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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

JCT Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2018

1. COMPANY INFORMATION

JCT Limited (‘the Company’) is a public limited Company incorporated in India, with its registered office in Hoshiarpur (Punjab) and Corporate Office in New Delhi. The Company is listed on the Bombay Stock Exchange (BSE).

The Company is primarily a manufacturer of cloth and nylon filament yarn, with its manufacturing facilities at Phagwara and Hoshiarpur in Punjab.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorized for issue on 30thMay, 2018.

2. STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION

a. Compliance with Indian Accounting Standards :

The financial statements have been prepared in accordance with the Indian Accounting Standards (‘Ind AS’) notified under Companies (Indian Accounting Standards) Rules, 2015, as amended by Companies (Indian Accounting Standards) Rules, 2017 and the other relevant provisions of the Companies Act, 2013. For all the periods upto and including year ended March 31, 2017, the Company prepared, its financial statements in accordance with the Accounting Standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (‘Previous GAAP’). These financial statements are the first financial statements which have been prepared in accordance with the Ind AS. Reconciliation and explanations of the effect of the transition from Previous GAAP to Ind AS on the Company’s Balance Sheet, Statement of Profit & Loss and Statement of Cash Flows are provided in Note 39.12.

The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at April 1, 2016 being the date of transition to Ind AS. All the assets and liabilities have been classified as current and non-current as per the Company’s normal operating cycle and other criteria as set out in Division II of Schedule III to the Companies Act, 2013.

b. Historical Cost Convention

The financial statements have been prepared on historical cost basis, except for the followings:

- Certain financial assets and liabilities that are measured at fair value,

- Assets held for sale - measured at fair value less cost to sell,

c. Functional and presentation currency

The financial statements are prepared in Indian Rupees (‘Rs.’), which is the Company’s functional and presentation currency. All financial information presented in Indian Rupees has been rounded to the nearest lakhs with two decimal places, unless stated otherwise.

d. Current versus non-current classification

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

- expected to be realized, or intended to be sold or consumed in normal operating cycle;

- held primarily for the purpose of trading;

- expected to be realized within 12 months after the reporting period; or

- cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

All other assets are classified as non-current.

A liability is classified as current when it is:

- expected to be settled in the normal operating cycle;

- held primarily for the purpose of trading;

- due to be settled within 12 months after the reporting date; or

- there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting date.

All other liabilities are classified as non-current.

Operating Cycle:

The operating cycle is the time between acquisition of assets for processing and their realization in cash and cash equivalent. The Company has identified twelve months as its operating cycle.

e. Use of estimates and judgments

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosure and the disclosure of contingent liabilities. Uncertainty about these estimates and assumptions could result in outcomes that requires material adjustments to the carrying amount of the assets and liabilities in future period/s.

These estimates and assumptions are based on the facts and events, that existed as at the date of Statement of Financial Position, or that occurred after that date but provide additional evidence about conditions existing as at the Statement of Financial Position date.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying values of assets and liabilities within the next financial year are discussed below.

i. Useful lives of Property Plant and Equipment

The Property, Plant and Equipment are depreciated, on a straight-line basis in the case of Plant & Machinery, Buildings and Data Processing Equipment and on written down value basis in the case of other assets, over their respective useful lives. Management estimates the useful lives of these assets as detailed in Note 3.1. Changes in the expected level of usage, technological developments, level of wear and tear could impact the economic useful lives and the residual values of these assets, therefore, future depreciation charges could be revised and could have an impact on the profit/loss in future years.

ii. Retirement benefit obligation

The cost of retirement benefits and present value of the retirement benefit obligations in respect of Gratuity and Leave Encashment is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, these retirement benefit obligations are sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the these obligations. The mortality rate is based on publically available mortality table for the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis are given in Note 39.11.

iii. Fair value measurement of financial instrument

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

iv. Impairment of Financial assets

The impairment provisions of financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

v. Impairment of non-Financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An assets recoverable amount is the higher of an assets’s fair value less cost of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Group of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, or other fair value indicators.

3. The above does not include the investment of 10,631,900 equity shares of face value of Re. 1 each of JCT Electronics Limited (an erstwhile Associate Company). The said investment though held by the Company has been fully impaired and written off in the financial statements of the earlier year/s. The Company has given an undertaking to a financial Institution and a bank of JCT Electronics Limited that the Company would not dispose off, pledge, charge, or create any lien, assign, 39,33,000 equity shares and also has pledged 42,87,000 equity share with a financial institution for financial facility availed by JCT Electronics Limited.

4. Includes Rs.Nil (Rs. NIL and Rs. 3.85 lakhs as at 31st March, 2017 and 1st April, 2016 respectively) earmarked for redemption of preference shares and Rs. 0.35 lakhs (Rs. 0.37 lakhs and Rs. 0.38 lakhs as at 31st March, 2017 and 1st April, 2016 respectively) against employees’ security deposits.

4.1 Under lien with banks for guarantee and letter of credit facilities.

5. Aggregate number of Equity Shares issued as fully paid without payment being received in cash during the period of five years immediately preceding the Balance Sheet date.

(a) 11,59,54,059 Equity Shares of Rs. 2.50 per share fully paid up at par aggregating Rs. 2,898.86 lakhs to Foreign Currency Convertible Bond (FCCBs) holders in settlement of their dues for FCcBs of US$ 12.93 million on preferential basis.

(b 4,08,80,000 Equity Shares of Rs. 2.50 per share fully paid up at par aggregating to Rs. 1,022 lakhs each to secured lenders and a promoter company on preferential basis in terms of the Corporate Debt Restructing (CDR) Scheme approved on 21.09.2012.

(c) 2,80,00,000 Equity Shares of Rs. 2.50 per share fully paid up aggregating Rs. 700 lakhs at a premium of Rs. 2.50 per share aggregating to another Rs. 700 lakhs. These shares related to 14,00,000 Optionally Convertible Preference Shares (OCPS) of Rs. 100 each.

(d) 1,33,33,333 Equity Shares of Rs. 2.50 per share fully paid up aggregating Rs. 333.33 lakhs at a premium of Rs. 5.00 per share aggregating to another Rs. 666.67 lakhs. These shares have a lock in period upto 30.05.2019. These shares related to 10,00,000 Optionally Convertible Preference Shares (OCPS) of Rs. 100 each.

5.1 The rights, powers and preferences relating to equity share and the qualifications, limitations and restrictions there of are contained in the Memorandum and Articles of Association of the Company. The Company has only one class of equity shares having a par value of Rs. 2.50 per share. The principle rights are as follows:

(a) Each holder of equity share is entitled to one vote per share.

(b) The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

(c) 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 shareholder.

6. Nature and purpose of reserves

(a) Capital Redemption Reserve: The Capital Redemption Reserve has been created, by appropriation of profit on Redemption of Cumulative Preference Shares.

(b) Share Premium Account: The amount received in excess of the face value of equity shares is recognized in Share Premium Account. This is net of amount appropriated against issue of Bonus Shares. Redemption premium payable to FCCB Holders at the time of maturity and gain/(loss) on such liability has also been adjusted against share premium account.

(c) Capital Reserve: The Reserve has been created from Capital Gain earned on settlement of (FCCBs) by issue of Equity Shares of Rs.2.50 each as fully paid up.

(d) Retained Earnings: Retained Earnings is net of the profits earned and losses suffered by the Company till date, less transfers to any Reserve, dividends or other distributions to shareholders.

6.1 Loss on exchange fluctuation of Rs 0.81 lakhs (Previous Year : Rs. 2.78 lakhs) on US$ 2.01 million payable towards redemption premium on matured 2.5% FCCBs of US$ 8.32 million has been adjusted against share premium account as the said premium had already been provided for and adjusted against share premium account in earlier years / periods.

7. Term Loans from Others:

Rs. 61.29 lakhs (Rs. 97.51 lakhs and Rs. 41.91 lakhs as at 31st March, 2017 & 1st April, 2016 respectively) Secured against hypothecation of specific vehicles etc.

7.1 Foreign Currency Convertible Bonds (FCCBs).

(a) The Company raised US$ 30 million through issue of unsecured FCCBs on 08.04.2006 out of which FCCBs of US$ 17.51 million were settled / converted into Equity Shares. The balance outstanding of US$ 12.49 million alongwith 20.075% redemption premium became due for redemption on 08.04.2011. As the Company could not pay on due date, the Trustees of FCCB holders filed a winding up petition in Punjab & Haryana High Court at Chandigarh on 29.09.2012. The winding up petition filed by the trustees, The Bank of New York Mellon, of Foreign Currency Convertible Bond Holders (FCCBs), was disposed off by the Hon’ble High Court on 27.01.2015,against which appeal was filed by the trustees and the Company with Sr.Bench of High Court where in consent term were allowed by the Hon’ble High Court on 05.06.2015, persuant to which the appeal is adjourned sine a die.

(b) The Company complied with all the conditions of consent terms and accordingly it became effective. The Company as per consent terms with FCCB holders has to pay US$ 19.19 million ( principal and redemption premium of US$ 15.0 million and defaulted interest of US$ 4.19 million) in 10 installments commencing from 05.10.2015 to 05.12.2017 alongwith interest @ 6% p.a. on reducing balance.

(c) Dues of Rs. 10,079.06 lakhs (including interest of Rs. 3,293.74 lakhs) having fallen due on 05.12.2017 to the FCCBs holders and the Company was making efforts to settle the dues. The Hon’ble High Court issued a notice on 12.01.2018 and on the date of its hearing on 08.05.2018, the Company and bond holders informed the Court of their ongoing settlement. Subsequent to Balance Sheet date, the settlement was reached on certain mutually agreed terms, subject to obtaining necessary approvals from statutory authorities including bankers to the company. The Company intends to settle these dues through refinancing of its existing term loans and availing fresh funds and the negotiations are going on with a reputed organisation. The impact of the settlement shall be taken in the accounts after necessary approvals have been received.

(d) As per the past practice, interest payable on FCCBs @ 6% p.a.for the period upto 31.03.2018 agregating to US$ 6.29 million equivalent Rs. 3,488.60 lakhs, will be accounted for when these unpaid amounts are paid by the Company, as such no provision has been made for interest in the accounts as on 31.03.2018.

7.2 Fixed Deposits from Public:

The Company discontinued the acceptance/renewal of public deposits from 29.09.2015 and is repaying the amounts as and when due.

8. Security deposits include Rs. 1,948 lakhs (Rs. 1,948 lakhs and Rs. 1,948 lakhs as at 31st March, 2017 and 1st April, 2016 respectively) against ‘Leave & License’ of certain properties with licensees’ option to buy at an agreed price in which eventuality the security deposit would be adjusted against the sale proceeds.

9. Secured Working Capital Loans availed from consortium of scheduled banks are secured by:

9.1 First Charge ranking pari-passu by way of hypothecation of entire Current Assets of the Company, namely, stocks of raw materials, stock in process, semi-finished and finished goods, stores & spares, bills receivable and books debts and all other movables, (both present & future) whether now lying loose or in cases or which are now lying or stored in or about or shall hereinafter from time to time during the continuance of the security of these presents be brought into or upon or be stored or be in or about of the Company’s factories, premises and godowns pertaining to Textile Unit at Phagwara and Filament Unit at Hoshiarpur, both in the state of Punjab or wherever-else the same may be or be held by any party to the order or disposition of the Company or in the course of transit or on high seas or on order or delivery, howsoever and wherever in the possession of the Company and either by way of substitution or addition.

9.2 Second Charge ranking pari-passu by way of equitable mortgage of all the immovable properties of the Company (both present & future) including land, buildings and tenements costructed/to be constructed thereon and hypothecation of entire moveable fixed assets.

9.3 Personal guarantees of Chairman and Managing Director and Shri M M Thapar.

9.4 Pledge of 23,61,01,790 Equity Shares of Rs.2.50 each of JCT Limited held by promoter and promoter companies.

10. There is no amount outstanding to suppliers under Micro, Small and Medium Enterprises Development Act, 2006 based on available information with the Company.

10.1 The trade payables are unsecured and usually non-interest bearing and are repayable within 60-90 days of its recognition.

11.a The Company is contesting these demands and the management including its advisors are of the view that these demands may not be sustainable at the appellate level. The management believes that the ultimate outcome of these proceedings will not have any material adverse effect on the Company’s financial position and results of its operations. The Company does not expect any reimbursement in respect of these contingent liabilities, and it is not practicable to estimate the timing of cash outflows, if any, in respect of these matters, pending resolution of the arbitration/appellant proceedings.

11.1 The Company had executed a Corporate guarantee of Rs. 400 lakhs towards Equipment Credit Scheme on 01.09.1993 and another towards foreign currency loan of DM 166,566,406 equivalant to Rs.3,580 lakhs as on 27.03.1998 for the term loan availed by JCT Electronics Ltd. (an erstwhile Associate Company) from IFCI Ltd. Subsequently, IFCI Ltd. assigned their debt to Asset Reconstruction Company (India) Limited (ARCIL) who had issued notice to the Company on 07.11.2015 for winding up under the then existing sections of the Companies Act, 1956. The Company has disputed the notice with ARCIL, thereafter no response has been received from ARCIL. Further, the Company has been legally advised that the demand raised by them is not sustainable.

11.2 The Company has not recorded cumulative deferred tax assets on account of timing differences as stipulated in Indian Accounting Standard 12 on “Income Taxes” issued by the Institute of Chartered Accountants of India in view of uncertainty of future taxable income.

11.3 Leases:

The Company has taken premises on lease under cancellable and non cancellable operating lease arrangements with lease terms ranging from 1 to 3 years, which are subject to renewal thereafter at mutual consent. The cancellable arrangements can be terminated by either party after giving due notice. The lease rent expense recognized during the year amounts to Rs. 219.52 lakhs (Previous year : Rs. 197.31 lakhs) and have been included in the Rent under Note 38 - Other Expenses. There is no future lease payments due in respect of the non-cancellable operating leases

11.4 Disclosure of Derivative Instruments :

(a) There are no outstanding forward exchange contracts used for hedge against currency exposures as at 31st March, 2018.

(b) Foreign currency exposures that have not been specifically hedged by a derivative instrument or otherwise as at 31 st March, 2018 are given below:

11.5 Going Concern:

Accumulated losses have resulted in erosion of substantial net worth of the Company. However, the financial statements have been prepared on a going concern basis on the strength of continued support from promoters, bankers / other lenders. Further, the Company is in the process of disposing off some of its non-core fixed assets to reduce its debt and improve its liquidity. The management, considering the future plans for operations and support of the promoters, lenders, business associates and workmen, is hopeful of improvement in its financial position.

11.6 The letters have been sent to most of the parties for confirmation of the balances under trade receivables, advances, trade payables and other parties. However, due to non receipt of the response from some of the parties, the balances from them are subject to confirmations / reconciliation. The impact, if any, subsequent to the confirmation / reconciliation, will be taken in the year of confirmation/ reconciliation, which in view of management, will be taken in the year of confirmation / reconciliation.

11.7 The Official Liquidator (OL) of CNLT Malaysia, (Company under liquidation) has during the year filed a recovery case in the High Court of Malaysia at Kuala Lumpur for US$ 1,250,000 towards alleged fraudulent payment by CNLT to the Company in 2006-07. The Company has filed objections for striking off the Case and asked for Security Cost. The Hon’ble High Court of Malaysia, has ordered OL to deposit security cost and the next date of hearing is fixed for 11th July, 2018. In view of the management, no liability will arise on this account to the Company.

11.8 Segment Reporting:

(a) Identification of segments

i) Primary Segment

Business segment: The Company’s operating business is organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products. Two identified segments are Textiles and Filament yarn. The products considered as a part of Textile segment are cloth and yarn. The products considered as a part of Filament segment are nylon yarn and chips.

ii) Secondary Segment

Geographical Segment: The analysis of geographical segment is based on the geographical location of the customers.

(b) Inter Segment transfers of goods, as marketable products produced by separate Segments of the Company, for captive consumption are made as if sales were made to third parties at current market prices and are included in turnover of the respective Segment.

(c) Unallocable Items:

Corporate income, corporate expenses, interest, capital and reserves are considered as part of unallocable items which are not identifiable to any business segment.

The Company has common property, plant and equipments for producing goods for domestic and overseas markets. Hence, separate figures for property, plant and equipments/additions to property, plant and equipments cannot be furnished.

11.9 Employee Benefits

(a) Defined Benefit plans:

Gratuity : Payable on separation as per the Payment of Gratuity Act, 1972 as amended, @ 15 days pay, for each completed year of service to eligible employees who render continuous service of 5 years or more, subject to maximum limit of Rs. 20 lakhs.

(b) Other Long Term Benefit:

Leave Encashment : Employees of the Company are entitled to accumulate their earned / privilege leave, which is payable / encashable as per the Company’s policy, while on service or on their separation.

(c) Defined Contribution plan:

Company’s employees are covered by Provident Fund, Pension Fund, Employees State Insurance Scheme/Fund and Employees’ Superannuation Scheme, to which the Company makes a defined contribution measured as a fixed percentage of salary. During the year, amount of Rs. 654.74 lakhs (Previous Year: Rs. 727.46 lakhs) has been charged to the Statement of Profit and Loss towards employer’s contribution to these schemes/funds as under:

The Company’s approved provident fund scheme, employees’ state insurance fund scheme, employees’ pension scheme and employees’ superannuation scheme are defined contribution plans. The Company has no obligation, other than the contribution paid/payable under such schemes. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.

11.10 First-time adoption of Ind AS

The Company w.e.f. 1st April, 2017 has adopted Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules, 2015, as amended by Companies (Indian Accounting Standards) Rules, 2017 and the other relevant provisions of the Companies Act, 2013, with a transition date of 1st April, 2016. For all the periods upto and including year ended March 31, 2017, the Company prepared, its financial statements in accordance with the Accounting Standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (‘Previous GAAP’).

The adoption of Ind AS has been carried out in accordance with Ind AS 101 ‘First-time Adoption of Indian Accounting Standards’. Ind AS 101 requires that all Indian Accounting Standrads (Ind AS) and interpretations that are issued and effective for the first Ind AS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared financial statements which comply with Ind AS for year ended 31st March, 2018, together with the comparative information as at and for the year ended 31st March, 2017 and the opening Ind AS Balance Sheet as at 1st April, 2016, the date of transition to Ind AS. The accounting policies as set out in Note 3 which are in accordance with Ind AS, have been applied in preparing these financial statements.

In preparing these Ind AS financial statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognised directly in Equity under Retained Earnings. This note explains the adjustments made by the Company in restating its financial statements prepared under Previous GAAP, including the Balance Sheet as at 1st April, 2016 and the financial statements as at and for the year ended 31st March, 2017.

Exemptions availed and mandatory exceptions

Ind AS 101 - First-time Adoption of Indian Accounting Standards permits first-time adopters certain exemptions from retrospective application of certain requirements under Ind AS. Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Previous GAAP to Ind AS.

A. Ind AS optional exemptions

The Company has elected to apply the following optional exemptions from retrospective application:

i) Deemed cost for Property, Plant and Equipment and Intangible Assets

The Company has elected to measure all its property, plant and equipment and intangible assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.

ii) Ind AS 17 “Leases’ requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment 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 material. The Company has elected to apply this exemption for such contracts/arrangements.

iii) Long Term Foreign Currency Monetary Items

The Company has elected the option provided under Ind-AS 101 to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the Previous GAAP. Refer Note 4.3 and 21.2 regarding adjustment of the foreign currency exchange variation on amounts borrowed (FCCBs), for acquisition of property, plant and equipment, to the carrying cost of property, plant and equipment.

B. Ind AS mandatory exceptions

i) Estimates

On assessment of the estimates made under the Previous GAAP financial statements, the Company has concluded that there is no necessity to revise the estimates under Ind AS, as there is no objective evidence of an error in those estimates. However, estimates that were required under Ind AS but not required under Previous GAAP are made by the Company, wherever required for the relevant reporting dates reflecting conditions existing as at that date.

ii) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition, if retrospective application is impracticable. Accordingly, the Company has determined the classification of financial assets bases on facts and circumstances that exist on the date of transition to Ind AS.

iii) De-recognition of financial assets and financial liabilities

Ind AS 101 requires an entity to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. Accordingly the Company has applied the de-recognition requirements for financial assets and financial liabilities in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

C. Transition to Ind AS - Reconciliations

The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:

I. Reconciliation of Equity as at 1st April, 2016

II. A. Reconciliation of Equity as at 31st March, 2017

B. Reconciliation of Statement of Profit and Loss for the year ended 31st March, 2017 There is no material impact on the Cash Flow Statements of the transition from Previous GAAP to Ind AS. Previous GAAP figures have been reclassified / regrouped wherever necessary to conform to financial statements prepared under Ind AS.

Notes to the reconciliation of equity as at 1st April, 2016 and 31st March, 2017 and total comprehensive income for the year ended 31st March, 2017.

a) Government Grant

The government grant related to assets was netted off with the cost of respective Property, Plant and Equipment under Previous GAAP. Under Ind AS, Property, Plant and Equipment has been recognised at gross cost and government grant has been recognised as liability. The income from amortisation is recognised as other income in the Statement of Profit and Loss on a systematic basis over the useful life of the assets for which it was received.

b) Fair Valuation of Investments

In accordance with Ind AS 109 “Financial Instruments”, investments in unquoted equity shares recognised at fair value through the other comprehensive income at each reporting period.

c) Under previous GAAP, security deposits (that are refundable in cash on completion of lease term) are recorded at their transaction value. Under Ind AS, at initial recognition all financial instruments are required to be recognised at fair value. Accordingly, the Company has fair valued the security deposits and the difference between the transaction value and fair value is recognised as “Prepaid Rent” at the reporting date.

d) Revaluation Reserve

The Company has elected cost model for its Property, plant & Equipment and thus, the revaluation surplus existing as on the transition date under Indian GAAP has been transferred to the retained earnings on the date of transition.

Accordingly, the adjustment of proportionate share of revaluation surplus arising from adjustment on sale of assets and depreciation of revalued assets under previous GAAP have been reversed under Ind AS during the year ended 31st March, 2017.

e) Under Ind AS, at initial recognition all financial instruments are required to be recognised at fair value. Accordingly, the Company has fair valued the “Interest free Loan from promoters” which are in the nature of Promoter Equity resulting in increase in “Retained Earnings”.

f) Under previous GAAP, security deposits from dealers/customers/vendors (that are refundable in cash on completion of contractual term) are recorded at their transaction value. Under Ind AS, at initial recognition all financial instruments are required to be recognised at fair value. Accordingly, the Company has fair valued the security deposits and the difference between the transaction value and fair value is recognised as “Unearned Interest Income” at the reporting date.

g) Excise Duty

Under the Previous Indian GAAP, revenue from sale to goods was presented exclusive of excise duty. Under Ind AS revenue from sales of goods is presented inclusive of excise duty. Excise duty paid is presented as expenditure under Statement of profit and loss.

h) Revenue from Sale of Products

Under Previous Indian GAAP, revenue was recognised net of trade discounts and inclusive of sales taxes / VAT and excise duties. Under Ind AS, revenue is recognised at the fair value of the consideration received or receivable, after deduction of any trade discounts, cash discounts, volume rebates, rate/weight difference and any taxes or duties collected on behalf of the government such as sales tax/VAT/GST except excise duty. Credit notes given to the consumer/dealer/distributor includes cash discounts, volume rebates and rate/weight differences which have been reclassified from other expenses under Previous GAAP are netted from revenue under Ind AS.

i) Actuarial gain/(loss) on Defined Benefit Plans (Ind AS - 19)

Both under Previous Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Previous Indian GAAP, the entire cost, including actuarial gains and losses, are charged to statement of profit or loss. Under Ind AS, re-measurements i.e. actuarial gains and losses are recognised in balance sheet through other comprehensive income. Thus, employee benefits expense is reduced with the corresponding impact under other comprehensive income.

j) Other comprehensive Income

Under Previous Indian GAAP, the Company has not presented Other Comprehensive Income (OCI) separately. Hence, it has reconciled Previous Indian GAAP profit to profit as per Ind AS. Further, Previous Indian GAAP profit is reconciled to Total Comprehensive Income as per Ind AS.

k) Previous Indian GAAP figures have been reclassified / regrouped wherever necessary to confirm to financial statements prepared under Ind AS.

D. Standard issued but not yet effective

The standard issued, but not yet effective (considering the applicability to the Company) upto the date of the issuance of the Company’s financial statements is disclosed below. The Company intends to adopt this standard when it becomes effective.

Ind AS 115 Revenue from Contracts with Customers

Ind AS 115 was issued in February, 2015 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This standard will come into force from accounting period commencing on or after April 01, 2018. The Company will adopt the new standard on the required effective date. During the current year, the Company performed a preliminary assessment of Ind AS 115, which is subject to changes arising from a more detailed ongoing analysis.

The fair value of the financial assets and liabilities is 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. The Company has disclosed financial instruments such as trade receivables, current invesments, cash and cash equivalents, other bank balances, trade payables, other financial assets and liabilities at carrying value because their carrying amounts are a reasonable approximation of the fair values due to their short term nature.

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 counter party. Based on this evaluation, allowances are taken to the account for the expected losses of these receivables.

Fair value hierarchy

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 that have a significant effect on the recorded fair value are observable, either directly or indirectly

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

11.11 Capital Management

The Company’s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company.

The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations, long term and short term bank borrowings and issue of securities.

The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Net debt includes interest bearing borrowings less cash and cash equivalents, other bank balances (including non-current earmarked balances) and current investments.

11.12 Financial risk management objectives and policies

The Company’s principal financial liabilities, comprise of borrowings, security deposits and trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include investments, loans, trade and other receivables, cash and cash equivalents and other bank balances that are derived directly from its operations.

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk

The Company’s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company’s senior management that the Company’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

The management reviews and agrees policies for managing each of these risks which are summarized as below:

(a) Market Risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include borrowings, security deposits and foreign currency receivables and payables. The sensitivity analyses in the following sections relate to the position as at March 31, 2018. The analyses exclude the impact of movements in market variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31, 2018.

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency) and outstanding FCCBs.

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EURO and others currency exchange rates, with all other variables held constant. The impact on the Company profit before tax is due to changes in the fair value of monetary assets and liabilities. Foreign currency exposures recognised by the Company that have not been hedged by a derivative instrument or otherwise are as under:

(i) Interest Rate Risk

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Company’s financial liabilities comprises of interest bearing vehicle loans, loan and advance from related party and security deposits; however these are not exposed to risk of fluctuation in market interest rate as the rates are fixed at the time of contract/agreement and do not change for any market fluctuation.

(ii) Commodity Price Risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing manufacture of yarn, fabric and garments therefore require a continuous supply of raw materials i.e. Caprolactum, Cotton and Dyes & Chemicals being the major input used in the manufacturing. Due to the significantly increased volatility of the price of the Caprolactum, Cotton and Dyes & Chemicals, the Company has entered into various purchase contracts for these material for which there is an active market. The Company’s management has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company partly mitigated the risk of price volatility by entering into the contract for the purchase of some of these materials and further the Company increases prices of its products as and when appropriate to minimize the impact of increase in raw material prices.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation under a financial instrument, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

i) Trade Receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating review and individual credit limits are defined in accordance with this assessment. The Company regularly monitors its outstanding customer receivables.

An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method based on provision matrix. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

ii) Financial instruments and cash & bank deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s management in accordance with the Company’s policy.

(c) 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’s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits, short term investments and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows.

12. Figures of the previous year/s have been rearranged and regrouped, wherever necessary, to confirm to current year classification.


Mar 31, 2016

1 During the year, 14,00,000 Optionally Convertible Preference Shares (OCPS) of Rs. 100 each were converted into 2,80,00,000 Equity Shares of Rs. 2.50 per share fully paid up on preferential basis aggregating Rs. 700 lakhs at a premium of Rs. 2.50 per share aggregating to another Rs. 700 lakhs after requisite approvals. These shares have a lock in period up to 19.02.2017.

2 In earlier years the Company allotted :-

- 11,59,54,059 Equity Shares of Rs. 2.50 per share fully paid up at par aggregating Rs. 2,898.86 lakhs to Foreign Currency Convertible Bond (FCCBs) holders in settlement of their dues for FCCBs of US$ 12.93 million on preferential basis.

- 4,08,80,000 Equity Shares of Rs. 2.50 per share fully paid up at par aggregating to Rs. 1,022 lakhs each to secured lenders and a promoter company on preferential basis in terms of the Corporate Debt Restructing (CDR) Scheme approved on 21.09.2012.

3 The rights, powers and preferences relating to equity share and the qualifications, limitations and restrictions thereof are contained in the Memorandum and Articles of Association of the Company. The Company has only one class of equity shares having a par value of Rs. 2.50 per share. The principle rights are as follows:

a) Each holder of equity share is entitled to one vote per share.

b) The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

c) 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 shareholder.

4 Redemption terms in respect of 10,00,000 Optionally Partially Convertible Preference Shares (OPCPS) of Rs 100 per share aggregating to Rs. 1,000.00 lakhs were modified on 25.03.2016 wherein the entire OPCPS were optionally convertible into Equity Shares (OCPS) as against earlier condition of conversion of 20 % of the face value of OPCPS. Further these OCPS have been subsequently on 05.05.2016 converted into 1,33,33,333 Equity Shares of Rs. 2.50 per share fully paid aggregating to Rs. 333.33 lakhs at a premium of Rs. 5.00 per share further aggregating to Rs. 666.67 lakhs.

5. Loss on exchange fluctuation of Rs. 104.39 lakhs (Previous Year: loss of Rs. 64.44 lakhs) on US$ 2.35 million (Previous year: US$ 2.51 million) payable towards redemption premium on matured FCCBs of US$ 9.71 million (Previous year: US$ 12.49 million) has been adjusted against share premium account as the said premium had already been provided for and adjusted against share premium account in earlier years.

6. Since in earlier years all the debentures were fully redeemed and the Company has no liability towards any debenture holder, the Company has utilized the entire amount of Rs. 2,045.76 lakhs of ''Debenture Redemption Reserve'' by transfer to ''Surplus''.

7. Foreign Currency Convertible Bonds (FCCBs).

(a) The Company raised US$ 30 million through issue of unsecured FCCBs on 08.04.2006 out of which FCCBs of US$ 17.51 million were settled / converted into Equity Shares. The balance outstanding of US$ 12.49 million along with 20.075% redemption premium became due for redemption on 08.04.2011. As the Company could not pay on due date, the Trustees of FCCB holders filed a winding up petition in Punjab & Haryana High Court at Chandigarh on 29.09.2012.The winding up petition filed by the trustees,The Bank of New York Mellon, of Foreign Currency Convertible Bond Holders (FCCBs), was disposed off by the Hon''ble High Court on 27.01.2015, against which appeal was filed by the trustees and the Company with Sr.Bench of High Court where in consent term were allowed by the Hon''ble High Court on 05.06.2015, pursuant to which the appeal is adjourned sine a die.

(b) Company complied with all the conditions of consent terms and accordingly it became effective. The Company as per consent terms with FCCB holders has to pay US$ 19.19 mn (principal and redemption premium of US$ 15.0 mn and defaulted interest of US$ 4.19 mn) in 10 installments commencing from 05.10.2015 to 05.12.2017 along with interest @ 6% p.a. on reducing balance.

(c) In respect of 3rd and partially unpaid 2nd installment aggregating to US$ 2.22 million equivalent Rs 1480.97. lakhs having become due the Company based on the communication dated 24th May,2016 from a bond holder has spread the aforesaid amount equally over the remaining installments w.e.f. 05.06.2016 onwards.

(d) Interest payable on FCCBs as detailed below will be accounted for on payment basis:

- Interest accrued @ 6% p.a. payable on FCCBs of US $ 15 million for the period from 08.04.2011 to 05.06.2015:aggregatingto US$2.75mn. equivalent Rs.1,834.94 lakhs.

- Interest accrued but not due of Rs 1,120.18 lakhs on outstanding balance of Rs.8,052.48 lakhs as at 31.03.2016.“In view of the management it is considered prudent to account for the aforesaid interest on payment basis as the interest has been spread together with the principal in 7 installments commencing from 05.06.2016 to 05.12.2017. As such , no provision has been made for such interest aggregating to US$ 4.43 million equivalent Rs.2,955.12 lakhs in the Accounts as at 31.03.2016.

6.1 Security deposits include Rs. 1,948 lakhs (Previous year: Rs. 1,948 lakhs) against ''Leave & License'' of certain properties with licensees'' option to buy at an agreed price in which eventuality the security deposit would be adjusted against the sale proceeds.

8. Secured Working Capital Loans availed from consortium of scheduled banks and are secured by:

(a) First Charge ranking pari-passu by way of hypothecation of entire Current Assets of the Company, namely, stock of raw materials, stock in process, semi-finished and finished goods, stores & spares, bills receivable and books debts and all other movables, (both present & future) whether now lying loose or in cases or which are now lying or stored in or about or shall hereinafter from time to time during the continuance of the security of these presents be brought into or upon or be stored or be in or about of the Company''s factories, premises and godowns pertaining to Texrtile Unit at Phagwara and Filament Unit at Hoshiarpur, both in the state of Punjab or wherever-else the same may be or be held by any party to the order or disposition of the Company or in the course of transit or on high seas or on order or delivery, howsoever and wherever in the possession of the Company and either by way of substitution or addition.

(b) Second Charge ranking pari-passu by way of equitable mortgage of all the immovable properties of the Company (both present & future) including land, buildings and tenements constructed/to be constructed thereon and hypothecation of entire moveable fixed assets.

(c) Personal guarantees of Chairman and Managing Director and Shri M. M. Thapar.

(d) Pledge of 222,768,457 Equity Shares of Rs. 2.50 each of JCT Limited held by promoter and promoter companies.

9. (a) The Company had revalued its certain freehold land held at Tehsil Phagwara on 01.04.2005 and the resultant revalued amount of Rs. 10,417.70 lakhs was substituted for the historical cost in the gross block of land, net block as at 31.03.2016 is Rs. 10278.14 lakhs. (Previous year: Rs. 10,417.70 lakhs.)

(b) The Company had revalued its freehold land at Village Chohal, Hoshiarpur on 15.03.2010 and the resultant revalued amount of Rs. 4,403.91 lakhs was substituted for the historical cost in the gross block of land, net block as at 31.03.2016 is Rs. 4313.03 lakhs. (Previous year: Rs. 4,326.35 lakhs.)

(c) The Company had revalued its building at Tehsil phagwara on 30.04.1985 and the resultant revalued amount of Rs. 738.41 lakhs was added to the historical cost in the gross block of building of Rs. 1,077.32 lakhs.

The aforesaid revaluations were done based on reports of external valuers at replacement / market value which resulted in net increase of Rs. 15560.02 lakhs (Previous year: Rs. 15,560.02 lakhs.) in the gross block of fixed assets.

10. (a) Government grant of Rs. 416.54 lakhs received in 2008-09 was reduced against the cost of specific plant and machinery.

(b) The Company has continued to adjust the foreign currency exchange variation on amounts borrowed (FCCBs) for acquisition of fixed assets to the carrying cost of fixed assets as the related borrowings originated in the year 2006, which is in accordance with para 46 & 46 A of AS-11. This has resulted in increase in fixed assets by Rs. 454.57 lakhs (Previous year: increase of Rs. 320.99 lakhs.), with corresponding increase (Previous year: incresese) in FCCBs borrowing during the year.

11. In respect of the Company''s investment in JCT Electronics Ltd.:

(a) The Company has given an undertaking to a financial institution and a bank of JCT Electronics Ltd. that the Company would not dispose off, pledge, charge, or create any lien, assign 39,33,000 equity shares having face value of Re. 1 each.

(b) The Company has pledged 42,87,000 equity shares having a face value of Re. 1 each with a financial institution for financial facility availed by JCT Electronics Ltd.

12. Includes Rs. 332.27 lakhs (Previous year: Rs. 388.18 lakhs) lying with outside parties/creditors.

13. Includes Rs. 3.85 lakhs (Previous year: Rs. 3.85 lakhs) earmarked for redemption of preference shares and Rs. 0.38 lakhs (Previous year: Rs. 0.38 lakhs) against employees'' security deposits.

14. Includes Rs. 48.38 lakhs (Previous year: Rs. 42.51 lakhs) having maturity of more than 12 months.

15. The Company had revalued its freehold land at Sriganganagar on 30.04.1985 and the resultant revalued amount of Rs. 134.58 lakhs was substituted for the historical cost in the gross block of land, net block as at 31.03.2016 is Rs. 149.88 lakhs (Previous year: Rs. 134.58 lakhs)

16. Others comprise receivables on account of export incentives, CER receivable, DEPB receivable, interest receivable, rent receivable, claims etc.

17. No amount has been remitted during the year in foreign currency on account of dividend.

18. Prior period expenses aggregating Rs. 12.37 lakhs (net debit) have been accounted for in the respective heads of account [Previous year:Rs.131.83 lakhs (net debit)]

19. The Company had executed a Corporate guarantee of Rs. 400 lakhs towards Equipment Credit Scheme on 01.09.1993 and one for foreign currency loan of DM 166,566,406 equivalent to Rs.3580 lakhs as on 27.03.1998 for term loan availed by JCT Electronics Ltd. from IFCI Ltd. Subsequently, IFCI Ltd. has assigned their debt to Asset Reconstruction Company (India) Limited (ARCIL) who have issued notice to the Company on 07.11.2015 for winding up u/s433 (e) &434 of the Companies Act, 1956.The Company has disputed the notice with ARCIL and has been legally advised that the demand raised by them is not sustainable.

20. (a) The Company has not recorded cumulative deferred tax assets on account of timing differences as stipulated in Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India in view of uncertainty of future taxable income.

(b) In view of no taxable profits under Income Tax Act, 1961 including section 115 JB for fiscal year 2015-16, no provision for income tax is considered necessary.

21. Leases:

The Company has taken premises on lease under cancellable and non cancellable operating lease arrangements with lease terms ranging from 1 to 3 years, which are subject to renewal thereafter at mutual consent. The cancellable arrangements can be terminated by either party after giving due notice. The lease rent expense recognized during the year amounts to Rs.223.80 lakhs (Previous year:Rs.194.93 lakhs). The future lease payments in respect of non-cancellable operating leases for a period later than one year but not later than 3 years is Rs.-Nil- lakhs as at 31st March, 2016 (Previous year: Rs.65.50 lakhs).

22. Disclosure of Derivative Instruments :

(a) There are no outstanding forward exchange contracts used for hedge against currency exposures as at 31st March, 2016.

(b) Foreign currency exposures that have not been specifically hedged by a derivative instrument or otherwise as at 31st March, 2016 are given below:

23. Going Concern:

Accumulated losses have resulted in erosion of substantial net worth of the Company. However, the financial statements have been prepared on a going concern basis on the strength of continued support from promoters'', bankers / other lenders. Further, the Company is in the process of disposing off some of its non-core fixed assets to reduce its debt and improve its liquidity. The management, considering the future plans for operations and support of the promoters, lenders, business associates and workmen, is hopeful of improved profitability leading to further improvement in its financial position.

24. CNLT, Malaysia:

The Company had given an advance of US$ 890,000 to a related company, CNLT, Malaysia in December 2006 for supply of yarn. As CNLT, Malaysia could not supply the material within the stipulated time, the Company suffered losses and claimed compensation of US$ 360,000 which was paid along with advance in June 2007. On a petition filed by the ex-employees of CNLT, Malaysia (under liquidation), the Hon''ble court of Malaya at Kuala Lumpur in its order dated 13.06.2014 directed the Company to return the entire money of US$ 1.25 million. On appeal against this order by the Company, the Court of Appeal at Malaysia vide its order dated 03.12.2015 set aside the said Order. Thereafter, the Company has received a notice of motion from the Federal Court in the said matter which is pending disposal. No provision against the said motion is considered necessary by the management in view of favorable order.

25. Discontinued Operations:

26. In earlier years, operations of both the Units at Sriganganagar Textile Mill were discontinued. The identified asset being land in both the Units, having net book value of Rs. 149.88 lakhs (Previous year:Rs. 134.58 lakhs) is being carried at book value as expected net realizable value is higher, and is disclosed in Note no. 20.1 as “Land held for disposal”.

27. Company has recognized loss of Rs 23.15 lakhs (Previous year: Rs.101.61 lakhs) as ''Loss from discontinued operations'' and disclosed it separately in the ‘Statement of Profit and Loss''.

28. The letters have been sent to most of the parties for confirmation of the balances under trade receivables, advances and trade payables. However, due to non receipt of the response from some of the parties, the balances from them are subject to confirmations/reconciliation. The impact, if any, subsequent to the confirmation/ reconciliation will be taken in the year of confirmation/reconciliation.

29. In the opinion of the management, the value of assets other than fixed assets and non-current investments, on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

30. Segment Reporting:

(a) Identification of segments

i) Primary Segments

Business segment: The Company''s operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products. Two identified segments are Textiles and Filament yarn. The products considered as a part of Textile segment are cloth and yarn. The products considered as a part of Filament segment are nylon yarn and chips.

ii) Secondary Segment

Geographical Segment: The analysis of geographical segment is based on the geographical location of the customers.

(b) Inter Divisional transfers of goods, as marketable products produced by separate divisions of the Company, for captive consumption are made as if sales were made to third parties at current market prices and are included in turnover.

(c) Unallocable Items:

Corporate income, corporate expenses, interest, capital and reserves are considered as part of unallocable items which are not identifiable to any business segment.

31. Employee Benefits:

(a) Defined Benefit Plan

Gratuity: Payable on separation as per the Employees Gratuity Act @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more.

(b) Defined Contribution Scheme

Company''s employees are covered by Provident Fund, Employees State Insurance and Superannuation scheme etc. to which the Company makes a defined contribution measured as a fixed percentage of salary. During the year, amount of Rs. 1,325.03 lakhs (Previous Year: Rs. 1,312.77 lakhs) have been charged to the Statement of Profit and Loss towards contribution to the above schemes/benefits.

(c) Other Long term Benefits

Employees of the Company are entitled to accumulate their earned/privilege leave up to a maximum of 30 days for workers and 300 days for other employees which is payable/encashable as per the policy on their separation.

32. Figures of the previous year have been rearranged and regrouped, wherever necessary, to conform to current year classification.


Mar 31, 2015

1. No amount has been remitted during the year in foreign currency on account of dividend.

2. Prior period expenses aggregating Rs. 131.83 lakhs (net debit) have been accounted for in the respective heads of account [Previous period: Rs. 49.84 lakhs (net debit)]

3. Corporate guarantee of Rs. 3,580.00 lakhs given to a Financial Institution for term loan availed by JCT Electronics Ltd. was invoked in earlier years before the rehabilitation scheme was sanctioned by the "Board for Industrial and Financial Reconstruction" (BIFR). JCT Electronics Limited made quarterly payments to Institutions in terms of the sanctioned scheme till 31.3.2011. Thereafter at the request of the said Company, the said institution with the consent of all other secured lenders filed a Modified Debt Restructuring Scheme (MDRS) before the BIFR for deferment of over-due quarterly instalments. The invocation of corporate guarantee is under abeyance till the BIFR decides on the same.

4. (a) The Company has not recorded cumulative deferred tax assets on account of timing differences as stipulated in Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India in view of uncertainty of future taxable income.

(b) In view of no taxable profits under Income Tax Act, 1961 including section 115JB for fiscal year 2014-15, no provision for income tax is considered necessary. Adequate provision in respect of Wealth tax has been made in the Accounts.

5. In view of accumulated losses:

(i) No commission is payable to whole time directors.

(ii) No capital redemption reserve has been created during the year.

6. Leases:

The Company has taken premises on lease under cancellable and non cancellable operating lease arrangements with lease terms ranging from 1 to 3 years, which are subject to renewal thereafter at mutual consent. The cancellable arrangements can be terminated by either party after giving due notice. The lease rent expense recognized during the year amounts to Rs. 194.93 lakhs (Previous period: Rs. 92.27 lakhs). The future lease payments in respect of non- cancellable operating leases for a period later than one year but not later than 3 years is Rs. 65.50 lakhs as at 31st March, 2015 (Previous period: Rs.184.90 lakhs).

7. Disclosure of Derivative Instruments :

(a) There are no outstanding forward exchange contracts used for hedge against currency exposures as at 31st March, 2015.

(b) Foreign currency exposures that have not been specifically hedged by a derivative instrument or otherwise as at 31st March, 2015 are given below:

8. Going Concern:

Accumulated losses have resulted in erosion of substantial net worth of the Company. However, the financial statements have been prepared on a going concern basis on the strength of continued support from promoters', bankers / other lenders. Further, the Company is in the process of disposing off some of its non-core fixed assets to reduce its debt and improve its liquidity. The management, considering the future plans for operations and support of the promoters, lenders, business associates and workmen, is hopeful of improved profitability leading to further improvement in its financial position.

9. CNLT, Malaysia:

The Company had given an advance of US$ 890,000 to a related company, CNLT, Malaysia in December 2006 for supply of yarn. As CNLT, Malaysia could not supply the material within the stipulated time, the Company suffered losses and claimed compensation of US$ 360,000 which was paid alongwith advance in June 2007. On a petition filed by the ex-employees of CNLT, Malaysia (under liquidation), the Hon'ble court of Malaya at Kuala Lumpur in its order dated 13.06.2014 directed the Company to return the entire money. The Company also deposited US$ 34,250 during the year towards security to the Company's local advocate as per their legal requirement. The Company has filed an appeal against the said Order with the Courts of Appeals at Malaysia, which is pending disposal. The Company has been legally advised that provision for said contingency of Rs. 788.25 lakhs is not necessary as the appeal against the said Order will most likely be allowed.

10. Discontinued Operations:

11. In earlier years, operations of both the Units at Sriganganagar Textile Mill were discontinued. The identified asset being land in both the Units, having net book value of Rs. 134.58 lakhs (Previous period: Rs. 134.58 lakhs) is being carried at book value as expected net realizable value is higher, and is disclosed in Note no. 19 as "Land held for disposal".

12. Company has recognised loss of Rs. 101.61 lakhs (Previous period : Rs. 51.08 lakhs) as 'Loss from discontinuing operations' and disclosed it separately in the 'Statement of Profit and Loss'.

13. The letters have been sent to most of the parties for confirmation of the balances under trade receivables, advances and trade payables. However, due to non receipt of the response from some of the parties, the balances from them are subject to confirmations/reconciliation. The impact,if any,subsequent to the confirmation/ reconciliation will be taken in the year of confirmation/reconciliation.

14. In the opinion of the management, the value of assets other than fixed assets and non-current investments, on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

15. Related party disclosures (AS-18):

A. List of Related Parties and relationships

(a) Key Management Personnel : Mr. Samir Thapar - Chairman & Managing Director

(b) Associates : JCT Electronics Ltd.

India International Airways Ltd.

Provestment Securities Pvt. Ltd.

KCT Textiles Ltd.

JCT Sports Pvt. Ltd.

(c) Relatives of Key management Personnel:

Mr. M. M. Thapar : Father of Mr. Samir Thapar

Ms. Priya Thapar : Whole Time Director & Sister of Mr. Samir Thapar

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

16. Segment Reporting:

(a) Identification of segments

i) Primary Segments

Business segment: The Company's operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products. Two identified segments are Textiles and Filament yarn. The products considered as a part of Textile segment are cloth and yarn. The products considered as a part of Filament segment are nylon yarn and chips.

ii) Secondary Segment

Geographical Segment: The analysis of geographical segment is based on the geographical location of the customers.

(b) Inter Divisional transfers of goods, as marketable products produced by separate divisions of the Company, for captive consumption are made as if sales were made to third parties at current market prices and are included in turnover.

(c) Unallocable Items:

Corporate income, corporate expenses, interest, capital and reserves are considered as part of unallocable items which are not identifiable to any business segment.

17. Employee Benefits:

(a) Defined Benefit Plan

Gratuity: Payable on separation as per the Employees Gratuity Act @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more.

(b) Defined Contribution Scheme

Company's employees are covered by Provident Fund, Employees State Insurance and Superannuation scheme etc. to which the Company makes a defined contribution measured as a fixed percentage of salary. During the year, amount of Rs. 1312.77 lakhs (Previous period : Rs. 579.53 lakhs) have been charged to the Statement of Profit & Loss towards contribution to the above schemes/benefits.

(c) Other Long term Benefits

Employees of the Company are entitled to accumulate their earned/privilege leave up to a maximum of 30 days for workers and 300 days for other employees which is payable/encashable as per the policy on their separation.

18. Current year figures are not comparable with the figures of the previous period being of six months.

Figures of the previous period have been rearranged and regrouped, wherever necessary, to conform to current year classification.


Mar 31, 2014

1. GENERAL INFORMATION

JCT Limited (the Company) is primarily a manufacturer of cloth and nylon filament yarn. The Company''s manufacturing facilities are located at Phagwara and Hoshiarpur.

2.1 During the period, the Company alloted 11,59,54,059 equity shares at par @ Rs.2.50 per share aggregating to Rs. 2,898.86 lakhs to Foreign Currency Convertible Bond holders in settlement of Foreign currency Convertible Bonds (FCCBs) liability of US$ 12.93 million on preferential basis with a lock in period of 1 year. Out of such shares so allotted, 4,41,95,092 equity shares shall be dematerialised on receipt of post allotment listing approval from Bombay Stock Exchange Limited.

2.2 In the previous period ended 30.09.2013, the Company allotted 8,17,60,000 equity shares at par @ Rs.2.50 per share aggregating to Rs. 2,044 lakhs (Rs. 1,022 lakhs each to a related Company and to secured lending bankers) on preferential basis with a lock in period of 1 year w.e.f. 30.05.2013 in terms of the Corporate Debt Restructuring (CDR) Scheme.

2.3 10,00,000 OPCPS of Rs. 1,000 lakhs are redeemable on 31.12.2016 (date extended from 31.12.2011). 20% of the face value is optionally convertible into equity shares during the currency of OPCPS. They are neither entitled to dividend nor carry any voting right.

2.4 14,00,000 OPCPS of Rs. 1,400 lakhs are redeemable on 26.12.2015 (date extended from 26.12.2010) with the option to convert before that the whole amount into equity shares at a rate to be determined and as permissible under the SEBI guidelines. They are neither entitled to dividend nor carry any voting right.

3.1 During the period, the Company settled FCCBs of US $ 12.93 million by issue of equity shares (Refer note 3.1). Premium of Rs. 1,641.52 lakhs payable on such redemption has been written back and added to share premium account.

3.2 Redemption premium of US$ 2.51 million (Previous period: US$ 5.08 million) equivalent to Rs. 1,133.90 lakhs (Previous period: Rs. 2,294.92 lakhs) provided in share premium account on matured 2.5% FCCB of US$ 12.49 millions (Previous period: US$ 25.42 millions) in the earlier years has been reinstated at Rs. 1,516.71 lakhs (Previous period: Rs. 3,227.18 lakhs) and the resultant exchange fluctuation of Rs. 68.95 lakhs thereon has been adjusted in the share premium account.

4.1.1 Term Loans from Banks :

a. Rs.14,522.08 lakhs (Previous period: Rs. 15,149.61 lakhs) and interest accrued & due of Rs. 175.26 lakhs (Previous period: Rs. 112.76 lakhs):

Secured by hypothecation of all the moveable properties including plant & machinery and accessories etc. (both present & future) and also equitable mortgage, by deposit of title deeds, of all the immoveable properties (both present & future) including land, factory buildings, structures, erections, constructions and/or further constructions to be made thereon pertaining to Textile and Filament Units. Further, these loans are additionally secured by the personal guarantees of Chairman and Managing Director and Sh. M.M.Thapar. Term loans from Allahabad Bank are additionaly secured by first charge by way of an equitable mortgage over the land admeasuring around 9 acres and structures thereon at Phagwara.

b. Rs. 934.76 lakhs (Previous period: Rs. 918.82 lakhs) and interest accrued & due of Rs. 9.55 lakhs (Previous period : Rs.5.78 lakhs):

Secured by hypothecation of specific plant & machinery and the personal guarantees of Chairman and Managing Director and Sh. M.M.Thapar.

c. Working capital term loans- Rs. 3,436.31 lakhs (Previous period: Rs. 3,520.78 lakhs) and interest accrued & due of Rs. 40.47 lakhs (Previous period: Rs. 24.51 lakhs):

Secured by first charge ranking pari-passu inter-se amongst member banks on all the stocks of raw materials, stock in process, semi-finished and finished goods, stores & spares, bills receivable and books debts and all other moveables current assets both present and future pertaining to Company''s Textile and Filament Units.These are also secured by second charge over the fixed assets pertaining to abovesaid Units and by personal guarantees of Chairman and Managing Director and Shri M M Thapar. Working capital term loans from Allahabad Bank are additionaly secured by first charge by way of an equitable mortgage over the land admeasuring around 9 acres and structures thereon at Phagwara.

d. Rs. 26.45 lakhs (Previous period Rs. 21.66 lakhs):

Secured against hypothecation of specific vehicles.

4.1.2 Term Loans from Others :

Rs. 0.46 lakhs (Previous period: Rs. 2.23 lakhs) Secured against hypothecation of specific vehicles etc.

5.1.3 Securities specified above in respect of term loans, working capital term loans and funded interest on term loans approved in the previous period under the Corporate Debt Restructuring (CDR) Scheme have already been modified in terms of the Master Restructuring Agreement and other agreements executed on 18.01.2013. However, charge has not been filed due to restrainment order of the Hon’ble High Court of Punjab & Haryana at Chandigarh. (refer note 31.8)

4.2 Default in repayment of FCCBs (included under current maturities as on 31.03.2014 in note no.10)

"The Company raised US$ 30 million through issue of unsecured Foreign Currency Convertible Bonds (FCCBs) on 08.04.2006 to part finance the capital expenditure. FCCBs of US$ 4.58 million were converted into equity shares during the tenure and US$ 12.93 million were settled by issue of equity shares during the period ended 31.03.2014. The balance outstanding of US$ 12.49 million (equivalent to Rs. 7,555.20 lakhs) along with premium of 20.075% (US$ 2.51 million equivalent to Rs. 1,516.71 lakhs) became due for redemption on 08.04.2011. The Company has not been able to redeem such matured FCCBs due to paucity of cash funds. Further, provision of Rs. 1,622.36 lakhs towards yield protection on the unpaid amount is not considered necessary as this will not be payable once the restructuring/settlement of FCCBs is completed."The Bank of New York, trustees of the FCCBs, filed a winding up petition in the Hon’ble High Court of Punjab & Haryana on 29th September, 2012, on behalf of the FCCBs holders, which is pending for disposal. During the period, the Company has settled US$ 12.93 million FCCBs by issue of 115,954,059 equity shares of Rs. 2.50 each at par. Based on legal opinion, the capital gain of Rs. 5,082.50 lakhs has been shown in Capital Reserve under ''Reserves & Surplus''." "Other bondholders of FCCBs are pursuing the matter in the court for winding up of the Company for non payment of the dues. The Company has been advised that the merit of the case do not warrant winding up.

Status of Fixed deposits as at 31st March, 2014

Since 01.10.2012 the Company is not accepting and renewing public deposits u/s 58A of the Companies Act, 1956 and repaying the existing deposits as and when they became due and claimed. However during the period, there have been some delays including of clearance of cheques aggregating to Rs. 328.46 lakhs as at 31st March, 2014 which have since been cleared.

5 Security deposits includes Rs. 1,948 lakhs (Previous period:Rs. 1,948 lakhs) against ''Leave & License'' of certain properties with licensees'' option to buy at an agreed price in which eventuality the security deposit would be adjusted against the sale proceeds.

6 Secured Working Capital Loans have been taken from consortium of scheduled banks and are secured by first charge ranking pari-passu inter-se amongst member banks on all the stocks of raw materials, stock in process, semi-finished and finished goods, stores & spares, bills receivable and books debts and all other moveables current assets both present and future pertaining to Company''s Textile and Filament Units. These are also secured by second charge over the fixed assets pertaining to abovesaid Units and by personal guarantees of Chairman and Managing Director and Shri M M Thapar. Working capital loans from Allahabad Bank are additionaly secured by first charge by way of an equitable mortgage over the land admeasuring around 9 acres and structures thereon at Phagwara.(Refer note 5.1.3 - for creation of charge).

7 There is no amount outstanding to suppliers under Micro, Small and Medium Enterprises Development Act, 2006 based on available information with the Company.

8.1 There is no amount due and outstanding to be credited to Investors Education & Protection Fund.

8.2 Includes for machinery and civil works Rs. 42.57 lakhs (Previous period : Rs. 31.61 lakhs)

9.1 (a) The Company had revalued its certain freehold land held at Tehsil Phagwara on 01.04.2005 and the resultant revalued amount of Rs. 10,417.70 lakhs was substituted for the historical cost in the gross block of land, net block as at 31.03.2014 is Rs. 10,417.70 lakhs.(Previous period: Rs. 10,417.70 lakhs.)

(b) The Company had revalued its freehold land at Village Chohal, Hoshiarpur on 15.03.2010 and the resultant revalued amount of Rs. 4,403.91 lakhs was substituted for the historical cost in the gross block of land, net block as at 31.03.2014 is Rs. 4,326.35 lakhs (Previous period: Rs. 4,326.35 lakhs)

(c) The Company had revalued its building at Tehsil phagwara on 30.04.1985 and the resultant revalued amount of Rs. 738.41 lakhs was added to the historical cost in the gross block of building of Rs. 1,077.32 lakhs.

"The aforesaid revaluations were done based on reports of external valuers at replacement / market value which resulted in net increase of Rs. 15,560.02 lakhs (Previous period: Rs. 15,560.02 lakhs) in the gross block of fixed assets."

9.2 (a) Government grant of Rs. 416.54 lakhs received in 2008-09 was reduced against the cost of specific plant and machinery.

(b) The Company has continued to adjust the foreign currency exchange variation on amounts borrowed (FCCBs) for acquisition of fixed assets to the carrying cost of fixed assets as the related borrowings originated in the year 2006, which is in accordance with provision of the Company''s Act 1956, read with notification of the Government of India. This has resulted in decrease in fixed assets by Rs. 539.05 lakhs (Previous period: increase of Rs. 2976.68 lakhs), with corresponding decrease (Previous period: increase) in FCCBs borrowing during the period.

10.1 In respect of the Company''s investment in JCT Electronics Ltd.:

(a) The Company has given an undertaking to a financial institution and a bank of JCT Electronics Ltd. that the Company would not dispose off, pledge, charge, or create any lien, assign 39,33,000 equity shares having face value of Re. 1 each.

(b) The Company has pledged 42,87,000 equity shares having a face value of Re. 1 each with a financial institution for financial facility availed by JCT Electronics Ltd.

10.2 In respect of the Optionally Convertible Zero Rate Debentures, the Company has given moratorium of 5 years on repayment and they are redeemable as under:

(a) Redeemable in two equal annual instalments starting from 31.03.2019 instead of 31.03.2014.

(b) Redeemable in seven equal annual instalments starting from 31.03.2019 instead of 31.03.2014.

11 Includes Rs. 3.85 lakhs (Previous period: Rs. 3.85 lakhs) earmarked for redemption of preference shares and Rs. 2.58 lakhs (Previous period: Rs. 4.03 lakhs) against employees'' security deposits.

12.1 The Company had revalued its freehold land at Sriganganagar on 30.4.1985 and the resultant revalued amount of Rs. 134.58 lakhs was substituted for the historical cost in the gross block of land, net block as at 31.03.2014 is Rs. 134.58 lakhs (Previous period: Rs. 134.58 lakhs)

12.2 Others comprise receivables on account of export incentives, CER receivable, DEPB receivable, interest receivable, rent receivable, claims etc.

13 Represents the difference between excise duty on opening and closing stock of finished goods.

14.1 No amount has been remitted during the period in foreign currency on account of dividend.

14.2 Prior period expenses aggregating Rs. 49.84 lakhs (net debit) have been accounted for in the respective heads of account [Previous period: Rs. 50.54 lakhs (net debit)]

15 Additional notes to the financial statements for the period ended 31 st March, 2014.

15.1 Contingent liabilities and commitments not provided for: (Rs. in lakhs)

Particulars As at As at 31.03.2014 30.09.2013 (I) Contingent Liabilities (a) Claims against the Company not acknowledged as debts 76.87 20.78 (b) Guarantees given by the bankers on behalf of the Company 284.92 336.31 (c) Unutilised letter of credit - 28.40 (d) Disputed liabilities not adjusted as expenses in the Accounts for various years being in appeals towards: * Sales tax 1,241.48 1,681.30 * Excise Duty 4,207.70 4,265.38 * Stamp Duty 187.72 187.72 * Custom Duty 186.05 186.05 * Entry Tax 1,934.14 1,488.08 * Others 217.04 212.24 Total 7,974.13 8,020.77

(II) Commitments (a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts (net of advances) 514.56 332.06 (b) Export obligation against import of machinery under EPCG Scheme 198.24 1,583.56

15.2 Corporate guarantee of Rs. 3,580.00 lakhs given to a Financial Institution for term loan given to JCT Electronics Ltd. was invoked in earlier years. JCT Electronics Limited was making quarterly payments to Institution in terms of the Scheme sanctioned by the "Board for Industrial and Financial Reconstruction" (BIFR) till 31.3.2011. Thereafter the said institution with the consent of all the secured lenders whose interest were effected had filed a Modified Debt Restructuring Scheme (MDRS) before the BIFR covering the deferment of over-due quarterly instalments. The invocation of corporate guarantee is under abeyance till the approval of the MDRS.

15.3 (a) The Company has not recorded cumulative deferred tax assets on account of timing differences as stipulated in Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India in view of uncertainty of future taxable income.

(b) In view of no taxable profits for fiscal year 2013-14, no provision for Income Tax as per the provisions of the Income tax Act, 1961 is considered necessary. Adequate provision in respect of Wealth tax has been made in the Accounts.

15.4 In view of accumulated losses:

(i) No commission is payable to whole time directors.

(ii) No capital redemption reserve has been created during the period.

15.5 Leases:

The Company has taken premises on lease under cancellable and non cancellable operating lease arrangements with lease terms ranging from 1 to 3 years, which are subject to renewal thereafter at mutual consent. The cancellable arrangements can be terminated by either party after giving due notice. The lease rent expense recognized during the period amounts to Rs.92.27 lakhs (Previous period: Rs.242.96 Lakhs). The future lease payments in respect of non-cancellable operating leases for a period later than one year but not later than 3 years is Rs. 184.90 lakhs as at 31 st March, 2014 (Previous period: Rs.89.46 lakhs).

15.6 Disclosure of Derivative Instruments :

(a) There are no outstanding forward exchange contracts used for hedge against currency exposures as at 31 st March, 2014.

(b) Foreign currency exposures that have not been specifically hedged by a derivative instrument or otherwise as at 31 st March, 2014 are given below:

15.7 Going Concern:

Accumulated losses have resulted in erosion of substantial net worth of the Company. However, the financial statements have been prepared on a going concern basis on the strength of continued support of the promoters, bankers/ other lenders. Further,with the implementation of restructuring of Company''s debt with its lending bankers under the Corporate Debt Restructuring Cell (CDR), the performance of the Company is expected to continue to improve.In addition,release of additional working capital fund sanctioned under CDR Scheme would further improve the liquidity position and operations of the Company. The management, considering the future plan for operations and support of the promoters, lenders, business associates and workmen is hopeful of improved profitability leading to improvement in its financial position.

15.8 Corporate debt restructuring (CDR)

The restructuring of the Company''s debts with its lending bankers under the Corporate Debt Restructuring (CDR) Scheme mechanism have been implemented by the banks. The promoters and the Company have complied with the conditions of the scheme.

However, additional working capital funds of Rs. 4,577 lakhs have not yet been released by the banks as stipulated in the CDR Scheme due to order dated 17.10.2012 of the Hon''ble High Court of Punjab & Haryana at Chandigarh and upheld by the Hon''ble Supreme Court restricting creation of charge on the assets of the Company on the petition filed by the Trustee of Foreign Currency Convertible Bond holders to wind up the Company due to default in repayment of their dues.

15.9 Discontinued Operations:

15.9.1 In earlier years, operations of both the Units at Sriganganagar Textile Mill were discontinued. The identified asset being land in both the Units, having net book value of Rs. 134.58 lakhs (Previous period: Rs. 134.58 lakhs) is being carried at book value as expected net realizable value is higher, and is disclosed in ''Note no. 20'' as "Land held for disposal".

15.9.2 Company has recognised loss of Rs. 51.08 lakhs (Previous period: Rs. 673.59 lakhs) as ''Loss from discontinuing operations'' and disclosed it separately in the ''Statement of Profit & Loss''.

15.9.3 Disclosures as required under ''Accounting Standard 24 - Discontinuing Operations'' in respect of Sriganganagar Unit I and II are as under:

15.10 The letters have been sent to most of the parties for confirmation of the balances under trade receivables, advances and trade payables. However, due to non receipt of the response from some of the parties, the balances from them are subject to confirmations/reconciliation. The impact,if any, subsequent to the confirmation/ reconciliation will be taken in the year of confirmation/reconciliation.

15.11 In the opinion of the management, the value of assets other than fixed assets and non-current investments, on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

15.12 Related party disclosures (AS-18):

List of Related Parties and relationships

(a) Key Management Personnel : Mr. Samir Thapar - Chairman & Managing Director

(b) Associates : JCT Electronics Ltd. India International Airways Ltd. Provestment Securities Pvt. Ltd. KCT Textiles Ltd. JCT Sports Pvt. Ltd.

(c) Relatives of Key management Personnel:

Mr. M. M. Thapar : Father of Mr. Samir Thapar Ms. Priya Thapar : Sister of Mr. Samir Thapar

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

(a) Identification of segments

i) Primary Segments

Business segment: The Company''s operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products. Two identified segments are Textiles and Filament yarn. The products considered as a part of Textile segment are cloth and yarn. The products considered as a part of Filament segment are nylon yarn and chips.

ii) Secondary Segment

Geographical Segment: The analysis of geographical segment is based on the geographical location of the customers.

(b) Inter Divisional transfers of goods, as marketable products produced by separate divisions of the Company, for captive consumption are made as if sales were made to third parties at current market prices and are included in turnover.

(c) Unallocable Items:

Corporate income, corporate expenses, interest, capital and reserves are considered as part of unallocable items which are not identifiable to any business segment.

15.13 Employee Benefits:

(a) Defined Benefit Plan

Gratuity: Payable on separation as per the Employees Gratuity Act @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more.

(b) Defined Contribution Scheme

Company''s employees are covered by Provident Fund, Employees State Insurance and Superannuation scheme etc. to which the Company makes a defined contribution measured as a fixed percentage of salary. During the period, amount of Rs. 579.53 lakhs (Previous period : Rs. 1,485.96 lakhs) have been charged to the Statement of Profit & Loss towards contribution to the above schemes/benefits.

(c) Other Long term Benefits

Employees of the Company are entitled to accumulate their earned/privilege leave up to a maximum of 30 days for workers and 300 days for other employees which is payable/encashable as per the policy on their separation.

(d) Other disclosures as required under Accounting Standard-15 (Revised 2005) on "Employee Benefits"

16. Current period''s figures being for six months are not comparable with the figures of the previous period being of eighteen months. Figures of the previous period have been rearranged and regrouped,wherever necessary, to conform to current period classification.


Sep 30, 2013

1. GENERAL INFORMATION

JCT Limited (the Company) is primarily a manufacturer of cloth and nylon filament yarn. The Company''s manufacturing facilities are located at Phagwara and Hoshiarpur.

2.1 No amount has been remitted during the period in foreign currency on account of dividend.

2.2 Prior period expenses aggregating Rs.50.54 lakhs (net debit) have been accounted for in the respective heads of account [Previous Year: Rs. 52.75 lakhs (net debit)]

2.3 Corporate guarantee of Rs. 3,580.00 lakhs given to a Financial Institution for term loan given to JCT Electronics Ltd. was invoked in earlier years. JCT Electronics Limited was making quarterly payments to Institution in terms of the Scheme sanctioned by the "Board for Industrial and Financial Reconstruction" (BIFR) till 31.3.2011.Thereafter the said institution with the consent of all the secured lenders whose interest were effected had filed a Modified Debt Restructuring Scheme (MDRS) before the BIFR covering the deferment of over-due quarterly instalments. The invocation of corporate guarantee is under abeyance till the approval of the MDRS.

2.4 (a) The Company has not recorded cumulative deferred tax assets on account of timing differences as stipulated in Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India in view of uncertainty of future taxable income.

(b) In view of no taxable profits, no provision for Income Tax as per the provisions of the Income tax Act, 1961 is considered necessary. Adequate provision in respect of Wealth tax has been made in the Accounts.

2.5 In view of accumulated losses: (i) No commission is payable to whole time director. (ii) No capital redemption reserve has been created during the period.

2.6 Leases:

The Company has taken premises on lease under cancellable and non cancellable operating lease arrangements with lease terms ranging from 1 to 3 years, which are subject to renewal thereafter at mutual consent. The cancellable arrangements can be terminated by either party after giving due notice. The lease rent expense recognized during the period amounts to Rs.242.96 lakhs (Previous Year: Rs.117.64 Lakhs). The future lease payments in respect of non-cancellable operating leases for a period later than one year but not later than 5 years is Rs.89.46 lakhs as at 30th September, 2013 (Previous year: Rs.100.85 lakhs).

2.7 Going Concern:

Continuing and accumulated losses have resulted in entire erosion in net worth of the Company. However, the financial statements have been prepared on a going concern basis on the strength of continued support of the promoters, bankers/ other lenders. Further, during the period the restructuring of Company''s debt with its lending bankers has been partially implemented under the Corporate Debt Restructuring (CDR) mechanism. Once the CDR Scheme is fully implemented, liquidity position and the operations of the Company are likely to improve. The management, considering the future plan for operations and support of the promoters, lenders, business associates and workmen is hopeful of improved profitability leading to improvement in its financial position.

2.8 Corporate debt restructuring (CDR)

During the period,Restructuring of the Company''s debts with its lending bankers was approved under the Corporate Debt Restructuring (CDR) Scheme mechanism. The Scheme has been implemented by most of the banks and the impact thereof has been taken in the Accounts to the extent as advised by such banks. Further, in terms of the Scheme;

– one of the Promoter companies, namely Provestment Securities Private Limited, contributed additional Rs.1022 lakhs in the form of equity capital and Rs.578 lakhs as subordinate debt.

– Mr. Samir Thapar - Chairman & Managing Director, Provestment Securities Private Limited and KCT Textiles Limited (Promoter companies) pledged their entire shareholdings in the Company to the lenders.

– Mr. Samir Thapar and Mr. M M Thapar have given their personal guarantees to the lenders. – Lenders'' sacrifice of Rs.1622 lakhs has been settled by way of issuance of equity shares of Rs.1022 lakhs at par and the balance amount of Rs.600 lakhs through funding to make the CDR Scheme Net Present Value protected.

However, additional working capital funds of Rs. 4577 lakhs have not been provided by the banks as stipulated in the CDR Scheme due to order dated 17.10.2012 of the Hon''ble High Court of Punjab & Haryana at Chandigarh and upheld by the Hon''ble Supreme Court restricting creation of charge on the assets of the Company on the petition filed by the Trustee of Foreign Currency Convertible Bond Holders to wind up the Company due to default in repayment of their dues.

2.9 Discontinued Operations:

2.9.1 In earlier years, operations of both the Units at Sriganganagar Textile Mill were discontinued. The identified asset being land in both the Units, having net book value of Rs.134.58 lakhs (Previous year: Rs.301.24 lakhs) and is being carried at book value as expected net realizable value is higher, and is disclosed in Note 20.1 as "Asset held for disposal".

2.9.2 Company has recognised loss of Rs.673.59 lakhs (Previous Year: Rs. 142.89 lakhs) as ''Loss from discontinuing operations'' and disclosed it separately in the ''Statement of Profit & Loss''.

2.10 Pursuant to the losses in the current accounting period, accumulated losses as on 30th September,2013 stood at Rs 25,795.69 lakhs resulting in erosion of entire net worth of the Company thereby attracting provisions of ''Sick Industrial Companies (Special Provisions) Act 1985''. Accordingly, requisite steps are being taken as envisaged under the said Act. However as the Company, has approval to convert 51% of the value of its Foreign Currency Convertible Bonds (FCCBs) into equity capital, made profits during the last quarter ended 30th September, 2013 and there is no default in the repayment of its financial obligations to Banks, the Company is confident that its net worth will exceed its accumulated losses within a reasonable time.

2.11 The letters have been sent to almost all the parties for confirmation of the balances under trade receivables, advances and trade payables. However, due to non receipt of the response from the parties, the balances are subject to confirmations/reconciliation in some cases.The impact,if any,subsequent to the confirmation/ reconciliation will be taken in the year of confirmation/reconciliation.

2.12 In the opinion of the management, the value of assets other than fixed assets and non-current investments, on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

2.13 Segment Reporting:

(a) Identification of segments

i) Primary Segments

Business segment: The Company''s operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products. Two identified segments are Textiles and Filament yarn. The products considered as a part of Textile segment are cloth and yarn. The products considered as a part of Filament segment are nylon yarn and chips.

ii) Secondary Segment

Geographical Segment: The analysis of geographical segment is based on the geographical location of the customers.

(b) Inter Divisional transfers of goods, as marketable products produced by separate divisions of the Company, for captive consumption are made as if sales were made to third parties at current market prices and are included in turnover.

2.14 Employee Benefits:

(a) Defined Benefit Plan

Gratuity: Payable on separation as per the Employees Gratuity Act @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more.

(b) Defined Contribution Scheme

Company''s employees are covered by Provident Fund, Employees State Insurance and Superannuation scheme etc. to which the Company makes a defined contribution measured as a fixed percentage of salary. During the period , amount of Rs.1485.96 lakhs (Previous year: Rs.832.34 lakhs) have been charged to the Statement of Profit & Loss towards contribution to the above schemes/benefits.

(c) Other Long term Benefits

Employees of the Company are entitled to accumulate their earned/privilege leave upto a maximum of 30 days for workers and 300 days for other employees which is payable /encashable as per the policy of on their separation.

Other disclosures as required under Accounting Standard-15 (Revised 2005) on ''Employee Benefits'' are as under:

3. Current period figures being 18 months are not comparable with the figures of the previous year.

Figures of the previous year have been rearranged and regrouped,wherever necessary, to conform to current period classification.


Mar 31, 2012

1. GENERAL INFORMATION

JCT Limited (the Company) is primarily a manufacturer of cloth and nylon filament yarn. The Company's manufacturing facilities are located in Phagwara and Hoshiarpur.

2.1 10,00,000 OPCPS of Rs.1,000 lakhs are redeemable on 31.12.2016 (date extended from 31.12.2011). 20% of the face value is optionally covertible into equity shares during the currency of OPCPS.They are neither entitled to dividend nor carry any voting right.

2.2 1,400,000 OPCPS of Rs.1,400 lakhs are redeemable on 26.12.2015 (date extended from 26.12.2010) with the option to convert before that the whole amount into equity shares at a rate to be determined and as permissble under the SEBI guidelines.They are neither entitled to dividend nor carry any voting right.

3.1 "Redemption premium of US$ 5.08 million equivalent to Rs.2294.92lakhs (Previous year:Rs.2294.92 lakhs) fully provided in share premium account on 2.5% FCCB of US $ 25.42 millions has been reinstated at Rs 2619.79 lakhs as at 31.03.12 and the resultant exchange fluctuation has been adjusted in the share premium account.

(b) FCCB

Company raised US$ 30 million through issue of 2.5% unsecured FCCBs on 8.4.2006. FCCBs of US$ 4.58 million stood converted into equity shares in earlier years and the balance of US$ 25.42 million (equivalent to Rs.13,098.93 lakhs) became due for redemption on 08-04-2011 alongwith premium of 20.075% (US$ 5.08 million equivalent to Rs.2,619.79 lakhs). The Company could not redeem the same due to paucity of cash funds. Further, provision of Rs.924.78 lakhs towards yield protection on the unpaid amount is not considered necessary as this will not be payable once the restructuring is completed considering the changes in economic scenario. In the meantime, the Bank of New York Mellon, Trustee has filed winding up petition before the Hon'ble High Court of Punjab and Haryana at Chandigarh on 29th September,2012, which is pending hearing /disposal. In the light of ongoing talks with some of the major bond holders and the merit of the petition,The Company does not anticipate any adverse outcome of the said litigation.

4.1 Secured Working Capital Loans have been taken from consortium of scheduled banks and are secured by first charge ranking pari-passu inter-se amongst member banks on all the stocks of raw materials, stock in process, semi-finished and finished goods, stores and spares, bills receivable and books debts and all other movables current assets both present and future pertaining to Company's Textile and Filament Units. These are also secured by second charge over the fixed assets pertaining to abovesaid Units and by personal guarantees of Chairman and Managing Director and Sh. M M Thapar. Working Capital Loans from Allahabad Bank are additionally secured by First Charge by way of an equitable mortgage over the land admeasuring around 9 acres and structurres thereon at Phagwara.

4.2 Secured loans from other is secured against pledge of shares held under Current Investments of the company - Refer Note 15(a)i.

5.1 There is no amount due and outstanding to be credited to Investors Education & Protection Fund.

5.2 Includes for machinery and civil works Rs.4.53 lakhs (Previous Year : Rs. 36.40 lakhs)

6.1 (a) The Company had revalued its certain freehold land held at Tehsil Phagwara on 01.04.2005 and the resultant revalued amount of Rs. 10,417.70 lakhs was substituted for the historical cost in the gross block of land,net block as at 31.03.12 is Rs 10,417.70 lahks.

(b) The Company had revalued its freehold land at Village Chohal, Hoshiarpur on 15.03.2010 and the resultant revalued amount of Rs.4,403.91 lakhs was substituted for the historical cost in the gross block of land,net block as at 31.3.12 is Rs 4359.66 lakhs.

(c) The Company had revalued its certain freehold land at Sriganganagar on 30.4.85 and the resultant revalued amount of Rs.134.58 lakhs was substituted for the historical cost in the gross block of land, net block as at 31.3.12 is Rs. 50.19 lakhs.

(d) During the year ended 31.3.2012, the company had adjusted Rs.44.09 lakhs relating to Filament unit, Hoshiarpur from revaluation reserve against sale of land.

(e) The company had revalued its building at Tehsil phagwara on 30.4.85 and the resultant revalued amount of Rs.738.41 lakhs was added to the historical cost in the gross block of building of Rs.1077.32 lakhs.

"The aforesaid revaluations were done based on reports of external valuers at replacement / market value which resulted in net increase of Rs.15694.60 lakhs in the gross block of fixed assets."

6.2 (a) Government grant of Rs. 416.54 lakhs received in 2008-09 was reduced against the cost of specific plant and machinery.

(b) The Company has continued to adjust the foreign currency exchange variation on amounts borrowed(FCCBs) for acquisition of fixed assets to the carrying cost of fixed assets as the related borrowings originated in the year 2006, which is in accordance with provisions of the company's Act 1956, read with notifications of the Government of India. This has resulted in increase in fixed assets by Rs.1624.33 lakhs (previous year decrease of Rs 111.85 lakhs), with corresponding increase in FCCBs borrowings during the year.

6.3 Capital work in progress includes under noted pre-operative expenditure pending allocation on commencement of commercial production:

7.1 In respect of the Company's investment in JCT Electronics Ltd.:

(a) The Company has given an undertaking to a financial institution and a bank of JCT Electronics Ltd. that the Company would not dispose off, pledge, charge, or create any lien, assign 39,33,000 equity shares having face value of Re.1 each.

(b) The company has pledged 42,87,000 equity shares having a face value of Rs.1/- each with a financial institution for financial facility availed by JCT Electronics Ltd.

7.2 Though Rs.597.60 lakhs was redeemable on 31.03.2012, however moratorium of 2 years has been given for repayment of whole amount which is now redeemable from 31.03.2014 onwards in two annual equal instalments.

7.3 Though Rs.287.24 lakhs was redeemable on 31.03.2012, however a moratorium of 2 years has been given for repayment of whole amount which is,now redeemable from 31.03.2014 onwards in seven annual equal instalments.

7.4 Provision for shortfall of Rs. 199.38 Lakhs (previous year Rs. 127.09 lakhs) in the aggregate market value of quoted investments as compared to the book value is not considered necessary as in the view of the management, there is no permanent diminution in value of investment except to the extent for which adequate provision is already made in the accounts.

8.1 Includes Rs.3.79 lakhs (Previous Year: Rs.3.80 lakhs) earmarked for redemption of preference shares and Rs.6.08 lakhs ( Previous Year: Rs 7.31 lakhs) against employees' security deposits.

8.2 Includes fixed deposits of Rs.75 lakhs maturing on 20.03.2013 (Previous year: Rs.150 lakhs maturing on 20.03.2012)

9.1 Others comprise receivables on account of export incentives, CER receivable, DEPB receivable, interest receivable, rent receivable, claims etc.

10.1 No amount has been remitted during the year in foreign currency on account of dividend.

10.2 Prior period expenses aggregating Rs. 52.75 lakhs (net debit) have been accounted for in the respective heads of account (Previous Year: 15.30 lakhs (net debit.)

11. Additional notes to the financial statements for the year ended 31st March, 2012.

11.1 Contingent liabilities and commitments not provided for:

(Rs. In Lakhs)

Particulars 31.03.2012 31.03.2011

(I) Contingent Liabilities

(a) Claims against the Company not acknowledged as debts. 19.38 18.47

(b) Guarantees given by the bankers on behalf of the Company 205.28 229.21

(c) Unutilised letter of credit 24.80 166.31

(d) Disputed liabilities not adjusted as expenses in the Accounts for various ( years being in appeals towards:

- Sales tax 735.02 454.46

- Income tax 83.04 120.87

- Excise Duty 2,422.80 2,363.51

- Stamp Duty 187.72 187.72

- Custom Duty 186.05 186.05

- Entry Tax 351.82 16.37

- Others 228.46 218.70

- Total 4,194.91 3,547.68

(II) Commitments

(a) Estimated amount of contracts remaining to be executed on Capital 154.59 483.76 (Account and not provided for in the accounts (net of advances)

(b) Export obligation against import of machinery under EPCG Scheme 13,590.00 6,151.12





11.2 Corporate guarantee of Rs. 3,580.00 lakhs given to a Financial Institution for term loan given to JCT Electronics Ltd. was invoked in earlier years. JCT Electronics Limited was making quarterly payments to Institution in terms of the Scheme sanctioned by the "Board for Industrial and Financial Reconstruction" (BIFR) till 31.3.2011. Thereafter the said institution with the consent of all the secured lenders whose interests were effected had filed a Modified Debt Restructuring Scheme (MDRS) before the BIFR covering the deferment of over-due quarterly instalments. The invocation of corporate guarantee is under abeyance till the approval of the MDRS.

11.3 (a) The Company has not recorded cumulative deferred tax assets on account of timing differences as stipulated in Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India in view of uncertainty of future taxable income.

(b) In view of no taxable profits, no provision for Income Tax as per the provisions of the Income tax Act, 1961 is considered necessary. Adequate provision in respect of Wealth tax has been made in the Accounts.

11.4 In view of accumulated losses:

(i) No commission is payable to whole time directors.

(ii) No capital redemption reserve has been created during the year.

11.5 Leases:

The Company has leased facilities under cancellable and non cancellable operating lease arrangements with a lease terms ranging from 1 to 3 years, which are subject to renewal thereafter at mutual consent. The cancellable arrangements can be terminated by either party after giving due notice. The lease rent expense recognized during the year amounts to Rs. 117.64 lakhs (Previous Year: Rs. 84.73 Lakhs). The future lease payments in respect of non- cancellable operating leases for a period later than one year but not later than 5 years is Rs. 100.85 lakhs as at 31st March, 2012 (Previous year Rs.103.80 lakhs).

11.6 Going Concern:

Accumulated losses have resulted in substantial erosion in net worth of the Company. However, the financial statements have been prepared on a going concern basis on the strength of continued support of the promoters, bankers/ other lenders. Further, the restructuring of Company's debts with its bankers has been approved under Corporate Debt Restructuring Cell (CDR) mechanism in its meeting held on 12/09/2012 as per LOA dated 21/09/2012 which shall be implemented after completing all the conditions stipulated therein and the impact thereof as such shall be given in the accounts on its fulfilment of all the formalities/conditions. The management, considering the future plans for operations and support of the promoters, lenders, business associates and workmen is hopeful of improved profitability leading to improvement in its financial position.

11.7 Discontinued Operations:

11.7.1 The operations at Unit-I of Sriganganagar Textile Mill were discontinued since 16.11.2009. The identified asset being land having net book value of Rs. 84.65 lakhs is carried at the net book value as expected net realizable value is higher, and is disclosed in Note No.20.1 as 'Assets held for disposal'. Advances of Rs. 421.50 lakhs received from the buyers of the asset are included in other Current Liabilities to be adjusted pending completion of legal formalities.

11.7.2 During the year, operations at Unit-II of Sriganganagar Textile Mill were discontinued. The Company entered into an agreement with the workers unions pursuant to which full and final dues of some of the workers have been settled and paid off. Company also entered into agreement for disposal of the assets of the Unit except Land and Building. The identified fixed assets pending disposal having net book value of Rs. 216.59 lakhs and inventory of Rs.61.52 lakhs are carried at the net book value, expected net realizable value being higher, and are disclosed in Note No.20.1 and 16.2 respectively as 'Assets held for disposal'. Advances of Rs.180 lakhs received from a buyer of these assets are included in other Current Liabilities to be adjusted on sale of assets.

11.7.3 Company has recognised loss of Rs. 142.89 lakhs as 'Loss from discontinuing Operations' and disclosed it separately in the 'Statement of Profit & Loss'. In earlier years results of the Unit were included under 'Textile Segment'.

11.8 During the year the Company sold its entire shareholding in its subsidiary company Rajdhani Trading Company Limited for a total consideration of Rs. 5.01 lakhs. Loss of Rs. 60.70 lakhs thereon has been shown separately in the 'Statement of Profit & Loss' as an Exceptional Loss.

11.9 Pursuant to the losses in the current year, accumulated losses as on 31.03.2012 exceed fifty percent of the peak net worth of the Company during preceding four financial years attracting provisions of 'Sick Industrial Companies (Special Provisions) Act, 1985'. Accordingly, requisite steps are being taken as envisaged under the said Act including intimation to the 'Board for Industrial and Financial Reconstruction'.

11.10 The letters have been sent to almost all the parties for confirmation of the balances under trade receivables, advances and trade payables, however, due to non receipt of the response from the parties, the balances are subject to confirmations/reconciliation in some cases. The impact, if any, subsequent to the confirmation/reconciliation will be taken in the year of confirmation/ reconciliation.

11.11 During the year, the company made an interest-free security deposit of Rs. 1150 lakhs to an associate company. The said deposit was made due to the non-fulfillment of a specific obligation stipulated in an agreement entered into by the Company in the year 2008 with the said Associate Company. Subsequent to the year end, the deposit has been repaid in full to the company by the said associate company. With respect to the applicability of the provisions of section 295 and/or 372A of the Companies Act, 1956, the Company has been legally advised that considering the nature of transaction and the fact that the entire deposit has been repaid, any applicable enabling penal clauses of the aforesaid sections, if any, are unlikely to be material.

11.12 In the opinion of the management, the value of assets other than fixed assets and non-current investments, on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

Note: Figures in respect of Rajdhani Trading Company Limited have not been given since it ceased to be a wholly owned subsidiary company w.e.f.14th March 2012.

11.13 Segment Reporting:

(a) Identification of segments

i) Primary Segments

Business segment: The Company's operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products. Two identified segments are Textiles and Filament yarn. The products considered as a part of Textile segment are cloth and yarn. The products considered as a part of Filament segment are nylon yarn and chips.

ii) Secondary Segment

Geographical Segment: The analysis of geographical segment is based on the geographical location of the customers.

(b) Inter Divisional transfers of goods, as marketable products produced by separate divisions of the Company, for captive consumption are made as if sales were made to third parties at current market prices and are included in turnover.

(c) Unallocable Items:

Corporate income, corporate expenses, interest, capital and reserves are considered as part of unallocable items which are not identifiable to any business segment.

The Company has common fixed assets for producing goods for domestic and overseas markets. Hence, separate figures for fixed assets/additions to fixed assets cannot be furnished.

11.14 Employee Benefits:

(a) Defined Benefit Plan

Gratuity: Payable on separation as per the Employees Gratuity Act @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more.

(b) Defined Contribution Scheme

Company's employees are covered by Provident Fund, Employees State Insurance and Superannuation scheme etc. to which the Company makes a defined contribution measured as a fixed percentage of salary. During the year amount of Rs.832.34 lakhs (Previous year Rs.728.68 lakhs) have been charged to the Statement of Profit & Loss towards contribution to the above schemes/benefits.

(c) Other Long term Benefits

Employees of the Company are entitled to accumulate their earned/privilege leave upto a maximum of 30 days for workers and 300 days for other employees which is payable /encashable as per the policy of on their separation.

The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for plan assets management.

12. The financial statements for the year ended 31.03.2011 were prepared as per then applicable Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule Vi under the Companies Act, 1956, the financial statements for the year ended 31.03.12 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year classification.

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