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

Suditi Industries Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2018

1. Offsetting of Financial Instruments.

Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

2. Derivative Financial Instruments.

The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end of each period. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit and loss.

Fair value Hierarchy

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

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

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

o) Earnings per share

The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the period by the weighted average number of equity shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless they have been issued at a later date. The diluted potential equity shares have been arrived at, assuming that the proceeds receivable were based on shares having been issued at the average market value of the outstanding shares. In computing dilutive earnings per share, only potential equity shares that are dilutive and that would, if issued, either reduce future earnings per share or increase loss per share, are included. p) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. q) Dividend distribution to equity holders

The Company recognizes a liability to make cash distributions to equity holders of the Company when the distribution is authorized and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company’s Board of Directors. r) Cash Flow

The cash flow statement is prepared by the “Indirect Method” set out in Accounting Standard (AS) -3 on “Cash Flow Statements” and presents the cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the Cash Flow Statement consists of cash on hand and deposits with banks. s) Custom duty

Custom duty payable on imported Raw materials, components, stores/spares etc is recognized to the extent assessed and charged by the custom department.

t) Service tax input credit

Service tax on input service is expensed out since the Company does not have any output liability.

u) Goods & Service Tax

The Government of India introduced the Goods and Service Tax (GST) with effect from 01/07/2017. Accordingly, in compliance with Indian Accounting Standard (Ind AS) 18 - Revenue, Revenue from operations for the period beginning 01/07/ 2017 to 31/03/2018 is presented net of GST. Revenue from operations of earlier periods include Excise Duty which now is subsumed with GST. Accordingly, the Revenue from operations for the quarter ended and year ended 31/03/2018 are not comparable with corresponding previous periods presented in the Financial Results which are reported inclusive of Excise Duty.

v) Segment Reporting

In accordance with Ind AS 108 “Operating Segments”, the Company has only one reportable Primary Business segment viz. Hosiery Fabrics and Garments. The Geographical segment reported earlier under Export as well as Domestic are now not reported as the exports are insignificant. Further, the Company does not have separate identifiable bifurcation of Assets as the entire operations are undertaken for Hosiery Fabric only. w/) Investment in subsidiaries and associates

An investor, regardless of the nature of its involvement with an entity (the investee), shall determine whether it is a parent by assessing whether it controls the investee. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Thus, an investor controls an investee if and only if the investor has all the following:

a) power over the investee;

b) exposure, or rights, to variable returns from its involvement with the investee; and

c) the ability to use its power over the investee to affect the amount of the investor’s returns.

An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but not control or joint control over those policies. The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries.

The Company has elected to recognize its investments in subsidiary and associate companies at cost in accordance with the option available in Ind AS 27, ‘Separate Financial Statements’. Except where investments accounted for at cost shall be accounted for in accordance with Ind AS 105, ‘Non-current Assets Held for Sale and Discontinued Operations’, when they are classified as held for sale.

Investment carried at cost is tested for impairment as per Ind-AS 36. x) Share-based payments

Employees (including senior executives) of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments which are classified as equity-settled transactions.

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognized as an employee benefit expense with a corresponding increase in ‘Share- Based Payment Reserves’ in other equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Company’s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions.

Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.

No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

When the terms of an equity-settled award are modified, the minimum expense recognized is the expense had the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through the Statement of Profit and Loss. y) Significant management judgment in applying accounting policies and estimation uncertainty

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

In particular, the Company has identified the following areas where significant judgments, estimates and assumptions are required. Further information on each of these areas and how they impact the various accounting policies are described below and also in the relevant notes to the financial statements. Changes in estimates are accounted for prospectively.

i) Judgments

In the process of applying the Company’s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements:

a) Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgments and the use of estimates regarding the outcome of future events.

b) Recognition of deferred tax assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry- forward can be utilized. In addition, significant judgment is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.

ii) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market change or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a) Useful lives of depreciable assets

The Company reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets.

b) Defined benefit obligation

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that 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. In view of the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

c) Inventories

The Company estimates the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by future technology or other market-driven changes that may reduce future selling prices.

d) Business combinations

The Company uses valuation techniques when determining the fair values of certain assets and liabilities acquired in a business combination. In particular, the fair value of contingent consideration is dependent on the outcome of many variables including the acquires’ future profitability

e) Impairment of non-financial assets and goodwill

In assessing impairment, Company estimates the recoverable amount of each asset or cash-generating units based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.

f) Fair value measurement of financial instruments

When the fair values 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 DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments 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.

The company has only one class of shares i.e. Equity Shares having a face value of Rs. 10 each. The equity shareholders are entitled to dividend only if dividend in a particular financial year is recommended by the Board of Directors and approved by the members at the annual general meeting of that year. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the 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 shareholders.

Shares reserved for issue under options

960000 shares were reserved for issue under the Employees Stock Option Plan pursuant to a special resolution passed in 20th Annual General Meeting held on 2nd September, 2011. In the year 2013, the Company has granted options to 48 employees aggregating to 278700 options. Out of this, 18 employees accepted the grant aggregating to 219500 options. Thirty employees did not accept 59200 options granted to them. The unaccepted options are ploughed back in the pool for further allocation. During 201718, another 30% of the options so granted have been vested which is in line with the Company''s ESOP scheme. No options are exercised in the current year.

Further the Compensation Committee had further granted 13000 options to 20 Employees in their meeting held in the month of February 2017. In addition to this the Company on the successful completion of 25 years of its operations decided to reward its Employees additional option to mark the Silver Jubilee celebrations of the Company. Accordingly the Compensation Committee has granted additional 1,11,605 options to 38 Employees both Senior and Junior level Employees. In total in the month of February 2017, the Company has granted additional 1,24,605 options to 38 Employees and all Employees have accepted their grant. In view of Special Resolution passed by members in their 25th Annual General Meeting, all the options granted shall vest after one year from the grant date. During the year, all the options granted under the above scheme were vested ; however no options were exercised in the current year.

There has been no allotment of shares pursuant to contract(s) without payment being received in (cash during 5 years immediately preceding 31st March, 2018).

Description of nature & purpose of each reserve:

Securities Premium Reserve: Created to record the premium on issue of shares. The reserve is utilized in accordance with the provisions of the Act.

Retained Earnings: Created from Profit/loss of the Company, as adjusted for distribution to owners, transfers to other reserves etc.

Share based Payment reserve: Created for recording the grant date fair value of options issued to employees under the Employees stock option schemes & is adjusted on exercise/forfeiture of options.

Other items of other comprehensive income : Created for transferring the re-measurements gains & losses on defined benefit plans & deferred revenue of Fully convertible debentures.

The Board of Directors has recommended a dividend of Rs.0.20 per share exclusively on the portion of the share capital held by the public as on the record date to be announced. The promoters have waived their entitlement of receiving the dividend in order to support the business activities of the company. The proposed dividend is subject to the approval by Shareholders at the ensuing Annual General Meeting and has not been recorded as a liability as at 31st March 2018 in accordance with Indian Accounting Standard (Ind AS)-10 “Events after the Reporting Period “.

Summary of borrowing arrangements

(i) Fully Convertible debentures:

During the year 2017-18, Company has issued 3 Fully Convertible debentures of Face value of Rs. 1,50,00,000/- each to H.T. Media Limited. The terms of the issue are :

1. The Equity shares issued on conversion shall rank pari passu with the Existing Equity Shares of the company.

2. The FCDs shall be converted into Equity shares at the end of 18 months from date of such allotment.

3. The FCDs shall be unsecured.

4. Pricing of Equity shares - Frequently Trade Shares: The FCDs shall be converted into Equity shares of face value of Rs. 10/- each at a price which is higher of the following:

(a) Rs. 80/- per Equity share.

(b) Price arrived at in accordance with the ICDR Regulations. (“Conversion Price”)

The objects of the Preferential issue:

(i) The object of the issue is to meet funding requirements towards brand building through advertising in the print & non-print media.

(ii) To meet issue expenses

(iii) General Corporate Purposes

As per IND AS 109 - Financial Instruments, Fully convertible debentures issued during the year are convertible into Equity shares as stated above. The same are reflected at fair value calculated on the basis of present value of the instrument as on the date of Balance Sheet.

Note: There are no delayed payments to Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 during the year. Further, there are no dues to such parties which are outstanding for more than the terms of the Contract agreed between the parties at the Balance Sheet date. This information has been determined on the basis of information available with the company.

1) Market Risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may results from change in the price of a financial instrument. The value of a financial instrument may change as result of change in the interest rates, foreign currency exchange rates, equity prices and other market changes may affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments and deposits, foreign currency receivables, payables and loans and borrowings. Market risk comprises mainly two types of risk: Interest rate risk & currency risk. The Company has an elaborate risk management system to inform Board Members about risk management and minimization procedures.

a) Foreign Currency Risk

The Company is not having any significant foreign transactions; hence the company is not prone to foreign currency risks as on the date of balance sheet.

b) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any changes in the interest rates environment may impact future rates of borrowing. The following Table shows the blend of Company’s Fixed & Floating Rate borrowings in Indian Rupee:

2) Credit Risk

Credit Risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

Trade Receivable:-Customer Credit Risk is managed based on Company’s established policy, procedures and controls. The Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and aging of trade receivables. Individual credit risk limits are set accordingly.

The credit risk from the organized and bigger buyers is reduced by securing Bank Guarantees/Letter of Credits/part advance payments/postdated cheques. The Outstanding’s of different parties are reviewed periodically at different level of organization. The outstanding from the trade segment is secured by two tier security - security deposit from the dealer himself, and our business associates who manage the dealers are also responsible for the outstanding from any of the dealers in their respective region. Impairment analysis is performed based on historical data at each reporting period on an individual basis.

Financial Instruments and Deposits with Banks:

The Company considers factors such as track record, size of institution, market reputation and service standards to select the bank with which balances and deposits are maintained. Generally, balances are maintained with the institutions with which the Company has also availed borrowings. The Company does not maintain significant cash and deposit balances other than those required for its day to day operation.

3) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.

The Company relies on a mix of borrowings, and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowings facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

* Includes Government dues

31 Capital Risk Management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company’s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company’s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal structure to reduce the cost of capital.

For the purpose of the Company’s capital management, capital includes issued capital, securities premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, less cash & cash Equivalents.

The Company monitors capital using a gearing ratio, which is Net Debt divided by Total Capital plus Net Debt. Net Debt is calculated as total borrowings including short term and current maturities of long term debt.

Fair Valuation Techniques

1. Fair Value of Investments in quoted shares are based on the quoted market price at the reporting date.

2. Fair Value of Trade receivables is derived after considering the expected credit losses of these receivables.

3. As per Ind AS 109 - Financial Instruments, Fully Convertible Debentures issued for Rs.4,50,00,000/- during the year are convertible into Equity Shares. The same are reflected at fair value calculated on the basis of persent value of instrument using RBI rate as on the reporting date.

3 Other Comprehensive Income (OCI )

The disaggregation of changes to OCI by each type of reserves in equity is shown below

4 Share-based payments

Description of share based payments arrangements

The Company instituted the Employee Stock Option Plan - ESOP 2011 to grant equity based incentives to its eligible employees in accordance with the SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The ESOP-2011 (“The Scheme”) had been approved by the Board of Directors of the Company at their meeting held on 30th Sept, 2011 and by the shareholders of the Company by way of special resolution passed at their Annual General Meeting held on 2nd Sept 2011, to grant 9,60,000 options, representing one share at par for each option upon exercise by the employee of the Company determined by the Board/Compensation Committee. The Scheme covers grant of options to the specified permanent eligible employees of the Company and also to non-executive directors of the Company including independent directors. During the year ended 31 January, 2013, the Company granted stock options to certain employees of the Company.

A. Suditi Employee Stock Option Plan 2011 (SUDITI ESOP 2011)

Pursuant to the Scheme, the Compensation Committee had given its approval to grant 350800 options at par to specified eligible employees of the Company in the year January 2013. Further the Company has also granted another 124605 options to the eligible Employees in 15th February 2017. The Company has the following share-based payment arrangements for employees. Movements during the year

The following table illustrates the number and fair price of, and changes in, share options during the year. Excise price is fixed at face value of ''10/- each.

B. Amendments to Suditi Employee Stock Option Plan 2011 (SUDITI ESOP 2011)

a) The Board has modified the SUDITI ESOP plan vide special resolution in the 25th Annual General Meeting by discounting the bifurcation of the vesting of the plan from 5 years to 1 year.

b) The lock-in-period of 1 year from the allotment is now modified and the same will be decided at the time of allotment of shares against exercise of options.

c) Further the total number of options, quantitative restricted to 85200 shares is now modified to 1% of the paid-up capital as on the date of allotment.

d) The Employee as defined in the plan now covers Employees of the Subsidiaries also.

Notes:

(a) The above details of consumption consists of Raw materials which are consumed directly for manufacture of finished products and also other items which are indirectly related to manufacture of finished products, i.e. stores, spares and packing materials.

# There is no amount payable in foreign currency outstanding as on 31st March, 2018.

5 Employee Benefits Gratuity:

The Company has a defined benefit gratuity plan governed by the Payments of Gratuity Act, 1972. Every employee who has completed five years or more of services is eligible for gratuity on separation at 15 days salary (last drawn salary) for each completed year of service. The Company has formed a Gratuity Trust to which contribution is made and an insurance policy is taken by the trust, which is a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate ( particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset. The Company makes a provision of unfunded liability based on actuarial valuation in the Balance Sheet as part of employee cost.

The company has classified various employee benefits as under:

NOTE:

i. Leave Encashment liability is determined by an independent actuary and relevant provisions are made in the books of account. The payment towards the liability is made by the company as and when the employee becomes eligible to claim the encashment.

ii. The liability towards gratuity is determined by an independent actuary and the relevant amounts towards gratuity liability is paid by the company to the “Suditi Employees Group Gratuity Trust”. The said Trust administers the scheme.

45 Related Party Disclosures

Related parties with whom the company had transactions during the year

a) Key Management Personnel

1. Mr.Pawan Agarwal - Chairman and Managing Director

2. Relatives of Key Management Personnel:

1. Mr.Anand Agarwal (Brother)

2. Mr.Rajendra Agarwal (Brother)

3. Mrs.Pramila Agarwal (Wife of Anand Agarwal)

4. Mrs.Shalini Agarwal (Wife of Pawan Agarwal)

b) Enterprises under Common control of the Promoters

1. BLR Knits Pvt. Ltd.

2. Intime Knits Pvt. Ltd.

3. Black Gold Leasing Pvt. Ltd.

4. R. Piyarellal Pvt. Ltd.

5. Suditi Design Studio Ltd.

6. Suditi Sports Apparels Ltd.

7. SAA & Suditi Retail Pvt. Ltd.

Note:

(i) Future cash outflows in respect of (a)(i) above is determinable only on receipt of judgments/decisions pending with various authorities/forums and/or final outcome of the matters. Accordingly, no provision in the accounts has been made as management is confident that these matters would be decided in the company’s favour.

(ii) The aforesaid amount referred to in (a)(i) above is inclusive of interest and other penalties/levies.

(iii) Similarly in respect of Item (b)(I) the Liability may vary depending up to the scheme if any allowed or permitted at the time of redemption or settlement of the licence which may include interest and other penalties/levies.

Capital Commitments

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

6. The previous period figures have been regrouped / reclassified, wherever necessary to conform to the current period presentation. Signatures to Notes 1 to 50

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


Mar 31, 2016

(d) Shares reserved for issue under options

960000 shares were issued under the Employees Stock Option Plan pursuant to a special resolution passed in 20th Annual General Meeting held on 2nd September, 2011. Till date, the Company has granted options to 48 employees aggregating to 278700 options. Out of this, 18 employees accepted the grant aggregating to 219500 options. Thirty employees did not accept 59200 options granted to them. The unaccepted options are ploughed back in the pool for further allocation. During the current year, another 25% of the options so granted have been vested which is in line with the Company’s ESOP scheme. However, options so vested has not been exercised by the employees.

(e) Rights Issue

Consequent to the Issue of Equity Shares on Right Basis to the existing shareholders in the year 2012-13, the Share Capital of the Company increased from Rs.852.00 lakhs to Rs.1667.45 lakhs. Out of the net Rights Issue proceeds an aggregate sum of Rs. 815.45 lakhs(Previous year Rs.718.98) has been utilised towards the objectives stated in the Rights Issue document Up to 31st March, 2016. With this the Company has utilised the entire net Rights Issue proceeds.

(f) Shares allotted as fully paid-up pursuant to contract(s) without payment being received in cash (during 5 years immediately preceding 31st March, 2016)

There has been no allotment of shares pursuant to contract(s) without payment being received in (cash during 5 years immediately preceding 31st March, 2016)

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Board of Directors has recommended a Dividend of Rs.0.70 per share exclusively on the share capital held by the public for the year ended 31st March, 2016. The promoters have waived their entitlement of receiving dividend in order to support the business activities of the company.

1. Employees’ Stock Option Plan 2011

The Company instituted the Employee Stock Option Plan - ESOP 2011 to grant equity based incentives to its eligible employees in accordance with the SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The ESOP-2011 (“The Scheme”) had been approved by the Board of Directors of the Company at their meeting held on 30th Sept, 2011 and by the shareholders of the Company by way of special resolution passed at their Annual General Meeting held on 2nd Sept 2011, to grant 9,60,000 options, representing one share at par for each option upon exercise by the employee of the Company determined by the Board/Compensation Committee. The Scheme covers grant of options to the specified permanent eligible employees of the Company and also to non-executive directors of the Company including independent directors. Pursuant to the Scheme, the Compensation Committee had given its approval to grant 350800 options at par to specified eligible employees of the Company. Out of this, 97600 options were not accepted.

The options granted under the Scheme shall vest not less than one year and not more than five years from the date of grant of options. Under the terms of the Scheme, the total options are divided on certain prescribed basis spread over a period of 5 years and accordingly the same will vest in the employee every year. The Option grantee must exercise all vested options within a period of five years from the date of granting. Once the options vest as per the Scheme, they would be exercisable by the Option Grantee at any time within the staid period of five years and the shares arising on exercise of such options shall be subject to a lock-in period of 1 year from the date of allotment. There has been no exercise of the options vested in the employees as at year end.

(a) The primary reporting of the company is based on the business segment. The company has no substantial amount of business in other segment except manufacturing of knitted hosiery fabrics and readymade garments.

(b) Secondary segment reporting is based on the geographical location of customers. Revenue is segregated in to two segments namely India and Other Countries for the purpose of reporting geographical segments.

(c) The accounting policies adopted for segment reporting are in line with the accounting policies adopted for the preparation of financial statements as disclosed in Note 2.

(d) In the opinion of the Company it is not practicable to provide segment wise disclosure relating to the Capital Employed as it cannot be bifurcated between segments considering the nature of production facilities which are common and combined for all the segments.

2. Related Party Disclosures

Related parties with whom the company had transactions during the year

a) Key Management Personnel

1. Mr.Pawan Agarwal - Chairman and Managing Director

2. Relatives of Key Management Personnel:

1. Mr.Kishorilal Agarwal (Father - Late)

2. Mr.Anand Agarwal (Brother)

3. Mr.Rajendra Agarwal (Brother)

4. Mrs.Pramila Agarwal (Wife of Anand Agarwal)

5. Mrs.Shalini Agarwal (Wife of Pawan Agarwal)

b) Enterprises under Common control of the Promoters

1. BLR Knits Pvt. Ltd.

2. Intime Knits Pvt. Ltd.

3. Black Gold Leasing Pvt. Ltd.

4. R. Piyarellal Pvt. Ltd.

5. Suditi Design Studio Ltd

6. Suditi Sports Apparels Ltd

3. Earnings per Share

Basic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year. Diluted earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. Dilutive potential equity shares that have been converted in to equity shares during the year are included in the calculation of diluted earnings per share from the beginning of the year to the date of conversion and from the date of conversion, the resulting equity shares are included in computing both basic and diluted earnings per share. Earnings per Share has been computed as under:

4. The previous period figures have been regrouped / reclassified, wherever necessary to conform to the current period presentation.


Mar 31, 2015

1. Employees' Stock Option Plan 2011

"The Company instituted the Employee Stock Option Plan – ESOP 2011 to grant equity based incentives to its eligible employees in accordance with the SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The ESOP-2011 ("The Scheme") had been approved by the Board of Directors of the Company at their meeting held on 30th Sept, 2011 and by the shareholders of the Company by way of special resolution passed at their Annual General Meeting held on 2nd Sept 2011, to grant 9,60,000 options, representing one share at par for each option upon exercise by the employee of the Company determined by the Board/Compensation Committee. The Scheme covers grant of options to the specified permanent eligible employees of the Company and also to non-executive directors of the Company including independent directors. Pursuant to the Scheme, the Compensation Committee had on 31st December, 2012 given its approval to grant 278700 options at par to specified eligible employees of the Company. Out of this, 59200 options were not accepted."The options granted under the Scheme shall vest not less than one year and not more than five years from the date of grant of options. Under the terms of the Scheme, the total options are divided on certain prescribed basis spread over a period of 5 years and accordingly the same will vest in the employee every year. The Option grantee must exercise all vested options within a period of five years from the date of granting. Once the options vest as per the Scheme, they would be exercisable by the Option Grantee at any time within the said period of five years and the shares arising on exercise of such options shall be subject to a lock-in period of 1 year from the date of allotment. There has been no exercise of the options vested in the employees as at year end.

2. Forward Contracts and Unhedged Foreign Currency Outstanding Balances

The company has not executed any forward contract for hedging exchange rate risk; the outstanding unhedged foreign currency balances as on 31st March, 2015 are as under:

NOTE:

i. Leave Encashment liability is determined by an independent actuary and relevant provisions are made in the books of account. The payment towards the liabilty is made by the company as and when the employee becomes eligible to claim the encashment.

ii. The liability towards gratuity is determined by an independent actuary and the relevant amounts towards gratuity liability is paid by the company to the "Suditi Employees Group Gratuity Trust". The said Trust administers the scheme.

Notes:

(a) The primary reporting of the company is based on the business segment. The company has no substantial amount of business in other segment except manufacturing of knitted hosiery fabrics and readymade garments.

(b) Secondary segment reporting is based on the geographical location of customers. Revenue is segregated in to two segments namely India and Other Countries for the purpose of reporting geographical segments.

(c) The accounting policies adopted for segment reporting are in line with the accounting policies adopted for the preparation of financial statements as disclosed in Note 2.

(d) In the opinion of the Company it is not practicable to provide segmentwise disclosure relating to the Capital Employed as it cannot be bifurcated between segments considering the nature of production facilities which are common and combined for all the segments.

3. Related Party Disclosures

Related parties with whom the company had transactions during the year

a) Key Management Personnel

1. Mr. Pawan Agarwal - Chairman and Managing Director

2. Relatives of Key Management Personnel:

1. Mr. Kishorilal Agarwal (Father - Late)

2. Mr. Anand Agarwal (Brother)

3. Mr. Rajendra Agarwal (Brother)

4. Mrs. Pramila Agarwal (Wife of Anand Agarwal)

5. Mrs. Shalini Agarwal (Wife of Pawan Agarwal)

b) Enterprises under Common control of the Promoters

1. BLR Knits Pvt. Ltd.

2. Intime Knits Pvt. Ltd.

3. Black Gold Leasing Pvt. Ltd.

4. R. Piyarellal Pvt. Ltd.

Disclosure of transactions between the company and related parties

Note:

(i) Future cash outflows in respect of (a)(i) above is determinable only on receipt of judgments/decisions pending with various authorities/forums and/or final outcome of the matters. Accordingly, no provision in the accounts has been made as management is confident that these matters would be decided in the company's favour.

Capital Commitments

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

4. The previous period figures have been regrouped / reclassified, wherever necessary to conform to the current period presentation.

Complied by: Dion Global Solutions Limited

SUDITI INDUSTRIES LTD

FACTORY & ADMK OFF. : C-253/254, M.I.D.C., T.T.C.

INDUSTRIAL AREA, VILLAGE PAWNE, NAVI MUMBA1 - 4U0 703

TEL,: (91) 22 6736 Xf>0<]/I0, FAX : (91) 22 276X 3465

E-MAIL : [email protected] WEBSITE : www.suditi.inpt


Mar 31, 2014

1. Employees'' Stock Option Plan 2011

The Company instituted the Employee Stock Option Plan - ESOP 2011 to grant equity based incentives to its eligible employees in accordance with the SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The ESOP-2011 ("The Scheme") had been approved by the Board of Directors of the Company at their meeting held on 30th June, 2011 and by the shareholders of the Company by way of special resolution passed at their Annual General Meeting held on 2nd Sept 2011, to grant 9,60,000 options, representing one share at par for each option upon exercise by the employee of the Company determined by the Board/Compensation Committee. The Scheme covers grant of options to the specified permanent eligible employees of the Company and also to non-executive directors of the Company including independent directors. Pursuant to the Scheme, the Compensation Committee had on 31st December, 2012 given its approval to grant 278700 options at par to specified eligible employees of the Company. Out of this, 59200 options were not accepted.

The options granted under the Scheme shall vest not less than one year and not more than five years from the date of grant of options. Under the terms of the Scheme, the total options are divided on certain prescribed basis spread over a period of 5 years and accordingly the same will vest in the employee every year. The Option grantee must exercise all vested options within a period of five years from the date of granting. Once the options vest as per the Scheme, they would be exercisable by the Option Grantee at any time within the said period of five years and the shares arising on exercise of such options shall be subject to a lock-in period of 1 year from the date of allotment. There has been no exercise of the options vested in the employees as at year end.

The estimated fair value computed by an independent valuer on the basis of Black Scholes pricing model for each stock option granted is within the range of Rs.10.00 to Rs.15.47 per option. Accordingly, the compensation cost and charge to the profit and loss account for the year ended March 31,2014 would have been higher by Rs.3,39,567/- had the Company followed the fair valuation method for accounting the options issued. On proforma basis the Company''s basic and diluted earnings per share would have been Rs. 0.44 and Rs. 0.44.

Notes:

(a) The above details of consumption consists of Raw materials which are consumed directly for manufacture of finished product and other items which are indirectly related to manufacture of finished products, i.e. stores, spares and packing materials.

2. Forward Contracts and Unhedged Foreign Currency Outstanding Balances

The company has not executed any forward contract for hedging exchange rate risk; the outstanding unhedged foreign currency balances as on 31st March, 2014 are as under:

(a) The foreign currency outstanding balances that have not been hedged by any derivative instrument or otherwise as at the Balance Sheet date are as follows:

NOTE:

i. Leave Encashment liability is determined by an independent actuary and relevant provisions are made in the books of account. The payment towards the liabilty is made by the company as and when the employee becomes eligible to claim the encashment.

ii. The liability towards gratuity is determined by an independent actuary and the relevant amounts towards gratuity liability is paid by the company to the "Suditi Employees Group Gratuity Trust". The said Trust administers the scheme.

(a) The primary reporting of the company is based on the business segment. The company has no substantial amount of business in other segment except manufacturing of knitted hosiery fabrics and readymade garments. During the year the company has provided service through buying house agency and received commission of Rs.129462 only.

(b) Secondary segment reporting is based on the geographical location of customers. Revenue is segregated in to two segments namely India and Other Countries for the purpose of reporting geographical segments.

(c) The accounting policies adopted for segment reporting are in line with the accounting policies adopted for the preparation of financial statements as disclosed in Note 2.

(d) In the opinion of the Company it is not practicable to provide segmentwise disclosure relating to the Capital Employed as it cannot be bifurcated between segments considering the nature of production facilities which are common and combined for all the segments.

3. Related Party Disclosures

Related parties with whom the company had transactions during the year

a) Key Management Personnel

1. Mr.Pawan Agarwal - Chairman and Managing Director

2. Relatives of Key Management Personnel:

1. Mr.Kishorilal Agarwal (Father - Late)

2. Mr.Anand Agarwal (Brother)

3. Mr.Rajendra Agarwal (Brother)

4. Mrs.Pramila Agarwal (Wife of Anand Agarwal)

5. Mrs.Shalini Agarwal (Wife of Pawan Agarwal)

b) Enterprises under Common control of the Promoters

1. BLR Knits Pvt. Ltd.

2. Intime Knits Pvt. Ltd.

3. Black Gold Leasing Pvt. Ltd.

4. R. Piyarellal Pvt. Ltd.

4. Earnings per Share

Basic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year. Diluted earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. Dilutive potential equity shares that have been converted in to equity shares during the year are included in the calculation of diluted earnings per share from the beginning of the year to the date of conversion and from the date of conversion, the resulting equity shares are included in computing both basic and diluted earnings per share. Earnings per Share has been computed as under:

5. Contingent Liabilities

(a) Claims against the company not acknowledged as debts

(i) Sales tax matters 16,029,051 16,029,051

(ii) Excise matters - -

(iii) Income tax matters - 61,516,831

16,029,051 77,545,882

(b) Guarantee given to any Government Department or Corporation (i) Asstt. Commissioner of Customs under EPCG Scheme towards export obligations 16,910,924 16,910,924

16,910,924 16,910,924

Note:

(i) Future cash outflows in respect of (a)(i) above is determinable only on receipt of judgments/decisions pending with various authorities/forums and/or final outcome of the matters.

Capital Commitments

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

5. Previous year''s figures have been recast / restated, wherever necessary.

1. The above Cash Flow Statement has been prepared under the ''Indirect Method'' as set out in the Accounting Standard - 3 on Cash Flow Statements, notified under sub-section (3C) of Section 211 of the Companies Act, 1956 (the ''Act'') which as per a clarification issued by Ministry of Corporate Affairs continue to apply under section 133 of the Companies Act, 2013 (which has superseded section 211(3C) of the Companies Act, 1956 with effect from September 12, 2013).

2. Previous year figures have been regrouped where necessary.


Mar 31, 2013

1. Corporate information

Suditi Industries Limited (the ''company'') was incorporated on 12th September, 1991 as Suditi Hosiery Processors Limited. The name of the company was subsequently changed to Suditi Industries Limited on 21 st October, 1994. The company is in the business of processing and manufacturing of knitted hosiery fabrics and readymade garments. The company has also started business in retail sector.

2. Employees'' Stock Option Plan 2011

The Company instituted the Employee Stock Option P lan - ESOP2011 to grant equity based incentives to its eligible employees. The ESOP- 2011 (The Scheme") had been approved by the Board of Directors of the Company at their meeting hold on 30lh June 2011 and by the shareholders of the Company by way of special resolution passed at their Annual General Meeting held on 2nd Sept2011, to grant 9,60,000/ - options, representing one share at par for each option upon exercise by the employee of the Companydeterrnined by the BoardCompensation Committee The Scheme covers grant of options to the specified permanent eligible employees of the Company and also to non-executive directors of the Company including independent directors. Pursuant to the Sche m e , the Compensation Committee has on 31 st December, 2012 granted 278700 options at par to specified eligible employees of the Company as per SEBI Guidelines.

The options granted under the Scheme shall vest not less than one year and not more than five years from the date of grant of options. Under the terms of the Scheme, the total options are dividend on certain prescribed basis spread over a period of 5 years and accordingly the same will vest in the employee every year. The Option grantee must exercise all vested options within a period of fiveyears from the date of granting. Once the options vest as per the Scheme, they would be exercisable by the Option Grantee at any time and the shares arising on exercise of such options shall be subject to a lock-in period of 1 year from the date of allotment.

3. Forward Contracts and Unhedged Foreign Currency Outstanding Balances

The company has not executed any forward contract for hedging exchange rate risk; the outstanding unhedged foreign currency bal ances as on 31st March, 2013 are as under:

(a) The foreign currency outstanding balances that have not been hedged by any derivative instrument or otherwise as at the Balance Sheet date are as follows:

4. Related Party Disclosures

Related parties with whom the company had transactions during the year

a) Key Management Personnel

1. MrPawan Agarwal - Chairman and Managing Director

2. Relatives of Key Management Personnel:

1. Mr.KishorilalAgarwal (Father)

2. Mr.AnandAgarwal (Brother)

3. Mr.Rajendra Agarwal (Brother)

4. Mrs.Pramila Agarwal (Wife of Anand Agarwal)

5. MrsShalini Agawal (We of Pawan Agawal)

b) Enterprises under Common control of the Promoters

1. BLRKnitsPvt.Ltd.

2. lntimeKnitsPvt.Ltd.

3. Black Gold Leasing Pvt. Ltd.

Disclosure of transactions between the company and related parties

5. Earnings per Share

Basic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equty snares outstanding during the year. Diluted earnings per share has been calculated by di v i ding profit for the year attributable to equity shareholders, by the weighted average number of equty shares outstanding during the year and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. Dilutive potential equity shares that have been converted in to equity shares during the year are included in the calculation of diluted earnings per share from the beginning of the year to the date of conversion and from the date of conversion, the resulting equity shares are included in computing both basic and diluted earnings per share.

6. Previous year''s figures have been recast / restated, wherever necessary.


Mar 31, 2012

1. Corporate information

Suditi Industries Limited (the 'company') was incorporated on 12th September, 1991 as Suditi Hosiery Processors Limited. The name of the company was subsequently changed to Suditi Industries Limited on 21 st October, 1994.

The company is in the business of processing and manufacturing of knitted hosiery fabrics and readymade garments. The company a Iso has started business in retail sector.

(a) Shares reserved (or issue under options 960000 shares are to be issued under the Employees Stock Option Plan pursuant to a special resolution passed in 20th Annual General Meeting held on 2nd, September, 2011.

(f) The company has decided to implement its proposal for rights issue of equity shares pursuant to a resolution passed in its Board of Directors' meeting held on 19r May, 2011.

(g) Shares allotted as fully paid-up pursuant to contract(s) without payment being received in cash (during 5 years immediately preceding 3111 March, 2012) There has been no allotment of shares pursuant to contract(s) without payment being received in (cash during 5 years immediately preceding 31st March, 2012)

(a) Nature of security and terms of repayment for secured borrowings

(i) Terms Loans from Banks are secured by hypothecation of specific assets purchased under loans. The loan is collaterally secured by Land and Building and Plant and machinery located at Turbhe-Mahape Plant, Navi Mumbai.

(ii) Repayable is in 57 Monthly Installments beginning after three months from the time loan is taken along with interest @ rate of 13.75% P.A.

The total term loan of Rs. 113.00 lakhs is sanctioned by the bank out of which the company has availed the loan amounting to Rs.21.36 lakhs on 29,March, 2012 and bank has debited interest of Rs.0.02 lakhs till 31 st March, 2012.

2. Employees' Stock Option Plan 2011

Pursuant to a special resolution passed by the Shareholders at the 20th Annual General Meeting held on 2nd September, 2011 the company adopted the Employee Stock Option Scheme titled 'SUDITI EMPLOYEES' STOCK OPTION PLAN, 2011(SUDfTI ESOP 2011) for employees and directors of the company. The said Issue has been approved by Bombay Stock Exchange Limited on 13th March, 2012 in pursuance to guidelines issued by SEBI (ESOS and ESPS) Guidelines, 1999 with maximum issue and allotment of 9,60,000 Equity Shares and the company is required to complete and comply with all related terms and conditions stipulated in the sanction letter.

3. Proposed Rights Issue

The proposal of Rights Issue is presented and approved by the Board of Directors of the Company in its meeting held on 19th May, 2011. The said proposal has also been sanctioned by the Bombay Stock Exchange Limited vide their letter dt.17th June, 2011. The draft Offer Document prepared by the Lead Manager to the Rights Issue had been filed with SEBI and their observations are in the process of being responded.

4. Forward Contracts and Unhedged Foreign Currency Outstanding Balances

The company has not executed any forward contract (or hedging exchange rate risk, the outstanding unheeded foreign currency balances as on 31st March, 2012 are as under:

(a) The foreign currency outstanding balances that have not been hedged by any derivative instrument or otherwise as at the Balance Sheet date are as follows:

i. Leave Encashment inability is determined by an independent actuary and relevant provisions are made in the books of account. The payment towards the liability is made by the company as and when the employee becomes eligible to claim the encashment.

ii. The liability towards gratuity is determined by an independent actuary and the relevant amounts towards gratuity liability is paid by the company to the "Suditi Employees Group Gratuity Trust". The said Trust administers the scheme.

Notes:

(a) The primary reporting of the company is based on the business segment. The company has no substantial amount of business in other segment except manufacturing of knitted hosiery fabrics and readymade garments. During the year the company has provided service through buying house agency and received commission of Rs. 32696 only.

(b) Secondary segment reporting is based on the geographical location of customers. Revenue is segregated in to two segments namely India and Other Countries for the purpose of reporting geographical segments.

(c) The accounting policies adopted for segment reporting are in line with the accounting policies adopted for the preparation of Financial statements as disclosed in Note 2.

((} In the opinion of the Company it is not practicable to provide segment wise disclosure relating to the Capital Employed as it cannot be bifurcated between segments considering the nature of production facilities which are common and combined for all the segments.

5. Related Party Disclosures

Related parties with whom the company had transactions during the year

a) Key Management Personnel

1. Mr.Pawan Agarwal Chairman and Managing Director

2. Relatives of Key Management Personnel:

1. Mr.Kishorilal Agarwal (Father)

2. Mr .Anand Agarwal (Brother)

3. Mr.Rajendra Agarwal (Brother)

4. Mrs.Pramila Agarwal (Wife of Anand Agarwal)

5. Mrs.Shalini Agarwal (Wife of Pawan Agarwal)

b) Enterprises under Common control ol the Promoters

1. BLR Knits Pvt. Ltd.

2. Intime Knits Pvt. Ltd.

3. Black Gold Leasing Pvt. Ltd.

6. Earnings per Share

Basic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year. Diluted earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, un less they have been issued at a later date. Dilutive potential equity shares that have been converted in to equity shares during the year are included in the calculation of diluted earnings per share from the beginning of the year to the date of conversion and from the date of conversion, the resulting equity shares are included in computing both basic and diluted earnings per share. Earnings per Share has been computed as under:

7. The financial statements for the year ended 31st March, 2011 were prepared as per the applicable, pre-revised Schedule VI to the Act. Consequent to the notification of Revised Schedule VI under the Act, the financial statements for the year ended 31a March, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

1) I) Contingent Liabilities not provided for:

a) In respect of Bonds executed in favour of:

i Asst. Commissioner of Customs under EPCG scheme towards export obligation-Rs. 169.07 lacs. (Previous Year Rs. 169.07 lacs)

b) Disputed matters in appeal

Contested in Current year Previous year respect of 31.03.2011 31.03.2010 (Rs. in lacs) (Rs. in lacs)

Excise Duty 40.85 40.85 including penalties

Sales Tax 156.25 156.25

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.Nil (Previous year Rs.2.50 lakhs)

2) The Company's Sales Tax assessment is completed upto the accounting year 2004-2005 and the disputed demand outstanding upto the said assessment year is Rs.156.25 lacs. Based on the opinion received by the company, the demands made are likely to be either deleted or substantially reduced and accordingly no provision has been made in the accounts.

3) Some of the Balances in the customers and suppliers, deposit accounts are taken as per books and are subject to confirmation/reconciliation and consequent adjustments.

4) In terms of Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has computed Net Deferred Tax Asset for the F.Y. 2010-2011 amounting to Rs.327.39 lakhs (previous year Rs.579.17 lakhs). The Management does not consider it appropriate to account for the Net Deferred Tax Asset due to uncertainty of future profits.

5) a) The Company makes contribution towards Provident Fund administered by the Central Government. The contribution towards the Fund are made as per the Provident Fund Act and Rules amended from time to time. The amount of contribution is directly charged to the Profit and Loss account as revenue expense. Since the contribution is paid to the Provident Fund authorities of the Central Government as per rules & regulations, there are no further liabilities on the Company towards this obligation.

b) The Company makes annual contribution to the Employees Group Gratuity cum Life Assurance Scheme of Life Insurance Corporation of India, a funded "Defined Benefit Plan" for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the Gratuity Scheme. Vesting occurs upon completion of five years of service. There are no other schemes, apart from the above, that are administrated by the company for the benefit of employees.

c) The Company has also computed and made necessary provisions on account of leave encashment benefits based on actuarial valuation as per Accounting Standard-15(Revised) "Employee Benefits". The total service eligibility as per the Company's leave rules are estimated and provided in the books as a revenue expenditure after making adjustment towards the benefit paid on this account. The actuarial valuation of plan assets and the present value of the defined benefit obligation were carried out at 31 st March, 2011. The following tables setout the funded status and amounts recognized in the Company's financial statement as at 31st March, 2011 for the defined benefit plans.

i) Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations.

ii) Expected rate of return on plan assets is based on the average long-term rate of return expected on Investments of the fund during the estimated term of the obligations.

iii)The estimates of future salary increases, considered in actuarial valuation, take account the inflation, seniority, promotion and other relevant factors.

6) There are no Micro, Small and Medium Enterprises, to whom the Companies owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. Further, the company has neither paid nor is any interest payable to any Micro, Small and Medium Enterprises on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.

7) Name of Related Parties and nature of related party relationships

As per AS-18 issued by The Institute of Chartered Accountants of India, the Companies related parties are disclosed below.

a) KEY MANAGEMENT PERSONNEL

1) Mr.Anand Agarwal - Chairman, Mr. Pavan Agarwal - Managing Director

2) Relatives of Key Management Personnel: Mr.Kishorilal Agarwal (Father), Mr. Rajendra Agarwal (Brother), Mrs.Pramila Agarwal (Wife of Anand Agarwal), Mrs.Shalini Agarwal (Wife of Pavan Agarwal)

b) Enterprises under Common Control of the Promoters

1. BLR Knits Pvt. Ltd.

2. Intime Knits Pvt. Ltd.

3. Black Gold Leasing Pvt. Ltd.


Mar 31, 2010

1) I) Contingent Liabilities not provided for:

a) In respect of Bonds executed in favour of:

i Asst. Commissioner of Customs under EPCG scheme towards export obligation-Rs.169.07 lacs. (Previous Year Rs.169.07 lacs)

b) Disputed matters in appeal

Contested in Current year Previous year

respect of 31.03.2010 31.03.2009 (Rs. in lacs) (Rs. in lacs)

Excise Duty 40.85 40.85 including penalties

Sales Tax 156.25 156.25

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 2.50 lakhs (Previous year Rs. Nil)

2) The Companys Sales Tax assessment is completed upto the accounting year 2002-2003 and the disputed demand outstanding upto the said assessment year is Rs.156.25 lacs. Based on the opinion received by the company, the demands made are likely to be either deleted or substantially reduced and accordingly no provision has been made in the accounts.

3) Some of the Balances in the customers and suppliers, deposit accounts are taken as per books and are subject to confirmation/reconciliation and consequent adjustments.

4) The company has computed Net Deferred Tax Asset for the current financial year F.Y. 2009-10. The management does not consider it appropriate to account for the Net Deferred Ta x Asset due to the uncertainty of future profits.

5) a) The Company makes contribution towards Provident

Fund administered by the Central Government. The

contribution towards the Fund are made as per the Provident Fund Act and Rules amended from time to time. The amount of contribution is directly charged to the Profit and Loss account as revenue expense. Since the contribution is paid to the Provident Fund authorities of the Central Government as per rules & regulations, there are no further liabilities on the Company towards this obligation.

b) The Company makes annual contribution to the Employees Group Gratuity cum Life Assurance Scheme of Life Insurance Corporation of India, a funded "Defined Benefit Plan" for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the Gratuity Scheme. Vesting occurs upon completion of five years of service. There are no other schemes, apart from the above, that are administrated by the company for the benefit of employees.

i) Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations.

ii) Expected rate of return on plan assets is based on the average long-term rate of return expected on Investments of the fund during the estimated term of the obligations.

6) There are no Micro, Small and Medium Enterprises, to whom the Companies owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. Further, the company has neither paid nor is any interest payable to any Micro, Small and Medium Enterprises on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.

7) Name of Related Parties and nature of related party relationships

As per AS-18 issued by The Institute of Chartered Accountants of India, the Companies related parties are disclosed below.

a) KEY MANAGEMENT PERSONNEL

1) Mr.Anand Agarwal - Chairman, Mr. Pavan Agarwal - Managing Director

2) Relatives of Key Management Personnel : Mr.Kishorilal Agarwal (Father), Mr.Govind Agarwal (Brother), Mr. Rajendra Agarwal (Brother), Mrs.Pramila Agarwal (Wife of Anand Agarwal), Mrs.Shalini Agarwal (Wife of Pavan Agarwal)

b) Enterprises under Common Control of the Promoters

1. BLR Knits Pvt. Ltd.

2. Intime Knits Pvt. Ltd.

3. Black Gold Leasing Pvt. Ltd.

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