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Notes to Accounts of VIP Clothing Ltd.

Mar 31, 2018

1 Corporate Information

VIP Clothing Limited (formerly known as Maxwell Industries Ltd.) (the ‘Company’) is domiciled in India. The Company was incorporated on January 14, 1991. The Company’s Identification No. is L18101MH1991PLC059804. The Company’s registered office is at C-6, Road No. 22, MIDC, Andheri (East), Mumbai- 400093. The Company is a leading Manufacturer, Marketing and Distributor of Men’s and Women’s innerwear and socks under the brand name VIP, Frenchie, Feelings, Leader and Eminence. The Company’s equity shares are listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

During the year, your Company had issued 1,65,19,304 fully paid-up equity shares of face value of Rs. 2/- each (“Rights Issue Equity Shares”) for cash at a price of Rs. 26/- per equity share including a share premium of Rs. 24/- per equity share aggregating up to Rs. 4295.02 Lakhs to the existing equity shareholders on a rights basis in the ratio of 1 fully paid up equity shares for every 4 fully paid-up equity shares held by the existing equity shareholders on the record date, i.e. November 20, 2017 (“The Issue”). The Issue was open for subscription from November 28, 2017 to December 12, 2017.

2. Rights, Preference and Restriction attached to Shares.

The Company has two class of shares, one is Equity shares having face value of Rs. 2/- each per share and other is Preference shares of Rs. 100/- each. Each holder of equity share is entitled to one vote per share. The Preference shares does not carry voting rights but entitled to get the dividend. The dividend, if any, proposed by the Board of Directors is subject to the approval of the equity shareholder in their ensuing general meeting. In the event of liquidation of the Company, the holder of equity shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (including redeemable Preference Shares). The distribution will be in proportion to the number of equity shares held by the shareholder.

3. The Company does not have any Holding Company or Subsidiary Company, Hence disclosure of shares held by Holding Company and Subsidiary Company does not arise.

(i) Working capital loan secured by way of hypothecation of inventories, book debts and movable fixed assets of the company and further secured by way of first charge of property situated at GIDC-Umbergaon (Gujarat), Thingalur (Tamil Nadu), Edyaarpalayam (Tamil Nadu), Kon village-Kalyan (Maharashtra)

(ii) The unsecured loan received from the Promoter Directors of the Company.

During the financial year, Company had sold off the Knitting unit on 17.11.2017 situated at 360/13, Ganesh Industrial Estate, Village Kachigam, Nani Daman, Daman - 396210, for a consideration of Rs. 150 Lakhs and booked the capital loss of Rs. 35.39 Lakhs and loss on account of discontinued operation is Rs. 8.73 Lakhs. Also Company had completed it''s sale transaction of Gobi land on 28.03.2018 and realised the sale consideration of Rs. 73.76 Lakhs and incurred the capital gain of Rs. 33.76 Lakhs on the transaction. Previous year Company had sold off the process unit situated at 13-15, SIPCOT, Perundurai, Erode, Tamil Nadu - 638052, for a consideration of Rs. 444 Lakhs and booked the capital loss of Rs. 721 Lakhs and loss on account of discontinued operation was Rs. 122 Lakhs.

Additional information to financial statements and disclosures under Accounting Standards: Note

No.4: Employee Benefits:

Defined benefit plans:

A. Gratuity:

The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age. The contributions are managed through a third party which acts as the adminitrator of the fund.

B. Other defined benefit plan (Leave encashment)

Amount recognized in the balance sheet and movement in the net defined benefit obligation for the year are as follows:

Note No.5: Corporate Social Responsibility (CSR)

During the financial year, the Company spend Rs. 6.52 Lakhs (P.Y Rs. 16.00 Lakhs) as per the section 135 of the Companies Act, 2013 in respect of Corporate Social Responsibility (CSR). The Company was focus on implementing the project identified by the CSR Committee and successfully completed the project.

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

The Company has availed a concessional rate of tax of 1% on the taxable sales without filing the forms “C” and “H” within the time frame stipulated under rule 12 (7) of the Central Sales Tax (Registration and Turnover) Rules, 1957 and is therefore liable to pay Rs. 3,615.63 Lakhs. The Company has since collected and in possession of forms required to be submitted to the concerned Sales Tax Officer and requested for time period to submit the relevant forms at the time of assessment.

In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company''s results of operations or financial conditions.

The Company is engaged in the business of manufacturing garments. Therefore there is no separate reportable segment.

Note No. 6. FINANCIAL INSTRUMENTS:

Note No. 6.1 Capital Management:

The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns to the shareholders and benefits to other stakeholders and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may issue new shares or sell assets to reduce debt. The capital structure of the Company consists of debt and total equity of the Company.

The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity, External-commercial borrowings and short-term borrowings. The Company’s policy is aimed at combination of short-term and long-term borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

The Company is not subject to any externally imposed capital requirements.

Total debt includes all long and short term debts as disclosed in notes no. 18 to the financial statements.

Note No. 6.2. Fair Value Measurement

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Ind AS 113 - Fair Value Measurement. An explanation of each level is as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability.

The Company is exposed primarily to market risk, credit risk and liquidity risk which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

Market Risk:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates and other market changes.

Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s variable rate short-term debt obligations and external commercial borrowings.

Credit Risk:

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Outstanding customer receivables are regularly monitored. The Company maintains its cash and cash equivalents and deposits with banks having good reputation and high quality credit ratings.

Liquidity Risk:

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Share based payments expenditure:

Share based payments expense (included in Note 28 : Employee Benefit Expense) recognized during the year represents the difference between market value of equity shares as at the grant date and market value of equity shares as at the exercise date.

7. Standards issued but not yet effective

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying Ind AS 115, ‘Revenue from Contracts with Customers’ substituting Ind AS 18, ‘Revenue’ and Ind AS 11, ‘Construction Contracts’. This notification is in line with the recent notifications made by International Accounting Standards Board (IASB) by notifying IFRS 15, ‘Revenue from Contracts with Customers’ substituting IAS 18, ‘Revenue’ and IAS 11, ‘Construction Contracts’. The standard is applicable to the Company from April 1, 2018.

Impact assessment because of Ind AS 115:

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

8. Fair value measurement of Land

Under Previous GAAP, land was valued at cost. Under Ind AS, the entity has opted option available under paragraph D5 of Appendix D to Ind AS 101 and has elected to measure land at the date of transition to Ind AS at its fair value and use that fair value as its deemed cost at that date.

The carrying value of land as per IGAAP was '' 76.81 Lakhs as on transition date. The land has been fair valued at '' 1334.91 Lakhs and the difference of '' 1258.10 Lakhs has been transferred to retained earnings.

9. Fair value measurement of License / Brand

Under Previous GAAP, license was valued at cost. Under Ind AS, the entity has opted option available under paragraph D7 read with paragraph D5 of Appendix D to Ind AS 101 and has elected to measure licence at the date of transition to Ind ASs at its fair value and use that fair value as its deemed cost at that date.

The carrying value of brand as per IGAAP was Rs. 1189.65 Lakhs as on transition date . The brand has been fair valued at Rs. 12397.10 Lakhs and the difference of Rs. 11207.45 Lakhs has been transferred to retained earnings.

10. Reclassification of lease

Under Indian GAAP, there is no specific guidance for contracts that involve leases of Land. Under Ind AS, leases of land is recognized as operating or finance lease as per definition and classification criteria. Where the land lease is for several decades, generally it qualifies as a finance lease even though the right of ownership of the land may not transfer at the end of the lease term. Land lease for relatively shorter periods are treated as operating leases. In such cases lease rentals paid in advance are recorded as prepaid lease rentals as part of other current / non-current assets.

11. Trade receivables:

Under Indian GAAP, provision for doubtful debts was recognized based on the estimates of the outcome and of the financial effect of contingencies determined by the management of the Company. This judgement was based on consideration of information available up to the date on which the financial statements were approved and included a review of events occurring after the balance sheet date.

Under Ind AS, a loss allowance for expected credit losses is recognized on financial assets carried at amortised cost. Expected loss on individually significant receivables is assessed when they are past due and based on Company''s historical counterparty default rates and forecast of macro-economic factors. Other receivables have been segmented by reference to the shared credit risk characteristics to evaluate the expected credit loss.

12. Loans to employees:

Under Indian GAAP, interest on term loan is recorded at transaction price.

Under Ind AS, term loan is discounted to its present value where the effect of the time value of money is material. The imputed interest on the term loan is subsequently recognized in statement of profit and loss.

13. Re-measurements of defined benefit obligations:

Under the previous GAAP, actuarial gains and losses were recognized in the statement of profit or loss. Under Ind AS, the actuarial gains and losses form a part of re-measurement of the net defined benefit liability / assets which is recognized in other comprehensive income.

14.Sales of goods:

1) Under the previous GAAP, revenue from operations was presented net of taxes. Under Ind AS, revenue from operations is shown inclusive of taxes. The taxes paid is presented on the face of the statement of profit and loss as part of expense.

2) The Company recovers from its customers certain freight and insurance costs paid to the vendor. Under Previous GAAP, the actual freight and insurance costs incurred was netted off with the recoveries. Under Ind AS, such costs and amounts recovered from the customers is accounted on gross basis

3) The Company evaluated its revenue contracts and consequently, reversed revenue that did not meet the revenue recognition criteria under Ind AS with corresponding increase in inventory and decrease in cost of sales and trade receivable.

4) The Company had carried out job work from its related party.

15. Financial liabilities:

Under Indian GAAP, interest on term loan is recorded at transaction price

Under Ind AS, term loan is discounted to its present value where the effect of the time value of money is material. The imputed interest on the term loan is subsequently recognized in statement of profit and loss.

16. Deferred Tax

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

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

17. Previous year figures have been regrouped/rearranged, wherever necessary to make them comparable with the current year''s classification.


Mar 31, 2016

Note:

(i) 3,57,50,000 Equity Shares of Rs. 2/- each allotted as fully paid up Bonus Shares by way of Capitalization of Share Premium.

(ii) The Company has allotted the 24,35,000, 5% Redeemable Preference Shares of Rs. 100/- each on 1st February, 2006, redeemable after 31.01.2016 with an option to the Company to redeem it at the end of the 8th, 9th and 10th Year, in three equal installment of Rs. 811.60 Lakhs each i.e redeemable on 31.01.2014, 31.01.2015 and 31.01.2016. After the buyback of 12,50,050 Preference Shares the installment will be proportionately reduce to Rs. 394.98 Lakhs each year to be redeemed on 31.03.2014, 31.01.2015 and 31.01.2016. The Company had redeemed its first trench on 31.07.2014, second trench on 31.01.2015 and third trench was redeemed on 31.01.2016.

(iii) The Company had issued and allotted 30,00,000 Equity Shares of Rs. 2/- each on conversion of 30,00,000 warrants issued to person belonging to Promoter Group. The warrants were issued at Rs. 38 per warrant. The Equity share capital increased from Rs. 1,261.54 Lakhs to Rs. 1321.54 Lakhs and securities premium increase from Rs. 2,609.49 Lakhs to Rs. 3,689.49 Lakhs.

1. Rights, Preference and Restriction attached to Shares.

The Company has two class of shares, one is Equity shares having face value of Rs. 2/- each per share and another is 5% Redeemable Preference shares of Rs. 100/- each. Each holder of equity share is entitled to one vote per share. The Preference shares does not carry voting rights but entitled to get the dividend. The dividend, if any, proposed by the Board of Directors is subject to the approval of the equity shareholder in their ensuing general meeting. In the event of liquidation of the Company, the holder of equity shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (including redeemable Preference Shares). The distribution will be in proportion to the number of equity shares held by the shareholder.

2. The Company had issued and allotted 30,00,000 Equity share on conversion of warrants to person belongs to Promoter group on 14th February, 2016 @ Rs. 38/- each .

3. The Company does not have any holding company or subsidiary company, Hence disclosure of shares held by holding company and subsidiary company does not arise.


Mar 31, 2015

1. CORPORATE INFORMATION

Maxwell Industries Limited ('Company') was incorporated on 14th January, 1991. The Company's Identification No. is L18101MH1991PLC059804. The Company is a leading Manufacturer, Marketing and Distribution of Men's, Women's inner wears and Socks under brand name VIP, Frenchie and Feelings. The Company's Equity Shares are listed on BSE Limited (BSE) and National Stock Exchange Limited (NSE).

1.1 Rights, Preference and Restriction attached to Shares.

The Company has two class of shares, one is Equity shares having face value of Rs. 2/- each per share and another is 5% Redeemable Preference shares of Rs.100/- each. Each holder of equity share is entitled to one vote per share. The Preference shares does not carry voting rights but entitled to get the dividend. The dividend, if any, proposed by the Board of Directors is subject to the approval of the equity shareholder in their ensuing general meeting. In the event of liquidation of the Company, the holder of equity shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (including redeemable Preference Shares). The distribution will be in proportion to the number of equity shares held by the shareholder.

1.2 Company had issued and allotted 30,00,000 convertible warrants at price of Rs. 38 per warrant determined under regulation of SEBI (ICDR) Regulation, 2009 to person belongs to Promoter Group. The warrants will be converted into Equity shares within a period of 18 months from the date of issue and allotment.

1.3 The Company does not have any holding company or subsidiary company, Hence disclosure of shares held by holding Company and subsidiary company does not arise.

Notes:

(I) Working Capital Loan secured by way of Hypothecation of Inventories, Book Debts & Movable Fixed Assets of the Company and further secured by way of First charge of Property situated at GIDC-Umergaon (Gujarat), Kachigam (Daman), SIPCOT-Perundurai (Tamil Nadu), Edyaarpalayam (Tamil Nadu) and Thingalur (Tamil Nadu).

(ii) The unsecured loan received from the Promoter of the Company.

# The figures reflect the position as at year end. The actual amount to be transferred to the Investor Education and Protection Fund in this respect shall be determined on the due date. *

* Including Statutory dues, Contributions to PF and ESIC, VAT, TDS, Service Tax, Professional Tax etc.

2. Employee benefit plans

Defined contribution plans

The Company makes Provident Fund and Employee pension scheme to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 175.67 Lakhs (Year ended 31 March, 2014 Rs. 118.90 Lakhs) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Other defined benefit plans (Leave Encashment)

3. Related party transactions

a. Details of related parties:

Associates

Maxwell Ventures Private Limited Maxwell Capital Management Private Limited Maxwell Entertainment Private Limited Maxwell Retails Private Limited Maxwell Health & Hygiene Private Limited Shogun Chemicals Private Limited HYBO Hindustan PAKO Hindustan *

Pats Treasures *

Unnati Ventures Kanishk Capital Partners K. 3 Realtors Global Construction Pathare Agro Farms

Note: Related parties have been identified by the Management. * Transactions with Related Parties.

4. Contingent Liabilities and Contingent Assets

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

Particulars Year ended Year ended 31 March, 2015 31 March, 2014 (Rs. in Lakhs) (Rs. in Lakhs)

Guarantees given by Bank 21.10 23.35

Claims against the company not acknowledged as debts - -

Cotton Corporation of India 33.83 33.83

Income Tax Liability in Appeal by IT department 1,175.53 1,157.49

Letter of Credits 471.65 283.13

* Split-up of equity shares from Rs. 10/- each to Rs. 2/- each and issue of bonus shares.

** Rs. 620.60 Lakhs 5% Redeemable Preference shares of Rs. 100/- each bought back.

*** Rs. 629.45 Lakhs 5% Redeemable Preference shares of Rs. 100/- each bought back.

**** Rs. 790 Lakhs 5% Redeemable Preference shares of Rs. 100/- each redeemed.

# Excluding yarn - discontinued operation.


Mar 31, 2014

CORPORATE INFORMATION

Maxwell Industries Limited (''Company'') was incorporated on 14th January, 1991. The Company''s Identification No. is L18101MH1991PLC059804. The Company is a leading Manufacturer, Marketing and Distribution of Men''s, Women''s inner wears and Socks under brand name VIP, Frenchie and Feelings. The Company''s Equity Shares are listed on BSE Limited (BSE) and National Stock Exchange Limited (NSE).

Notes:

(i) Working Capital Loan secured by way of Hypothecation of Inventories & Book Debts of the Company and further secured by way of Equitable Mortgage of Property situated at GIDC-Umergaon (Gujarat), Kachigam (Daman), SIPCOT-Perundurai (Tamil Nadu), Edyaarpalayam (Tamil Nadu) and Thingalur (Tamil Nadu).

(ii) Buyers credit arranged by Kotak Mahindra Bank is secured against import of Machineries, finance by them.

(ii) Purchase Bill Discounting is secured by way of sub-servient charge on the inventories and Book Debts and further secured by way of Personal Guarantee of Promotor - Directors.

(iii) Unsecured Short Term Loan is guaranteed by Promotor - Directors.

1. Contingent Liabilities and Contingent Assets

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

Particulars Year ended Year ended 31 March, 2014 31 March, 2013 (Rs. in Lakhs) (Rs. in Lakhs)

Guarantees given by Bank 23.35 30.95 Claims against the company not acknowledged as debts -

Cotton Corporation of India 33.83 33.83

Income Tax Liability in Appeal by IT department 1,157.49 1,157.49

Letter of Credits 283.13 262.11


Mar 31, 2013

1 CORPORATE INFORMATION

Maxwell Industries Limited (‘Company'') was incorporated on 14th January, 1991. The Company''s Identification No. is L18101MH1991PLC059804. The Company is a leading Manufacturer, Marketing and Distribution of Men''s, Women''s inner wears and Socks under brand name VIP, Frenchie and Feelings. The Company''s Equity Shares are listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange Limited (NSE).

2. Employee benefit plans

a Defined contribution plans

The Company makes Provident Fund and Employee pension scheme to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 132.33 Lakhs (previous year Rs. 115.62 Lakhs) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

b Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

I. Gratuity

ii. Other defined benefit plans (Leave Encashment)

3. Segment information

During the year under review, Company has one primary business segment, which is Hosiery. In the previous year, the Company were having two business segments namely Hosiery and Spinning. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment and manpower efforts, all other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments.

4. Related party transactions

a. Details of related parties:

Associates

Maxwell Ventures Private Limited

Maxwell Capital Management Private Limited

Maxwell Entertainment Private Limited

Maxwell Retails Private Limited

HYBO Hindustan

PAKO Hindustan *

Pats Treasures *

Unnati Ventures

Kanishk Capital Partners

K. 3 Realtors

Global Construction

Pathare Agro Farms

Shogun Chemicals Private Limited

Note: Related parties have been identified by the Management. * Transactions with Related Parties.

5. Remuneration to Managing Director and Whole Time Directors exceeds the maximum permissible limits prescribed in Section 198, 269 and other applicable provisions of the Companies Act, 1956. The Company is in the process of getting Central Government approval.

However, the excess remuneration paid to Managing Director and Whole time Directors is well within the limit of Schedule XIII of the Companies Act, 1956.

6. Contingent Liabilities and Contingent Assets

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

(Rs. in Lakhs)

Particulars Year ended Year ended 31 March, 2013 31 March, 2012

Guarantees given by Bank 30.95 30.95

Claims against the company not acknowledged as debts -

Cotton Corporation of India 33.83 33.83

Income Tax Liability in Appeal by IT department 1,157.49 1,157.49

Letter of Credits 262.11 594.24


Mar 31, 2012

1. Corporate Information:

Maxwell Industries Limited ('Company') was incorporated on 14th January, 1991. The Company's Identification No. is L18101MH1991PLC059804. The Company is a leading Manufacturer, Marketing and distribution of Men's, Women's inner wears and Socks under brand name VIP, Frenchie and feelings. The Company's Equity Shares are listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange Limited (NSE).

Note:

(i) 3,57,50,000 Ordinary Shares of Rs 21- each allotted as fully paid up Bonus Shares by way of Capitalization of Share Premium.

(ii) The Company has originally allotted the 5%, 24,35,000 Redeemable Preference Shares of Rs 100/-each on 1st February, 2006, redeemable after 31.01.2016 with an option to the Company to redeem it at the end of the 8th, 9th and 10th Year, in three equal installment of Rs 811.60 Lacs each i.e. redeemable on 31.01.2014, 31.01.2015 and 31.01.2016. After the buyback, installment will be reduced to Rs 394.98 Lacs each i.e. redeemable on 31.01.2014,31.01.2015 and 31.01.2016.

(iii) out of 24,35,000 Redeemable Preference Shares, the bought back 6,20,600 Preference Share during the financial year 2010-11 and 6,29,450 Preference Shares during the financial year 2011-12.

1.1 The Board of Director of the Company approved the Buyback of 6,29,450 fully paid up, 5% Redeemable Preference Shares of Rs 100/- at par including dividend due up to the date of Buyback, During the year, the Company has bought back and existinguised 6,29,450 Preference Shares of Rs 100/- each by utilising Securities Premium Account to the extent of Rs 629.45 Lacs. Capital Redemption Reserve has been created out of Securities Premium Account being the nominal value of share bought back in terms of Section 77AAof the Companies Act, 1956.

1.2 Rights, Preference and Restriction attached to Shares

The Company has two class of shares, one is Equity shares having face value of Rs 21- each per share and another is 5% Redeemable Preference shares of Rs 100/- each. Each holder of equity share is entitled to one vote per share. The Preference shares does not carry voting rights but entitled to get the dividend. The dividend, if any, proposed by the Board of Directors is subject to the approval of the equity shareholder in their ensuing general meeting. In the event of liquidation of the Company, the holder of equity shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts (including redeemable Preference Shares). The distribution will be in proportion to the number of equity shares held by the shareholders.

1.3 The Company does not have any holding company or subsidiary company. Hence disclosure of shares held by holding Company and subsidiary company doe not arise.

Note:

There were 2 Term Loans outstanding from Barclays Bank PLC in the previous year (current year Nil).

One Term loan from Barclay Bank PLC is secured by way of first charge on Land and Building, Plant & Machinery, Furniture & Fixtures and Electrical Equipments of Company's unit situated at Thingalur (Tamil Nadu) and re-payable in 16 equal quarterly instalments.

Second Term loan from Barclays Bank PLC is secured by way of first charge on Land & Building, Plant & Machinery, Furniture & Fixtures and Electrical Equipments of Company's unit situated at Daman and repayable in 12 equal quarterly installment.

The Company has recognized deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax (or) The Company has recognized deferred tax asset on unabsorbed depreciation and brought forward business losses based on the Management's estimates of future profits considering the non-cancellable customer orders received by the Company.

Notes:

(i) Working Capital Loan secured by way of Hypothecation of Inventories & Book Debts of the Company and further secured by way of Equitable Mortgage of Property situated at TTC- Turbhe (Navi Mumbai), GIDC- Umergaon (Gujarat), Kachigam (Daman), SIPCOT- Perundurai (Tamil Nadu), Edayaarpalayam (Tamil Nadu) and Thingalur (Tamil Nadu).

(ii) Purchase Bill Discounting is secured by way of second charge on the Inventories and Book debts and further secured by way of Personal Guarantee of Promotor - Directors.

(iii) Unsecured Short Term Loan is guaranteed by Promotor- Directors.

1. Employee benefit plans

a. Defined contribution plans

The Company makes Provident Fund and Employee pension scheme to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs 115.62 Lacs (Year ended 31st March, 2011 Rs 106.57 Lacs) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

b. Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Other defined benefit plans (Leave Encashment)

2. Segment information

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily Hosiery and Spinning. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments.

Note: Figures in bracket relates to the previous year 27. Related party transactions a. Details of related parties:

Associates

Maxwell Ventures Private Limited

Maxwell Capital Management Private Limited

Maxwell Entertainment Private Limited

Maxwell Retails Private Limited

HYBO Hindustan

PAKO Hindustan *

Pats Treasures *

Unnati Ventures

Kanishk Capital Partners

K. 3 Realtors

Global Construction

Pathare Agro Farms

Shogun Chemicals Pvt. Limited

Note: Related parties have been identified by the Management. * Transactions with related parties

3. Discontinuing operations

During the year, pursuant to the approval of the Shareholders and other authorities as required, the Company has transferred the Spinning Division business to M C Spinners Private Limited on a slump sale basis with effect from the close of business on 10th December' 2011 for a consideration of Rs 39.00 Crore (Rupees Thirty Nine Crore only). The Sipinning business was reported as part of Business segment of the Company. The results of the discontinued business during the year until discontinuation were as under:-

4. The Revised Schedule VI has become effective from 1sl April, 2011 For the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

5. Remuneration to Managing Director and Whole Time Directors exceeds the maximum permissible limits prescribed in Section 269 and other applicable provisions of the Companies Act, 1956. The Company is in the process of getting Central Government approval.


Mar 31, 2011

1 a) Working Capital borrowing from banks are secured by hypothecation of Company's entire stock of raw materials (imported and indigenous), stocks in process, finished goods and goods in transit covered by documents of title to goods, book debts further collaterally secured by way of first charge on land and building, plant and machinery, furniture & fixture and electrical equipments of the Company's units at TTC Turbhe (Navi Mumbai), Gobichettipalayam (Tamil Nadu) and Equitable Mortgage of land at Edayarpalayam (Tamil Nadu), Umbergaon (Gujarat) and Perundurai (Tamil Nadu).

b. Term loan from Barclays Bank PLC is secured by way of first charge on land and building, plant and machinery, furniture and Fixture and electrical equipments of the Company's units at Thingalur (Tamil Nadu), Kachigam (Daman).

2. Cash Credit loan from State Bank of India of Rs. 6853.03 Lakhs outstanding as on 31.03.2011.

3. Payment against supplies from small scale and ancillary undertakings are generally made in accordance with agreed credit terms.

4. In the opinion of the Company, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of the business.

5. Sundry Debtors and Sundry Creditors balances are subject to confirmation.

ACCOUNTING STANDARD DISCLOSURES (Issued by Institute of Chartered Accountant of India)

6. AS 10 -ACCOUNTING FOR FIXED ASSETS:

The Company assets were capitalized on the date they were ready and put to use for commercial production. Depreciation on these assets under the Companies Act and Income Tax Act have been calculated accordingly.

7. AS-17-SEGMENT REPORTING:

The segments are identified based on the dominant source and nature of risks and returns and the internal organization and management structure. Inter segment revenue is accounted on the basis of transactions which are primarily market driven. Unallocated Corporate Expenses include revenue and expenses which relate to the enterprise as a whole and are not attributable to the segments.

8. AS 18 RELATED PARTY:

A. List of Related Parties with whom the Company undertook transactions:

1. Group Concerns: VIP Overseas Marketing Pvt. Ltd., Hybo Hindustan, Pako Hindustan, PATS Treasure.

2. Directors and other members of Promoter Group: Shri J. K. Pathare, Shri Sunil J. Pathare, Smt Lalita J. Pathare, Shri KapilJ. Pathare.

9. AS-29 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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


Mar 31, 2010

1. a) Working Capital borrowing from bank are secured by hypothecation of Companys entire stock of raw materials (imported and indigenous), stocks in process, finished goods and goods in transit covered by documents of title to goods, book debts and further collaterally secured by way offirst charge on land and building, plantand machinery, furniture & fixture and electrical equipments of the Companys units at TTC Turbhe (Navi Mumbai), Gobichettipalayam (Tamil Nadu) and Equitable Mortgage of land at Edayarpalayam (Tamil Nadu), Umbergaon (Gujarat) and Perundurai, Tamil Nadu.

b. Short Term (Working Capital) Loan taken from IDBI Bank Limited are secured by way of sub-serivent charge on Stock and Book Debts of the Company.

c. Term loan from Barclays Bank is secured by way of first charge on land and building, plantand machinery, furniture and fixture and electrical equipments of the Companys units at Thingalur (Tamil Nadu), Daman (Kanchigam) and byway of personal guarantees of Promoter Directors.

2. Cash Credit loan from State Bank of India of Rs. 5032.75 lakhs outstanding as on 31.03.2010.

3. i) Payment against suppliers from small scale and ancillary undertaking are generally made in accordance with agreed credit terms.

ii) The Company has not received any intimation from "Suppliers" regarding the status under the Micro, Small and Medium Enterprises Development Act, 2006 & hence disclosures ifany relating to amounts paid as atyearend together with interest paid / payable as required under the said Act have not been given.

4. In the opinion of the Company, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of the business.

6.AS 10 -ACCOUNTING FOR FIXEDASSETS:

The CompanyAssets arecapitalized on the date they were ready and put to usefor commercial production.Depreciation on these assets under the CompaniesAct and IncomeTaxAct have beencalculated accordingly.

7.AS-15 -EMPLOYEES BENEFIT:

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

9.AS 18 RELATED PARTY:

A.List of Related Parties with whom the Company undertook transactions;

1 Group Concerns:VIP Overseas Marketing Pvt.Ltd.,Hybo Hindustan, Pako Hindustan,Pats Treasure, Maxwell Entertainment Pvt.Ltd.

2.Directors and other members of Promoter Group:Shri Jaykumar K.Pathare,Shri Sunil J.Pathare,Smt Lalita J. Pathare,Shri Kapil J.Pathare,Shri Jaykumar K.Pathare HUF.

12.AS-28-IMPAIRMENT OFASSETS:

The Companys asset at TTC,Thane are in the process of being disposed off and are stated at realizable market value.As a cash generating unitthe flows are expected to be positive overthe useful life ofthe asset.

13.AS-29 PROVISIONS.CONTINGENT LIABILITIESAND CONTINGENT ASSETS

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation.A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may,but probablywill not,require an outflow of resources.Wherethere is a possibleobligation or a present obligation thatthe likelihood ofoutflow of resourcesis remote,noprovisionordisclosure is made.

Contingent Liabilities Rupees in Lakhs

Particulars 2009-10 2008-09

Guarantees given by Bank 35.05 33.94

Letter of Credits 458.03 274.39

Claims against the company not acknowledged as debts 33.83 0.00

Income Tax Liability in Appeal 1157.49 1157.49

Export obligations 196.52 381.86

Previous Years figures have been regrouped,reclassified and rearranged wherever necessary.

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