reconciliation/ adjustments.

7. In term of Accounting Standard -17, the company operates materially only in one business segment viz., Textile industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs.31590.11 Lacs ( Previous year Rs.36459.37 lacs) and within India sale of Rs. 22540.56 lacs ( Previous year Rs. 23270.98 Lacs)

8. The Company was sanctioned a Debt Restructuring Package under Corporate Debt Restructuring (CDR) Scheme on 12.10.2012 effective from 01.04.2012 for the loans availed from Banks/Financial Institutions,which was approved by CDR-EG and all the lenders.

The restructuring inter-alia envisages:

- Deferment / Rescheduling in payment of principal

- Refixation of interest rates on term loans

- Sanction of additional long term working capital term loan of Rs.22.16 crores

- In lieu of sacrifice by the lenders, Preference Shares of Rs.10.81 crores were allotted on 29.01.2013 to the banks/ financial institutions. The amount represents difference between the net present value (NPV) of the future cash flows towards repayment of principal and interest thereon as per the revised term and those payable as per the original terms. The said sacrifice will be amortized equally over a period of 9 years beginning from the FY 2013-14 and ending in the financial year 2021-22 being the last year of repayment of entire loans.

- The Promoters to bring in contribution of Rs.2.70 crores by way of Preference Shares.The said amount was brought into two phases of Rs 1.35 Crores each on 7th November,2012 and 28th November ,2013 respectively in line with CDR Scheme.

- GTN Textiles Limited (GTN), the main Promoter to pledge 72,86,405 Equity Shares of Rs.10 each (51% of the shareholding in Patspin India Limited) in favour of Central Bank of India, the Monitoring Institution. GTN has since pledged the shares on 14.05.2013.

- The CDR lenders, with the approval of CDR EG, shall have the right to recompense the reliefs/ sacrifices/waivers extended by respective CDR lenders as per CDR guidelines

---

Mar 31, 2014

1. LONG TERM BORROWINGS

Term Loan are secured by :

(i) Term loans from banks and financial institution, excluding corporate term loan from a bank of Rs. 1500 lacs (security for which is explained in Para 1(ii) below) and Term Loan from a financial institution of Rs. 2000 lacs (security for which is explained in Para 1(iii) below), are secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company, subject to prior charges in favour of banks for working capital ranking pari passu, inter se (as mentioned in Note No 5, Para (i) and (ii) and further secured by personal guarantee of two Directors of the Company.

(ii) Corporate term loan from a bank of Rs. 1500 lacs mentioned in para 1 (i) above is secured by way of hypothecation of moveable assets (excluding vehicle purchased on Finance lease basis) of the company, both present and future, has been secured by second charge by way of equitable mortgage on the immovable assets of the company, both present and future, and further secured by personal guarantee of two directors of the Company.

(iii) Term Loan from a financial institution of Rs. 2000 lacs is secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company, subject to prior charges in favour of banks for working capital ranking pari passu, inter se (as mentioned in Note No 5, Para (i) and (ii) below), and further secured by Corporate Guarantee from GTN Textiles Limited (Rs 300 lacs) and GTN Enterprises Limited (Rs. 1700 lacs).

(iv) Finance lease obligations are relating to vehicles and are secured by hypothecation of respective vehicles costing Rs 40.53 lacs (Previous year Rs 40.53 lacs).

2. SHORT TERM BORROWINGS

i Working Capital limits from Banks are secured by:

Working Capital loans from banks are secured / to be secured by first charge by way of hypothecation on current assets of the company and further secured by way of second charge over the immovable assets of the company both present and future and further secured by personal guarantee of two directors of the Company.

ii Non Fund based limits from Banks are secured by:

Non-fund based limits sanctioned by the bankers are secured / to be secured by extension of first charge on the current assets of the Company and further secured by second charge on the immovable properties of the company and personal guarantee of two directors of the company; Total amount outstanding at the end of the year is Rs 6121.73 lacs (Previous year Rs 5026.08 lacs).

3. Related Party Disclosures

DISCLOSURE IN RESPECT OF RELATED PARTIES PURSUANT TO ACCOUNTING STANDARD-18

(a) List of Related Parties

(As identified by the Management)

Related parties with whom company entered in to transactions during the year.

i. Associates

1. GTN Textiles Limited

2. GTN Enterprises Limited

ii Key Management Personnel:

Shri Umang Patodia - Managing Director

iii. Enterprises/Entities having "Common Key Management Personnel" :

1 Perfect Cotton Co.

2 Patcot Co

3 Purav Trading limited

4 Standard Cotton Corporation

iv. Relatives of Key Management Personnel:

1 Shri Binod Kumar Patodia - Father of Shri. Umang Patodia

2 Shri Ankur Patodia - Brother of Shri. Umang Patodia

3 Smt. Prabha Patodia - Mother of Shri. Umang Patodia

4 Smt.Swati Patodia - Sister-in-law of Shri. Umang Patodia

4 CONTINGENT LIABILITY AND COMMITMENTS:

A COMMITMENTS

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

2. Outstanding Export Forward Contracts (not in the nature of derivatives) as on 31st March ''14 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US$ 19.89 lacs and Euro 5.89 lacs (Previous Year US$ 33.53 lacs and Euro 3.49 lacs) at average Exchange Rate of Rs 62.54 /US$ and Rs 88.78/Euro (Previous year Rs. 55.86/US$ and Rs. 73.41/Euro). The period covered under these contracts spreads over April 2014 to September 2014 (Previous Year April 2013 to September 2013). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2014 works out to Rs. 61.47/US$ and Rs. 84.46/Euro (Previous year Rs. 55.32/US$ and Rs. 70.62/Euro), resulting in notional gain of Rs. 46.75 lacs (Previous year notional gain of Rs. 28.00 lacs).

3. Outstanding Import Forward Contracts (not in the nature of derivatives) as on 31st March 2014 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amounting to US$ 9.76 Lacs (Previous year US$ 12.86 Lacs) at average exchange rate of Rs. 63.34/US$ (Previous year Rs. 54.74/US$). The period covered under these contracts spreads over April 2014 to June 2014 (Previous year April 2013 to June 2013). The average exchange rate applicable for above period based on exchange rate on 31.03.2014 works out to Rs.60.95/US$ (Previous year Rs. 54.88/US$), resulting a notional loss of Rs. 23.39 lacs (Previous year notional gain of Rs.1.85 Lacs).

B CONTINGENT LIABILITIES

1. Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 254.14 lacs (Previous year Rs. 257.88 lacs)

b) Sales Tax (VAT) : Rs 150.22 lacs (Previous year Rs. 61.07 lacs)

c) Market Committee Cess: Rs. 41.90 lacs (Previous year Rs. 27.07 lacs)

d) Disputed Income Tax demands Rs. 353.78 lacs (Previous year 364.92 lacs ) and interest there on Rs. 308.65 lacs (Previous Year Nil), matter having been decided by the Hon''ble High Court of Kerala against the Company. The Company has gone for appeal before the Supreme Court of India and is hopeful of outcome in its favour. Payment there against Rs. 408.58 lacs (Previous Year Rs. 348.58 lacs) is included in the loans and advances, with a further commitment to pay Rs. 172.40 lacs in fifteen equal monthly instalments effective from 01.04.2014.

e) Disputed amount of fiscal penalty imposed by Joint Director General of Foreign Trade Charging violation of condition of EPCG authorization Rs. 288.89 lacs (Previous Year-Nil). The Company has appealed to the Appellate Authority and it is pending for hearing.Meanwhile, Hon''ble High Court of Kerala has ordered to maintain status quo till the matter is decided by the appellate authority. The company is hopful of outcome in its favour.

2. Corporate Guarantee :

2.1 The company has given Corporate Guarantee amounting to Rs. 2113 lacs (Previous year Rs. 2113 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs.1538 lacs as on 31st March 2014 ( Previous Year - Rs. 1785 lacs).

2.2 The company has given Corporate Guarantee amounting to Rs.175 lacs (Previous year Rs.175 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Textiles Ltd and the outstanding amount thereof is Rs. 295 lacs as on 31st March 2014 (Previous Year - Rs. 225 lacs).

5. Net loss / Gain on Foreign currency transaction and translation

The amount of net loss on foreign currency transaction and translation included in the other expenses amounts to Rs. 365.77 lacs (Previous year Rs. 484.14 lacs ).This includes gain on account of export Rs. 129.90 lacs (Previous Year Rs. 278.44 lacs loss), Loss on account of Import Rs. 457.86 lacs (Previous year Rs. 182.18 lacs ) and loss on account of cancellation of forward contracts Rs. 37.81 lacs (Previous Year Rs. 23.51 lacs)

6. a) In the opinion of the management, assets other than fixed assets and non current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

b) The accounts of certain Trade Receivables,Trade payables, Loans and advances and Banks are however, are subject to formal confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current period''s financial statements on such reconciliation/ adjustments.

7. In term of Accounting Standard -17, the company operates materially only in one business segment viz., Textile industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs.36459.37 Lacs (Previous year Rs. 28094.70 lacs) and within India sale of Rs. 23270.98 lacs (Previous year Rs. 17133.05 Lacs)

8. The Company was sanctioned a Debt Restructuring Package under Corporate Debt Restructuring (CDR) Scheme on 12.10.2012 effective from 01.04.2012 for the loans availed from Banks/Financial Institutions, which was approved by CDR-EG and all the lenders.

The restructuring inter-alia envisages:

* Deferment / Rescheduling in payment of principal

* Refixation of interest rates on term loans

* Sanction of additional long term working capital term loan of Rs. 22.16 crores

* In lieu of sacrifice by the lenders, Preference Shares of Rs.10.81 crores were allotted on 29.01.2013 to the banks/ financial institutions. The amount represents difference between the net present value (NPV) of the future cash flows towards repayment of principal and interest thereon as per the revised term and those payable as per the original terms. The said sacrifice will be amortized equally over a period of 9 years beginning from the FY 2013-14 and ending in the financial year 2021-22 being the last year of repayment of entire loans.

* The Promoters to bring in contribution of Rs.2.70 crores by way of Preference Shares. The said amount was brought into two phases of Rs 1.35 Crores each on 7th November, 2012 and 28th November, 2013 respectively in line with CDR Scheme.

* GTN Textiles Limited (GTN), the main Promoter to pledge 72,86,405 Equity Shares of Rs.10 each (51% of the shareholding in Patspin India Limited) in favour of Central Bank of India, the Monitoring Institution. GTN has since pledged the shares on 14.05.2013.

* The CDR lenders, with the approval of CDR EG, shall have the right to recompense the reliefs/sacrifices/waivers extended by respective CDR lenders as per CDR guidelines.

---

Mar 31, 2013

1. Related Party Disclosures

DISCLOSURE IN RESPECT OF RELATED PARTIES PURSUANT TO ACCOUNTING STANDARD -18 (a) List of Related Parties

(As identified by the Management)

Related parties with whom company entered in to transactions during the year.

i. Associates

1. GTN Textiles Limited

2. GTN Enterprises Limited

ii Key Management Personnel:

Shri Umang Patodia - Managing Director

iv. Relatives of Key Management Personnel:

1 Shri Binod Kumar Patodia - Father of Shri.Umang Patodia

2 Shri Ankur Patodia - Brother of Shri.Umang Patodia

3 Smt.Prabha Patodia - Mother of Shri.Umang Patodia

4 Smt.Swati Patodia - Sister-in-law of Shri.Umang Patodia

2 CONTINGENT LIABILITY AND COMMITMENTS: A COMMITMENTS

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

2. Outstanding Forward Contracts (not in the nature of derivatives ) as on 31st March ''13 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US$ 33.53 lacs ( Previous Year US$ 63.45 lacs) at average Exchange Rate of Rs 55.86 /US$ (Previous year Rs 50.43/US$). The period covered under these contracts spreads over April 2013 to September 2013 (Previous Year April 2012 to March 2013). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2013 works out to Rs 54.29 /US$ (Previous year Rs 51.21/US$), resulting in notional gain of Rs 52.76 lacs (Previous year notional loss of Rs 49.53 lacs)

B CONTINGENT LIABILITIES

1. Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 257.88 lacs (Previous year Rs. 132.37 lacs)

b) Sales Tax (VAT) : Rs 61.07 lacs (Previous year Rs.61.07 lacs)

c) Market Committee Cess: Rs. 27.07 lacs (Previous year Rs.17.68 lacs)

d) Disputed Income Tax demands Rs 364.92 lacs (Previous year 364.92 lacs ), matter having been decided by the Hon''ble High Court of Kerala against the Company. The Company has gone for appeal before the Supreme Court of India and is hopeful of outcome in its favour.Payment there against Rs 348.58 lacs is included in the loans and advances (Previous Year Rs 348.58 lacs)

2. Corporate Guarantee :

2.1 The company has given Corporate Guarantee amounting to Rs.2113 lacs (Previous year Rs.2113 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs.1785 lacs as on 31st March 2013 (Previous Year – Rs. 1799 lacs ).

2.2 The company has given Corporate Guarantee amounting to Rs.175 lacs ( Previous year Rs.175 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Textiles Ltd and the outstanding amount thereof is Rs.225 lacs as on 31st March 2013 ( Previous Year – Rs. 225 lacs ).

3. a) In the opinion of the management, assets other than fixed assets and non current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated. b) The accounts of certain Trade Receivables,Trade Payables, Loans and Advances and Banks are however,subject to formal confirmations /reconciliations and consequent adjustments ,if any.The management does not expect any material difference affecting the current period''s financial statements on such reconciliation /adjustments.

4 In term of Accounting Standard -17, the company operates materially only in one business segment viz., Textile industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs.28094.70 Lacs (Previous year Rs.20806.67 lacs) and within India sale of Rs. 17133.05 lacs ( Previous year Rs. 20652.97 Lacs)

5 During the year, the Company has implemented the Corporate Debt Restructuring (CDR) Package for the loans availed from Banks/Financial Institution, which was approved by CDR EG and all the lenders. The same is effective from the cutoff date of 01.04.2012.

The restructuring inter-alia envisages:

- Deferment / Rescheduling in payment of principal

- Refixation of interest rates on term loans

- Sanction of additional long term working capital term loan of Rs.22.16 crores

- In lieu of sacrifice by the lenders, Preference Shares of Rs.10.81 crores were allotted on 29.01.2013 to the banks/ financial institutions. The amount represents difference between the net present value (NPV) of the future cash flows towards repayment of principal and interest thereon as per the revised term and those payable as per the original terms. The said sacrifice will be amortized equally over a period of 9 years beginning from the FY 2013-14 and ending in the financial year 2021-22 being the last year of repayment of entire loans.

- The Promoters to bring in contribution of Rs.2.70 crores by way of Preference Shares, out of which Rs.1.35 crores has already been brought in and the balance is required to be brought in by December, 2013.

- GTN Textiles Limited (GTN), the main Promoter to pledge 72,86,405 Equity Shares of Rs.10 each (51% of the shareholding in Patspin India Limited) in favour of Central Bank of India, the Monitoring Institution. GTN has since pledged the shares on 14.05.2013.

- The CDR lenders, with the approval of CDR EG, shall have the right to recompense the reliefs/ sacrifices/waivers extended by respective CDR lenders as per CDR guidelines.

6 PREVIOUS YEAR''S FIGURES

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

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Mar 31, 2012

(a) Rights, preferences and restrictions attached to shares

Preference Shares:

700000, 5% Non Cumulative preference shares of Rs 100 each were issued to promotors and their associates .The issue details are as follows.

I Term Loan are secured by :

(i) Term loans from banks and financial institution, excluding corporate term loan from a bank of Rs. 1500 lacs (security for which is explained in Para 1(ii) below) and Term Loan from a financial institution of Rs 2000 lacs (security for which is explained in Para 1(iii) below) , are secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vechicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company,subject to prior charges in favour of banks for working capital ranking pari passu,inter se (as mentioned in Note No 6 ,Para (i) and (ii) below),and further secured by personal guarantee of 2 Directors of the Company.

(ii) Corporate term loan from a bank of Rs. 1500 lacs mentioned in para 1 (i) above is secured by way of hypothecation of moveable assets (excluding vehicle purchased on Finance lease basis) of the company, both present and future, has been secured by second charge by way of equitable mortgage on the immovable assets of the company, both present and future,and further secured by personal guarantee of two directors of the Company

(iii) Term Loan from a financial institution of Rs 2000 lacs is secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all movable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company,subject to prior charges in favour of banks for working capital ranking pari passu,inter se (as mentioned in Note No 6, Para (i) and (ii) below),and further secured by Corporate Guarantee from GTN Textiles Limited (Rs 300 lacs) and GTN Enterprises Limited (Rs 1700 lacs).

(iv) Finance lease obligations are relating to vehicles and are secured by hypothecation of respective vehicles costing Rs.40.53 lacs (Previous year Rs.40.53 lacs)

i Working Capital limits from Banks are secured by:

Working Capital loans from banks are secured by first charge by way of hypothecation on current assets of the company and further secured/to be secured by way of second charge over the immovable assets of the company both present and future and further secured by personal guarantee of 2 directors of the Company.

ii Non Fund based limits from Banks are secured by:

Non-fund based limits sanctioned by the bankers are secured by extension of first charge on the current assets of the Company and further secured/to be secured by second charge on the immovable properties of the company and personal guarantee of 2 directors of the company; Total amount outstanding at the end of the year is Rs.3817.09 lacs (Previous year Rs.3918.17 lacs).

1 RELATED PARTY DISCLOSURE

Disclosure in respect of Related Parties pursuant to Accounting Standard -18 (a) List of Related Parties

(As identified by the Management)

Related parties with whom company entered in to transactions during the year

i Associates:

1 GTN Textiles Limited

2 GTN Enterprises Limited

ii Key Management Personnel:

Shri Umang Patodia -Managing Director

iii Enterprises/Entities having "Common Key Management Personnel":

1 Perfect Cotton Co.

2 Patcot & Co

3 Purav Trading Limited

4 Standard Cotton Corporation

5 Patodia Export and Investments (P) Limited

6 Beekaypee Credit (P) Limited

7 Umang Finance (P) Limited

8 B.K. Patodia (HUF)

9 Umang Patodia (HUF)

10 Ankur Patodia (HUF)

iv Relatives of Key Management Personnel:

1 Shri Binod Kumar Patodia - Father of Shri.Umang Patodia

2 Shri Ankur Patodia - Brother of Shri.Umang Patodia

3 Smt.Prabha Patodia - Mother of Shri.Umang Patodia

4 Smt.Swati Patodia - Sister-in-law of Shri.Umang Patodia

2 CONTINGENT LIABILITY AND COMMITMENTS:

A COMMITMENTS

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

B CONTINGENT LIABILITIES

1. Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 132.37 lacs (Previous year Rs. 132.37 lacs)

b) Sales Tax (VAT) : Rs 61.07 lacs (Previous year Rs.1.11 lacs)

c) Market Committee Cess: Rs. 17.68 lacs (Previous year Rs.13.39 lacs)

d) Disputed Income Tax demands Rs 364.92 lacs (Previous year Nil), matter having been decided by the Hon'ble High Court of Kerala against the Company. The Company has gone for appeal before the Supreme Court of India and is hopeful of outcome in its favour.Payment there against Rs 348.58 lacs is included in the loans and advances (Previous Year Rs 401.89 lacs)

2. Corporate Guarantee :

2.1 The company has given Corporate Guarantee amounting to Rs.2113 lacs (Previous year Rs.1724 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs.1799 lacs as on 31st March 2012 ( Previous Year - Rs. 1426 lacs ).

2.2 The company has given Corporate Guarantee amounting to Rs.175 lacs (Previous year Rs.Nil) to a Financial Institution in respect of financial assistance provided by them to GTN Textiles Ltd and the outstanding amount thereof is Rs.275 lacs as on 31st March 2012 (Previous Year - Rs. Nil lacs ).

3. Forward Cover :

3.1 Oustanding Forward Contracts (not in the nature of derivatives) as on 31 st March '12 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US$ 63.45 lacs (Previous Year US$ 84.77 lacs) at average Exchange Rate of Rs 50.43 /US$ (Previous year Rs 47.32/US$). The period covered under these contracts spreads over April 2012 to March 2013 (Previous Year April 2011 to May 2012). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2012 works out to Rs 51.21 /US$ (Previous year Rs 44.70/US$), resulting in notional loss of Rs 49.53 lacs (Previous year notional gain of Rs 222.09 lacs)

3 In the opinion of the Board, all assets other than fixed assets and non current investments have a realisable value in the ordinary course of business which is not less than the amount at which it is stated.

4 In term of Accounting Standard -17, the company operates materially only in one business segment viz., Textile industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs.21931.90 Lacs (Previous year Rs.22155.67 lacs) and within India sale of Rs.19527.74 lacs (Previous year Rs.20497.04 Lacs).

5 PREVIOUS YEAR'S FIGURES

During the year ended 31st March 2012 the Revised Schedule VI notified under the Companies Act ,1956, has become applicable to the Company. The Company has reclassified/regrouped previous year's figures to conform to this year's classification.

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Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 855 lacs (Previous year Rs. Nil).

2 Contingent Liabilities not provided for in respect of :

2.1 Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 132.37 lacs (Previous year Rs. 132.37 lacs)

b) Sales Tax (VAT) : Rs. 1.11 lacs (Previous year Rs.1.11 lacs )

c) Market Committee Cess: Rs.13.39 lacs (Previous year Rs. 9.17 lacs)

d) Disputed Income tax demands - Rs. Nil (Previous year Rs. 590.69 lacs), matter having been decided by the Tribunal (ITAT) in favour of the Company. Though the Income Tax Department has gone in for appeal before the Hon ble High Court of Kerala against the order of the ITAT, the company is hopeful of outcome in its favour. Payment there against Rs.401.89 lacs included in Loans & Advances in Schedule No. 7 (Previous year Rs. 401.89 lacs)

2.2 The company has given Corporate Guarantee amounting to Rs.1724 lacs (Previous year Rs.1724 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Limited and the outstanding amount thereof is Rs.1426 lacs (Previous Year - Rs. 1536 lacs).

3. (i) The amount of foreign exchange difference (net) included in the Net Profit for the year amounts to Rs. 276.23 lacs gain. (Previous year Rs. 30.13 lacs gain). This comprises foreign exchange difference in respect of export Rs.230.59 lacs gain (previous year 3.32 lacs gain) and in respect of imports Rs. 45.64 lacs gain (previous year Rs. 26.81 lacs gain) as shown in Schedule 18.

(ii) Outstanding Forward Contracts (not in the nature of derivatives) as on 31st March, 2011 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US $ 84.77 lacs (Previous year US$ 81.76 lacs) at average Exchange Rate of Rs. 47.32 / US$ (previous year Rs.46.99/US$). The period covered under these contracts spreads over April 2011 to May 2012. (Previous year April, 2010 to March, 2011). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2011 works out to Rs. 44.70 / US$ (Previous year Rs.45.77/US$), resulting in notional gain of Rs. 222.09 lacs (Previous year loss Rs.100.24 lacs).

4. a) In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

b) Balance of certain creditors, debtors, loans and advances given are subject to confirmation and reconciliation, if any. However in the opinion of management, there would not be any material impact on financial statements.

5. Interest on others in Schedule - 17 is net of interest income of Rs. 55.60 lacs (Previous Year Rs. 30.10 lacs); tax deducted at source thereon Rs. 6.67 lacs (Previous Year Rs. 2.53 lacs).

6. In terms of Accounting Standard - 17, the Company operates materially only in one business Segment viz., Textile Industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs. 21741.49 lacs (Previous year Rs. 14142.73 lacs) and within India sale of Rs.20523.81 lacs (Previous year Rs. 15237.35 lacs).

7. Disclosure in respect of Related Parties pursuant to Accounting Standard -18:

(a) List of Related Parties:

(As identified by the Management)

Related parties with whom company entered into transactions during the year:

i) Associates

1) GTN Textiles Limited

2) GTN Enterprises Limited

ii) Key Management personnel and Enterprises (having common key Management personnel or their Relatives)

Key Management Personnel

Shri Umang Patodia - Managing Director

Enterprises/Entities having common Key Management Personnel

1) Perfect Cotton Co.

2) Patcot & Co

3) Purav Trading Limited

4) Standard Cotton Corporation

5) Patodia Exports and Investments (P) Limited

6) Beekaypee Credit (P) Limited

7) Umang Finance (P) Limited

8) B. K. Patodia (HUF)

9) Umang Patodia (HUF)

10) Ankur Patodia (HUF)

Relatives of Key Management Personnel

Shri. Binod Kumar Patodia - Father of Shri. Umang Patodia

Shri. Ankur Patodia - Brother of Shri. Umang Patodia

Smt. Prabha Patodia - Mother of Shri. Umang Patodia

Smt. Swati Patodia - Sister-in-law of Shri. Umang Patodia

(d) Details of Material transactions with Related Party

(a) Sales of cotton to GTN Textiles Limited Rs. 102.98 lacs (Previous Year Rs.1582.21 lacs), Sales of yarn to GTN Textiles Limited Rs. 383.86 lacs (Previous year Rs. 668.55 lacs), Processing Charges received from GTN Textiles Limited Rs. 80.36 Lacs(Previous year Rs. 4.47 lacs), Rent received from GTN Textiles Limited Rs 2.15 lacs (Previous Year Rs Nil) Sale of cotton to GTN Enterprise Limited Rs. Nil (Previous year Rs.823.15 lacs), Sales of yarn to GTN Enterprise Limited Rs. 371.51 lacs (Previous year Rs. 413.41 lacs), Sale of Machinery to GTN Enterprises Limited Rs 9.10 lacs (Previous Year Nil ), Rent received from GTN Enterprise Limited Rs. Rs. 1.08 lacs (Previous year Rs.1.08 lacs), Processing Charges received from GTN Enterprise Limited Rs. 73.09 lacs (Previous year Rs. 102.14 lacs), Fixed Deposits from Shri Binod Kumar Patodia Rs 154.00 lacs,Fixed Deposit from Patodia Exports and Investments (P) Limited Rs 13.00 lacs, Fixed Deposit from Beekaypee Credit (P) Limited Rs 5.00 lacs, Fixed Deposit from Umang Finance (P) Limited Rs 8.50 lacs, Fixed Deposit from Smt Prabha Patodia Rs 65.00 lacs Fixed Deposit from Smt Swati Patodia Rs 3.00 lacs, Fixed Deposit from Binod Kumar Patodia (HUF) Rs 6.00 lacs,Fixed Deposit from Umang Patodia (HUF ) Rs 13.00 lacs, and Fixed Deposit from Ankur Patodia (HUF ) Rs 12.00 lacs

(b) Purchase of cotton from GTN Textiles Limited Rs. 1104.61 lacs (Previous Year Rs. 1932.16 lacs), Purchase of yarn from GTN Textiles Limited Rs 352.69 lacs (Previous year Rs. 404.82 lacs), Purchase of store items from GTN Textiles Limited Rs. Nil (Previous Year Rs.0.76 lacs), Purchase of Focus Market License from GTN Textiles Limited Rs 7.26 lacs (Previous Year Rs Nil) Processing Charges paid to GTN Textiles Limited Rs. 32.64 Lacs (Previous Year Rs. 28.09 lacs) Rent Paid to GTN Textiles Limited Rs 1.32 lacs (Previous Year Rs Nil ). Purchase of Cotton from Standard Cotton Corporation Rs 1443.68 lacs ( Previous year Rs 185.58 lacs),Purchase of Cotton from Patcot & Co Rs 1310.92 lacs ( Previous year Rs 165.45 lacs), Purchase of Cotton from Perfect Cotton Co Rs 1494.71 lacs(Previous year Rs1590.92 lacs) Purchase of Cotton from Purav Trading Ltd Rs 1205.60 lacs ( Previous Year Rs 1679.69 lacs), Purchasing of cotton from GTN Enterprise Limited Rs. 1015.33 lacs (Previous year Rs.1308.39 lacs), Purchase of yarn from GTN Enterprise Limited Rs. 190.49 lacs (Previous year Rs.297.64 lacs), Purchase of Machinery from GTN Enterprises Limited Rs 3.22 lacs (Previous year Rs Nil), Purchase of Focus Market License from GTN Enterprises Ltd Rs 2.99 lacs (Previous year Rs Nil ), Processing Charges paid to GTN Enterprise Limited Rs. 279.84 lacs (Previous year Rs.154.91 lacs), and Purchase of store items from GTN Enterprise Limited Rs. Nil (Previous year Rs. 0.12 lacs).Sitting fee paid to Shri Binod Kumar Patodia Rs 0.30 lacs ,Interest on Fixed Deposits paid to Shri Binod Kumar Patodia Rs 2.09 lacs, Interest on Fixed Deposit paid to Patodia Exports and Investments (P) Limited Rs 0.09 lacs, Interest on Fixed Deposit paid to Beekaypee Credit (P) Limited Rs 0.04 lacs, Interest on Fixed Deposit paid to Umang Finance (P) Limited Rs 0.07 lacs, Interest on Fixed Deposit paid to Smt Prabha Patodia Rs 0.75 lacs. Interest on Fixed Deposit paid to Smt Swati Patodia Rs 0.02 lacs, Interest on Fixed Deposit paid to Binod Kumar Patodia (HUF) Rs 0.03 lacs , Interest on Fixed Deposit paid to Umang Patodia (HUF) Rs 0.04 lacs, and Interest on Fixed Deposit paid to Ankur Patodia (HUF) Rs 0.04 lacs

8. Previous years figures have been regrouped and rearranged wherever necessary so as to make them comparable with those of the current year.

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Mar 31, 2010

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

2 Contingent Liabilities not provided for in respect of:

2.1 Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 132.37 lacs (Previous year Rs. 130.68 lacs)

b) Service Tax : Rs Nillacs (Previous year: Rs. 1.89 lacs) c) Sales Tax (VAT) : Rs 1.11 lacs (Previous year Rs. Nil)

d) Market Committee Cess: Rs. 9.17 lacs (Previous year Rs. NIL)

e) Disputed Income tax demands consequent to reopening the completed assessments of certain prior years and restricting the claim for deduction u/s 10B of the Income Tax Act, which was appealed against before the Hon. Income Tax Appellate Tribunal, Cochin Bench which is now pending on appeals before the Hon. Income Tax Appellate Tribunal, Cochin Bench, and on which the company is hopeful of full relief- Rs.590.69 lacs (Previous year: Rs. 1803.30 lacs). {Payment there against Rs.401.89 lacs included in Loans & Advances in Schedule No. 5 (Previous year Rs. 401.89 lacs)

2.2 The company has given Corporate Guarantee amounting to Rs.1724 lacs ( Previous year Rs.1724 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs.1536 Lacs as on 31st March 2010 ( Previous Year - Rs. 1567 Lacs ).

3. (i) The amount of foreign exchange difference (net) included in the Net Loss for the year amounts to Rs.30.13 lacs credit. (Previous year Rs. 893.84 lacs debit). This comprises foreign exchange difference in respect of exports Rs 3.32 lacs credit (previous year Rs. 1035.94 lacs debit) and in respect of imports Rs. 26.81 lacs credit (previous year Rs. 142:10 lacs credit) as shown in Schedule 18.

(ii) Foreign exchange difference (Net) adjusted to the cost of respective fixed assets Rs. NIL (Previous year Rs. NIL)

(iii) Outstanding Forward Contracts (not in the nature of derivatives) as on 31 st March 2010 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US $ 81.76 lacs (Previous year 0S$ 79.26 lacs) at average Exchange Rate of Rs. 46.99 / US$ (previous year Rs.46.26/US$). The period covered underthese contracts spreads over April 2010 to March 2011. (Previous year April 2009 to January 2010). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2010 works out to Rs. 45.77 / US$ (Previous year Rs.51 60/USS), resulting in notional gain of Rs. 100.24 lacs (Previous year loss Rs.423.25 lacs).

4. , Stock of Raw Materials costing Rs 74.33 Lacs as referred to in Schedule 13 and Goods - In - Progress valued at Rs. 25.47 Lacs as referred to in Schedule 12 represents the Cost Of Inventory damaged on account of Fire. Damaged Inventory is covered under Insurance and the Management is certain that the insurance claim will realize the value of such Raw Materials and Goods-ln-Progress at Replacement Cost. Considering prudence and certainty of realization, the Insurance Claim is measured and recognized only to the extent of Cost Of Goods Damaged and shown as "Other Operating Income", Schedule 1Q forming part of Profit & Loss Account. The amount of such damaged stock totalling to Rs 99.80 Lacs is shown under "Other Expenses" in Schedule 18 forming part of Profit & Loss Account.

5. a In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

b Balance of certain creditors, debtors, loans and advances given are subject to confirmation and reconciliation, if any. However in the opinion of management, there would not be any material impact on financial statements.

6. Interest on others in Schedule -15 is net of interest income of Rs 30.10 lacs (Previous Year Rs. 25.90 lacs); tax deducted at source thereon Rs:2.53 lacs (Previous Year Rs. 4.75 lacs).

7. In terms of Accounting Standard -17, the Company operates materially only in one business Segment viz., cotton yam and has its production facilities and all other assets located in India. Sales to external customers comprise exports sales of Rs. 14142.73 lacs (Previous year Rs. 15936.61 lacs) and local sale of Rs. 15237.35 lacs (Previous year Rs. 5632.20 lacs).

8. Disclosure in respect of Related Parties pursuant to Accounting Standard-18: (a) List of Related Parties:

(As identified by the Management)

Related parties with whom company entered into transactions during the year:

i) Associates

GTN Textiles Limited

Purav Trading Limited

GTN Enterprises Limited

ii) Key Management personnel and Enterprises (having common key Management personnel or their Relatives)

Key Management Personnel

Shri Umang Patodia - Managing Director

Enterprises/Entities having common Key Management Personnel

Perfect Cotton Co.

Patcot & Co

Standard Cotton Corporation

Relatives of Key Management Personnel

Shri B.K. Patodia - Father of Shri Umang Patodia

Shri Ankur Patodia - Brother of Shri Umang Patodia

9. Previous years figures have been regrouped and rearranged wherever necessary so as to make them comparable with those of the current year.