Notes to Accounts of Prakash Woollen & Synthetic Mills Ltd.

Mar 31, 2018

30 Post Retirement Benefit Plans Defined Benefits Plan

(i) Gratuity

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to recognized funds in India.

Net Gain recognized in the Other Comprehensive Income before tax 7.41 (2.90)

*Surplus of assets over liabilities has not been recognized on the basis that future economic benefits are not available to the Company in the form of a reduction in future contributions or cash refunds.

F Assumptions

With the objective of presenting the plan assets and plan liabilities of the defined benefits plans at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

The significant actuarial assumptions were as follows:

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

Risk Exposure - Asset Volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. The scheme is funded with an insurance company in the form of qualifying insurance policy.

(ii) Leave Obligations

The lease obligations cover the Company’s liability for sick and earned leave.

The amount of the provision of ?15.80 lakhs is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations.

(iii) Defined Contribution Plans

The Company also has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to EPFO. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognized during the period towards defined contribution plan is '' 40.67 lakhs (31 st March, 2017 - '' 33.41 lakhs).

31 The company carries on the business of textiles under which blankets of different qualities and size are produced. Further the sale is made in domestic markets at the same terms and conditions. Therefore, no different business or geographical segments are recognizable and reportable.

32 Related Party Disclosures Related parties where control exists

Prahlad Industries, Designs Unlimited, Shree Bankey Bihari Enterprises,Himani Gupta, with whom transactions took place. Directors and key management personal and their relatives with whom transactions took place

Mr. J.K. Gupta, Mr. D.K. Gupta and Mr. V.K. Gupta, all whole time directors.Mr. V.P. Gupta, non-executive director, Mr. S.K. Agarwal, Mr. Adeep Gupta, Mr. Kapil Gupta and Mr. Ashish Gupta , Anita Gupta, Rajni Gupta, Adeep Gupta HUF, Ashish Gupta HUF,D K Gupta HUF, Jai Kishan Gupta HUF and Kapil Gupta HUF are related parties.

Related Party Transactions

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year.

33 Fair Value Measurement

Financial Instrument by category and hierarchy

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

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts. The fair values for loans and security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

34 Financial Risk Management

Financial risk management objectives and policies

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

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument.

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

The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommend 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 like foreign exchange forward contracts, borrowing strategies and ensuring compliance with market risk limits and policies.

Market Risk- Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. 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.

According to the Company interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

Market Risk- Foreign Currency Risk

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

(a) (iii) Market Risk- Price risk

(a) Exposure

The exposure to equity securities price risk arises from investments held and classified in the balance sheet either at fair value through OCI or at fair value through profit and loss. The Company does not have any exposure to equity/securities.

(b) Sensitivity

The Company does not have any exposure to equity/securities. So no sensitivity analysis is done.

(c ) Foreign Currency Risk Sensitivity

A change of 5% in Foreign currency would have following Impact on profit before tax

Credit Risk

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

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

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

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

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

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

Financial assists are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. 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 as income in the statement of profit and loss.

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

Financial Assets are considered to be of good quality and there is no significant increase in credit risk.

Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows.

(i) Financing Arrangements

The Company closely monitors liquidity position and arranges for the funds in anticipation in case of need.

35 Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company’s policy is to keep the gearing ratio between 20% and 40%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2017 and 31 March 2016.

36 Earnings Per Share (Eps)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent (after adjusting for interest on the convertible preference shares) if any,by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

The following reflects the income and share data used in the basic and diluted EPS computations:

37 First-Time Adoption Of Ind As

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

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

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

A. Optional Exemptions availed Deemed Cost

The Company has opted paragraph D7 AA and accordingly considered the carrying value of property, plant and equipment’s and Intangible assets as deemed cost as at the transition date.

B. Applicable Mandatory Exceptions

(a) Estimates

The Company’s estimates in accordance with Ind AS at the date of transition to Ind AS consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).

(b) Classification and measurement of financial assets

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

C. Transition to Ind AS - Reconciliations

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

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

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

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

III. Reconciliation of Equity as at April 1, 2016 and as at March 31, 2017

IV. Adjustments to Statement of Cash Flows

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.

The following explains the material adjustments made while transition from previous accounting standards to IND AS

A Remeasurements Of Post-Employment Benefit Obligation

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit and loss. Under the previous GAAP, these remeasurements were forming part of the profit and loss for the year. As a result of this change, the profit for the year ended March 31, 2017 increase by ‘ 2.90 lakhs There is no impact on the total equity as at 31st March, 2017.

B Retained Earnings

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

C Other Comprehensive Income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

D Deferred Tax

Deferred Tax on aforesaid IND AS adjustments E Current Tax

Tax component on Actuarial Gains and losses which is transferred to Other Comprehensive Income under IND AS has been debited to Profit and Loss.

The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 31st March, 2017 as compared with the previous GAAP.

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Mar 31, 2015

1. Gratuity benefit plan

The company operates defined benefits plan for gratuity for its employees. Under the plan every employee who has completed at least five years of service gets a gratuity on departure @ 15 days last drawn salary for each completed year of service. The Scheme is funded with an insurance company in the form of qualifying insurance policy.

The following tables summarises the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet.

EPFO Bareilly has demanded Rs, 26.69 lacs as PF dues. The management of the company has contested the demand of EPFO. An appeal with Hon'ble EPFAT New Delhi is pending. The company has not recognized provision for liabilities in the financial statement.

2. Balances of trade receivables, trade payables are subject to confirmation as on 31.3.15

3. The company has not received information from vendors regarding their status under the Micro. Small and Medium Enterprises Development Act 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act has not been given.

4. The company carries on the business of textiles under which blankets of different qualities and size are produced. Further the sale is made in domestic markets at the same terms and conditions. Therefore, no different business or geographical segments are recognizable and reportable.

5. Corporate information

Prakash Woollen Mills Ltd. Is a public company domiciled in India and incorporated under the provisions of the Companies Act 1956. Its shares aer listed on two stock exchanges in India namely BSE and DSE. The company is engaged in the manufacturing and selling of mink blankets.

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Mar 31, 2014

1. Related party disclosures Related parties where control exists Prahlad Industries, Designs Unlimited, Shree Bankey Bihari Enterprises. Directors and key management personal

Mr V.P. Gupta, Mr J.K. Gupta, Mr D.K. Gupta, Mr V.K. Gupta, Mr S.K. Agarwal, Mr Adeep Gupta, Mr Kapil Gupta and Mr Ashish Gupta Related party transactions

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year

2. Earnings in foreign currency (accural basis)

Earnings in foreign currency (accural basis) Nil Nil

3. Gratuity benefit plan

The company operates defined benefits plan for gratuity for its employees. Under the plan every employee who has completed at lea; five years of service gets a gratuity on departure @ 15 days last drawn salary for each comleted year of service. The Scheme is funde with an insurance company in the form of qualifying insurance policy.

The following tables summarises the components of net benefit expense recognized in the statement of profit and loss and the funde status and amounts recognized in the balance sheet.

4. Contingent liabilities 31 March 2014 31 March 2013

in lacs in lacs

Demand by EPFO against the company not acknowledged as debt 26.69 26.69 Lc opened with bank - 42.26

EPFO Bareilly has demanded Rs, 26.69 lacs as PF dues. The management of the company has contested the demand of EPFO. An appeal with Hon''ble EPFAT New Delhi is pending. The company has not recognized provision for liabilities in the financial statement.

5. Balances of trade receivables, trade payables are subject to confirmation as on 31.3.14

6. The company has not received information from vendors regarding their status under the Micro. Small and Medium Enterprises Derelopment Act 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act has not been given.

7. The company carries on the business of textiles under which blankets of different qualities and size are producid. Further the sale is made in domestic markets at the same terms and conditions. Therefore, no different business or geographical segments are recognizable and reportable.

8. Corporate information

Prakash Woollen Mills Ltd. Is a public company domiciled in India and incorporated under the provisions of the Companies Act 1956. Its shares aer listed on two stock exchanges in India namely BSE and DSE. The company is engaged in the manufacturing and selling of mink blankets.

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Mar 31, 2013

1. Gratuity benefit plan

The company operates defined benefits plan for gratuity for its employees. Under the plan every employee who has completed at least five years of service gets a gratuity on departure @ 15 days last drawn salary for each comleted year of service. The Scheme is funded with an insurance company in the form of qualifying insurance policy.

The following tables summarises the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet.

2. Contingent liabilities

Demand by EPFO against the company not acknowledged as debt 26.69 38.95

Lc opened with bank 42.26 58.85

EPFO Bareilly has demanded Rs, 26.69 lacs as PF dues. The management of the company has contested the demand of EPFO. An appeal with Hon''ble EPFAT New Delhi is pending. The company has not recognized provision for liabilities in the financial statement.

LC amounting to US$ 77000 has been opened with the bank for purchase of machinery and is outstanding as on 31 March 2013.

3. Balances of trade receivables, trade payables are subject to confirmation as on 31.3.13.

4. The company has not received information from vendors regarding their status under the Micro. Small and Medium Enterprises DerelopmentAct 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act has not been given.

5. The company carries on the business of textiles under which blankets of different qualities and size are producid. Further the sale is made in domestic markets at the same terms and conditions. Therefore, no different business or geographical segments are recognizable and reportable:

6. Corporate information

Prakash Woollen Mills Ltd. Is a public company domiciled in India and incorporated under the provisions of the Companies Act 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacturing and selling of mink blankets.

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Mar 31, 2012

A Terms/riahts attached to equity shares

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

During the year ended 31 March 2012, no dividend amount has been recognized as distributions to equity shareholders.

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

As per records of the company, including its register of shareholders/members and other declarations, received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

b. Details of forfeited shares

913900 equity shares were forfeited in the financial year 1998-99 which were issued at a premium of Rs. 20/- pre share. On these shares Rs. 142.16 lacs were paid.

(a)JUV

Term loan from State Bank of India has been sanctioned for an amount of Rs. 3.45 crores which is under disbursement. The loan carries interest @ 16.25% p.a. The loan is repayable w.e.f. October 2012 in 6 monthly instalments of Rs. 2 lacs each, 24 monthly instalments of Rs. 5.50 lacs each, 30 monthly instalments of Rs. 6.50 each and on last instalment of Rs. 6 lacs ending in the month of October 2017. The loan is secured primarily by first charge on assets created/ to be created out of this term loan.

(b) TL III

The term loan from State Bank of India was converted into FCNRB and carries interest @ 6.18% p.a. The loan is repayable in 15 monthly instalments of Rs. 2 lacs each w.e.f 31.01.2009 and 60 monthly instalment of Rs. 7 lacs each from 30.4.10 till 31.3.2015. The loan is secured by hypothecation of assets created out of this loan.

(c)CL

The term loan from State Bank of India was converted in to FCNRB and carries interest @ 5.91% p.a. The loan is repayable in 6 monthly instalments of Rs. 2.50 lacs each starting from 31.10.2010, 24 monthly instalments of Rs. 4.50 lacs each, 14 monthly instalments of Rs. 8.50 lacs each and last instalment of Rs. 8 lacs by 30.06.2013, Since the loan was not fully disbursed the same will be repaid in full in FY 2012-13. The loan is secured by extension of charges on all assets of the company.

(d)_TL_H

The loan from State Bank of India was converted in to FCNRB and carries Interest @ 6.2% p.a. The laon is repayable in 6 monthly instalments of Rs. 2 lacs each, 53 monthly instalments of Rs. 4 lacs each and last instalment of Rs. 1 lac till September 2013. The loan is secured by hypothecation of assets created / to be created out of this loan.

(e) Car loan

The loans from State Bank of India carry interest @ 12% p.a. and are secured by hypothecation of cars. The loans are repayable in 36 monthly instalments.

All the loans from State Bank on India are further secured by land and building of the company, residential properties of two whole time directors namely Mr. J.K. Gupta and Mr. D.K. Gupta and 3 STDRs of Rs. 5 lacs each pledged by M/s J.K. Gupta, D.K. Gupta and V.K. Gupta as collateral security. Further all the loans from State Bank Of India have been secured by the guarantees of all the four whole time directors of the company.

(f) The loan from HDFC bank has been secured by hypothecation of car purchased out of this loan and carries interest @ 12.5% p.a. The loan is repayable in 36 monthly instalments.

(g) Deposits from shareholders carry interest @ 12.% p.a. and are repayable after 3 years from respective dates of deposits.

Cash credit from State Bank of India is primarily secured against inventories and trade receivables and further secured by land and building of the company, residential properties of two whole time directors namely Mr. J.K. Gupta and Mr. D.K. Gupta and 3 STDRs of Rs. 5 lacs each pledged by Mr. J.K. Gupta, Mr. D.K. Gupta and Mr. V.K. Gupta whole time directors as collateral security. Further, guarantees by all the four whole time directors have been given. The loan carries interest @ 16% p.a. on rupee portion and 6% to 9% on FCNRB portion.

The company has charged depreciation on entire value including revalued amount wherever applicable from profit and loss statement and no amount of depreciation has been recouped from revaluation reserve. The amount of depreciation on amount between revalued value and original cost is Rs. 2.20 lacs. .

The management of the company has assessed the assets of the company on the Balance Sheet date in compliance of AS 28 and they are of the opinion that there are no indication that the assets of the company may be impaired. Therefore no estimate has been made of the recorevable amount of the assets.

1. Related party disclosures Related parties where control exists

Prahlad Industries, Prahlad Flour Mills (P) Ltd., Designs Unlimited, Shree Bankey Bihari Enterprises. Related parties where significant influence exists.

Swastik Biscuit (P) Ltd., Designer Crafts.

Directors and key management personal

M/s V.P. Gupta, J.K. Gupta, D.K. Gupta, V.K. Gupta, S.K. Agarwal, Adeep Gupta, Kapil Gupta and Ashish Gupta

Related party transactions

The following table provides the total amount of transactions that have been entered into with related parties for the vrelevant financial year

In addition, Mr. S.K. Agarwal, Adeep Gupta, Kapil Gupta and Ashish Gupta are covered by group gratuity scheme and remuneration to managerial personnel does not include the provisions/contribution made for gratuity as they are determined on an actuarial basis for the company as a whole.

2. Gratuity benefit plan

The company operates defined benefits plan for gratuity for its employees. Under the plan every employee who has completed at least five years of service gets a gratuity on departure @15 days last drawn salary for each comleted year of service. The Scheme is funded with an insurance company in the form of qualifying insurance policy.

The following tables summarises the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet.

The principal assumptions used in determining gratuity obligation for the company's plan are shown below:

31 March 2012 31 March 2011

Discount Rate 8% 8%

Expected rate of return on assets 9% 9%

3. Contingent liabilities 31 March 2012 31 March 2011 Rs.in lacs Rs. in lacs

Demand by EPFO against the company not acknowledged as debt 38.95 38.95

Lc opened with bank 58.85 -

EPFO Bareilly has demanded Rs, 38.95 lacs as PF dues. The management of the company has contested the demand of EPFO. The company has not recognized provision for liabilities in the financial statement.

LC amounting to US$ 107000 has been opened with the bank for purchase of machinery and is outstanding as on 31 March 2012

4. Balances of trade receivables, trade payables are subject to confirmation as on 31.3.12

5. The company has not received information from vendors regarding their status under the Micro. Small and Medium Enterprises Derelopment Act 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act has not been given.

6. Till the year ended 31 March 2011 the company was using pre-revised schedule VI to the Coampanies Act 1956 for preparation and presentation of the financial statements. During the year ended 31 march 2012 the revised schedule VI notified under the Companies Act 1956 , has became applicable to the company. The company has reclassified previous year figures to conform to this year's classification.

7. The company carries on the business of textiles under which blankets of different qualities and size are producid. Further the sale is made in domestic markets at the same terms and conditions. Therefore, no different business or geographical segments are recognizable and reportable.

8. Corporate information

Prakash Woollen Mills Ltd. Is a public company domiciled in India and incorporated under the provisions of the Companies Act 1956. Its shares are listed on five stock exchang in India. The company is engaged in the manufacturing and selling of mink blankets.

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Mar 31, 2010

1. Letter of Credit opened and outstanding as on 31st March 2010 on behalf of the company by bank for purchase of Raw Material / Machinery amounts to Rs. 6.64 Lacs.

2. Balances of Sundry Debtors, Sundry Creditors and Advance from Customers etc. are subject to confirmation as on 31.3.2010.

3. Break up of Intrest on Borrowing is as under.

2009-2010 2008-2009

(Rs.ln Lakhs) (Rs.ln Lakhs)

i) Interest to State Bank of India 195.41 199,32

on term loan & working Capital

ii)ICICIBank 0.77 1.66

hi) Others 34.98 609

231.10 207.07

4. The company has not received information from vendors regarding their status under the Micro, Small And Medium Enterprises Development Act 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act hence not been given.

5. In the opinion of the management and to the best of their knowledge and belief, the value of loans, advances and other Current Assets in the ordinary course of business will not be less than the amount at which they will be stated in Balance Sheet.

6. Pursuant to notification no. 30/2004 dated 09.07.2004, the company availed exemption of excise duty w.e.f. 01.09.2004, Therefor no excise duty is applicable and payable on blankets there after.

7. The figures relating to Previous year have been rearranged / regrouped wherever necessary .

8. Prior period items include :-

(i) Writing back of Gratuity provisions for past services amounting to Rs. 9.20 lacs.

9. The management of the company has assessed the assets of the company on the Balance Sheet date in compliance of AS 28 and they are of the opinion that there are no indication that the assets of the company, may be impaired. Therefore, no estimate has been made of the recoverable amount of the assets.

10. In accordance with the Accounting Standard 22 on Accounting for Taxes on Income, the Company has made adjustments in its accounts for deferred tax liabilities/assets. The tax effects of significant temporary differences that resulted in deferred tax liabilities are

11. The company carries on the business of textiles. Under which blankets of different qualities & sizes are produced Further the sale is made in domestic markets at the same terms and conditions. Therefore, no different business or geographical segments are recognisable and reportable.

12. Related party disclosures as required by AS-18. Related party disclosures are given below :-

I. Relations Ships :-

(i) Enterprises over which significant influence exists: Prahlad Industries, Prahlad Flour Mills Ltd., Design Unlimited, Swastik Biscuit (P) Ltd.

(ii) Directors & Key Management Personnel:

Shri Ved Prakash Gupta, Shri Jai Kishan Gupta, Shri Daya Kishan Gupta, Shri Vijay Kumar Gupta, Shri Pradeep Kumar Gupta, Dr. S. K Raj, Shri S. K Gupta, Shri N. C. Agarwal, Shri M.K. Agarwal, Shri Sanjay Kumar Agarwal, Shri Adeep Gupta, Shri Kapil Gupta and Shri Ashish Gupta.