Notes to Accounts of Shri Dinesh Mills Ltd.

Mar 31, 2018

*1.1 Share Option Outstanding Account

“The company during FY 2017-18, after taking requisite approvals of the governing body and shareholders, approved grant of up to 54,000 options to eligible employees of the Company. In terms of the said approval, the eligible employees are entitled against each option to subscribe for one equity share of face value of Rs. 10 each at a price of Rs. 10 per share. Market value per share of the company as on grant date is Rs. 134.70 against which the eligible employees shall subsribe each share at a price of Rs. 10 per share. “The holders of the Employee Stock Options are entitled to exercise the option within a period of three years from the date of first vesting, failing which they stand cancelled. In the case of termination of employment by the Company, all options, vested or not, stand cancelled immediately. In case of voluntary resignation, all un-vested options stand cancelled. Please refer below table for details on vesting period. There are no other vesting conditions, apart from service condition.”

The stock options granted during the period has been measured using the Black-Scholes option pricing model at the date of the grant. The Black-Scholes option pricing model considers assumptions regarding dividend yields, expected volatility, expected terms and risk free interest rates. The key inputs and assumptions used are as follows:

Share price: The closing price on stock exchange as on the date of grant has been considered for valuing the options granted.

Exercise Price: Exercise Price is the price as determined by the Committee of the Directors

Risk free interest rate: The risk free interest rate on the date of grant considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the yield curve for Government bonds.

a. Disclosure under Section 22 of Micro, Small and Medium Enterprise Development (MSMED) Act, 2006

The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 and hence disclosures as required under Section 22 of The Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 regarding:

2 - SEGMENT REPORTING

(a) Primary segment - Business Segment

The Company has only one business segment : “Textile”.

(b) Secondary segment - Geographical Segment Information of geographical segment:

3 - DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 19 EMPLOYEE BENEFITS

The Company has classified the various benefits provided to employees as under:-

(a) Defined contribution plans

- Provident fund

The Company has recognized the following amounts in the statement of profit and loss:

Employers’ contribution to provident fund :- Current Year Rs. 97.02 Lakhs (Previous Year Rs. 97.75 Lakhs)

(b) Defined benefit plans

- Gratuity

In accordance with Indian Accounting Standard 19, actuarial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions-

Economic Assumptions

The discount rate and salary increases assumed are the key financial assumptions and should be considered together; it is the difference or ‘gap’ between these rates which is more important than the individual rates in isolation.

Discount Rate

The discounting rate is based on the gross redemption yield on medium to long term risk free investments. The estimated term of the benefits/obligations works out to zero years. For the current valuation a discount rate of 7.27% p.a. (Previous Year 7.86% p.a.) compound has been used. Salary Escalation Rate

The salary escalation rate usually consists of at least three components, viz. regular increments, price inflation and promotional increases. In addition to this any commitments by the management regarding future salary increases and the Company’s philosophy towards employee remuneration are also to be taken into account. Again a long-term view as to trend in salary increase rates has to be taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.

4. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS

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 values 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 the evaluation, allowances are taken to account for the expected losses of these receivables.

The company uses the following hierarchy for determining and disclosing the fair values 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 effects on the recorded fair value are observable, either directly or indirectly.

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

5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise of borrowings and trade & other payables. The main purpose of these financial liabilities is to finance the Company’s operations and to support its operations. The Company’s principal financial assets include Investments, loans given, trade and other receivables and cash & short-term deposits that derive directly from its operations

The Company’s risk management is carried out based on the policies approved by the Board of directors. Based on that policy, company identifies and evaluates financial risks in close co-operation with the Company’s operating unit. The board overviews policy related to overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and non-derivative financial instruments along with investment of excess liquidity.

Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity and mutual fund 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 loan borrowings.

The Company is manufacturing woolen & worsted fabrics and felts. The environment in which the Company operates has changed significantly over the past decade, predominantly as a result of introduction of new competitive markets, globalization and changes in the Laws. This, in turn, has resulted in to considerable changes in internal operations, including our risk profile. As the company’s operating environment continues to be transformed, embedding risk management principles and practices into strategy development and day to day business processes is critical to achieve robust and proactive commercial outcomes - a balance between mitigation threats and exploiting opportunity; creating and protecting value. Overall, the company expects to strengthen its current position in coming years.

Interest rate risk

Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the company’s position with regards to the 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 it total portfolio.

The company is not exposed to significant interest rate risk as at the specified reporting date on account absence of any instruments whose interest rate is dependent on foreign exchange fluctuation. Refer Notes to account for interest rate profile of the Company’s interest-bearing financial instrument at the reporting date.

Foreign currency risk

The Company operates in domestic as well as international market, however, the nature of its operations requires it to transact in several currencies and consequently the Company is exposed to foreign exchange risk in certain categories of foreign currencies. In current year, about 10 % of the Company’s revenue is from export. The Company has laid down certain procedures to de-risk itself against currency volatility. It also out sources expert advice whenever required.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies.

I. Foreign Currency Exposure

Refer Note 41 for foreign currency exposure as at March 31, 2018, March 31, 2017 and April 01, 2016 respectively.

II. Foreign Currency Sensitivity

1% increase or decrease in foreign exchange rates will have the following impact on the profit before tax

Credit risk

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

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is significant increase in credit risk the company compares the risk of a default occurring an the asset at the reporting date with the risk of default as 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 mere its obligation,

(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 third-party guarantees or credit enhancements.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than reasonable period of time decided by the Management. 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 recognised in profit or loss.

Liquidity Risk

Liquidity Risk is defined as the risk that the company will not be able to settle or meet its obligations on time or at reasonable price. The company is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the company’s net liquidity position through rolling forecast on the basis of expected cash flows.

Maturity profile of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

Capital management

For the purposes of the Company’s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company’s Capital Management is to maximise shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirement of the financial covenants.

The company monitors capital using gearing ratio, which is total debt divided by total capital plus debt.

6 - FIRST TIME ADOPTION OF IND AS

First-time Adoption of Ind AS

The company has prepared its first Financial Statements in accordance with Ind AS for the year ended March 31, 2018. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The effective date for Company’s Ind AS Opening Balance Sheet is 1 April 2016 (the date of transition to Ind AS).

The accounting policies have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS Balance Sheet at April 01, 2016 (the Company’s date of transition). According to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that are based on standards and interpretations that are effective at March 31, 2018, the date of first-time preparation of Financial Statements according to Ind AS. These accounting principles and measurement principles must be applied retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS Financial Statements.

Any resulting differences between carrying amounts of assets and liabilities according to Ind AS 101 as of April 01, 2016 compared with those presented in the Indian GAAP Balance Sheet as of March 31, 2016, were recognized in equity under retained earnings within the Ind AS Balance Sheet.

An explanation of how the transition from previous GAAP to Ind AS has affected the company’s financial position, financial performance and cash flows is set out in the following notes and reconciliations.

I. Exemptions and exceptions availed:

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

A) Deemed cost:

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the Indian GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their Indian GAAP carrying values.

B) Leases:

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, thisassessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.

C) Designation of previously recognised financial instruments:

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.

D) Estimates:

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Indian GAAP [after adjustments to reflect any difference in accounting policies], unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with Indian GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under Indian GAAP:

i. Investment in equity instruments carried at FVPL or FVOCI;

ii. Investment in debt instruments carried at FVPL; and

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

E) Classification and measurement of financial assets:

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

F) De-recognition of financial assets and liabilities:

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a firsttime adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

** Fair Valuation adjustments for Investments:

- Under IGAAP, no adjustment was required in order to carry the mutual funds and investment in equity instruments at their market value. Under Ind AS provisions, the same is required to be fair valued and adjusted with their market price or any other valuation method wherein no market price is available. The resultant gain / loss is recorded through OCI or Profit and loss account based on the holding pattern along with the intention of the company.

# Fair Valuation adjustments for financial assets and financial liabilities:

- Under IGAAP, security deposits given and taken were required to be carried at book value. Under Ind AS, the said concept has shifted from book value to fair value hence the same has been adjusted after considering FVTPL & Adjustment of Dividend and its tax thereon

- Under Ind AS, Dividend and its tax thereon is required to be recognised in the books of account as and when payment is made by the company and not at the of proposing the same.

% Actuarial loss on defined benefit plan:

Both under IGAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under IGAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, re-measurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

~ Others:

Sale of goods:

Under the IGAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses.

Other comprehensive income:

Under Ind AS, all items of income and expense recognised 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 recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ include remeasurements of defined benefit plans and fair value gains or (losses) on FVOCI equity instruments and corresponding tax impact thereon. The concept of other comprehensive income did not exist under previous GAAP.

Statement of cash flows:

The transition from IGAAP to Ind AS has not had a material impact on the statement of cash flows.

Note: 7

The Board of Directors have recommended for the approval of Members, a final dividend of Rs. 1.50 per equity share of Rs. 10/- each for the Financial Year 2017-18.

Note: 8

Figures of the earlier year have been regrouped or reclassified to conform to Ind AS presentation requirements.

The accompanying notes are an integral part of the financial statements.

9. CORPORATE INFORMATION

Shri Dinesh Mills Limited (SDML) is a company having composite textile mill with a very strong presence in the textile industry for more than 60 years; manufacturing worsted fabrics (menswear), paper makers felts and industrial textiles. For International market, it has been manufacturing and exporting worsted fabrics to various overseas markets since last 30 Years. It maintains the highest standards of quality to meet the requirements of its discerning customers.

10. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation

In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2017. The transition from previous GAAP to Ind AS has been accounted for in accordance with the Ind AS 101 “First Time Adoption of Indian Accounting Standards”, with April 1, 2016 being the transition date. In accordance with the Ind AS 101 “First time adoption of Indian Accounting Standard”, the Company has presented a reconciliation [from the presentation of financial statements under accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (“Previous GAAP”) to Ind AS] of total equity as at April 1, 2016, March 31, 2017 and Statement of Profit and Loss for the year ended March 31, 2017.

b) Functional and presentation currency

These financial statements are presented in Indian rupee, which is the Company’s functional currency. All amounts have been rounded to the nearest lakh, unless otherwise indicated.

c) Basis of measurement

The financial statements have been prepared on historical cost basis, except certain financial assets and liabilities which have been measured at fair value (refer accounting policy regarding financial instruments), defined benefits plans - plan assets and contingent consideration. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Act. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purposes of current / non-current classification of assets and liabilities.

Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:

a. Expected to be realized or intended to be sold or consumed in normal operating cycle

b. Held primarily for the purpose of trading

c. Expected to be realized within twelve months after the reporting period, or

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

All other assets are classified as non-current.

A liability is current when:

a. It is expected to be settled in normal operating cycle

b. It is held primarily for the purpose of trading

c. It is due to be settled within twelve months after the reporting period, or

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

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

10A. USE OF ESTIMATES

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgment in applying the group’s accounting policies. This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be adjusted due to estimates and assumptions turning out to be different from those originally assessed. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

Critical estimates and judgments

The areas involving critical estimates or judgments are:

a) Estimation of current tax expense and payable - Refer accounting policies - 3.9

b) Estimated useful life of property, plant & equipment and intangible assets - Refer accounting policies - 3.1

c) Estimation of defined benefit obligation - Refer accounting policies - 3.8

d) Estimation of fair values of contingent liabilities - Refer accounting policies - 3.12

e) Recognition of revenue - Refer accounting policies - 3.4

f) Recognition of deferred tax assets for carried forward tax losses - Refer accounting policies - 3.9

g) Impairment of financial assets - Refer accounting policies - 3.2 & 3.5

Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the group and that are believed to be reasonable under the circumstances.

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Mar 31, 2015

1. 330,780 Equity shares allotted to Shareholders of Platewel Processes and Chemicals Limited as fully paid without payment being received in cash in terms of amalgamation scheme sanctioned by Gujarat High Court, as per order Dated 20th March, 1981.

2. 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. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in case of interim dividend. 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. There is no amount due and outstanding to be credited to Investor Education and Protection Fund as at 31st March, 2015

4. Effective from 1st April, 2014, the company has started providing depreciation on tangible assets over the revised remaining useful lives of tangible assets in alignment with useful lives prescribed in Schedule II to the Companies Act, 2013. Consequently, depreciation charge for the year ended March 31, 2015 is lower by Rs. 80.75 Lacs. Further, an amount of Rs. 340.57 Lacs (net of deferred tax) has been recognised in the opening balance of Retained Earnings which relate to the carrying amount of tangible assets whose revised remaining useful life was NIL as at 1st April, 2014.

5. Gross Block is carried at cost except Leasehold Land which is at cost less amounts written off.

6. Amount written off Rs. 0.09 Lacs of Leasehold Land has been debited to Profit and Loss Account under the head Depreciation and Amortization Expenses.

7. Buildings includes Rs. 750/- being the cost of shares in Co-operative Society (Previous year Rs. 750/-)

8. Capital work-in-progress includes spares for Spinning machine amounting to Rs. 32.04 Lacs, which were not put to use as on 31.03.2015.

9. Valution of Inventory is carried out as per the Standard Accounting policy followed by the company. See Annexure I referred to in Note 32

Workers' demand - matter under appeal 216.56 35.96

Claims against the company not acknowledged

as debts - -

Income tax Demands - matter under appeal 842.03 714.78

Excise matter under appeal 214.09 214.59

10. "Estimated amount of contracts remaining to be excecuted on Capital Account (net of advance payment) Rs. 489.53 Lacs (previous year Rs. NIL)

(A) Name of related party and nature of relationship

Name of related party Description of relationship

1. Where signiicant influence exists:

Dinesh Remedies Limited Subsidiary

Shri Dinesh Foundation Key Management Personnel are Trustee

Shri Maganbhai B. Patel's Charity Key Management Trust Personnel are Trustee

2. Key Management Personnel :

Mr. U.M.Patel Chairman Emeritus

Mr. B.U.Patel Chairman & Managing Director

Mr. N.U.Patel Managing Director

3. Relatives Of Key Management Personnel

Mrs. R.B.Patel Wife of Mr. B.U.Patel

Mrs. A.N.Patel Wife of Mr. N.U.Patel

Ms J.B.Patel Daughter of Mr. B.U.Patel

Mr. A.B.Patel Son of Mr. B.U.Patel

Mr. N.N.Patel Son of Mr. N.U.Patel

Mrs. M.U.Patel Wife of Mr. U.M.Patel

(C) There are no provisions for doubtul debts or amounts written off or written back in respect of debts due to or due from related parties

(D) Related party relationship is as identified by the Company on the basis of information available with them and relied upon by the Auditors

11. Segment Information

(a) Primary segment : Business segment

The Company has only one business segment Viz : "Textile".

12. Significant Accounting Policies followed by the Company are as stated in the statement annexed to this schedule as Annexure I.

13. Previous year's figures have been regrouped whereever necessary.

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Mar 31, 2014

NOTE:1 RELATED PARTY INFORMATION

(A) Name of related party and nature of relationship

Name of related party Description of relationship

1. Where significant influence exists:

Dinesh Remedies Limited Subsidiary

Shri Dinesh Foundation Key Management Personnel are Trustee

Shri Maganbhai B. Patel''s Charity Trust Key Management Personnel are Trustee

2. Key Management Personnel :

Mr. U.M.Patel Chairman Emeritus

Mr. B.U.Patel Chairman & Managing Director

Mr. N.U.Patel Managing Director

3. Relatives Of Key Management Personnel

Mrs. R.B.Patel Wife of Mr. B.U.Patel

Mrs. A.N.Patel Wife of Mr. N.U.Patel

Ms. J.B.Patel Daughter of Mr. B.U.Patel

Mr. A.B.Patel Son of Mr. B.U.Patel

Mstr. N.N.Patel Son of Mr. N.U.Patel

Mrs. M.U.Patel Wife of Mr. U.M.Patel

(C) There are no provisions for doubtul debts or amounts written off or written back in respect of debts due to or due from related parties.

(D) Related party relationship is as identified by the Company on the basis of information available with them and relied upon by the Auditors.

Note: 2 Segment Information

(a) Primary segment : Business segment

The Company has only one business segment Viz : "Textile".

Note: 3 Significant Accounting Policies followed by the Company are as stated in the statement annexed to this schedule as Annexure I.

Note: 4 Previous year''s figures have been regrouped whereever necessary.

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Mar 31, 2013

Note 1 Segment Information :

(a) Primary segment : Business segment

The Company has only on business segment Viz : "Textile".

(b) Secondary segment – Geographical segment :

Information of graphical segment:

Note: 2 Previous year''s figures have been regrouped whereever necessary.

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Mar 31, 2012

1.1 30,780 Equity shares alloted to Shareholders of Platewel Processes and Chemicals Limited as fully paid without payment being received in cash in terms of amalgamation scheme sanctioned by Gujarat High Court, as per order Dated 20th March, 1981.

1.2 4,775,420 Equity shares issued as Bonus Shares by way of capitalisation of Reserve and Share Premium Account.

1.3 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. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in case of interim dividend. 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.

2.1 Repayable in 24 quarterly installments, commencing from April 2007, Last installment due in March 2013 rate of Interest 15.75%.

2.2 The above term loan is secured by way of hypothecation of machineries purchased therefrom.

3.1 There is no amount due and outstanding to be credited to Investor Education and Protection Fund as at 31st March, 2012.

NOTE: 4 CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF

Workers' demand - matter under appeal 77.74 34.70

Claims against the company not acknowledged as debts 3.02 3.02

Income tax Demands (including interest) - matter under appeal 187.30 219.25

Excise matter under appeal 214.58 214.08

Note: 5 Significant Accounting Policies followed by the Company are as stated in the statement annexed to this schedule as Annexure I.

Note: 6 Previous year's figures have been regrouped whereever necessary.

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Mar 31, 2011

2010-11 2009-10 Rs. Rs.

1 Contingent Liabilities not provided for in respect of:

(a) Workers'demands - matter under appeal 3,470,317 3,071,891

(b) Income tax Demands (Including Interest)-Matter under Appeal 21,925,443 6,673,079

(c) Excise matter under appeal. 21,408,225 21,408,225

(d) Other claims against the Company not acknowledged as debts. 302,396 302,396

Note :

"Future cash outflows in respect of above are determinable on receipt of judgements/decisions pending with various forums / authorities. The Company has taken legal and other steps necessary to protect its position in respect of these claims, which based on legal advice are not sustainable. It is not possible to make any further determination of the liabilities which may arise or the amounts which may be refundable in these respects.

2. Employee Benefits

(a) Amount of Rs. 21,713,710/- ( Previous Year Rs.19,740,853 /-) is recognised as expense and included in the Schedule 12 " Contribution to Provident and Other Funds" in the Profit and Loss Account.

3. Related Party Information :

A. Name of related party and nature of relationship

Sr. Name of the related party Description of relationship

1. Where control exists:

Dinesh Remedies Ltd. Subsidiary

2. Key Management Personnel :

Mr, U. M. Patel Chairman Emeritus

Mr. B. U. Patel Chairman & Managing Director

Mr. N. U. Patel Managing Director

3. Relatives of Key Management Personnel and other organization where significant influence exists, to the extent of transaction entered :

Mrs. R. B. Patel Wife of Mr. B. U. Patel

Mrs. A. N. Patel Wife of Mr. N. U. Patel

Ms. J. B. Patel Daughter of Mr. B. U. Patel

Mr. A. B. Patel Son of Mr. B. U. Patel

Mstr. N. N. Patel Son of Mr. N. U. Patel

Mrs. M. U. Patel Wife of Mr. U. M. Patel

Shri Dinesh Foundation Key Management Personnel are Trustee

Maganbhai B. Patel's Charity Trust Key Management Personnel are Trustee

C. There are no provisions for doubtful debts or amounts written off or written back in respect of debts due to or due from related parties.

D. Related party relationship is as identified by the Company on the basis of information available with them and relied upon by the Auditors.

4. Micro and Small Enterprises :

(a) 'Sundry Creditors' in Schedule '8' to the Accounts include (i) Rs. NIL (31.03.2010 - Rs.NIL) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs. 214,079,092 (31.03.2010 - Rs. 199,012,706) due to other creditors.

(b) No interest is paid / payable during the year to any enterprise registered under the MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

5. Segment Information :

(a) Primary segment - Business Segment

The Company has only one business segment Viz : "Textile".

6. Significant Accounting Policies followed by the Company are as stated in the statement annexed to this schedule as Annexure I.

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

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Mar 31, 2010

1. Employee Benefits :

i) Defined Contribution Plan

Companys contribution paid/payable during the period to Provident Fund, Employee Deposit Linked Insurance Plan, Super Annuation Fund, Employee State Insurance Plan and Labour Welfare Fund are recognised in the Profit and Loss Account.

ii) Defined Benefit Plan

Provision tor payments to the Employees Gratuity Fund after taking into account the funds available with the Trustees ot the Gratuity Fund is based on acturial valuation done at the close of each financial year. , At the reporting date Companys liabilities towards gratuity is determined by independent acturial valuation using the projected unit credit method. Acturial gain and losses are recognised immediately in the statement of Profit and Loss account as income or expenses.

iii) Other defined benefits

Provision for other defined benefits for long term leave encashment is made based on an independent actuarial valuation on projected unit credit method at the end of each financial year. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expenses. Company recognizes the undiscounted amount of short term employee benefits during the accounting period based on service rendered by employees.

2. Taxation :

Income tax expense comprises of Current tax and Deferred tax charge or credit.

Provision for current tax is made on assessable income at the tax rate applicable to the relevant assessment year. The Deferred tax Asset and Deferred tax liability are calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is virtual certainty of its realiasation, supported by convincing evidence. Deferred Tax Assets oh account of other timing difference are recognized only to the extent there is a reasonable certainty of its realisation. The carrying amount of Deferred tax assets are reviewed to reassure realization at each Balance Sheet date.

3. Government Grants :

3.1 Government grants are recognized when there is reasonable assurance that the same will be received.

3.2 Revenue grants for expenses incurred are reduced from the respective expenses.

3.3 Capital grants relating to specific fixed assets are reduced from the gross value of the respective fixed assets.

4. Borrowing Costs:

Interest and other borrowing costs attributable to qualifying assets are capitalized. Other interest and borrowing costs are charged to revenue.

5. Provisions :

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the Balance Sheet date and adjusted to reflect the current management estimates.

6. Impairment of Assets :

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital.