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24TH ANNUAL REPORT2013-14

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Annual Report 2013-14 1

BOARD OF DIRECTORS:Nitin S. Kasliwal Chairman & Managing DirectorHaresh M. Israni Additional Director w.e.f. 14th August, 2014Sunil Kumar Jain Additional Director w.e.f. 23rd September, 2014Pradeep K. B. Kumar Director w.e.f. 27th April, 2015Yogesh H. Patel Director w.e.f. 27th April, 2015Vanraj V. Shah Director w.e.f. 27th April, 2015Uday J. Kamath Director w.e.f. 27th April, 2015Anil Channa Deputy Managing Director upto 14th August, 2014Jagadeesh S. Shetty Director – Finance & Group CFO upto 27th December, 2013Sujeet Bhale Nominee Director - EXIM Bank Ltd. upto 30th September, 2013Gaurav Bhandari Nominee Director - EXIM Bank Ltd. upto 9th May, 2014Ranjitha Godbole Nominee Director - IDBI Bank Ltd. upto 18th July, 2014Vijay Kalantri Director upto 19th May, 2014Rajinder Garg Additional Director upto 14th August, 2014Mithileshkumar M. Choubey Additional Director upto 17th April, 2015

BANKERS / ASSET RECONSTRUCTION COMPANIES:Bank of India IDBI Bank Ltd. Central Bank of India Union Bank of IndiaICICI Bank Ltd. Punjab National Bank Indian Bank Corporation BankThe Jammu & Kashmir Bank Ltd. Banca Intesa, Italy JM Financial Asset Reconstruction Co. Pvt. Ltd. Edelweiss Asset Reconstruction Co. Ltd.Asset Reconstruction Co. (India) Ltd.

MAJOR PLANTS:

Menswear and Home Textiles Complex3B Industrial Area No. 2,Agra Bombay Road, Dewas, (M.P.)

Worsted Fabrics ComplexThandavapura, Nanjangud Taluka,Mysore Dist., Karnataka.

Spinning and Weaving ComplexChamunda Standard Mills,Balgarh, Dewas, (M.P.)

Leggiuno S.p.A.Via Dante Alighieri, 121038 Leggiuno (VA) - Italy

Baruche Superfi ne Cottons (BSFC) & Home TextilesJhagadia Industrial Estate, GIDC,Ankleshwar, Gujarat.

REGISTERED OFFICE: REGISTRAR & TRANSFER AGENTS: B2, 5th Floor, Marathon NextGen,Off Ganpatrao Kadam Marg,Lower Parel (West), Mumbai 400 013

M/s. Bigshare Services Pvt. Ltd.E-2, Ansa Industrial Estate,Sakivihar Road, Sakinaka,Andheri (East), Mumbai 400 072

AUDITORS:M/s. Shyam Malpani & Associates

COMPANY SECRETARY:Dinesh Darji (w.e.f. 27th May, 2015)

SOLICITORS:M/s. Little & Co.

2

CONTENTS

Particulars Page no.

Directors’ Report 3

Management Discussion & Analysis 8

Report on Corporate Governance 9

Independent Auditors’ Report 18

Balance Sheet 22

Statement of Profi t & Loss Account 23

Cash Flow Statement 24

Notes to Financial Statements 25

Statement pursuant to Section 212 of the Companies Act, 1956 49

Consolidated Financial Statements 51


DIRECTORS’ REPORTYour Directors are pleased to present the Twenty Fourth Annual Report and Audited Statements of Accounts for the period of 18 months ended 30th September, 2014.FINANCIAL HIGHLIGHTS

(` in lacs)Particulars For the period of

18 months ended30.09.2014 (Standalone)

For the period of 12 months ended

31.03.2013 (Standalone)1 Revenue from Operations (Net) 372,729 339,5882 Other Income 167 1613 Profi t/(Loss) from Operations (PBIDT) (147,009) 57,136

(-) Finance Costs 22,210 52,989(-) Depreciation and Amortization Expenses 16,564 12,877

4 Profi t/(Loss) before Tax and Exceptional Items (185,783) (8,730)5 Exceptional (Expenses)/ Incomes:

Net provision for diminution in the in the value of Overseas Investments & Reversal thereof 29,081 (29,081)Reversal of NPV gain - (3,334)Amount of Overseas Investments written off during the period (29,081) -

6 Profi t/ (Loss) before Tax (185,783) (41,145)7 (-) Provision for Taxation (Net) 1,166 2718 Profi t/ (Loss) after Tax (186,949) (41,416)9 Balance brought forward from Previous Year (21,026) 17,36010 Reversal of Proposed Preference & Equity Dividend and Tax - 3,50511 Transfer to Capital Redemption Reserve - (475)12 Adjustment of depreciation as per schedule II of Companies Act, 2013 (7,399) -13 Surplus/ (Defi cit) carried to Balance Sheet (215,374) (21,026)

DIVIDENDIn view of the Loss incurred during the period, your Directors are unable to recommend any dividend on Equity Shares and Preference Shares for the period ended 30th September, 2014.YEAR IN RETROSPECTThe Company continued to face fi nancial stress during the year which has negatively impacted the business operations of the Company. This coupled with the overall slackness in demand and general economic slowdown has affected the Company’s performance considerably. Bharuch Super Fine Cottons (BSFC) manufacturing facility of the Company has operated at sub-optimal capacities during the period resulting in loss from operation in this product line. The Company was forced to call back non-moving products from the dealers/ debtors and sell the same at huge discounts resulting in loss. Owing to the fi nancial stress faced by the Company, some of its business operations could not be funded, which has resulted in the closure of Spinning and Weaving Complex at Chamunda Standard Mills, Dewas, M.P., and also Menswear & Home Textiles Complex at Dewas, M.P. for most part of the accounting period. For the same reason, Ready-to-wear (RTW) Garments business conducted from Bangalore has also been closed down.RESTRUCTURING PACKAGESome of the lenders of the Company have fi led petitions seeking Winding up of Company in the Hon’ble High Court of Judicature at Bombay and the Hon’ble Court has admitted the said petitions and appointed Offi cial Liquidator as “Provisional Liquidator” with effect from 15th September, 2014. The Company has taken various steps to legally protect its position. The Company has also submitted a Scheme of deep Restructuring of Debts under Section 391 of the Companies Act, 1956 (Section 230 of the Companies Act, 2013) for consideration and approval of the lenders and the Hon’ble High Court. The Company is in discussion with lenders for seeking their approval to the Scheme. The Company is of the view that once the above scheme is approved and implemented, the Company should be in a position to address its fi nancial needs and focus on the conduct of the business to a profi table level.In view of the erosion of the net worth of the Company, the Company is statutorily required to make a Reference to the Board for Industrial & Financial Reconstruction (BIFR) under the proviso of section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and accordingly steps are being taken to make the reference.EXPORTSYour Company is predominantly a domestic player. It was able to manage higher exports of ` 1,494 lacs as against `436 lacs during the previous year. Additionally, exports from the Company’s subsidiary, Reid & Taylor (India) Limited reached to ` 2,272 lacs (previous year ` 2,416 lacs).CURRENT BUSINESS OUTLOOK AND PLANSThough, currently the demand for textile and ready-to-wear garments is sluggish on account of lack luster performance of the economy in general, it is hoped that post the sanction and implementation of the restructuring package, the Company should be able to provide adequate working capital for its various businesses and operate its plants at higher capacities and restart the production facilities which are temporarily closed paving way for higher turnover and improved profi tability.CORPORATE SOCIAL RESPONSIBILITY (CSR)Your Company is committed to support CSR initiatives and contribute towards the welfare and social upliftment of the community.

Directors’ Report

4

EMPLOYEES STOCK OPTION SCHEME (ESOP)As the employees of the Company did not exercise their option for conversion into equity shares of the last remaining 365,760 nos. of ESOPs as per the Vesting Schedule, the Company has cancelled the remaining options and the ESOP scheme stands closed.HUMAN RESOURCEYour Company recognizes that employees play a key role in the successful conduct of the business and even under the current challenging times the Company was focused on maintaining high level of morale and team work. The Company, however, continued with its efforts on rationalization of manpower with focus on effi cient utilization of work force.CORPORATE GOVERNANCETo comply with the conditions of Corporate Governance, pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Management Discussion and Analysis and Corporate Governance together with a certifi cate from a Practicing Company Secretary confi rming the status of compliance is included in the Annual Report.INFORMATION TECHNOLOGYYour Company was in the process of implementing Enterprise Resource Planning (ERP), but in view of the fi nancial stress faced by the Company completion of the programme has been deferred.DIRECTORATEThe following Directors were appointed during the period:Name of the Director Date of Appointment Appointed asShri Haresh Miyomal Israni 14.08.2014 Additional DirectorShri Sunil Kumar Jain 23.09.2014 Additional DirectorShri Mithileshkumar Muralidhar Chaubey 23.09.2014 Additional DirectorShri Pradeep Kariyattu Bhaskaran Kumar 27.04.2015 DirectorShri Yogesh Himatlal Patel 27.04.2015 DirectorShri Vanraj Vinod Chandra Shah 27.04.2015 DirectorShri Uday Jayavanth Kamath 27.04.2015 Director

The following Directors have resigned from the Board due to various reasons:

Name of the Director Resigned w.e.f.Shri Anil Channa 14.08.2014Shri Rajinder Garg 14.08.2014Shri Vijay Kalantri 19.05.2014Shri Mithileshkumar Murlidhar Chaubey 17.04.2015

Shri Jagadeesh S. Shetty, Additional Director, has ceased to be director with effect from 27th December, 2013 pursuant to section 164(2) (b) of the Companies Act, 2013.EXIM Bank has withdrawn the nomination of Shri Gaurav Bhandari as a nominee Director in the Company, with effect from 9th May, 2014.IDBI Bank has withdrawn the nomination of Smt Ranjitha Godbole as a nominee Director in the Company, with effect from 18th July, 2014.The Board placed on record its appreciation for the invaluable contribution, advice and guidance given by all the Directors during their tenure as Directors.Shri Haresh Miyomal Israni was appointed as an Additional Director on the Board with effect from 14th August, 2014, pursuing to Section 161(1) of the Companies Act, 2013. The Company has received the requisite notice in writing from a member pursuant to Section 160(1) of the Companies Act, 2013, proposing the candidature of Shri Haresh Miyomal Israni for the offi ce of Director.Shri Sunil Kumar Jain was appointed as an Additional Director on the Board with effect from 23rd September, 2014, pursuing to Section 161(1) of the Companies Act, 2013. The Company has received the requisite notice in writing from a member pursuant to Section 160(1) of the Companies Act, 2013, proposing the candidature of Shri Sunil Kumar Jain for the offi ce of Director.Shri Sunil Kumar Jain is also to be appointed as ‘Whole Time Director’ of the company for the period of three years w.e.f. 29th February, 2016. A special resolution is placed for your approval in the Notice calling the 24th Annual General Meeting of the Company.DIRECTOR’S RESPONSIBILITY STATEMENTTo the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 217 (2AA) of the Companies Act, 1956 (Section 134(5) of the Companies Act, 2013):1) that in preparation of the Annual accounts the applicable Accounting Standards have been followed along with proper explanations relating to material

departures, if any;2) that such Accounting Policies have been selected and applied consistently, and judgements and estimates have been made that are reasonable and prudent so

as to give a true and fair view of the state of affairs of the Company as at 30th September, 2014 and of the Statement of Profi t and Loss of the Company for the 18 months period ended on that date;

3) that proper and suffi cient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4) that the Annual accounts have been prepared on a going concern basis.

Directors’ Report


DEPOSITSFixed Deposits received from the shareholders and the public stood at Nil as on 30th September, 2014 (Previous year - Nil).There is no deposit or interest claimed but remained unpaid. All the claimed deposits with interest have been repaid in time. Members are aware that the fi xed deposit schemes have been discontinued with effect from 1st April, 2001, as benefi ts were not commensurate with administrative costs.

STATUTORY INFORMATIONCONSOLIDATED FINANCIAL STATEMENTSThe consolidated fi nancial statements have been prepared by your Company in accordance with the applicable Accounting Standards (AS 21, AS 23 and AS 27) issued by the Institute of Chartered Accountants of India and the same together with Auditors Report thereon form part of the Annual Report.SUBSIDIARY COMPANIESThe statement pursuant to Section 212 of the Companies Act, 1956 containing the details of the Company’s subsidiaries is attached. Pursuant to direction under section 212(8) of the Companies Act, 1956 by Government of India, Ministry of Corporate Affairs, New Delhi vide General Circular No. 2/2011 No. 51/12/2007-CL-III dated 8th February, 2011, the Board of Directors, by passing resolution on 6th October, 2015, gave consent for not publishing / attaching copies of the Balance Sheets, Statement of Profi t & Loss, Reports of the Board and the Auditors of all the Subsidiary Companies with the audited fi nancial statements of the Company as at 30th September, 2014.The annual accounts of the subsidiary companies are kept for inspection by any shareholder at the registered offi ce of the Company and shall be made available to shareholders seeking such information at any point of time.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOAdditional information required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 in respect of Conservation of Energy and Technology Absorption is given in the prescribed forms which are given in Annexure ‘1’ to the Directors’ Report.PARTICULARS OF EMPLOYEESInformation as per Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all shareholders of the Company excluding the statement of particulars of employees under Section 217 (2A) of the Companies Act. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Offi ce of the Company.AUDITORSM/s. Shyam Malpani & Associates, Chartered Accountants, Mumbai, (bearing Firm Registration No. 120438W) were appointed as Statutory Auditors of the Company by the Shareholders at the adjourned 23rd Annual General Meeting held on 13th July, 2015, who hold the offi ce upto the conclusion of the ensuing Annual General Meeting.The retiring auditors M/s Shyam Malpani & Associates have resigned as the Statutory Auditors of the Company. Pursuant to the provisions of Section 139 and other applicable provisions, if any, it is proposed to appoint M/s Ray & Ray, Chartered Accountants, (Firm Registration No 301072E) as Statutory Auditors of the Company from the conclusion of the 24th Annual General Meeting, for 5 (fi ve) consecutive years, till the conclusion of the 29th Annual General Meeting, subject to ratifi cation of their appointment at every AGM, at such remuneration as may be mutually agreed between the Board of Directors of the Company and the Auditors. A certifi cate from M/s Ray & Ray has been received to the effect that their appointment as Statutory Auditors of the Company, if made, would be according to the terms and conditions prescribed under Sections 139 and 141 of the Companies Act, 2013 and rules made thereunder.In respect of observations made by the auditors, please refer to note no. 32(a), (b), 34, 35 in respect of Standalone Financial Statements and note no. 39(a), (b), 40, 41 in respect of consolidated fi nancial statements, in addition to the notes already referred to in the respective observations, which are self explanatory and hence in the opinion of Directors, do not require any further explanation.However, in respect of the observation made by the Auditors under Basis of Qualifi ed Opinion point No.(1), regarding inadequacy of documentation and internal control systems, which was mainly emanating from the high sales returns during the period and the need to strengthen the documentation thereof, the Board has taken effective steps to ensure that the sales accounting system is suitably reinforced to ensure adequacy of documentation.ACKNOWLEDGEMENTYour Directors wish to place on record the support, assistance and guidance provided by the fi nancial institutions, banks, customers, suppliers and other business associates. Thanks are also due to your Company’s employees for their tireless efforts and high degree of commitment and dedication. Your Directors especially appreciate the continued understanding and confi dence of the Members.

By Order of the BoardFor S. KUMARS NATIONWIDE LIMITED

Place : Mumbai Nitin S. KasliwalDate : 15th October, 2015 Chairman & Managing Director

Directors’ Report

6

ANNEXURE (1) TO THE DIRECTORS’ REPORTA. CONSERVATION OF ENERGYa) Energy Conservation measures taken The need of energy conservation has assumed paramount importance due to the rapid growth of industries. The textile industry retains a record of the lowest

effi ciency in energy utilization and is one of the major energy consuming industries. It is known that thermal energy in textile mill is largely consumed in two operations, in heating of water and drying of water. Fuel consumption in textile mills

is almost directly proportional to amount of water consumed. Hence, if consumption of water can be reduced, it will also save energy. Due to Global Energy crisis, as well as high cost of fuels, we are committed to conserve various forms of energy to maximum extent through various cost

effective resources. For the growth of company, we believe to adopt the eco-friendly technology to save energy. Some major energy conservation measures carried out during the reporting period are as under: Baruche Superfi ne Cotton (BSFC) Division, at Jhagadia, Gujarat:

1) Optimization of dissolved Oxygen in ETP Aeration tank. Optimum operation of air blower for maintaining the Dissolved Oxygen & biomass level in aeration tank by close monitoring of technical parameters. We

are stopping the air blower three hours daily, by which reduced power consumption of 115 Kwh per day i.e. 41884 KWH per year. The expected saving will be ` 3.35 Lacs per annum.

2) Operation of HBD system in case of Caustic Recovery Plant running. After modifi cation in water distribution system, we had set the optimum water presser by which power consumption is reduced by 653 Kwh per month

i.e. 7841 Kwh per year. Expected saving will be ` 0.627 Lacs per annum.3) Installation of Variable frequency drive in Garden supply pump: We have installed Variable frequency drive to control fl ow & water presser in Garden supply pump. Earlier Power consumption was 2461 Kwh per Month Now 1517 Kwh per month Saving in power consumption is 944 Kwh per month i.e. 11328 units per Year. Expected saving ` 0.906 Lacs per annum.4) Installation of Variable frequency drive in Intermediate pump of ETP: We have installed Variable frequency drive to control fl ow & water presser in intermediate supply pump of ETP. Earlier Power consumption was 3109 Kwh per Month Now 2092 Kwh per month Saving in power consumption is 1017 Kwh per month i.e. 12204 units per Year. Expected saving ` 0.976 Lacs per annum.5) Installation of Variable frequency drive in Evaporator feed pump: We have installed Variable frequency drive to control fl ow & water presser in evaporator feed pump. Earlier Power consumption was 5152 Kwh per Month Now 2576 Kwh per month

Saving in power consumption is 2576 Kwh per month i.e. 30912 units per Year. Expected saving ` 2.47 Lacs per annum. 6) Installation of new exhaust fan in canteen We have installed wall mounted Exhaust fan instead of centrifugal blower. Earlier Power consumption was 1980 Kwh per month Now 900 Kwh per month Saving in power consumption is 1080 Kwh per month i.e. 12960 Kwh per Year. Expected saving `1.03 Lacs per annum. 7) Installation of Variable frequency drive in winding H-Plant (SAF) & RAF Motor We have installed Variable frequency drive in winding H. Plant. Earlier Power consumption was 33180 Kwh per Month Now 16980 Kwh per month Saving in power consumption is 16200 Kwh per month i.e. 1, 94,400 Kwh per Year. Expected saving ` 15.55 Lacs per annum. 8) Installation of variable frequency drive in weaving H-Plant RAF Motor We have installed Variable frequency drive in weaving H. Plant. Earlier Power consumption was 19500 Kwh per Month Now 9750 Kwh per month Saving in power consumption is 9750 Kwh per month i.e. 1, 17,000 Kwh per Year. Expected saving ` 9.36 Lacs per annum. 9) Reduce interval time of winding overhead cleaner motor by reducing interval time Power Consumption Earlier 8640 Kwh per Month Now 7200 Kwh per Month Saving in power consumption is 1440 Kwh per Month i.e. 17280 Kwh per Year Saving expected ` 1.38 Lacs per annum.

Annexure to the Directors Report


10) Reducing interval time of weaving overhead cleaner motor by reducing Interval time Power Consumption Earlier 46800 Kwh per Month Now 35100 Kwh per Month Saving in power consumption is 11700 Kwh per Month i.e. 140400 Kwh per Year Saving expected ` 11.23 Lacs per annum. 11) Installation of led tube rods in place of conventional in winding, Warping & Weaving. Power consumption Earlier 10710 Kwh per Month Now 3300 Kwh per Month Saving in power consumption is 7410 Kwh per Month i.e. 88920 Kwh per Year Saving expected `7.11 Lacs per annum.B. TECHNOLOGY ABSORPTION Efforts made in Technology Absorption - As per Form “B” given below: Research & Development (R & D)

FORM “B”1. Specifi c areas in which R&D carried out by the Company:

a) Focus is given on continual product development and research.2. Benefi ts derived as a result of the above R & D As a result we are able to cater high end market, improved product quality and customer satisfaction.3. Future plan of action Same as above along with Product Development having fi nishes like Bio Polish, Anti Microbial, Fire retardant & Soil repellent.4. Research and Development Technology Absorption, Adoption and Innovation The Company has absorbed the technology of manufacturing exclusive high value super fi ne cotton shirting fabric.

1. Efforts, in brief, made towards technology absorption, adoption and innovation: Latest state of the art technology machines and testing equipments have been imported from Western Europe, which give consistent high value end

product and are being tested and maintained regularly for consistent quality. Additional Equipments for testing and new product developments have been installed for faster and accurate product manufacturing.2. Benefi ts derived as a result of the above efforts: With continuous product and design developments, new complete product range of High value added Shirting and Bottom Weight fabrics is offered to

high end brands.3. Information regarding Imported Technology: All testing and manufacturing equipments have been imported from Europe. Latest technology machinery with automation has been adopted.

C. FOREIGN EXCHANGE EARNINGS AND OUTGOa) Activities relating to export, initiatives to increase exports, Developments of new export markets for Products and Services and Export Plan: The company has continued to maintain focus on and avail of export opportunities based on economic consideration During the year the Company has

exports (FOB value) worth ` 1493.58 lacs.b) Total Foreign exchange earned and used: (` in Lacs)

For the period of 18 months ended 30.09.2014


a. Total Foreign Exchange earned 1493.58 436.48b. Total savings in foreign exchange through products manufactured by the

Company and deemed exports- -

Sub Total (a + b) 1493.58 436.48c. Total Foreign Exchange used 442.03 2130.73

FORM AFORMING PART OF ANNEXURE (1)

Form for Disclosure of particulars with respect to conservation of EnergyPart A - POWER AND FUEL CONSUMPTION

ELECTRICITY For the period of 18 months ended 30.09.2014


A) Purchase: Units in lacs 237.79 276.24 Total Amount (` in lacs) 1222.57 1657.66 Rate / Units (`) 5.14 6.00B) Own generation Through Diesel Generator - 3.85 Units (D. G. Units) (in lacs) - 5.85 Unit/Ltr of Diesel Oil - - Cost/Unit (Rs) - -

Part B - CONSUMPTION PER UNIT OF PRODUCTION ELECTRICITY Current year Previous yearElectricity per meter of fabrics (units) (in lacs) 0.33 0.32

Annexure to the Directors Report

8

MANAGEMENT DISCUSSION AND ANALYSISEconomic Overview and Industry StructureAlthough the present Government has taken many positive steps to reenergize the economy, the impact on the key economic numbers were limited, particularly considering the benefi ts from an extraneous factors like low commodity prices mainly of Crude Oil, Metals and Agricultural products, and much needed respite from high infl ation.Optimism nevertheless continues on the Indian economy based on the plans to create an environment for improving ease of doing business and attracting investments from world over. Opportunity / Threats / ChallengesYour Company continued to face fi nancial stress during the year and was not able to fund the working capital requirements of the various business divisions given the overdue position with the lenders. This has lead to the suspension of operations of Spinning & Weaving Complex (Chamunda Standard Mills), Dewas; and Menswear & Home Textiles Complex also at Dewas, M.P. Similarly, Ready-to-Wear Garments business conducted from Bangluru, under the brand name “Belmonte” and “World Player” have been temporarily closed.Infusion of critical fi nance into the business and implementation of a Deep Restructuring Programme for the Debts of the Company is essential and the Management is focused on working towards this.A brief review of the Strategic Business Units is given hereunder:Blended and Uniform fabricsConsumer Textiles division focuses on the economy and mid-price segments of the market and deals in fabrics for work wear, uniforms and daily wear. The company is market leader in Uniforms and is one of the largest institutional suppliers of textiles to defence and police forces in India. However, during the period under review lack of working capital funds resulted in the closure of manufacturing facilities in Dewas and this coupled with sluggish movement of the products in the market place forced the Company to call back the unpaid stock from the dealers and sell the same at heavy discounts resulting in huge loss to the Company.Total Home ExpressionsThough the Carmichael House brand has been well-accepted, the market for Home Textiles has been generally lukewarm and this situation coupled with inability to fund the business forced the Company to close down this division during the period.Baruche Superfi ne Cottons (BSFC)The Luxury Cotton fabrics division manufacturing high quality shirting fabric at the state-of-the art plant near Bharuch in Gujarat is a high margin business with good growth potential. The capacity utilization in this SBU was sub-optimal during the period under review mainly on account of inability to fund the business.Luxury TextilesReid & Taylor (India) Ltd., a subsidiary, has been one of the major profi tability drivers reporting satisfactory performance over a period of time. However, during the year EBIDTA margins were under severe stress owing to low realization and rising raw material prices for both polyester and wool. The Company had to provide for non-recovery of some of its receivables and loans and advances resulting in net loss during the period.Ready to WearThis Division consists of garments / apparel represented by ‘Reid & Taylor’ and “Belmonte” and “World Player” and the performance of this division is adversely affected by the market conditions and inability to fund the business requirements.International BusinessesWith the liquidation of HMX Acquisition Corp, USA and SKNL (UK) Ltd., International operations are now restricted to Leggiuno in Italy. Leggiuno S.p.A. has gone through a debt restructuring as per the local laws and the business is showing signs of recovery despite the sluggish market conditions in Europe.Growth Prospects & Financial PerformanceThe Company is focusing currently on approval and implementation of Deep Restructuring package and arranging of critical fi nance to fund the various business and to restart the operations which are closed. The implementation of restructuring package should result in improved business performance and profi tability.Risks and ConcernsThe domestic, regional and global economic environment directly infl uences the consumption of textile products. Any economic slowdown can adversely impact demand-supply dynamics and profi tability of all industry players including our Company. However, with some exception, the Company’s operations have historically shown signifi cant resilience to the fl uctuations of economic and industry cycles. The Company’s diverse product portfolio and broad product mix basket is an added asset, providing a buffer against market fl uctuations.The Company is exposed to risks from market fl uctuations of foreign exchange, interest rates, commodity prices, business risk and compliance risks. Business risk evaluation and management is an ongoing process within the Company which is managed by regular monitoring and corrective actions. The Company adopts a prudent and conservative risk-mitigating strategy to minimize any adverse impact. The Company’s strong reputation for quality product differentiation and service, the existence of a powerful brand image and a robust marketing network mitigates the impact of price rise of raw materials.Adequacy of Internal ControlThe Company has proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition, and that transactions are authorized, recorded and reported correctly.The internal control systems are supplemented by an extensive programme of internal audits, reviews by management and documented guidelines and procedures. The internal control systems are designed to ensure that the fi nancial and other records are reliable for preparing fi nancial statements and other data and for maintaining accountability of assets.Cautionary StatementStatements made in this report in describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized by the Company. Actual results could differ materially from those expressed in the statement or implied due to the infl uence of external and internal factors, which are beyond the control of the Company.The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or events.

Management Discussion And Analysis


REPORT ON CORPORATE GOVERNANCE1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE: The Company believes in ensuring corporate fairness, transparency, professionalism, accountability and propriety in total functioning of the Company which

are pre-requisites for attaining sustainable growth in this competitive corporate world. The Company would constantly endeavour to improve on these aspects. COMPLIANCE WITH CLAUSE 49 OF THE LISTING AGREEMENT The Company has generally complied with the provisions of the amended Clause 49 of the Listing Agreements with the Stock Exchanges as stated below.2. BOARD OF DIRECTORS: Composition of the Board: The Board of Directors which consists of eminent persons with considerable professional expertise and experience provides leadership and guidance to the

management, thereby enhancing stakeholders’ value. As on 30th September, 2014 the Company’s Board consisted of 4 members. Of these, two (2) are Executive Directors including Chairman and Managing

Director, who is a Promoter Director, one is Independent Director and one is Non Independent Non Executive Directors. The composition of the Board is generally in conformity with Clause 49 of the Listing Agreement. Number of Board Meetings: The Board of Directors met nine times during the year on 14th June 2013, 16th July 2013, 30th September 2013, 14th November 2013, 14th February 2014, 3rd

April 2014, 15th May 2014, 19th July 2014 and 14th August 2014. The maximum time gap between any two consecutive meetings did not exceed four months. In compliance with Clause 49 of the Listing Agreement, the Board Meetings for consideration of unaudited fi nancial results of the Company for the quarter

ended June, 2013, September, 2013, December, 2013, March 2014 and June 2014 were held on 16.07.2013, 14.11.2013, 14.02.2014, 15.05.2014 respectively. The Board Meeting for consideration of consolidated audited fi nancial results for the entire fi nancial period ended 30th September, 2014 was held on 15th

October, 2015. Directorship held and Director’s attendance Record: The composition of the Board of Directors and their directorship/chairmanship on the Board/Committees of other Companies are as under:

Name of Director Category of Directorship No of other Directorship in Public Ltd. Cos.

No. of other Board Committees # (Other than SKNL) in which he is

Chairman / Member.Chairman Member

Shri Nitin S. Kasliwal Promoter & Executive 5 - -Shri Haresh Milyomal Israni Additional Director 1 - 1Shri Sunil Kumar Jain Additional Director 1 - 1Shri MithileshKumar M Choubey Director 1 - 2

1. # Relates to Audit Committee and Shareholders Grievance Committee only.2. Excludes Directorship in Indian Private Limited Companies, Foreign Companies and Companies under Section 25 of the Companies Act, 1956.

Board Procedure The Board meets at least once a quarter to review the quarterly performance and the fi nancial results, to formulate the strategy and to consider other items on

the agenda. Board Meetings are held at the Registered Offi ce of the Company. The attendance of each Director at the Board Meetings and the last Annual General Meeting (AGM) is as under:

Name of the Director No. of Board Meetings attended during the year

Attendance at the23rd Annual General meeting held on

28th April, 2014

Attendance at the Adjourned 23rd Annual General meeting

held on 13th July, 2015 Shri Nitin S. Kasliwal 7 Yes YesShri Haresh Milyomal Israni1 1 N.A. YesShri Sunil Kumar Jain2 1 N.A. YesShri Mithileshkumar M Choubey3 1 No N.A.Smt. Ranjitha Godbole4 2 No N.A.Shri Sujeet Bhale5 1 No N.A.Shri Vijay G. Kalantri6 5 No N.A.Shri Anil Channa7 6 Yes NoShri Jagadeesh Shetty8 9 Yes N.A.Shri Gaurav Bhandari9 3 No N.A.Shri Rajinder K Garg10 4 No N.A.

1 Appointed with effect from 14th August, 2014 2 Appointed with effect from 23rd September, 2014 3 Appointed with effect from 14th August, 2014 & Resigned with effect from 17th April, 2015 4 Nomination withdrawn with effect from 18th July, 2014 5 Nomination withdrawn with effect from 30th September, 2013 6 Resigned with effect from 19th May, 2014 7 Resigned with effect from 14th August, 2014 8 Ceased to be Director w.e.f. 27th December, 2013 9 Nomination withdrawn with effect from 9th May, 2014 10 Resigned with effect from 14th August, 2014

Report On Corporate Governance

10

As mandated by the revised Clause No. 49, the Independent Directors on the Company’s Board:i) Apart from receiving Directors’ remuneration, do not have material pecuniary relationship or transactions with the Company, its Promoters, its Directors,

its senior management or its holding Company, its subsidiaries and associates which may affect the independence of the Director.ii) Are not related to the promoters or persons occupying the management positions at the Board level or at one level below the Board.iii) Have not been executives of the Company in the immediately preceding three fi nancial years.iv) Are not partners or executives or were not a partner or executive during the preceding three years of the:

• Statutory Audit Firm or the Internal Audit Firm that is associated with the Company,• Legal Firm(s) and consulting fi rm(s) that have a material association with the Company.

v) Are not material suppliers, service providers or customers or lessors or lessees of the Company, which may affect their independence?vi) Are not substantial shareholders of the Company, i.e., do not own two percent or more of the block of voting shares.vii) Are not less than 21 years of age.

The Company does not have any pecuniary relationship with any Non-Executive or Independent Director except for payment of sitting fees and reimbursement of travelling expenses for attending the Board Meetings.

Shareholding of Directors as at 30th September, 2014 is as follows:Sr. No. Name of the Director No. of Shares

1 Shri Nitin S. Kasliwal (Chairman & Managing Director) 4532 Shri Haresh Milyomal Israni Nil3 Shri Sunil Kumar Jain Nil4 Shri Mithileshkumar M. Choubey Nil

3. BOARD COMMITTEES:A. AUDIT COMMITTEE: The Audit Committee acts as a link between the statutory auditors, internal auditors and the Board of Directors. It addresses itself to matters pertaining

to adequacy of internal controls, reliability of fi nancial statements / other management information, adequacy of provisions for liabilities and whether the audit tests are appropriate and scientifi cally carried out and that they were aligned with the realities of the business, adequacy of disclosures, compliance with all relevant statutes and other facets of Company’s operation that are of vital concern to the Company.

The Committee oversees the work carried out by the management, internal auditors on the fi nancial reporting process and the safeguards employed by them.

The Terms of Reference of the Audit Committee are wide enough to cover the matters specifi ed for Audit Committee under Clause 49 of the Listing Agreement as well as under Section 292A of the Companies Act, 1956.

As per clause 49 of Listing Agreement, minimum 3 members should form a part of the Audit Committee. However, due to resignation of directors, the Audit Committee of the Company was re-constituted by inducting Shri Mithilesh Kumar Choubey as its Chairman and Shri Haresh Israni and Shri Sunil Kumar Jain as members with effect from 14st August, 2014.

All the Directors of the Committee are fi nancially literate and are experienced in fi nance and accounts / legal matters and general business practices. The composition of Audit Committee as on 30.09.2014 is as under:

Name Position CategoryShri MithileshKumar M Choubey Chairman Independent DirectorShri Sunil Kumar Jain Member Executive DirectorShri Haresh Milyomal Israni Member Non Independent Non Executive Director

The Company Secretary acts as Secretary to the Committee. The Statutory Auditors of the Company, Chairman & Managing Director, President – Finance & Group CFO of the Company are Invitees to the meeting. Meetings and Attendance details During the 18 months fi nancial period ended on 30th September, 2014, Eight Audit Committee Meetings were held on 14.6.2013, 16.7.2013, 27.9.2013,

14.11.2013, 14.2.2014, 15.5.2014, 19.7.2014 and 14.8.2014. The Audit Committee also met prior to the fi nalization of accounts for the fi nancial period ended 30th September, 2014. The attendance at the Audit Committee Meetings is as under:

Name of the Member No. of meetings attendedShri Vijay G. Kalantri1 5Smt. Ranjitha Godbole (Nominee of IDBI)2 2Shri Jagadeesh S. Shetty3 5Shri Mithileshkumar M Choubey4 1Shri Haresh Milyomal Israni 1Shri Sunil Kumar Jain 1Shri Rajindra Garg5 1

1 Resigned with effect from 19th May, 2014 2 Nomination withdrawn with effect from 18th July, 2014 3 Ceased to be Director with effect from 27th December, 2013 4 Appointed with effect from 14th August, 2014 & resigned with effect from 17th April, 2015 5 Resigned with effect from 14th August, 2014 The Company Secretary was present in all the above meetings.B. NOMINATION & REMUNERATION COMMITTEE:

i The company has a Nomination and Remuneration Committee of Directors ii Brief description of terms of reference:

� Formulation of the criteria for determining qualifi cations, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;

� Formulation of the criteria for evaluation of Independent Directors and the Board;� Devising a policy on Board diversity;



� Indentifying person who are qualifi ed to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal. The company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.

iii The Composition of the Compensation and Remuneration Committee is as under:

Name of the Director Position CategoryShri Vijay G. Kalantri1 Chairman upto 19th May, 2014 IndependentSmt. Ranjitha Godbole (Nominee of IDBI) 2 Member upto 18th July, 2014 IndependentShri Haresh Milyomal Israni3 Member w.e.f. 6th October, 2015 Non Independent Non ExecutiveShri Sunil Kumar Jain4 Member w.e.f. 6th October, 2015 Executive Shri Uday Kamath5 Member w.e.f. 26th August, 2015 Independent

1 Resigned with effect from 19th May, 2014 2 Nomination withdrawn with effect from 18th July, 2014 3 Appointed with effect from 27th April, 2015 4 Appointed with effect from 27th April, 2015 5 Appointed with effect from 27th April, 2015

Two Meetings of Nomination & Remuneration Committee was held on 14th August, 2014 and 15th October, 2015. The Company Secretary acts as Secretary to the Nomination & Remuneration Committee. Remuneration Policy

A. Remuneration to Non – Executive Directors: The non-executive Directors of the Company do not draw any remuneration from the Company except sitting fees. None of the Non-Executive Directors has any material pecuniary relationship or transactions with the Company, except sitting fees, commission

and reimbursement of expenses (if any). The details of sitting fees and compensation paid to Non-Executive Directors during the 18 months period 2013-14 are as follows:

(Amount in `)Name Sitting fees paid during 1st April, 2013 to 30th September,2014 Gross

AmountAudit Committee

Meeting

BoardMeeting

Committee of Directors

Meeting

Compensation& Remuneration

Committee Meeting

Shareholders Grievance Committee

MeetingSmt. Ranjitha Godbole2 (Nominee of IDBI) N.A. 10,000 N.A. N.A. N.A. 10,000Shri Vijay G. Kalantri1 40,000 40,000 N.A N.A N.A 80,000Shri Gaurav Bhandhari3 (Nominee of Exim) N.A. 45,000 N.A N.A N.A 45,000

Grand Total 1,35,000 1 Resigned with effect from 19th May, 2014 2 Nomination withdrawn with effect from 18th July, 2014 3 Nomination withdrawn with effect from 9th May, 2014B. Remuneration paid to Chairman & Managing Director, Deputy Managing Director and Director Finance & Group CFO: The appointment of Managing Director, Deputy Managing Director and Director – Finance & Group CFO and Whole Time Director is governed

by resolutions passed by the Board of Directors and shareholders of the Company. Remuneration paid to the Managing Director, Deputy Managing Director, Director – Finance & Group CFO and Whole Time Director is recommended by the Nomination and Remuneration Committee, approved by the Board and is within the limits set by the shareholders. The remuneration package of Managing Director, Deputy Managing Director, Director – Finance & Group CFO and Whole Time Director comprises of salary, perquisites, allowances and contributions to the Provident Fund and Gratuity as per rules as approved by the shareholders.

The details of the remuneration paid to Managing Director, Deputy Managing Director, Director – Finance & Group CFO and Whole Time Director during the period 1st April, 2013 to 30th September, 2014 are as under:

(` in Lacs)Name and Designation *Shri Nitin S.Kasliwal,

Chairman1 & ManagingDirector

*Shri Anil Channa,Deputy ManagingDirector (Resigned on 14th August, 2014)

* Shri Jagadeesh S. Shetty,Director – Finance & Group CFO (Ceased to be Director 27th December, 2013)

Tenure of Appointment Five Years(From 1st April 2012 to 31st March, 2017)

Five Years(From 12th January, 2010 to 11th January, 2015)

Five Years(From 10th November, 2012 to 9th November, 2017)

Salary (1st April, 2013 to 30th Sep, 2014)) NIL NIL NILOther perquisites such as leave travel expenses, leave encashment, gratuity, club fees, etc., (including contribution to Provident Fund)

NIL NILNIL

And Details of Service contracts, notice period, severance fees.

NIL NIL NIL

Stock option details (if any) NIL NIL NILTotal NIL NIL NIL


12

*In view of Loss incurred no remuneration was paid to Shri Nitin Kasliwal, Chairman and Managing Director, Shri Anil Channa, Deputy Managing Director and Shri Jagadeesh S. Shetty, Director – Finance & Group CFO during the period 1st April, 2013 to 30th September, 2014.

During the Period 1st April, 2013 to 30th September, 2014, the Company did not advance any loans to any of its Directors. Managing Director, Deputy Managing Director so long as they function as such, and they have not been paid any sitting fees for attending the meetings of Board or any Committee thereof.

Code of Conduct: The Board of Directors of the Company have adopted the Code of Business Conduct & Ethics for Directors/ Management Personnel (‘the Code’).

The Code is a comprehensive Code applicable to both, executive and non- executive Directors and senior management personnel. The Code while laying down, in detail, the standards of business conduct, ethics and governance, centers around the following theme: “The Company’s Board of Directors and Management Personnel are responsible for and are committed to setting the standards of conduct contained

in this Code and for updating these standards, as appropriate, to ensure their continuing relevance, effectiveness and responsiveness to the needs of local and international investors and all other stakeholders

as also to refl ect corporate, legal and regulatory developments. This Code should be adhered to in letter and in spirit.” A copy of the code is available on Company’s website i.e. www.sknl.co.in, The Code has been circulated to all the Directors and Senior Management

Personnel and the Managing Director has affi rmed that they have complied with the same for the period ended 30th September, 2014.C. STAKEHOLDERS’ RELATIONSHIP COMMITTEE: Terms of Reference The Shareholders’ Relationship Committee of the Company deals with various matters relating to:

1. Review of shares dematerialized and all other related matters.2. Monitoring expeditious redressal of investor grievances.3. Transfer / transmission of shares.4. Issue of duplicate share certifi cates.5. Non-receipt of Annual Reports and dividend, if any.6. All the matters related to Shares / Debentures investors relations.

The Terms of Reference of the Committee cover the matters specifi ed under Clause 49 of the Listing Agreement with the Stock Exchanges. The Stakeholders’ Relationship Committee meetings are held generally once in a month. All valid transfer / transmission and other requests received

during the year were approved and attended to by the Committee. There were no pending requests for transfer of Equity Shares as on 30th September, 2014.

The Committee also oversees the performance of Registrar and Transfer Agents of the Company M/s. Bigshare Services Pvt. Ltd. and looks into the investor complaints, if any and tries to resolve them immediately. The main object of the Stakeholders Relationship Committee is to strengthen investor relations.

Composition: The Committee comprises of the following Directors as on 30.09.2014.

Name of Director Position CategoryShri Sunil Kumar Jain Chairman ExecutiveShri Haresh Milyomal Israni Member Non Independent Non ExecutiveShri Mithileshkumar M Choubey Member Independent

After resignation of Shri Mithilesh Choubey, the Committee was reconstituted on 6th October, 2015 and the Committee comprises of the following three Directors:

Name of Director Position CategoryShri Yogesh Himatlal Patel Chairman Independent Shri Haresh Milyomal Israni Member Non Independent Non ExecutiveShri Sunil Kumar Jain Member Executive

The Board has designated Shri Dinesh Darji, Company Secretary of the Company, w.e.f 27th May, 2015 as the Compliance Offi cer under the provisions of Listing Agreement entered into with the Stock Exchanges.

Meetings and Attendance During the period 1st April, 2013 to 30th September,2014 the Committee met Four times on 15.4.2013, 20.5.2013, 30.7.2013, 31.12.2013.

Name of the Member No. of meetings attendedShri Jagadeesh Shetty1 2Shri Anil Channa2 4Shri Vijay Kalantri3 4Shri MithileshKumar M Choubey4 N.AShri Haresh Milyomal Israni5 N.AShri Sunil Kumar Jain6 N.AShri Yogesh H. Patel7 N.A



1 Ceased to be Director with effect from 27th December, 2013 2 Resigned with effect from 14th August, 2014 3 Resigned with effect from 19th May, 2014 4 Appointed with effect from 14th August, 2014 & resigned with effect from 17th April, 2015 5 Appointed as an Additional Director with effect from 14th August, 2014 6 Appointed as an Additional Director with effect from 23rd September, 2014 7 Appointed as Director with effect from 27th April, 2015 Details of Shareholders Complaints: During the year under review, total of 9 complaints were received by the Company from the Shareholders / Investors. All the complaints were

resolved by the Company to the satisfaction of the investors and as on 30th September, 2014, there were no pending complaints. Name and address of the Compliance Offi cer is as follows: Shri Dinesh Darji (w.e.f. 27.05.2015)

Company SecretaryS. Kumars Nationwide LimitedB2, 5thFloor, Marathon Nextgen, Off Ganpatrao Kadam Marg,Lower Parel, Mumbai 400013, (India) Tel No. 24930180/24824500Fax No. 24931685e-mail id: [email protected]

4. The Employees Stock Option Scheme: As the employees of the company did not exercise the option for conversion into equity shares of the last remaining 365,760 nos. of ESOPs as per the Vesting

Schedule, the Company has cancelled the remaining options and the ESOP scheme stands closed.5. General Body Meetings: The details of the day, date, time and venue of the last three Annual General Meetings held are as under:

FinancialYear

AGM Day & Date Time Venue No. of Special Resolutions passed

2010-2011 21st AGM Wednesday,28th September, 2011

3.00 P. M. Walchand Hirachand Hall, Indian Merchants’ Chamber, IMC Marg, Churchgate, Mumbai 400 020

3

2011-2012 22nd AGM Thursday,27th September, 2012

11.00 A. M. Walchand Hirachand Hall, Indian Merchants’ Chamber, IMC Marg, Churchgate, Mumbai 400 020

2

2012-2013 23rd AGM Monday, 28th April, 2014

11.00 A. M. Hall of Harmony, Nehru Centre Conference Hall, Dr. Annie Besant Road, Worli, Mumbai 400 018

None, since the meeting was adjourned sine die

2012-2013 Adjourned 23rd AGM

Monday, 13th July, 2015

11.00 A. M. Hall of Harmony, Nehru Centre, Conference Hall, Dr. Annie Besant Road, Worli, Mumbai 400 018

None

Details of Postal Ballots conducted during the year: None.6. Subsidiary Companies: As on date the Company has 9 subsidiaries & stepdown subsidiary companies, out of which 3 companies are Indian Subsidiary companies, 3 companies are

foreign subsidiary companies, and 3 companies are foreign stepdown subsidiary companies incorporated outside India. The details of all the above subsidiary Companies are as follows:

Sr. No.

Name of the Subsidiary & Stepdown Subsidiary Company Date of incorporationDate on which the Company

became subsidiary/ stepdown subsidiary of SKNL

INDIAN SUBSIDIARY COMPANIES1. Reid & Taylor (India) Limited 19/04/2000 10/12/20072. Belmonte Retails Limited 02/07/2009 12/08/20103. Anjaneya Foundation (Sec. 25 Company) 21/01/2009 21/01/2009

FOREIGN SUBSIDIARY COMPANIES4. SKNL International B.V. 03/11/2008 03/11/20085. SKNL Europe B.V. 30/01/2007 07/01/20096. SKNL Italy S.p.A 15/09/2008 01/10/2008

STEPDOWN SUBSIDIARIES7. Leggiuno S.p.A (Subsidiary of SKNL Italy S. p. A.) 09/03/2005 01/10/20088. SKNL Global Holdings B. V. (Subsidiary of SKNL International B.V.) 30/01/2007 05/11/20089. SKNL North America B. V. (Subsidiary of SKNL Global Holdings B. V.) 30/01/2007 05/11/2008

All the above subsidiary and step down subsidiary Companies are managed by their Boards in professional manner and in the best interest of the Company. As a majority shareholder, the Company nominates its representatives on the Boards of subsidiary Companies and monitors the performance of all its subsidiary

companies, inter-alia, by the following means:i The Minutes of the Board Meetings of the subsidiary Companies are placed before the Board Meeting of the Company.ii The details of any signifi cant transactions and arrangements entered into by the unlisted subsidiary Company are placed before the Board of the Company.


14

7. DISCLOSURES: The Company has not entered into any transaction of a material nature with the Directors or the management or the relatives during the year that may have

potential confl ict with the interest of the Company at large. Transactions with related parties are disclosed in Note No. 50 in the Notes to the Financial Statements in the Annual Report. There was no instance of non-

compliance of any matters related to the capital markets during the year.a) Disclosure of accounting treatment in preparation of fi nancial statements: The Company has followed the guidelines of Accounting Standards laid down by the Institute of Chartered Accountants of India (ICAI) in preparation of

its fi nancial statements, except the qualifi cations included in the audit report of the Statutory Auditors. The explanations for the Auditors qualifi cations are given in the Directors Report. b) Details of non-compliance by the Company The Company has complied with all the requirements of regulatory authorities. No penalties / strictures were imposed on the Company by the Stock

Exchanges or SEBI or any statutory authority on any matter related to the capital market during the last three years.c) CEO /CFO certifi cation As required under Clause 49 V of the listing agreement with the Stock Exchanges, the Chairman and Managing Director and the President - Finance &

Group CFO have certifi ed to the Board about the fi nancial statements for the 18 months’ period ended 30th September, 2014.d) Distribution of Agenda and Board Notes Agenda and Notes on Agenda are generally circulated to the Directors, in advance, in the defi ned Agenda format. All material information is incorporated

in the Agenda papers for facilitating meaningful and focused discussions at the meeting. Where it is not practicable to attach any document to the Agenda, the same is tabled before the meeting with specifi c reference to this effect in the Agenda.

In special and exceptional circumstances, additional or supplementary item(s) on the Agenda are permitted. Sensitive subject matters may be discussed at the meeting without written material being circulated in advance.

e) Recording Minutes of the proceedings at Board and Committee Meetings The Company Secretary records the minutes of the proceedings of each Board and Committee meeting. Draft minutes are circulated to all the members

of the Board / Committee for their comments. The circulated minutes of proceedings of a meeting are entered in the Minutes Book within 30 days from the conclusion of that Meeting.

f) Post Meeting Follow-up Mechanism The Guidelines for Board and Committee Meetings facilitate an effective post-meeting follow-up, review and reporting process for the decisions taken by

the Board and Committees thereof. Action Taken Report on the decisions/minutes of the previous meeting(s), where required, is placed at the immediately succeeding meeting of the Board/Committee for noting by the Board/Committee.

g) Risk Management The Company is revising/updating a mechanism to inform the Board about risk assessment and minimization procedures and periodic review is conducted

to ensure that management controls risk through a properly defi ned framework.8. MEANS OF COMMUNICATIONS:

(i) Quarterly Results: Quarterly Results of the Company are published in ‘Free Press Journal (English) and Navshakti (Marathi)’ and are displayed on the Company’s website www.sknl.co.in

(ii) News Releases, Presentations, etc.: Offi cial news releases and Offi cial Media Releases are sent to the Stock Exchanges and are displayed on the Company’s website www.sknl.co.in

(iii) Website: The Company’s website www.sknl.co.in, contains a separate dedicated section ‘Investor Information’ where shareholders’ information is available.

(iv) Annual Report: Annual Report containing, inter alia, Audited Annual Accounts, Consolidated Financial Statements, Directors’ Report, Auditors’ Report and other important information is circulated to members and others entitled thereto.

The Management Discussion and Analysis (MD&A) Report forms part of the Annual Report and is displayed on the Company’s website www.sknl.co.in.(v) Corporate Filing and Dissemination System (CFDS): All disclosures and communications, etc are emailed and physically submitted to the Stock

Exchanges i.e BSE & NSE.(vi) NSE Electronic Application Processing System (NEAPS): The NEAPS is a web-based application designed by NSE for corporates. The Shareholding

Pattern, Corporate Governance Report and Financial Results are also fi led electronically on NEAPS.(vii) SEBI Complaints Redress System (SCORES): The investor complaints are processed in a centralized web based complaints redress system. The salient

features of this system are: Centralised database of all complaints, online upload of Action Taken Reports (ATRs) by the concerned Companies and online viewing by investors of actions taken on the complaint and its current status.

(viii) Designated email-id of Executives of the Company: The Company has designated the following email-id exclusively for investor servicing: [email protected]

9. GENERAL SHAREHOLDERS INFORMATION1) General Information:

(i) Nature of Industry: Textile Manufacturing, Trading and Ready-to-Wear Garments of various Brands. (ii) Date of commencement of commercial production: 28th September, 1990 (iii) Financial performance: Given in the Audited Balance Sheet.(iv) Export performance for the 18 months period 1st April, 2013 to 30th September, 2014 : `1493.58 Lacs(v) Foreign investments or collaboration, if any:

(i) Collaboration:(ii) Foreign Investments:

None` 11.20 Lacs



2) Registered Offi ce: B2, 5th Floor, Marathon Nextgen, Off Ganpatrao Kadam Marg, Lower Parel, Mumbai 400013, (India) Tel No. 24930180/24824500; Fax No. 24931685

Company’s Corporate Website: www.sknl.co.in The Company’s website is a comprehensive reference on SKNL’s management, vision, mission, policies, processes, social responsibility initiatives,

investor relations, updates and news.3) Plant Locations:

Menswear and Home Textiles Complex3B Industrial Area No. 2, Agra Bombay Road, Dewas, (M.P.)

Worsted Fabrics ComplexThandavapura, Nanjangud Taluka, Mysore Dist., Karnataka.

Spinning and Weaving ComplexChamunda Standard Mills, Balgarh, Dewas, (M.P.)

Baruche Superfi ne Cottons (BSFC) & Home TextilesJhagadia Industrial Estate, GIDC, Ankleshwar, Gujarat.

Leggiuno S.p.A.Via Dante Alighieri, 1 21038 Leggiuno (VA) - Italy

4) Registrar and Share Transfer Agents:Bigshare Services Private LimitedUnit: S.Kumars Nationwide LimitedE/2, Ansa Industrial Estate, Sakivihar Road, Saki Naka,Andheri (East), Mumbai 400 072Tel. No. 2847 0652 / 4043 0200; Fax No. 2847 [email protected]

5) The Equity Shares of the Company are listed on following Stock Exchanges:

Shares Listed at: Stock Code ISIN No.Bombay Stock Exchange Ltd. – Mumbai 514304 INE 772A01016National Stock Exchange of India Ltd. – Mumbai SKUMARSYNF INE 772A01016

6) Listing Fees of Bombay Stock Exchange & National Stock Exchange: Annual Listing Fees for the year 2014-15 will be paid to the above Stock Exchanges. Annual Custodial fees for the year 2015-16 will be paid to National Securities Depository Ltd. and Central Depository Services (India) Ltd.7) Market Price Data: High, Low during each month in eighteen months period ended 30.09.2014 Monthly share price movement during the period

2013-14 at BSE & NSE:

Month BSE NSEHigh

`Low

`Volume

(in no. of shares)High

`Low

`Volume

(in no. of shares)April - 13 8.80 8.33 72,89,850 8.78 8.29 2,65,90,262May – 13 5.94 5.57 1,34,93,722 5.93 5.57 4,92,66,499June – 13 4.43 4.14 96,32,822 4.62 4.32 3,22,03,785July – 13 4.02 3.73 1,45,96,952 4.02 3.73 4,02,27,793August – 13 2.86 2.70 92,08,601 2.86 2.71 2,27,38,639September – 13 3.36 3.17 11325369 3.26 3.14 1,62,72,984October – 13 4.62 4.39 1,69,70,136 4.36 4.18 1,23,34,679November -13 6.03 5.70 1,09,53,291 6.03 5.68 1,85,15,701December – 13 5.14 4.94 42,11,460 5.42 5.17 1,19,04,376January – 14 4.70 4.48 28,04,211 4.71 4.48 75,06,129February – 14 3.96 3.78 52,87,156 3.95 3.78 62,83,973March – 14 3.16 3.03 1,64,48,287 3.18 3.01 2,26,21,046April – 14 4.70 4.47 1,23,89,963 4.69 4.49 2,03,96,283May – 14 4.62 4.40 93,59,312 4.63 4.39 1,64,29,553June – 14 5.88 5.59 1,47,68,731 5.89 5.59 2,62,38,662July – 14 6.13 5.69 1,40,74,537 6.14 5.68 3,22,84,279August – 14 5.21 4.88 1,83,57,385 5.47 5.10 2,62,28,453September – 14 5.10 4.73 2,32,30,256 5.10 4.74 3,07,34,546

There are no outstanding GDRs / ADRs.8) Share Transfer System: Applications for transfer of shares held in the physical form are received at the Company’s Investors Services Division (Registrar and Transfer Agent).

All valid transfers are processed and affected normally within 15 days from the date of receipt provided they are in order in every respect. Shares held in the dematerialised form are electronically transferred by the Depository Participant and the Registrar and Transfer Agent is informed

periodically by the Depository about the benefi ciary holdings to enable the Company to send all corporate communications and dividend etc. All valid share transfers for the period ended 30th September, 2014 have been acted upon. Pursuant to Clause 47 (c) of the Listing Agreement with the Stock Exchanges, certifi cates on half yearly basis, have been issued by a Company Secretary-

in-practice for due compliance of share transfer formalities by the Company. Pursuant to SEBI (Depositories and Participants) Regulations, 1996, certifi cates have also been received from a Company Secretary- in-practice for timely dematerialization of the shares of the Company and for conducting secretarial audit on a quarterly basis for reconciliation of the share capital of the Company.

9) Dematerialisation of Shares and Liquidity: The Company’s shares are compulsorily traded in dematerialized form and are available for trading on both the Depositories in India - National Securities

Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).


16

As on 30th September, 2014, 296619646 nos. of Equity Shares of the Company representing 99.73% of the Company’s share capital have been dematerialized.

The Company’s shares were regularly traded on the Stock Exchange (BSE), Mumbai and the National Stock Exchange (NSE), Mumbai, during 1st April, 2013 to 30th September, 2014 as is seen from the volume of shares indicated in the Table containing market information.

Under the Depository System, the International Securities Identifi cation Number (ISIN) allotted to the Company’s shares is INE 772A0101610) Distribution of Shareholding Of 29,74,03,377 Equity Shares of `10/- each fully paid up. [Held both in physical and demat form (NSDL+CDSL)]

Range in ` Total Holders

% of Total Holders

Total Holding in `

% of Total CapitalFrom To

01 5,000 48888 62.6890 95951600 3.22635,001 10,000 11347 14.5502 99374590 3.3414

10,001 20,000 7145 9.1620 115531840 3.884720,001 30,000 2944 3.7751 77623660 2.610030,001 40,000 1473 1.8888 54281910 1.825240,001 50,000 1530 1.9619 73677940 2.477450,001 1,00,000 2375 3.0455 181183240 6.0922

1,00,001 9,99,99,99,999 2283 2.9275 2276408990 76.5428TOTAL 77985 100.0000 2974033770 100.0000

11) Distribution of Equity Shareholding as on 30th September, 2014.

Description No. of Shares Voting Strength %ageDirectors – Individuals 453 0.0002Promoters – Companies 2,30,20,642 7.7405Relatives / Friends of Directors 86,839 0.0292Public – Individuals 15,88,69,724 53.4190Public Bodies Corporate 10,08,05,646 33.8952Mutual Funds & UTI 4,400 0.0015Banks 9,67,290 0.3252Financial Institutions 0 0NRIs 47,05,209 1.5821Foreign Companies/ OCBs 0 0FII 13,18,107 0.4432Clearing Members 75,83,817 2.5500Trusts 41,250 0.0139Total 29,74,03,377 100.0000

12) Schedule of listed Securities of the Company:

Kind of Security (Shares) Number Listed as on 30th September, 2014

Nominal Value Per Share `

Paid-up Value Per Share `

Total NominalValue `

Total Paid upValue `

Equity Shares of ` 10/- each 29,74,03,377 10/- 10/- 297,40,33,770 297,40,33,7706% Cumulative Redeemable Preference Shares of ` 100/- each

5,27,500 100/- 100/- 5,27,50,000 5,27,50,000

13) Schedule of unlisted Securities of the Company:

Kind of Security(Shares)

Number of Shares as on30th September,2014

Nominal Value Per Share `

Paid-up Value Per Share `

Total NominalValue `

Total Paid upValue `

0.01% Redeemable Preference Shares of ` 100/- each

47,05,947 100/- 100/- 47,05,94,700 47,05,94,700

14) Annual General MeetingDate, Time and Venue of 24th Annual General Meeting Date : 29th February, 2016

Time : 10.30 a.m.Venue : Auditorium on 3rd Floor, The Synthetic & Art Silk Mills’ Research Association

(SASMIRA), Sasmira Marg, Worli, Mumbai – 400 030Book Closure Dates From 22nd February, 2016 to 29th February, 2016 (Both days inclusive Both days inclusive)Last date for receipt of proxy forms 27th February, 2016

15) Address for Correspondence: The shareholders may address their communications / suggestions / grievances / queries to: Shri Dinesh Darji

Company Secretary S. Kumars Nationwide Limited

B2, 5th Floor, Marathon NextGen, Off Ganpatrao Kadam Marg,Lower Parel, Mumbai 400013, (India) Tel No. 24930180/24965700/24824500, Fax No. 24931685; E - mail id: [email protected]



DECLARATION BY THE MANAGING DIRECTOR UNDER CLAUSE 49 1(D) OF THE LISTING AGREEMENT REGARDING ADHERENCE TO THE COMPANY’S CODE OF CONDUCTThis is to confi rm in accordance with Clause 49 1(D) of the Listing Agreement with the Stock Exchanges that all Directors and Senior Management of the Company have affi rmed compliance with the Code of Conduct laid down by the Company as applicable to them for the Eighteen months Financial Period ended on 30th September, 2014.

For S. Kumars Nationwide LimitedNitin S. KasliwalChairman & Managing Director

COMPANY SECRETARY’S CERTIFICATE ON CORPORATE GOVERNANCE Company Secretary’s Certifi cate on Compliance with the conditions of Corporate Governance

under clause 49 of the Listing Agreement(s)To,The MembersS Kumars Nationwide Limited

We have examined the compliance of conditions of Corporate Governance by S. Kumars Nationwide Limited as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India for 18 months (Eighteen months) from 1st April, 2013 to 30th September, 2014.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the fi nancial statements of the Company.

In our opinion and to the best of our information and according to the documents provided and explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above-mentioned Listing Agreement except for certain conditions of Corporate Governance as mentioned in Annexure I annexed to this certifi cate.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the effi ciency or effectiveness with which the Management has conducted the affairs of the Company.

For Pramod S. Shah & AssociatesPractising Company Secretaries

Pramod S. Shah- Partner C.P. No. 3804

Place: MumbaiDate: 28.01.2016

Annexure IIn our opinion and to the best of our information and according to the explanations given to us and documents as provided to us for verifi cation, we understand that the Company has not complied with the following conditions of Corporate Governance as stipulated in Clause 49 of Listing Agreement of the said Company with the Stock Exchanges in India :

1.) Composition Of Board Of Directors [Clause 49 (IA)]: As the Chairman of the company is an Executive Director, atleast half of the Board should comprise of the Independent Directors. The Company has not complied with this requirement in September, 2013 quarter, as there were total 7 directors out of which 4 should be Independent Directors, whereas composition consisted of only 3 Independent Directors. In June, 2014 quarter there were total 5 directors out of which 3 should be Independent Directors, whereas composition consisted of only 2 Independent Directors. In September, 2014 quarter there were total 4 directors out of which 2 should be Independent Directors, whereas composition consisted of only 1 Independent Director.

2.) Meetings of Audit Committee [Clause 49 (IIB)]: The quorum shall be either two members or one third of the members of the audit committee whichever is greater, but there should be a minimum of two independent members present. Whereas the meetings of the Audit Committee was conducted with quorum of only one independent director and one Executive Director except in June, 2013 and June, 2014 quarters.

3.) Preparation and submission of Financial Results [Clause (49(IVG)(ii)]: Quarterly results shall be put on company’s web-site, or shall be sent in such a form so as to enable the stock exchange on which the company is listed to put it on its own web-site: Quarterly results for March 2014 to September 2014 were not placed on company’s website and quarterly results for September, 2014 were not submitted to Stock Exchanges.


18

INDEPENDENT AUDITORS’ REPORTTo the Members of S. KUMARS NATIONWIDE LIMITEDI. Report on the Financial Statements We have audited the attached fi nancial statements of S. KUMARS NATIONWIDE LIMITED (hereinafter referred to as ‘the Company’), comprising of the

Balance Sheet as at 30th September 2014, the Statement of Profi t and Loss and the Cash Flow Statement for the period of 18 months ended on that date along with the Signifi cant Accounting Policies and other explanatory information forming an integral part thereof.

II. Management’s Responsibility for the Financial Statements The Company’s Board of Directors are responsible for the matters in section 134(5) of the Companies Act, 2013 with respect to the preparation of these

fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Company in accordance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 (“the Act”) now replaced by Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and in accordance with the accounting principles generally accepted in India. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal fi nancial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

III. Auditors’ Responsibility Our responsibility is to express an opinion on these fi nancial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report

under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specifi ed under section 143(10) of the Companies Act, 2013 since applicable. Those

Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal fi nancial control relevant to the Company’s preparation of the fi nancial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company’s Directors, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a reasonable basis for our audit opinion. Basis of Qualifi ed Opinion

1) In respect of Note No. 20 comprising of Sales of Fabrics net of Returns and Note No. 22 comprising of Purchases of Fabrics including the incidental costs, to the fi nancial statements, we were unable to validate the impact of the said transactions as the Company does not have adequate documentation / supportings and internal control system to substantiate such transactions. Consequently, any adjustment to such amount of Sales ` 513,326.64 Lacs, Sales Returns ` 141,077.03 Lacs and Purchases of ` 417,953.37 Lacs in the fi nancial statements and the corresponding elements if any, making up the Statement of Profi t and Loss and Cash Flow Statement and further, their effect on Trade Receivables, Trade Payables and Inventories and their confi rmation and recoverability is unascertainable and therefore the same cannot be quantifi ed.

2) As explained in Note No. 4,9,35 and 39 of the fi nancial statements, the Company has defaulted in payment of dues to Banks, Financial Institutions, Debenture Holders, and Unsecured Loans from Bodies Corporate and Trade Payables. Some of the lenders/suppliers/ service providers have fi led legal cases against the Company for recovery of their dues. The Company is in discussion with the Consortium of lenders and has submitted a scheme for restructuring of debts of the Company under Section 230 of the Companies Act, 2013 to the Hon. High Court of Judicature Bombay. While approval of the said scheme is critical to the ability of the Company to continue as a going concern, the fi nancial statements have continued to be prepared during the aforesaid period by the Company on Going Concern basis.

3) The amount standing to the credit of the Company’s promoters in the books of the Company as at the end of the accounting period amounting to ` 12,759.96 Lacs, as per Note No. 30 of the fi nancial statements, arising on account of the sale of pledged shares of the promoters by the lenders. In our opinion, this attracts provisions of Section 73 and 76 of the Companies Act, 2013 and may have to be refunded by the Company to the promoters.

4) As stated in Note No. 35 of the fi nancial statements and note number (2) of the Auditors report which states that the Company has been facing mismatch in the cash fl ows which has led to non- servicing of interest and installments to the Banks and Financial Institutions and as a result, the accounts have become non-performing assets (NPAs). The Banks/ Financial institutions have stopped charging interest on the Company’s various cash credit facilities and term loan accounts. The Company has not provided in the books of accounts a gross interest amounting to ` 72,130.88 Lacs for the period ended up to 30th September, 2014, as a consequence of which, loss of the Company and Other Current Liabilities have been understated by the said extent.

5) As stated in Note No. 46 of the fi nancial statements, the Company in its earlier years had issued 6% Redeemable Preference Shares, which were due for redemption on 1st October, 2013. In view of the fi nancial stress faced by the Company, the said preference shares were not redeemed on the above due date amounting to ` 3.72 Lacs. The preference shareholders have not extended the aforesaid due date.

6) The Company has invested ` 17,887.73 Lacs in one of the step down foreign subsidiary companies Leggiuno S.p.A. through direct subsidiaries SKNL International B.V., SKNL Italy S.p.A and SKNL Europe B.V., has gone under fi nancial reconstruction as per the applicable local laws. In view of the above, the said long term investment should be provided for diminution in the book value. On account of the same, loss incurred by the Company has been understated and Investments have been overstated, the extent of which is presently unascertainable.


7) Statement confi rming the balances appearing under the heads Borrowings and Other Current Liabilities pertaining to Banks and Financial Institutions amounting to ` 231,682.30 Lacs are not available with the Company as the said bank accounts have become non-performing assets/taken over by Asset Reconstruction Company. Hence, we were unable to confi rm book balances appearing as on 30th September, 2014.

8) The Outstanding balances of Trade Receivables, Trade Payables and their balances having been adjusted with each other, Loans & Advances and Borrowings are subject to confi rmation, reconciliation and recovery. The Consequential adjustments, if any, arising out of these are not quantifi able.

9) Inventories lying with third parties have not been physically verifi ed in totality by the Company during the period. Also, the fi xed assets have not been completely covered with regard to physical verifi cation and updation of records as at the close of the period. Further, no exercise of valuation of the Company’s fi xed assets has been carried out, even though the Company claims that there is no material impairment in respect of its fi xed assets, other than what is provided for in the books. In view of the above, the consequential write down in respect of the inventory and the material impairment in respect of the fi xed assets, if any, is not quantifi able. Refer Note No. 32 (b) and 43 of the fi nancial statements.

10) Promoters and other shareholders have pledged their shares with lenders mainly with IDBI bank against the loans given by them to the Company. The lenders have invoked the pledge and sold the pledged shares to recover their dues from the Company. The Company is liable to compensate the loss incurred by the parties who have pledged the shares. However, no provision in the books of the Company has been made to recognize the said loss and the amount of the same is unascertainable.

11) The Company’s cashfl ows for the period under review as shown in the Cash Flow Statement include net impact of certain transactions carried out by the Company by way of journal entries.

Emphasis of Matter1) We were appointed as the Auditors of the Company after 30th September 2014 and thus could not observe the counting of physical Inventories and Fixed

Assets at the beginning and end of the period and hence we have relied on the certifi cation of the management or documents produced before us. The value of Inventories and Fixed Assets as at the Balance Sheet date are `55,214.45Lacs and `71,627.29 Lacs respectively.

2) As stated in Note No. 43 of the fi nancial statements, the Company’s business operations of (i) Spinning and Weaving Complex at Chamunda Standard Mills, Balgarh, Dewas, (M.P.) have been shut down since July, 2013 (ii) Garment factory situated at Bengaluru has been closed due to the fi nancial troubles faced by the Company (iii) Menswear and Home Textiles Complex, 3B Industrial Area No. 2, Agra Bombay Road, Dewas, (M.P.) has been partially operating for some part of the accounting period on account of disconnection of power. Hence, we are unable to verify and comment on the existence and valuation of assets, accurate quantifi cation and reporting of liabilities, accuracy and correctness of income and expenditure amounting to ` 29,334.28 lacs, ` 3,374.01 lacs, ` 356.20 lacs and ` 10,096.59 lacs respectively. The same have been incorporated in the Balance Sheet of the Company based on the management estimates

Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for

Qualifi ed Opinion paragraph refer point number 1 to 11 above, the aforesaid standalone fi nancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 30th September, 2014, and its loss and its cash fl ows for the period ended on that date.

IV. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 issued by the

Central Government of India in terms of sub-section (4A) of Section 227 of the Act which has been replaced by Section 143 (11) of the Companies Act, 2013, we enclose in the Annexure a statement on the matters specifi ed in the relevant paragraphs of the said Orders, to the extent applicable to the Company during the period under review.

2. Further to our comments in the Annexure referred to in para 1 above, as per the requirements of 227(3) of the Act now replaced by Section 143(3) of the Companies Act,2013, we report as follows:

(a) We have sought and, except for the matters described in the Basis for Qualifi ed Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; (c) The Balance Sheet, the Statement of Profi t and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) Except for the effects of the matter described in the Basis of Qualifi ed Opinion paragraph above, in our opinion, the Balance Sheet, Statement of Profi t

and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Act now replaced by Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of written representation received by three directors out of four as on 30th September, 2014 and taken on record by the Board of Directors, they are not disqualifi ed as on 30th September, 2014 from being appointed as a director in terms sub-section (2) of Section 164 of the Companies Act, 2013. However, the remaining one as per his written representation has incurred disqualifi cation under sub-section (2) of Section 164 of the companies Act, 2013 from being reappointed as a director of the Company.

For Shyam Malpani& AssociatesChartered Accountants

Firm Registration No.120438 W

Shyam MalpaniPlace : Mumbai ProprietorDate : 6th October, 2015 Membership No. F- 34171

Independent Auditors’ Report

20

ANNEXURE TO INDEPENDENT AUDITORS’ REPORT[Referred to in paragraph IV. 1 under ‘Report on Other Legal and Regulatory Requirements’ in the Independent Auditors’ Report of even date to the members of S. Kumars Nationwide Limited on the fi nancial statements for the period ended 30th September, 2014](i) (a) The Company is in the process of maintaining proper records of its fi xed assets so as to show specifi c identifi cation of the said assets,

including its quantitative details and situation in respect of fi xed assets capitalized after 31st March, 2011. (b) As explained to us and except for the effect as stated in point number 1 and 2 of the Emphasis of Matter paragraph, the Company has

a regular programme of verifi cation of fi xed assets wherein all fi xed assets are verifi ed once in a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verifi cation.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fi xed assets has not been disposed off by the Company during the period.

(ii) (a) The inventories (excluding stocks with third parties) has been physically verifi ed by the management during the period however as stated point number 1 of Emphasis of Matter paragraph we could not observe the process as our appointment was after the balance sheet date. In respect of inventories lying with third parties, stated point number 1 of Emphasis of Matter paragraph these have substantially been confi rmed by them along with certifi cation of physical verifi cation of such inventories by the said parties.

(b) The procedures of physical verifi cation of inventories as referred to in (a) above followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventories and no material discrepancies were noticed on physical verifi cation carried out as mentioned in para (a) above during the period.

(iii) (a) The Company has granted loan to a party covered in the register maintained under Section 189 of the Companies Act, 2013 (Section 301 of the Act). The maximum amount involved during the period and the period end balance of loan granted to such party was ̀ 41.35 lacs.

(b In our opinion and according to the information and explanations given to us, the terms and conditions for such interest free loan is not, prima facie, prejudicial to the interest of the Company.

(c) The said loans are repayable on demand. (d) There is no overdue amount of loan granted to the Company listed in the register maintained under Section 189 of the Companies Act,

2013 (Section 301 of the Act). (e) The Company had taken loans (interest-bearing as well as interest-free) from a company covered in the register maintained under

Section 189 of the Companies Act, 2013 (Section 301 of the Act). The maximum amount involved during the period was ` 23,250 Lacs and the period-end balance of loans taken from such company was ` 23,250 Lacs, of which an amount of ` 4,000 lacs is interest free and for balance `19,250 Lacs, interest amounting to ` 9,156.39 Lacs has not been provided in the books of accounts.

(f) In our opinion and according to the information and explanations given to us, the rate of interest, wherever applicable and other terms and conditions for such loans are, prima facie, not prejudicial to the interest of the Company.

(g) The Company has not repaid the principal amount as stipulated and also not been regular in the payment of interest to the Company.(iv) In our opinion and according to the information and explanations given to us read together with Note no. 1 of the Basis of Qualifi ed Opinion,

the internal control system prevailing in the Company needs to be strengthened so as to make it commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fi xed assets and with regard to the sale of goods and services. During the course of audit, we have observed failures in internal control system of the Company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 189 of the Companies Act, 2013 (Section 301 of the Act) that need to be entered into the register maintained under Section 189 of the Companies Act, 2013 (Section 301 of the Act) have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of ` fi ve lacs have been entered into during the fi nancial period at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 (Sections 58 and 58-A of the Act) and the rules framed there under.

(vii) The Company has not carried out internal audit during the period covered under review.(viii) We have not been made available the books of account maintained by the Company in respect of products where, pursuant to the Rules made

by the Central Government of India, the maintenance of cost records has been prescribed under Section 148(1) of the Companies Act, 2013 (Section 233 of the Act) and hence, we are unable to comment upon whether prescribed records have been made and maintained.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess have not been regularly deposited with the appropriate authorities and there have been serious delays in many cases.

(b) According to the information and explanations given to us, undisputed dues in respect of provident fund, investor education and protection fund, employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other statutory dues which were outstanding, at the period end for a period of more than six months from the date they became payable are as follows:

Annexure To Independent Auditors’ Report


Name of the statute Nature of the dues Amount (` in lacs)Income Tax Act,1961 Tax Deducted at Source 5.24Provident Fund Act, 1952 Provident Fund 176.05Employees’ State Insurance Act, 1948 ESIC 77.10Madhya Pradesh Land Revenue Act, 1959 Property Tax 71.82Value Added Tax Act, 2005 Value Added Tax 35.72Entry Tax Act, 1976 Entry Tax 7.56Income Tax Act,1961 Tax Collected at Source 0.03Service Tax Service Tax 148.56Central Excise Act Excise Duty 1.24

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess which have not been paid on account of disputes, are as follows:

Name of the statute Nature of dues Amount(` in lacs)

Period to which the amount relates

Forum where dispute is pending

Income Tax Act,1961 Income Tax 0.48 A Y 2006-07 Commissioner of Income Tax (Appeals)Income Tax Act,1961 Income Tax 790.82 A Y 2007-08 Commissioner of Income Tax (Appeals)Income Tax Act,1961 Income Tax 448.49 A Y 2008-09 Commissioner of Income Tax (Appeals)Income Tax Act,1961 Income Tax 94.71 A Y 2009-10 Commissioner of Income Tax (Appeals)Income Tax Act,1961 Income Tax 19.48 A Y 2010-11 Commissioner of Income Tax (Appeals)Income Tax Act,1961 Income Tax 7,183.45 A Y 2011-12 Commissioner of Income Tax (Appeals)Central Excise Act, 1944 Central Excise 137.87 A Y 2009-10 Commissioner of Sales Tax

(x) In our opinion, the accumulated losses of the Company are more than fi fty percent of its net worth .Further, the Company has incurred cash losses during the fi nancial period covered by our audit However, previous year there were no cash losses.

(xi) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to banks fi nancial institution and debenture holder. The total amount of the default in respect of principal is ` 19,262.20 Lacs and interest is ` 37,202.80 Lacs and recalled loan is ` 119,645.67 Lacs. Further as mentioned in basis of qualifi ed opinion paragraph point number 4 the company has not provided for interest amounting to ` 72,130.88 Lacs in its books of amount.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefi t fund / society. Therefore the said clause is not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the said clause is not applicable.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company during the period, for loans taken by others from banks or fi nancial institutions, are not prejudicial to the interest of the Company.

(xvi) During the period, the Company has not obtained any term loans. (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, there were no

new funds raised by the Company. (xviii) According to the information and explanation given to us, the Company has not made any preferential allotment of shares to parties and

companies covered in the register maintained under Section 189 of the Companies Act, 2013 (Section 301 of the Act).(xix) According to the information and explanations given to us, no debentures have been issued by the Company during the period. (xx) The Company has not raised money by way of public issue during the period.(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing

practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the period, nor have we been informed of such case by the management.

For Shyam Malpani& AssociatesChartered Accountants

Firm Registration No.120438 W

Shyam MalpaniPlace : Mumbai, ProprietorDate : 6th October, 2015 Membership No. F- 34171

Annexure To Independent Auditors’ Report

22

BALANCE SHEET AS AT 30TH SEPTEMBER, 2014(` in lacs)

Note Current Year As at 30.09.2014

Previous Year As at 31.03.2013

EQUITY AND LIABILITIESSHAREHOLDERS' FUND

Share Capital 2 34,498.99 34,498.99 Reserves and Surplus 3 (112,922.27) 82,630.69

(78,423.28) 117,129.68 NON-CURRENT LIABILITIES

Long Term Borrowings 4 19,535.88 64,127.00 Deferred Tax Liabilities (Net) 5 2,688.36 4,231.62 Long Term Provisions 6 289.13 168.47

22,513.37 68,527.09 CURRENT LIABILITIES

Short Term Borrowings 7 132,593.52 133,432.48 Trade Payables 8 16,564.79 24,935.97 Other Current Liabilities 9 233,730.06 164,310.10 Short Term Provisions 10 7,418.95 4,804.27

390,307.32 327,482.82 TOTAL 334,397.41 513,139.59

ASSETSNON-CURRENT ASSETS

Fixed Assets(i) Tangible Assets 11 71,616.49 98,432.24 (ii) Intangible Assets 10.80 20.01 Non-Current Investments 12 22,002.83 21,991.63 Long Term Loans and Advances 13 349.03 55,402.15 Other Non-Current Assets 14 209.35 109.84

94,188.50 175,955.87 CURRENT ASSETS

Inventories 15 55,214.45 132,057.84 Trade Receivables 16 183,125.24 183,416.58 Cash and Bank Balances 17 82.49 311.83 Short Term Loans and Advances 18 1,786.73 21,374.61 Other Current Assets 19 - 22.86

240,208.91 337,183.72 TOTAL 334,397.41 513,139.59

Signifi cant Accounting Policies & Notes to Financial Statements 1 - 61The accompanying notes are an integral part of the Financial Statements.

As per our report of even date For and on behalf of the Board of Directors

For Shyam Malpani & AssociatesChartered AccountantsFirm Registration No.120438W NITIN S. KASLIWAL Chairman and Managing Director

HARESH ISRANI Director

SHYAM MALPANIProprietor DINESH DARJI Company SecretaryMembership No. F-34171

Place : Mumbai Place : MumbaiDate : 6th October, 2015 Date : 6th October , 2015

Balance Sheet


STATEMENT OF PROFIT AND LOSS FOR THE PERIOD OF 18 MONTHS ENDED 30TH SEPTEMBER, 2014(` in lacs)

Note For the period of 18 months ended

30.09.2014


31.03.2013INCOME

Revenue from operations (Gross) 20 372,728.77 339,700.07 Less : Excise Duty - 111.80 Revenue from operations (Net) 372,728.77 339,588.27 Other income 21 167.23 160.56

Total Revenue 372,896.00 339,748.83 EXPENSES

Cost of Materials consumed 22 451,918.97 268,448.80 Changes in Inventories of Finished Goods and Work-in-Progress 23 47,560.17 (8,983.04)Employee Benefi t Expenses 24 5,247.23 5,925.77 Finance Costs 25 22,210.44 52,989.29 Depreciation and Amortisation Expenses 11 16,563.58 12,877.17 Other Expenses 26 15,178.76 17,221.33

Total Expenses 558,679.15 348,479.32 Profi t/ (Loss) before Tax and Exceptional Items (185,783.15) (8,730.49)

Exceptional Items

a) Provision for Diminution in the value of Overseas Investments (Net of write back) - (29,080.49)b) Reversal of Provision for Diminution in the value of Overseas Investments (Net of write

back) 29,080.49 -

c) Amount of Overseas Investments written off during the period (29,080.49) -d) Reversal of NPV Gain - (3,334.14)Profi t/ (Loss) before Tax (185,783.15) (41,145.12)Tax Expense:

Current Tax 1 (xx) - - Deferred Tax 5 (1,543.26) 271.43 Short/ (Excess) Provision of Earlier Years 2,709.23 -

Total Tax Expenses 1,165.97 271.43 Profi t/(Loss) for the Period (186,949.12) (41,416.55)

Earnings per Equity Share: Basic 1(xix) & ` (62.86) ` (13.93)Diluted 55 ` (62.86) ` (13.92)

(Nominal Value of Shares ` 10/- each)Signifi cant Accounting Policies & Notes to Financial Statements 1 - 61The accompanying notes are an integral part of the Financial Statements.




SHYAM MALPANI DINESH DARJI Company SecretaryProprietorMembership No. F-34171


Statement of Profi t and Loss

24

CASH FLOW STATEMENT FOR THE PERIOD OF 18 MONTHS ENDED 30TH SEPTEMBER, 2014

(` in lacs)For the period of 18 months

ended 30.09.2014For the period of 12 months

ended 31.03.2013A Cash Flow from Operating Activities

Profi t/ (Loss) Before Tax and Extraordinary Items (185,783.15) (41,145.12)Adjustments for:a) Depreciation and Amortisation Expenses 16,563.58 12,877.17 b) Loss on Sale of Fixed Assets (net) 231.73 130.76 c) Sundry Balances Written Back (51.55) (94.59)d) ESOP Compensation (Credited)/ Debited to Statement of Profi t & Loss (140.45) (209.69)e) Balances not recoverable Written Off {Refer Note 32(a)} 23.73 1,974.16 f) Provision for Doubtful Receivables/ Amount not Recoverable {Refer Note 32(a)} 2,557.77 2,089.30 g) Finance Costs 22,210.44 52,989.29 h) Interest Income (45.01) (63.58)i) Exchange Rate Fluctuation 147.50 216.34 j) Provision for Diminution in the value of Overseas Investments (Refer Note 12 & 27) - 32,257.17 k) Reversal of NPV Gain - 3,334.14 Operating Profi t before Working Capital Changes (144,285.41) 64,355.35 Movements in Working Capitala) (Increase) / Decrease in Inventories 76,843.39 (15,847.39)b) (Increase) / Decrease in Trade Receivables (2,266.43) (36,129.85)c) (Increase) / Decrease in Advances & Deposits 74,551.19 9,649.19 d) Increase / (Decrease) in Trade Payables (8,371.18) (8,172.62)e) Increase / (Decrease) in Other Payables & Liabilities (4,761.27) 5,432.08 Cash Generated From/ (Used in) Operating Activities (8,289.71) 19,286.76 Direct Taxes Paid (33.65) (18.61)Net cash Flow From/ (Used in) Operating Activities Total (A) (8,323.36) 19,268.15

B Cash Flow from Investing Activitiesa) Acquisition of Fixed Assets (Including CWIP & Capital Advances) (69.65) (2,002.05)b) Sale of Fixed Assets 1,635.91 158.57 c) Non Current Investments (11.20) (2,562.22)d) Interest Income 45.01 63.58 Net cash Flow From/ (Used in) Investing Activities Total (B) 1,600.07 (4,342.12)

C Cash Flow from Financing Activitiesa) Proceeds from Long Term Borrowings - 133.64 b) Change in Long Term Borrowings due to Reschedulement (Refer Note 45) (5,652.27) 7,429.37 c) Repayment of Long Term Borrowings (556.51) (13,426.42)d) Changes in Short Term Borrowings (Net) 4,001.04 15,324.86 e) Movement in Debt Service Reserve Account - 577.50 f) Unsecured Advances from Promoters (Refer Note 30) 3,011.15 9,748.81 g) Redemption of Preference Shares - (474.80)h) Interest Paid (2,317.10) (30,810.16)i) Changes in Interest Liability due to Reschedulement & Reversal (Refer Note 35 & 45) 8,165.71 - j) Reversal of NPV Gain - (3,334.14)Net Cash Flow from / (Used in) Financing Activities Total (C) 6,652.02 (14,831.34)Net Increase in Cash and Cash Equivalents Total (A+B+C) (71.27) 94.69 Cash & Cash Equivalent at the beginning of the year 146.36 51.67 Cash & Cash Equivalent at the end of the year 75.09 146.36 Net Change in Cash & Cash Equivalent (71.27) 94.69

Notes :1 The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Accounting Standard-3 (AS-3) “Cash Flow Statement”.2 Cash and cash equivalents comprise cash at bank, cash in hand and short- term investments with an original maturity of three months or less. (Refer Note 17).3 This cash fl ow statement is also comprising of and has impact of fund fl ow/ journal entries transactions.4 Previous year fi gures have been recasted/ restated wherever necessary.As per our report of even date For and on behalf of the Board of Directors


HARESH ISRANI DirectorSHYAM MALPANIProprietor DINESH DARJI Company SecretaryMembership No. F-34171

Place : Mumbai Place : MumbaiDate : 6th October, 2015 Date : 6th October, 2015

Cash Flow Statement


NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2014NOTE : 1 - SIGNIFICANT ACCOUNTING POLICIESi. Corporate Information S. Kumars Nationwide Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956.

Company’s shares are listed on two stock exchanges in India. The Company is engaged in textile business and operates in several product categories including blended suitings, high value fi ne cotton (“HVFC”), uniform fabrics, work-wear, home textiles and furnishings and ready-to-wear garments and in all fi ber categories (natural, blended and man-made fi bers). The Company caters to both domestic and international markets.

ii. Basis of Preparation of Financial Statements The fi nancial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The

Company has prepared these fi nancial statements to comply in all material respects with the accounting standards notifi ed under the Companies (Accounting Standards) Rules 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The Financial statements have been prepared on an accrual basis and under the historical cost convention, except for freehold land, Building and Plant & Machinery having revalued amount as disclosed in Note -11 of the Financial Statements. The accounting policies adopted in the preparation of Financial Statements are consistent with those of previous year.

iii. Use of Estimates The presentation of fi nancial statements requires estimates and assumptions to be made that affect the value of assets and liabilities as well as revenues and

expenses as reported in the fi nancial statements. The difference between the actual result and estimates are recognized during the period in which they are materialized / known.

iv. Tangible Assets Tangible Assets are stated at their original cost, net of Cenvat/Value Added Tax and includes amounts added on revaluation, less accumulated depreciation and

impairment loss, if any. The cost includes interest, fi nancial charges, freight, taxes and other incidental expenses incurred for acquisition and installation of the assets. Assets revalued are stated at values determined by the independent valuers.

v. Intangible Assets Intangible assets are recognised when it is probable that the future economic benefi ts that are attributable to the asset will fl ow to the enterprise and the cost of

the asset can be measured reliably. vi. Depreciation and Amortisation

a) Depreciation on Tangible assets including revalued assets have been provided on Straight Line Method at the rates and in the manner prescribed in the Schedule XIV to the Companies Act, 1956 and Schedule II of Company’s Act 2013. Depreciation on additions to Tangible Assets is provided for on pro-rata basis from the date of addition/acquisition till the end of the year and on assets sold/discarded/demolished to the date of disposal. The depreciation on revalued portion of assets is adjusted against the revaluation reserve.

b) Depreciation on assets whose actual cost does not exceed ` 5,000/- each is provided at 100% of the cost as specifi ed in Schedule XIV to the Companies Act, 1956.

c) Computer software/System Development: Amortized Over a period of fi ve years.vii. Capital Work-In-Progress Projects under commissioning and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses, interest and other

fi nancing costs payable on funds specifi cally borrowed to the extent they relate to the period till assets are ready for intended use.viii. Impairment of Assets The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An

impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value at the weighted average cost of capital.

ix. Valuation of Inventoriesa) Raw materials (including goods-in-transit) are valued at cost, on fi rst-in-fi rst-out basis.b) Work-in-process is valued at cost. Cost for this purpose includes direct cost and attributable overheads.c) Finished goods are valued at lower of cost or net realisable value. Cost for this purpose includes direct cost, attributable overheads and excise duty.d) Stores, fuel, dyes, chemicals and packing materials are valued at cost on fi rst-in-fi rst-out basis.

x. Cash & Cash Equivalents Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank, cash on hand and short- term investments with an original maturity

of three months or less.xi. Recognition of Income and Expenditure

a) Domestic sales are recognized on transfer of risk and reward which generally coincides with dispatch of goods to the customers.b) Export sales are accounted on transfer of risk and reward which generally coincides on the date of bill of lading.c) Sales are inclusive of dyeing charges, conversion charges and are net of shortage and discounts, excluding value added tax.d) Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.e) Cost/expenditure is recognized on accrual, as they are incurred except payments of leave travel allowances and reimbursement of medical expenses to

the staff, being immaterial, are accounted for on cash basis.f) The claims against the company are accounted for on acceptance basis.

Notes to Financial Statements

26

xii. Foreign Exchange Transactions Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of transaction. Gains and losses resulting from the settlement

of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognized in the Statement of Profi t and Loss. In case of forward contracts (non speculative), the exchange differences are dealt with in the statement of Profi t and Loss over the period of contracts.

xiii. Employee Benefi tsa) Employee benefi ts comprise both defi ned contribution and defi ned benefi t plans. Defi ned contribution plan: Contribution to defi ned contribution plans are recognised as expenses in the Statement of Profi t and Loss, as they are incurred. Defi ned benefi t plan: The Company’s liability towards gratuity & Leave encashment is accounted for on the basis of an actuarial valuation, applying Projected Unit Credit

Method done at the year end and is charged to Statement of Profi t and Loss.b) All short term employee benefi ts are accounted for on undiscounted basis during the accounting period based on services rendered by employees.

xiv. Research & Development Revenue expenditure, including overheads on Research and Development, is charged off as an expense in the year in which incurred. Expenditure which results

in the creation of capital assets during development stage is taken as Fixed assets.xv. Investments Investments are classifi ed into Current and Non Current Investments. Current Investments are stated at lower of cost and fair value. Non Current Investments

are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of Non Current Investments.xvi. Borrowing costs Borrowing costs, which are directly attributable to acquisition, construction or production of a qualifying asset, are capitalized as a part of the cost of the asset.

Other borrowing costs are recognised as expenses in the period in which they are incurred. xvii. Operating Lease Leases where the lessor effectively retains substantially all the risks and benefi ts of ownership over the leased term are classifi ed as operating leases. Operating

lease rentals are recognized as an expense, as applicable, over the lease period.xviii. Segment The Company is engaged in manufacturing (in house and outsourced) fabrics, ready to wear garments and home textiles. Considering the overall nature, the

management is of the opinion that the entire operation of the Company falls under one business segment i.e. Textiles and as such there are no separate reportable business segments for the purpose of disclosures as required under Accounting Standard-17 “Segment Reporting”.

xix. Earnings per share Basic earnings per share are calculated by dividing the net profi t or loss for the period attributable to equity shareholders by the weighted average number of

equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profi t or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

xx. Income Tax Tax expense comprises of current tax and deferred tax. Current tax and Deferred tax are accounted for in accordance with Accounting Standard - 22 on

“Accounting For Taxes on Income”, notifi ed under the Companies (Accounting Standards) Rules 2006 . Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income taxes refl ect the impact of the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years / period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that suffi cient future taxable income will be available except that deferred tax assets arising on account of unabsorbed depreciation and losses are recognised if there is virtual certainty that suffi cient future taxable income will be available to realise the same. Deferred Tax is measure based on the Tax rate and Tax Laws, enacted or substantively enacted at the Balance Sheet date.

xxi. Employee Stock Option Schemes The Company has granted Stock Options to its employees under Employees Stock Option Scheme, 2007 - Series ‘A’ (“ESOP, 2007”). In respect of Options

granted under the Employees Stock Options Plan, in accordance with guidelines issued by the SEBI and in compliance with the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accounts of India in the year 2005 and applicable for the period on or after 1st April, 2005, the cost of stock options granted to employees are accounted by the Company using the intrinsic value method and the cost based on excess of market value over the exercise price is recognized in Statement of Profi t & Loss, over vesting period on time proportion basis and included in the ‘Employee benefi t expenses’ in Note 24 of the Financial Statements. Should any employee leave in the subsequent year, before exercise of the Option, the value of Option accrued in their favour is written back to the General Reserve.

xxii. Provisions and Contingent Liabilities A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outfl ow of resources embodying economic

benefi t will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to refl ect the current best estimates. A contingent liability is disclosed, unless the possibility of an outfl ow of resources embodying the economic benefi t is remote.

NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2014



NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2014 (` in lacs)

Current Year As at 30.09.2014


NOTE : 2 - SHARE CAPITAL No. of Shares Amount No. of Shares AmountAuthorised Capital Equity Shares of `10 each 370,000,000 37,000.00 370,000,000 37,000.00 Preference Shares of `100 each 9,000,000 9,000.00 9,000,000 9,000.00

Total 379,000,000 46,000.00 379,000,000 46,000.00 Issued, Subscribed & Paid up CapitalEquity Shares of ` 10 each, fully Paid up 297,403,377 29,740.34 297,403,377 29,740.34 6% Cumulative Redeemable Preference Shares of `100 each, fully Paid up 372,500 372.50 372,500 372.50 0.01% Redeemable Preference Shares of `100 each, fully Paid up 4,386,147 4,386.15 4,386,147 4,386.15

Total 302,162,024 34,498.99 302,162,024 34,498.99

Note 2.1 Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period: (` in lacs)Particulars Equity Shares

As at 30.09.2014 As at 31.03.2013 No. of Shares Amount No. of Shares Amount

Shares outstanding at the beginning of the period 297,403,377 29,740.34 297,403,377 29,740.34 Shares Issued during the period upon conversion of warrants - - - - Shares outstanding at the end of the period 297,403,377 29,740.34 297,403,377 29,740.34

Particulars 6% Cumulative Redeemable Preference Shares As at 30.09.2014 As at 31.03.2013

No. of Shares Amount No. of Shares AmountShares outstanding at the beginning of the period 372,500 372.50 527,500 527.50 Shares Issued during the period - - - - Shares redeemed during the period - - 155,000 155.00 Shares outstanding at the end of the period 372,500 372.50 372,500 372.50

Particulars 0.01% Redeemable Preference Shares As at 30.09.2014 As at 31.03.2013

No. of Shares Amount No. of Shares AmountShares outstanding at the beginning of the period 4,386,147 4,386.15 4,705,947 4,705.95 Shares Issued during the period - - - - Shares redeemed during the period - - 319,800 319.80 Shares outstanding at the end of the period 4,386,147 4,386.15 4,386,147 4,386.15

Note 2.2Details of Preference shareholders holding more than 5% in 6% Cumulative Redeemable Preference Shares of the CompanyName of Shareholder As at 30.09.2014 As at 31.03.2013

No. of Shares held % of Holding No. of Shares held % of Holding Anjaneya Holdings Private Limited 372,500 100.00 372,500 100.00

Details of Preference shareholders holding more than 5% in 0.01% Redeemable Preference Shares of the CompanyName of Shareholder As at 30.09.2014 As at 31.03.2013

No. of Shares held % of Holding No. of Shares held % of Holding IDBI Bank Limited 4,306,627 98.19 4,306,627 98.19

Details of Equity Shareholders holding more than 5% shares of the CompanyName of Shareholder As at 30.09.2014 As at 31.03.2013

No. of Shares held % of Holding No. of Shares held % of HoldingAnjaneya Holdings Private Limited 25,416,031 8.55 Copthall Mauritius Investment Limited 24,034,445 8.08 IDBI Bank Limited 15,827,419 5.32 IL& FS Financial Services Limited 17,656,051 5.94 22,467,505 7.55 Finquest Financial Solutions Private Limited 14,966,000 5.03 Bharat Jayantilal Patel 34,787,546 11.70


28


Note 2.3 - Term/rights attached to Equity SharesThe Company has only one class of equity shares having a par value of ` 10 per Share. Each holder of equity shares is entitled to one vote per share. The Dividend, if and when declared, is declared and paid in Indian rupees. The Board of directors have neither declared nor proposed any Dividend. 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 distributions will be in proportion to the number of equity shares held by the shareholders. Note 2.4 Terms of Redemption of Preference SharesDuring the year, the company has redeemed 6% Redeemable Preference Shares aggregating to ` NIL Lacs (Previous year ̀ 155.00 Lacs)Outstanding 6% Cumulative Redeemable Preference Shares was redeemable by 1st October, 2013 ( Refer Note 46).During the year, the company has redeemed 0.01% Redeemable Preference Shares aggregating to ` NIL Lacs (Previous year ̀ 319.80 Lacs).Outstanding 0.01% Cumulative Redeemable Preference Shares are to be redeemed @ 25% in each year between October 2016 to September 2020.Note 2.5Shares reserved for issue under options {Refer Note 1 (xxi)}The Company has issued stock options to the permanent employees exercisable into 1,911,000 numbers of equity shares of the Company under ‘Employees Stock Option Scheme 2007 – Series A’ (“ESOP 2007”). Each option when exercised would be convertible into one equity share of a face value of `10 each fully paid-up. The important features of the ESOP scheme are as follows:

Parameters/Terms ExplanationI Vesting period Minimum period of one year and a maximum period of fi ve years from the date of grant i.e. 31.10.2007.II Vesting schedule The actual Vesting Schedule of Options will be as follows:

Year Period and Date % of Vesting1st Year 31.10.2007 to 30.10.2008 30%2nd Year 31.10.2008 to 30.10.2009 30%3rd Year 31.10.2009 to 30.10.2010 40%

III Exercise price 30% discount on the prevailing market price of ` 128/- of the shares as on the date prior to the date of the Compensation Committee resolution.

IV Exercise Period Exercise period will be three years from the date of vesting.V ESOP Price per share ` 89.60

Particulars As at 30.09.2014 As at 31.03.2013a) Number of Options outstanding beginning of the period 365,760 911,820b) Options exercised NIL NILc) Total number of shares arising as a result of exercise of Options NIL NILd) Options Lapsed/cancelled 365,760 546,060e) Money realised by exercise of options NIL NILf) Total number of options in force NIL 365,760

Note : ESOP Scheme stands closed.




(` in lacs)Current Year

As at 30.09.2014Previous Year

As at 31.03.2013NOTE : 3 - RESERVES & SURPLUSa. Capital Reserve

Opening Balance 2,206.25 2,206.25 Closing Balance 2,206.25 2,206.25

b. Capital Redemption ReserveOpening Balance 13,742.29 13,267.49 (+) Current Year Transfer - 474.80 Closing Balance 13,742.29 13,742.29

c. Securities Premium AccountOpening Balance 81,750.34 81,750.34 Closing Balance 81,750.34 81,750.34

d. Debenture Redemption ReserveOpening Balance 4,752.80 4,752.80 Closing Balance 4,752.80 4,752.80

e. Revaluation ReserveOpening Balance 1,064.32 1,082.00 (-) Written back on account of depreciation on revalued portion of Fixed Assets {Refer Note 11 (ii)} 1,064.32 17.68 Closing Balance - 1,064.32

f. Employees Stock Options Outstanding AccountOpening Balance 140.45 350.14 (-) Written Back due to lapse/ cancellation of employee shared based payment plan (Refer Note 2.5) 140.45 209.69 Closing Balance - 140.45

g. SurplusOpening Balance (21,025.76) 17,360.70 (+) Adjustment of depreciation as per schedule II of Companies Act.{Refer note 11 (i)} (7,399.07) - (+) Net Profi t/(Loss) for the period (186,949.12) (41,416.55)(+) Reversal of Proposed Preference & Equity Dividend and tax thereon - 3,504.89 (-) Transfer to Capital Redemption Reserves - 474.80 Closing Balance (215,373.95) (21,025.76)

Total (112,922.27) 82,630.69

NOTE : 4 - LONG TERM BORROWINGSSECURED(a) Term Loans from Banks

Term Loans under Technology Upgradation Fund Scheme (Refer Note 4.1) 16,901.59 29,783.65 Term Loan under Overseas Investment Finance Programme (Refer Note 4.2) - 11,764.16 Rupee Term Loans from Banks (Refer Note 4.3) 2,634.29 10,596.24 Funded Interest Term Loans (Refer Note 4.4) - 5,219.37 Equipment Finance (Refer Note 4.5) - 13.58

(b) Loans and Advances from Related Party (Refer Note 4.6) - 2,750.00 19,535.88 60,127.00

UNSECURED(a) Loans and Advances from Related Party (Refer Note 4.7) - 4,000.00

- 4,000.00

Total 19,535.88 64,127.00


30


Notes : Nature of Security and Terms of Repayment for Long Term Borrowings: (` in lacs)Nature of Security / Terms of Repayment / Applicable Rate of Interest Current Year

As at 30.09.2014 Previous Year

As at 31.03.2013Long Term Borrowings

Current Maturities

grouped under Other Current

Liabilities

Long Term Borrowings

Current Maturities grouped under Other Current

Liabilities

4.1 Term Loans Under Technology Upgradation Fund Scheme(a) Secured by fi rst pari passu charge on the Fixed Assets of existing Jhagadia

Unit, second pari passu charge on all other Fixed Assets and Current Assets of the Company, both present and future, personal guarantee of Chairman & Managing Director and corporate guarantee of Anjaneya Holdings Pvt. Ltd.

(i) 32 Equal Quarterly Installment (EQI) starting from April 2010 to January 2018. The applicable interest rate is in the range of 13.3% to 15.0% p.a. The Installments amounting to ` 1,005.63 lacs against the loan have not been paid from 01/01/2013.

1,562.50 1,630.63 2,500.00 693.13

(ii) 32 EQI starting from July 2010 to April 2018. The applicable interest rate is in the range of 13.3% to 15.0% p.a. The Installments amounting to ` 468.75 lacs against the loan have not been paid from 01/04/2013.

859.38 781.25 1,328.12 312.50

(iii) This facility has been recalled by lender on 11th December, 2013 (Refer Note 9.2, 34 & 39).

- - 3,079.23 1,250.00

(iv) 78 Equal Monthly Installment (EMI) starting from June 2011 to November 2017. The applicable interest rate is 14.75% p.a.The Installments amounting to ` 2,211.54 lacs against the loan have not been paid from 01/11/2012.

2,500.00 3,365.39 5,961.54 -

(v) 78 EMI starting from June 2011 to November 2017. The applicable interest rate is 14.75% p.a. The Installments amounting to ` 530.77 lacs against the loan have not been paid from 01/11/2012.

600.00 348.38 971.46 -

(vi) 23 EQI starting from July 2011 to June 2017. The applicable interest rate is 14.25% p.a. The Installments amounting to ` 327.18 lacs against the loan have not been paid from 01/01/2013.

313.04 532.57 622.78 222.83

(vii) 78 EMI starting from June 2011 to December 2017. The applicable interest rate is 15.0% p.a. The Installments amounting to ` 2,146.15 lacs against the loan have not been paid from 01/07/2012.

2,066.67 3,100.00 3,497.44 1,669.23

(b) Secured by specifi c charge on the Fixed Assets of the Weaving Unit at Dewas, Process House and Stiching Unit at Jhagadia, fi rst pari passu charge on all other Fixed Assets (excluding Fixed Assets of existing Jhagadia Unit), second pari passu charge on Current Assets of the Company, both present and future, personal guarantee of Chairman & Managing Director and corporate guarantee of Anjaneya Holdings Pvt. Ltd.32 EQI starting from June 2012 to March 2020. The applicable interest rate is in the range of 14.0% to 14.25% p.a.

(i) The Installments amounting to ` 1,563.92 lacs against the loan have not been paid from 30/09/2012.

3,375.00 2,137.00 4,323.08 1,188.92

(ii) The Installments amounting to ` 3,125.00 lacs against the loan have not been paid from 30/06/2012.

5,625.00 4,375.00 7,500.00 2,500.00

Total 16,901.59 16,270.22 29,783.65 7,836.61







Current Maturities


Liabilities



Liabilities

4.2 Term Loans Under Overseas Investment Finance Programme(a) Secured by fi rst pari passu charge on the Fixed Assets (excluding fi xed

assets of existing Jhagadia Unit) of the Company, both present and Future, pledge of promoter's shares held in the Company, pledge of shares of overseas subsidiary company and personal guarantee of Chairman & Managing Director.

- - 6,375.00 5,093.68

This facility has been recalled by lender on 11th December, 2013 (Refer Note 9.2, 34 & 39).

(b) Secured by fi rst pari passu charge on the Fixed Assets (excluding Fixed Assets of existing Jhagadia Unit) of the Company, second pari passu charge on the Fixed Assets of existing Jhagadia Unit, second pari passu charge on Current Assets of the Company, both present and future, pledge of promoter’s shares held in the Company, pledge of shares of overseas subsidiary Company and personal guarantee of Chairman & Managing Director.

- 5,389.16 5,389.16 -

The Loan was repayable in 41 EMI starting from January 2011 to May 2014. The applicable interest rate is 14.75% p.a.The Installments amounting to ` 5,389.16 lacs against the loan have not been paid from 01/11/2012.

Total - 5,389.16 11,764.16 5,093.68 4.3 Rupee Term Loans from Banks(a) Secured by fi rst pari passu charge on the Fixed Assets (excluding Fixed

Assets of existing Jhagadia Unit) of the Company, second pari passu charge on the Fixed Assets of existing Jhagadia Unit, second pari passu charge on Current Assets of the Company, both present and future, personal guarantee of Chairman & Managing Director and corporate guarantee of Reid & Taylor (India) Ltd., fi rst pari passu charge on the Fixed Assets of the guarantor Company, second pari passu charge on Current Assets of the guarantor Company and pledge of promoter’s shares held in guarantor Company.

- - 3,480.00 8,540.00

This facility has been recalled by lender on 3rd January, 2014 (Refer Note 9.2, 34 & 39).

(b) Secured by specifi c fi rst charge on Offi ce property, second pari passu charge on Current Assets of the Company, both present and future, and personal guarantee of Chairman & Managing Director and corporate guarantee of Anjaneya Holdings Pvt. Ltd.

- 502.55 - 502.54

The Loan was repayable in 20 EQI starting from January 2010 to October 2014. The applicable interest rate is 14.25% p.a. The Installments amounting to ` 502.13 lacs against the loan have not been paid from 01/01/2013.

(c) Secured by fi rst pari passu charge on the Fixed Assets of the Company and second pari passu charge on Current Assets of the Company, both present and future.The Loan was repayable in 101 EMI starting from November 2005 to March 2014. The applicable interest rate is 10.0% p.a. The Installments amounting to ̀ 13.76 lacs against the loan have not been paid from 01/05/2013.

- 13.76 - 13.76

The Loan is repayable in 36 EMI starting from October 2013 to September 2016. The Installments amounting to ` 23.86 lacs against the loan have not been paid from 01/10/2013.

31.81 47.71 67.59 11.93


32





Current Maturities


Liabilities



Liabilities

(d) Secured by fi rst pari passu charge on the Fixed Assets of the Company and second pari passu charge on Current Assets of the Company, both present and future.The Loan is repayable 30%,30% & 40% by September 2014, September 2015 & September 2016 respectively. The Installments amounting to ` 1,951.86 lacs against the loan have not been paid from 30/09/2014.

2,602.48 3,903.72 6,506.20 -

(e) Secured by fi rst pari-passu charge on the Current Assets, second pari passu charge on the Fixed Assets of the Company, personal guarantee of Chairman & Managing Director and corporate guarantee of Anjaneya Holdings Pvt. Ltd.

- - 542.45 -

This facility has been revoked by the lender on 28/05/2014 and reinstated the accounts. (Refer Note 45)

Total 2,634.29 4,467.74 10,596.24 9,068.23 4.4 Funded Interest Term Loans 5,219.37 -

Secured by fi rst pari passu charge on the Current Assets, second pari passu charge on the Fixed Assets of the Company, Personal Guarantee of Chairman & Managing Director and Corporate Guarantee of Anjaneya Holdings Pvt. Ltd.This facility has been revoked by the lender on 28/05/2014 and reinstated the accounts. (Refer Note 45)

Total - - 5,219.37 - 4.5 Equipment Finance - 2.08 13.58 75.01

Secured by hypothecation of specifi c equipments / assets.Total - 2.08 13.58 75.01

4.6 Loans and Advances from Related Party - 19,250.00 2,750.00 16,500.00 Secured by second pari passu charge on the Fixed Assets of the Company, both present and future.The Loan was repayable in 16 EQI starting from September 2009 to June 2013, further extended to June 2014. The applicable interest rate is 12.0% p.a. The Installments amounting to ` 19,250.00 lacs against the loan have not been paid from 31/12/2012.

Total - 19,250.00 2,750.00 16,500.00 4.7 Unsecured Loans and Advances from Related Party - 4,000.00 4,000.00 -

Unsecured Interest Free Loan from Company’s Indian Subsidiary is repayable after complete repayment of Secured Loan from Subsidiary. (Refer note 4.6)

Total - 4,000.00 4,000.00 -

Current Year as at 30.09.2014

Previous Year as at 31.03.2013

NOTE : 5 - DEFERRED TAX LIABILITIES (NET)Deferred Tax Liabilities {Refer Note 1 (xx)} : Impact of Difference between Tax depreciation & Depreciation/ Amortisation charged as per Companies Act 2,866.15 4,231.62 Deferred Tax Assets {Refer Note 1 (xx)} :Disallowance under section 43B of Income Tax Act for Employee Benefi ts (177.79) -

Deferred Tax Liabilities (Net) 2,688.36 4,231.62






As at 31.03.2013NOTE : 6 - LONG TERM PROVISIONSProvision for Employee Benefi ts {Refer Note 1(xiii) & 57}Gratuity (Unfunded) 216.56 53.63 Leave Encashment (Unfunded) 72.57 114.84

Total 289.13 168.47

NOTE : 7 - SHORT TERM BORROWINGSSECURED(a) Repayable on Demand Working Capital Loans from Banks Cash Credit Loan (Refer Note 7.1) 131,184.08 131,890.37 (b) Short Term Loan from Others (Refer Note 7.2) 1,409.44 1,542.11

Total 132,593.52 133,432.48 Notes : Nature of Security / Applicable Rate of Interest for Short Term Borrowings:7.1 Working Capital Loans from Banks Secured primarily by fi rst pari passu charge on Current Assets and second pari passu charge on Company’s all movable and immovable properties. In addition to above,

corporate guarantee from Anjaneya Holding Pvt. Ltd. and personal guarantee of Chairman & Managing Director. Average Interest rate on above Working Capital Loan is in the range of 12% to 15.75% p.a.

7.2 Short Term Loans from Others Secured by pledge of shares held by promoters in the Company.

NOTE : 8 - TRADE PAYABLESTrade Payables for Goods Purchased & Services Received {Refer Note 32 (a) & 39}Due to Micro, Small and Medium Enterprises (Refer Note 8.1) - - Due to Others 16,564.79 24,935.97

Total 16,564.79 24,935.97

Notes :8.1 Payment against supplies from Micro, Small and Medium Enterprises (MSME) and ancillary undertakings are made in accordance with the agreed credit terms

and to the extent ascertained from available information, the Company does not have any MSME creditors.

NOTE : 9 - OTHER CURRENT LIABILITIESCurrent Maturities of Long Term BorrowingsSECURED

Term Loans under Technology Upgradation Fund Scheme (Refer Note 4.1) 16,270.22 7,836.61 Term Loans under Overseas Investment Finance Programme (Refer Note 4.2) 5,389.16 5,093.68 Rupee Term Loans from Banks (Refer Note 4.3) 4,467.74 9,068.23 Equipment Finance (Refer Note 4.5) 2.08 75.01 Loans and Advances from Related Party (Refer Note 4.6) 19,250.00 16,500.00

UNSECURED Loans and Advances from Related Party (Refer Note 4.7) 4,000.00 - Recalled Non-Convertible Debentures (Refer Note 9.1, 28, 34 & 39) 15,137.34 15,078.81 Recalled Long Term Borrowings including Interest (Secured ) (Refer Note 9.2, 34 & 39) 40,251.33 7,813.87 Recalled Short Term Borrowings including Interest (Secured) (Refer Note 9.3, 34 & 39) 61,849.95 50,490.65 Recalled Unsecured Term Loan from Banks (in foreign currency) (Refer Note 9.5, 34 & 39) 2,407.07 2,168.69 Interest accrued but not due on Borrowings - 205.20 Interest accrued and due on Borrowings (Refer Note 9.6 & 35) 37,202.80 20,465.55 Unsecured Advances from Promoters (Refer Note 9.4 & 30) 12,759.96 9,748.81 Short Term Loan from Others - 150.00 Debentures Redemption premium Payable (Refer Note 9.1, 28, 34 & 39) 3,932.73 3,932.73 Unclaimed Dividends 7.40 7.42 Advances received from Related Party 6,394.18 10,062.07 Payables for Expenses 2,557.93 920.95 Creditors for Capital Goods 225.99 245.58 Statutory Dues Payable (Refer Note 35) 549.27 3,101.43 Other Payables* 1,074.91 1,344.81

Total 233,730.06 164,310.10 *Other payable includes Advance/deposit received from customers/dealers and amount payable to employees.


34


Notes : Nature of Security and Terms of Repayment for Term Borrowings: (` in lacs)

Nature of Security / Terms of Repayment / Applicable Rate of Interest Current Year As at 30.09.2014


9.1 Redeemable Debentures Non-Convertible Debentures (NCDs) are secured by fi rst pari passu charge on all the Fixed Assets of the Company and on all the Fixed Assets of Reid & Taylor (India) Limited, simple mortgage on the property situated at Mehsana, Gujarat, pledge of promoter’s shares held in the Company, pledge on entire shareholding (present and future) held by Sansar Holding Inc. in the Company non-disposal undertaking for "Reid & Taylor" trade mark and fi rst pari passu charge on brands held by Company except "S. Kumars" brand. Current interest rate is 19.0% p.a.

15,137.34 15,078.81

The NCDs are recalled on 3rd January, 2013. (Refer Note 28, 34 & 39)Total 15,137.34 15,078.81

9.2 Recalled Long Term Borrowings including interestRefer Note 4.1 (a) (iii), 34, 39 5,196.09 -Refer Note 4.2 (a), 34, 39 13,748.96 -Refer Note 4.3 (a), 34, 39 12,503.28 -Secured by fi rst pari passu charge on the Fixed Assets (excluding assets having specifi c charge) of the Company, and second pari passu charge on Current Assets of the Company, both present and future.This Facility has been recalled by lender on 16th May 2013. (Refer Note 34 & 39) 8,803.00 7,813.87

Total 40,251.33 7,813.87 9.3 Recalled Short Term Borrowings including interest(a) Working Capital loans from banks including interest accrued thereon, are Secured primarily by fi rst pari

passu charge on Current Assets and second pari passu charge on Company's all movable and immovable properties. In addition to above, corporate guarantee from Anjaneya Holdings Pvt. Ltd. and personal guarantee of Chairman & Managing Director have also been provided. Average Interest rate on above Working Capital loan is in the range of 15.20% to 16.45% p.a.This facility has been recalled by lender on 16th May, 2013. (Refer Note 34 & 39) 1,834.99 1,633.59 This facility has been recalled by lender on 13th May, 2013. (Refer Note 34 & 39) 4,972.32 4,404.92 This facility has been recalled by lender on 28th December, 2012. (Refer Note 34 & 39) 18,251.32 16,050.62 This facility has been recalled by lender on 06th March, 2013. (Refer Note 34 & 39) 19,187.81 17,010.01 This facility has been recalled by lender on 11th December, 2013. (Refer Note 34 & 39) 5,921.74 -

(b) Short Term Loan including interest accrued thereon, is secured by fi rst pari passu charge on all Fixed Assets of the Company (excluding exclusively charged Fixed Assets), second pari passu charge on exclusively charged Fixed Assets, second pari-passu on all Current Assets (both Present and future), Demand Promissory Note, personal guarantee of Chairman & Managing Director along with pledge of Equity shares held by the Company in Reid and Taylor (India) Ltd. The applicable interest rate is 15.0% p.a.

11,681.77 11,391.51

This loan has been recalled by lender on 31st March 2013. (Refer Note 34 & 39)Total 61,849.95 50,490.65

9.4 Unsecured Advances from PromotersThe lenders of the Company to whom equity shares of the Company were pledged by the promoters as a collateral security (in addition to the security of Fixed and Current Assets of the Company) have invoked and or sold the shares pledged to them and adjusted the proceeds amounting to ` 12,759.96 lacs (Previous Year `9,748.81 lacs) against the dues owed by the Company. The amount of funds so realized by them by the invocation/sale of shares has been treated as amount advanced by the promoters to the Company as advance against share application money for the issue of equity shares to the promoters after due completion of the required formalities and approvals. (Refer Note 30)

12,759.96 9,748.81

Total 12,759.96 9,748.81 9.5 Recalled Unsecured Term Loan from Banks (in foreign currency)

This loan has been recalled by lender on 31st December 2012. (Refer Note 34 & 39) 2,407.07 2,168.69 Total 2,407.07 2,168.69

9.6 Interest accrued and due on all borrowings including debentures 37,202.80 20,465.55 There is a default in Interest payment amounting to ` 37,202.80 lacs. (Refer Note 35)

Total 37,202.80 20,465.55

NOTE : 10 - SHORT TERM PROVISIONS(a) Provision for Employee Benefi ts {Refer Note 1(xiii) & 57} Gratuity (Funded) 183.83 227.38 Leave Encashment (Unfunded) 42.98 60.33 (b) Others Provision for Taxation (Net of Advance Tax and MAT Credit utilised) {Refer Note 1(xx)} 7,190.58 4,515.01 Provision for FBT (Net of Advance Tax) 1.56 1.55

Total 7,418.95 4,804.27




NOTE : 11 - FIXED ASSETS{Refer Note 1(iv), 1(v), 1(vi), 1(vii), 1(viii), 1(xvi) and 32 (b)} (` in lacs)

Particulars Gross Block Accumulated Depreciation Net BlockBalance

as at 01.04.2013

Additions (Disposals)/Adjustments

Balance as at

30.09.2014

Balance as at

01.04.2013

Depreciation/Amortisation

Charge for the period

Adjustment due to

revaluations

Adjustment in Retained

Earnings

On (Disposals)/

Adjustments

Balance as at

30.09.2014

Balance as at

30.09.2014

Balance as at

31.03.2013

Not Under lease, unless stated otherwisea) Tangible Assets

LandFreehold 777.07 - - 777.07 - - - - - 777.07 777.07 Leasehold 826.53 - - 826.53 3.09 - - - 3.09 823.44 823.44

Buildings 14,665.69 45.58 - 14,711.27 2,316.22 708.55 1,064.32 - 4,089.09 10,622.18 12,349.47 Plant and Equipments 128,565.58 16.02 (2,318.44) 126,263.16 47,399.63 15,019.18 - 6,997.70 (922.33) 68,494.18 57,768.98 81,165.95 Furniture and Fixtures 2,153.05 3.32 (110.55) 2,045.82 408.18 330.04 - 2.20 (53.00) 687.42 1,358.40 1,744.87 Vehicles 916.03 0.62 (743.58) 173.07 401.65 67.02 - 7.66 (340.17) 136.16 36.91 514.38 Offi ce Equipments 530.03 2.58 (2.94) 529.67 115.01 124.91 - 65.57 (0.53) 304.96 224.71 415.02 Leasehold Improvements

1,085.86 - - 1,085.86 548.98 257.97 - 278.91 - 1,085.86 - 536.88

Computers 506.01 1.30 (22.97) 484.34 400.85 46.47 - 47.03 (14.81) 479.54 4.80 105.16

Total 150,025.85 69.42 (3,198.48) 146,896.79 51,593.61 16,554.14 1,064.32 7,399.07 (1,330.84) 75,280.30 71,616.49 98,432.24 Previous year Total 148,659.97 2,506.67 (1,140.79) 150,025.85 39,556.29 12,871.10 17.68 - (851.46) 51,593.61 98,432.24

b) Intangible AssetsComputer software 72.65 0.23 (30.56) 42.32 52.64 9.44 - - (30.56) 31.52 10.80 20.01 Total 72.65 0.23 (30.56) 42.32 52.64 9.44 - - (30.56) 31.52 10.80 20.01 Previous year Total 68.30 4.35 - 72.65 46.57 6.07 - - - 52.64 20.01

c) Capital Work In Progress

- - - - - - - - - - - -

Notes :- (i) The Company has revised useful life of assets as per the useful life specifi ed in the Schedule II of the Companies Act, 2013 or as reassessed by the Company

.As prescribed in Schedule II, an amount of ` 7,399.07 lacs has been charged to the opening balance of the retained earnings for the assets in respect of which the remaining useful life is ` Nil as on April, 2014.

(ii) Gross Block includes certain Fixed assets for which revaluation was carried out in the year 1997, by the valuer. The carried forward balance in Revaluation reserve amounting to ` 1,064.32 lacs has been written of fully during the period.

(iii) Based on the internal estimate and assessments the management worked out impairment in relation to its assets and made a provision of `609 lacs in the books as on 30.06.2014. {Refer Note 32(b)}

(iv) During the year the Company has capitalized interest of ` NIL (Previous Year ` 2,167.54 Lacs) which has been paid to TUFs Lenders. The borrowing was exclusively used for the HVFC/HT project, process house & stitching unit at Jhagadia and weaving unit at Dewas.



NOTE : 12 - NON CURRENT INVESTMENTSTrade Investments {Refer Note 12.1 & 1(xv)}Investment in Equity instruments 54,254.90 54,243.85 Less: Provision for Diminution in the Value of Investments (Refer note 12.3, 27 & 34) - 32,257.17 Less: Written off during the year 32,257.17 -

Total (A) 21,997.73 21,986.68 Other Non-Trade Investments {Refer Note 12.2 & 1(xv)} 5.10 4.95

Total (B) 5.10 4.95 Total (A+B) 22,002.83 21,991.63

Aggregate amount of quoted investments {Market value of ` 6.80 Lacs (Previous Year ` 41 Lacs)} 100.00 100.00 Aggregate amount of unquoted investments 21,902.83 21,891.63


36

NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 201412.1 Details of Trade Investments

(` in lacs)Name of the Body Corporate

Subsidiary / Associate / JV/

Controlled Entity / Others

No. of Shares / Units Quoted / Unquoted

Partly Paid /

Fully paid

Extent of Holding (%)

Amount (`) Whether stated at

CostYes / No

If Answer to Column (11)

is 'No' - Basis of Valuation

2014 2013 2014 2013 2014 2013

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)Investment in Equity InstrumentsReid & Taylor (India) Limited, Equity Shares of ` 10 each (Refer Note 29 & 12.4)

Subsidiary 64,199,550 75,601,344 Unquoted Fully Paid 47.70 56.17 4,005.00 4,005.00 Yes NA

SKNL Italy S.p.A, Equity shares of Euro 1 each

Wholly owned foreign Subsidiary

18,200,000 18,200,000 Unquoted Fully Paid 100.00 100.00 12,719.67 12,719.67 Yes NA

SKNL International B.V, Equity shares of Euro 1 each (Refer Note 27 & 12.3)


4,964,910 4,964,910 Unquoted Fully Paid 100.00 100.00 3,366.75 3,355.70 No Refer Note 27 & 12.3

SKNL Europe B.V, Equity shares of Euro 1 each


2,573,604 2,573,604 Unquoted Fully Paid 100.00 100.00 1,801.31 1,801.31 Yes NA

Brandhouse Retails Limited, Equity Shares of ` 10 each

Having Signifi cant infl uence

1,000,000 1,000,000 Quoted Fully paid 0.19 0.19 100.00 100.00 Yes NA

Belmonte Retails Limited, Equity Shares of ` 10 each

Subsidiary 50,000 50,000 Unquoted Fully Paid 100.00 100.00 5.00 5.00 Yes NA

Total 21,997.73 21,986.68 12.2 Details of Other Investments

Name of the Body Corporate




Partly Paid /

Fully paid

Extent of Holding

(%)


CostYes / No


is 'No' - Basis of

Valuation2014 2013 2014 2013 2014 2013

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)Investment in Equity InstrumentsAnjaneya Foundation, Equity Shares of ` 10 each


Total 5.10 4.95 12.3 Investment held in the shares of Subsidiary companies and Company under the same management, being of long term and strategic in nature is stated at cost

of acquisition, except for SKNL International B.V. where an adjustment of diminution of such investments has been made in the accounts. (Refer Note 27)12.4 The Company has availed a Short Term Loan facility of ` 10,000 lacs from IL&FS Financial Services Limited (IL&FS) as per the sanction letter dated 24th

August, 2011, against the security of 26% (34,995,838 shares) of Equity Shares (not listed) held by the Company in its subsidiary Reid & Taylor (India) Ltd. (RTIL). The lender has, on 31st March 2013, invoked 24,523,656 number of shares pledged to them and adjusted the proceeds calculated by them at ` 11,691.51 lacs towards the principal and interest due on the above Short Term Loan facility, in all amounting to ` 11,691.51 lacs. Subsequently, in response to Company’s repayment programme of the above Short Term Loan, IL&FS has vide their letter dated 15th April 2013 continued to show the Short Term Loan as due and outstanding and further required the Company to pay holding cost on the Loan so adjusted by them @ 15% p.a. The Company, therefore, continues to show the full liability of the Short Term Loan availed from the Lender on the liability side. Consequently, the investment in the equity shares of RTIL is shown at full value on the asset side without giving impact to the invocation.



NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2014(` in lacs)



NOTE : 13 - LONG TERM LOANS AND ADVANCESUnsecured, considered good, unless stated otherwisea. Capital Advances {Refer Note 32(a) & 34} 67.07 54,725.89 b. Security Deposits 198.80 322.05 c. Other Loans and Advances Loans and Advances to Staff 14.47 33.71 Advances Recoverable in Cash or Kind for value to be received 56.71 97.65 Prepaid Expenses - 60.60 Service Tax Receivable 2.53 162.25 Insurance Claim Receivable 9.45 -

Total 349.03 55,402.15 NOTE : 14 - OTHER NON CURRENT ASSETSBank Deposits against Margin Money 197.25 80.97 Interest Receivable on Fixed Deposit with Banks 12.10 28.87

Total 209.35 109.84

NOTE : 15 - INVENTORIES(As taken, valued and certifi ed by the Management)Valued at Lower of Cost and Net Realisable Value {Refer note 1(ix) & 32(b)}a. Raw Materials and Components 22,724.48 52,099.21 b. Work-in-Progress 7,346.06 23,906.16 c. Finished Goods 24,727.19 55,727.26d. Stores and Spares, Fuel and Packing Materials 416.72 325.21

Total 55,214.45 132,057.84 NOTE : 15.1Raw MaterialGrey Fabrics 22,552.50 43,361.47 Fabric for Garments 2.10 8,391.03 Yarn 169.88 22,724.48 346.71 52,099.21Work in ProgressFabrics 7,346.06 23,906.16 Finished GoodsFabrics 24,727.19 55,367.44 Garments/Made-ups - 24,727.19 359.82 55,727.25Stores and spares, fuel and packing materials 416.72 325.21

Total 55,214.45 132,057.84

Note : 16 - TRADE RECEIVABLESTrade Receivables outstanding for a period less than six months from the date they are due for payment {Refer note 32(a) & 49}Unsecured, Considered Good 148,401.15 164,030.15

148,401.15 164,030.15 Trade Receivables outstanding for a period exceeding six months from the date they are due for payment {Refer note 32(a) & 49}Unsecured, Considered Good 34,724.09 19,386.43 Unsecured, Considered Doubtful 836.42 743.63 (-) Provision for Doubtful Receivables (836.42) (743.63)

34,724.09 19,386.43

Total 183,125.24 183,416.58


38




As at 31.03.2013NOTE : 17 - CASH AND BANK BALANCESA Cash and Cash Equivalents {Refer note 1(x)} Cash on Hand 1.84 4.45 With Banks in Current Accounts 73.25 75.09 141.91 146.36B Other Bank Balances Bank Deposit against Margin money (with maturities more than

3 months and less than 12 months) - 87.13

Bank Deposits against Bank Guarantees (with maturities more than 3 months and less than 12 months)

- 70.92

with Bank (Earmarked for Dividend) 7.40 7.42 7.40 165.47

Total 82.49 311.83

NOTE : 18 - SHORT TERM LOANS & ADVANCESUnsecured, considered good, unless stated otherwise Advances to Related Party (Refer Note 48) Subsidiary -Anjaneya Foundation (Section 25 Company) 41.35 41.35 Advances Recoverable in Cash or Kind for value to be received {Refer note 32(a) & 34} Unsecured, Considered Good 1,250.70 20,691.52 Unsecured, Considered Doubtful 1,544.71 1,502.88 (-) Provision for Doubtful Advances (1,544.71) 1,250.70 (1,502.88) 20,691.52 Others Deposits 102.15 158.90 Prepaid Expenses 30.05 253.46 Loans and Advances to Staff 33.85 31.96 Cenvat Receivable 188.26 114.36 VAT Receivable 68.60 68.57 Export Incentives 71.77 494.68 14.49 641.74

Total 1,786.73 21,374.61

NOTE : 19 - OTHER CURRENT ASSETSInterest Receivable on TUF Loan - 22.86

Total - 22.86



NOTE : 20 - REVENUE FROM OPERATIONSSale of Products {Refer Note 1(xi) (a) & (b)} 372,402.31 338,262.52 Sale of Services {Refer Note 1(xi) (c)} 259.25 1,367.58 Other Operating Revenue : Export Benefi ts 67.21 27.09 Sale of Scrap - 42.88 Revenue from Operations (Gross) 372,728.77 339,700.07 (-) Excise duty - 111.80

Revenue from Operations (Net) 372,728.77 339,588.27 NOTE : 20.1 - SALE OF PRODUCTS & SERVICESa) Sale of Products {Refer Note 1(xi) (a) & (b)} Fabrics 372,249.61 287,997.68 Grey - 102.96 Yarn 87.92 36.78 Fibre - 17.41 Garments/ Made-ups 64.78 50,107.69

372,402.31 338,262.52 b) Sale of Services {Refer Note 1(xi) (c)} Conversion Charges 259.25 1,367.58

Total 372,661.56 339,630.10 Note : Excise duty on sales amounting to ` NIL lacs (Previous year ` 111.80 lacs) has been reduced from Sales in Statement of Profi t & Loss and Excise Duty on Increase or Decrease in Inventories has been charged to Manufacturing Expenses.






NOTE : 21 - OTHER INCOMEInterest Income {Refer Note 1(xi) (d)} 45.01 63.58 Other Non Operating Income 70.67 2.39 Liability no longer required 51.55 94.59

Total 167.23 160.56

NOTE : 22 - COST OF MATERIALS CONSUMEDOpening Inventory 52,099.21 45,283.41 (+) Purchases 422,544.24 275,264.60 (-) Closing Inventory 22,724.48 451,918.97 52,099.21 268,448.80

Total 451,918.97 268,448.80 NOTE : 22.1DETAILS OF MATERIALS CONSUMEDFibre 2.72 39.07 Yarn 8,700.69 5,634.75 Fabric/Grey 404,846.31 228,386.82 Fabric for Garments 38,369.25 34,388.16

Total 451,918.97 268,448.80

NOTE : 23 CHANGES IN INVENTORIESClosing Inventory of : - Semi-fi nished Fabrics 7,346.06 23,906.16 - Finished Fabrics 24,727.19 55,367.44 - Garments and Made-ups - 32,073.25 359.82 79,633.42 Opening Inventory of : - Semi-fi nished Fabrics 23,906.16 22,179.78 - Finished Fabrics 55,367.44 46,610.62 - Garments and Made-ups 359.82 79,633.42 1,859.98 70,650.38

(Increase)/Decrease in Inventories 47,560.17 (8,983.04)

NOTE : 24 EMPLOYEE BENEFIT EXPENSESSalaries and Incentives 4,735.28 5,419.68 Contributions to - (i) Provident Fund 301.17 337.91 (ii) ESIC Fund 49.06 54.57 Gratuity Expenses 135.52 76.14 Staff Welfare Expenses 26.20 37.47

Total 5,247.23 5,925.77

NOTE : 25 FINANCE COSTSInterest Expenses 22,203.18 52,400.06 Other Borrowing Costs 7.26 589.23

Total 22,210.44 52,989.29 NOTE : 26 OTHER EXPENSESMANUFACTURING EXPENSES Conversion Charges 2,358.91 2,193.08 Freight and Octroi 792.73 249.79 Water, Power & Fuel 3,209.36 2,734.87 Stores and Spares 311.67 287.67 Excise and Entry Tax 7.78 119.78 Other Materials/ Expenses 526.74 484.48 Insurance 46.68 38.05

Total (A) 7,253.87 6,107.72


(` in lacs)

40

NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2014(` in lacs)



ADMINISTRATIVE EXPENSESRent 235.03 452.45 Rates & Taxes 68.05 92.60 Repairs and Maintenance - to Buildings 64.55 34.04 - to Machinery 7.20 7.06 - to Others 14.95 86.70 45.87 86.97 Travelling Expenses 173.76 190.72 Electricity Charges 59.08 63.26 Vehicles Maintenance 156.57 166.94 Directors' Sitting Fees 1.26 12.37 Remuneration to Auditors - Audit Fees 47.88 47.91 - Other Services - 23.98 - Reimbursement of Expenses 0.29 48.17 2.53 74.42 Bank Charges 282.29 592.95 Conveyance Expenses 40.82 50.36 Legal & Professional Charges 266.93 386.50 Listing Fees 10.76 6.29 Printing and Stationery 28.76 44.65 Telephone Expenses 49.45 62.07 Postage and Telegrams 38.74 35.64 Sales Tax 11.19 4.26 License and Registration Fees 5.97 140.09 Balances not Recoverable written off {Refer Note 32 (a)} 23.73 1,974.16 Provision for Doubtful Receivables / Amounts not Recoverable {Refer Note 32 (a)}

2,557.77 2,089.30

Loss on Sale of Assets (Net) 231.73 130.76 Service Tax 35.01 13.67 Exchange Rate Fluctuation (Net) 147.50 216.34 Other Miscellaneous Expenses 275.68 23.40

Total (B) 4,834.95 6,910.17

SELLING AND DISTRIBUTION EXPENSES Dealers Incentives 218.50 270.12 Discounts, Rebates and Allowances 1,504.69 2,489.80 Commission and Brokerage 378.32 441.54 Conference/Publicity and Business Promotion Expenses 156.29 374.34 Other Selling Expenses 832.14 627.64

Total (C) 3,089.94 4,203.44 Total (A + B+ C) 15,178.76 17,221.33


27. (a) On 19th October 2012, HMX Poland sp. Z.o.o., and its subsidiary, HMX Acquisition Corp., along with step down subsidiaries of the Company have fi led Voluntary Petition under Chapter 11 with the United States Bankruptcy Court. Consequent to the above, the assets, brands and business of HMX Acquisition Corp. were sold through a bidding process motion fi led with the Bankruptcy Court. Upon the execution of a Liquidating Trust Agreement the assets of the HMX related Companies were transferred in to Liquidation Trust as per the notice dated 29th October, 2014. The Company refers to the United States Bankruptcy Court’s “stipulation and order” dated 2nd September, 2014 regarding settlement of SKNL related Companies claims.

(b) SKNL (UK) Limited, a subsidiary of the Company has, subsequent to the cessation of the Licence Agreement for the usage of DKNY Brand with Donna Karan Studio LLC., New York, fi led a winding up petition in the High Court of Justice, Chancery Division, Companies Court, UK. The winding up process was concluded on 22nd December, 2014.

(c) The Company has, therefore, reversed the provision made in the previous year for diminution in the value of the investments earlier made through a structure of holding companies in the above subsidiaries amounting to ` 29,080.49 lacs net off write back of amount payable to SKNL (UK) Ltd. of ` 3,176.68 lacs and during the period written off the investments amounting to ` 29,080.49 lacs (Net) in view of the liquidation of the above businesses held through subsidiary Companies.

28. (a) India Debt Management Private Ltd. and IDBI Trusteeship Services Ltd. (Security Agents) have fi led an interlocutory application No. 3 before the Hon’ble Vacation Court at Mysore, and the Hon’ble Vacation Judge has granted an ex parte order for temporary injunction, restraining Reid & Taylor (India) Ltd. (RTIL) & the Company from selling, transferring, alienating, encumbering, creating any third party rights on the mortgaged properties of RTIL. The above matter is being challenged and defended by the Company and other lenders.

(b) The Company had given a corporate guarantee to India Debt Management Private Ltd. for the purpose of loan taken by Brandhouse Retails Ltd. (BHRL) and the same has been invoked on 26th March, 2013. The outstanding balance of the loan in the books of BHRL as on 30th September, 2014 stands at ` 10,063.03 lacs.



29. The Company has availed a Short Term Loan facility of ̀ 10,000 Lacs from IL&FS Financial Services Ltd. (IL&FS) as per the sanction letter dated 24th August, 2011, against the security of 26% (34,995,838 shares) unquoted equity shares held by the Company in its subsidiary Reid & Taylor (India) Ltd. (RTIL). The lender has, on 31st March, 2013, invoked 24,523,656 shares pledged to them and adjusted the proceeds, calculated by them, towards the principal and interest due on the above Short Term Loan facility, amounting to ` 11,691.51 Lacs. IL&FS vide their letter dated 15th April, 2013 has intimated to the Company to pay holding cost on the Loan so adjusted by them @ 15% p.a. The Company, therefore, continues to show the liability of the Short Term Loan availed from the Lender. Consequently, the investment in the equity shares of RTIL is shown at cost on the asset side without giving impact to the invocation.

30. For the loans availed by the Company, the promoters have pledged the shares held by them in the Company with various Banks and Lenders, mainly IDBI Bank. The pledge has been created over and above the primary security given by the Company on its fi xed assets and current assets to the lenders. The lenders have invoked and sold the pledged shares to recover their dues from the Company. The amounts standing to the credit of the promoters in the books of the Company as at the end of accounting period is ` 12,759.96 lacs (Previous year ` 9,748.81 lacs).

31. As per Accounting Standard – 19 “Leases”, the total of future minimum lease payment commitments under operating non cancellable operating lease agreements for a period of 1 to 5 years to use offi ces, warehouses and guest house, are as under:

(` in Lacs)Period As at 30.09.2014 As at 31.03.2013i) not later than one year 35.14 130.01ii) later than one year but not later than fi ve years 35.74 Niliii) later than fi ve years Nil Nil

The above amounts are exclusive of taxes and duties. During the period, the Company has incurred an expenses of ` 29.37 lacs (Previous year ` 502.10 lacs) as rent in respect of cancellable leases.

32. (a) The confi rmation, reconciliation and adjustment of balances pertaining to trade receivables and payables through the accounts of collecting agents, loans & advances and capital advances is an ongoing process and additionally, to the extent possible, signifi cant portion of the outstanding balances as at the Balance Sheet date are independently confi rmed. Based on the above, during the period, the Company has identifi ed and made provision amounting to ` 2,581.50 lacs (Previous year ` 4,063.46 lacs) for unconfi rmed/non-recoverable balances.

(b) The Company has a regular programme of verifi cation of fi xed assets including capital work in progress, wherein all fi xed assets are verifi ed once in a period of three years. The Company maintains proper records of fi xed assets and the same are in the process of being updated for the period after 31st March, 2011. Based on the verifi cation of fi xed assets during the year vis-a-vis the underlying records, the Company has impaired assets amounting to ` 609 lacs (Previous year ` 226.25 lacs). Further, the inventories, including those lying with third parties aggregating ` 55,214.45 lacs (Previous year ` 129,352.30 lacs) are physically verifi ed by the Management. In view of the verifi cation process consistently followed, as regards the fi xed assets, capital work in progress and inventories as at the Balance Sheet date, the Company is of the opinion that the same are fully realizable and consequential adjustments and write down/impairment, if any, are not likely to be material given the nature and size of its operations.

33. The Company is engaged in manufacturing (in house and outsourced) fabrics, ready to wear garments and home textiles. Considering the overall nature, the management is of the opinion that the entire operation of the Company falls under one business segment i.e. Textiles and as such there are no separate reportable segments for the purpose of disclosures as required under Accounting Standard - 17 “Segment Reporting”.

34. The Company is facing a mismatch in its cash fl ows mainly on account of the delay in the planned Initial Public Offer of shares of Reid & Taylor (India) Ltd. (RTIL) and offer for sale of shares held by the Company in RTIL. The Company had invested in Overseas Businesses - HMX in the US and joint venture with DKNY in the UK, mainly from debt funds and during the period, the Company had to write off ` 29,080.49 Lacs (Net), after reversing the provision for diminution of the value of investments made during the earlier years of these overseas investments as well as receivables due from them. (Refer to Note No. 27 in this regard). The Company has not been able to raise the assessed working capital limits thereby creating further constraints in the cash fl ows of the Company. The above reasons have affected the timely servicing of dues to the lenders and resulted in delays in the payment of statutory dues. Consequently, loans aggregating `119,645.67 lacs have been recalled and the related securities have been invoked by the concerned lenders. The Company is in the process of making necessary arrangements to obtain adequate fi nancial resources for managing its day to day operations and discharging its liabilities as and when due. In the event, the required fi nancial resources are not raised on a timely basis and/ or the debts of the Company are not restructured in tune with cash fl ows, the operations of the Company may get impacted thereby, affecting the assumptions of going concern.

35. For the reasons explained in note 34 the Company has been facing mismatch in the cash fl ows which has led to non servicing of interest and installments to the Banks and Financial Institutions and as a result the accounts have become Non Performing Assets (NPA). The Banks have stopped charging interest on the various cash credits and term loan accounts maintained with them by the Company. However, the Company continued to provide interest up to 31st December 2013 and thereafter the Company too has stopped providing for interest on the borrowing/reversed the interest provided in the earlier period with a view to be aligned with the records of the Banks. The net amount of such interest not provided in the books of accounts works out to ` 72,130.88 lacs (including penal interest amounting to ` 5,508.21 lacs) for the period ended up to 30th September, 2014.

36. India Debt Management Pvt. Ltd. and some other creditors have fi led Company Petitions in the High Court of Judicature at Bombay seeking winding-up of the Company. The Hon’ble High Court has, while admitting the petitions on 15th September, 2014 appointed Offi cial Liquidator as “Provisional Liquidator” with effect from that date.

The Company has, with the view to seek remedial steps and to take the Company out of the Provisional Winding-up has fi led a Scheme of compromise and arrangement under Section 391 of the Companies Act 1956 or under Section 230 of the Companies Act, 2013 for restructuring of debts of the lenders with defi ned programme for raising fi nance required under the scheme. Accordingly, the Company has fi led Company Summons for direction on 12th August, 2015, seeking approval of the creditors and the Hon’ble Court of the scheme. Once the scheme is approved and the Company is removed from the provisional liquidation, the Company suspension placed on the trading of the shares of the Company by the provisional liquidator on the stock exchanges shall be brought to an end.

37. IDBI Bank acting under Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) has taken symbolic possession of the properties pertaining to the Company’s factories at Bharuche Superfi ne Cottons (BSFC), Jagadia Industrial Estate, GIDC, Ankleshwar, Gujarat; Spinning and Weaving Complex, Chamunda Standard Mills, Balgarh, Dewas, (M.P.); Menswear and Home Textiles Complex, 3B Industrial Area No. 2, Agra Bombay Road, Dewas, (M.P.) and pieces or parcels of non-agricultural vacant land situate, lying at Dongergaon, District Pune and during the month of January to March 2015.


42


38. Bank of India acting under Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the Act) (SARFAESI) has taken symbolic possession of Company’s offi ce premises at B2, 501 & C 501, 5th Floor, Marathon Innova, Off Ganpatrao Kadam Marg, Lower Parel (West), Mumbai - 400013 on 14th March, 2014.

39. Few of the creditors/ lenders of the Company have sent legal notices or recalled their loans or fi led legal cases for recovery of the money due to them. The liabilities due to these creditors/ lenders have been fully refl ected in the fi nancial accounts and the Company does not anticipate any material additional liability in this respect.

40. Some of the lenders to whom the Company had earlier issued cheques / post dated cheques have fi led cases under Section 138 of the Negotiable Instruments Act, 1881 for the recovery of their dues. The principal amount due to the lenders along with the interest till a specifi ed period are fully refl ected in the fi nancial statements. Please also refer to note 35 in this respect.

41. Some of the lenders have fi led suits for recovery of their debts at various Debts Recovery Tribunals (DRT). The Company is taking necessary steps to defend its position.

42. One of the suppliers of the Company and in another instance the Income Tax Department has fi led criminal case against the Company and its directors for recovery of some alleged dues; the Company has taken effective steps to defend its position and does not expect any material liability on these accounts.

43. Owing to the fi nancial troubles faced by the Company the following business operations could not be adequately funded resulting in the closure of the business: (a) Spinning and Weaving Complex at Chamunda Standard Mills, Balgarh, Dewas, (M.P.) has been shut down due to disconnection of electricity and labour

unrest since July, 2013. (b) Similarly, the garment factory situated at Bengaluru has been closed due to the fi nancial troubles faced by the Company. Consequently, the Ready-to-wear

Garments based under the brand Belmonte is also closed down. (c) Menswear and Home Textiles Complex, 3B Industrial Area No. 2, Agra Bombay Road, Dewas, (M.P.) has been partially operating for some part of the

accounting period and was closed on account of disconnection of power. In view of the above, the books of account of the said business places couldn’t be accessed and updated. The fi nancial statements include assets, liabilities,

income and expenditure for the said factories amounting to ` 29,333.09 lacs, ` 3,374.01 lacs, ` 356.20 lacs and `10,096.59 lacs respectively, prepared by the management on the best estimate basis. These accounts could not be subjected to audit. The Company is of the opinion that the consequential adjustments, if any, on retrieval of records and completion of audit are not likely to be material given the nature and size of its operations.

44. In view of the fi nancial troubles faced by the Company, the business operations could not be adequately funded resulting in uneconomical operations and hence the Company has incurred cash losses during the period. The closure of the above mentioned businesses/ factories have added to the losses suffered by the Company. The accumulated loss of ` 215,373.95 lacs at the end of the accounting period has resulted in erosion of the net worth of the Company.

45. IDBI Bank had rescheduled, the Term Loans and Working Capital Facilities given by them with cut-off-date, 1st October, 2012 and converted the outstanding dues into Funded Interest Term Loan (FITL) and Working Capital Term Loan (WCTL). The effect of the same was carried out in the books in the previous year. However, the same has been reversed during the current period by the Company, since the restructuring has been revoked by IDBI Bank, to reinstate the accounts position prior to restructuring.

46. 6% Cumulative Redeemable Preference Shares was due for redemption on 1st October, 2013, in view of the fi nancial stress faced by the Company, these Preference Shares were not redeemed on the above due date.

47. As per the approval received from Registrar of Companies, the accounting year of the Company ending 31st March, 2014 has been extended to a period of 18 months to end on 30th September, 2014. The extension of the accounting year has been earlier approved by the board resolution dated 21st March, 2014.

48. Disclosure as per clause 32 of the Listing agreement: Loans and Advances in the nature of loans given to Subsidiaries, Associates and Others : Name of the Company : Anjaneya Foundation Relationship : Subsidiary (Sec 25) Company Amount outstanding as at 30.09.2014 : `41.35 Lacs (PY. ` 41.35 Lacs) Maximum balance outstanding during the year : `41.35 Lacs (PY. ` 41.35 Lacs) Investment in Shares of the Company (No. of Shares) : 49,500 Shares (PY. 49,500 Shares)49. Trade receivables and advances due from fi rms and companies in which Directors are/ were interested: (` in Lacs)

Name of the Company As at 30.09.2014 As at 31.03.2013(A) Trade Receivables: Leggiuno S.p.A. HMX LLC

767.62Nil

693.93273.36

Total 767.62 967.29(B) Advances: Anjaneya Foundation Leggiuno S.p.A.

41.35258.76

41.35 Nil

Total 300.11 41.35 Grand Total 1,067.73 1,008.64




50. Related parties Disclosures required under Accounting Standard 18 –“Related Party Transactions” (a) Related parties

Sr. No. Name of the Related Party Relationship1. Reid & Taylor (India) Limited Subsidiary2. Anjaneya Foundation3. Brandhouse Retails Limited

Enterprises over which Key Managerial Personnel are able to exercise signifi cant infl uence

4. Brandhouse Oviesse Limited5. S. Kumars Enterprises (Synfabs) Limited6. S. Kumars Textiles Limited7. N’Essence Holdings Limited8. Rosewood Holdings Pvt. Limited

9. Anjaneya Holdings Pvt. Limited (Formerly known as Anjani Finvest Pvt. Ltd.)

10. Verve Properties & Investment Pvt. Limited11. Ingenious Finance & Investment Pvt. Limited12. Natty Finance & Investment Pvt. Limited13. S. K. Worsteds Pvt. Limited14. Tulja Enterprises Pvt. Limited15. Sansar Exim Pvt. Limited16. Chamundeshwari Mercantile Pvt. Limited 17. Maverick Mercantile Pvt. Limited18. Chamundeshari Trading & Finance Pvt. Limited19. SKNL Foundation20. Belmonte Retails Limited

Wholly Owned Subsidiary 21. SKNL International B.V.22. SKNL Europe B.V.23. SKNL Italy S.p.A.24. SKNL Global Holdings B.V. Wholly Owned Subsidiary of SKNL International B.V.25. SKNL North America B.V. Wholly Owned Subsidiary of SKNL Global Holdings B.V.26. SKNL (UK) Ltd. Subsidiary of SKNL Global Holdings B.V.27. Global Apparel (US) Ltd.

Wholly Owned Subsidiary of SKNL (UK) Ltd.28. Global Apparel (France) Ltd.29. 7172931 Canada Ltd.30. Global Apparel (Hong Kong) Ltd.31. Leggiuno S.p.A. Wholly Owned Subsidiary of SKNL Italy S.p.A.32. Marling & Evans Ltd. Subsidiary of Leggiuno S.p.A.33. Remala Trading B.V. Subsidiary of SKNL North America B.V.34. Coppley Corp. Wholly Owned Subsidiary of Remala Trading B.V.35. HMX Poland sp. Z.o.o36. HMX Acquisition Corp. Wholly Owned Subsidiary of HMX Poland sp Z.o.o37. HMX Des Plaines LLC

Wholly Owned Subsidiary of HMX Acquisition Corp.38. Quartet Real Estate LLC39. HMX LLC40. HMX DTC Co.

(b) Key Management Personnel Shri Nitin S. Kasliwal – Chairman & Managing Director Shri Jagadeesh S. Shetty – Director (till 27th December, 2013), President - Finance & Group CFO(c) Details of Transactions (` in Lacs)

Nature of Transactions As at 30.09.2014 As at 31.03.2013Purchases Goods - Reid & Taylor (India) Ltd. 230.18 516.93 Total 230.18 516.93Interest Expenses on Term Loan Reid & Taylor (India) Ltd. Nil 2,323.56 Total Nil 2,323.56Sales Goods Leggiuno S.p.A. 0.21 130.35 Reid & Taylor (India) Ltd. 111.36 74.93 Brandhouse Retails Ltd. (Net of returns and discount) 10,562.04 26,858.94 HMX LLC Nil 227.91 Total 10,673.61 27,292.13


44


Nature of Transactions As at 30.09.2014 As at 31.03.2013Services Reid & Taylor (India) Ltd. 128.50 186.30 Total 128.50 186.30Shared Services Reid & Taylor (India) Ltd. 97.43 137.09 Total 97.43 137.09Investment SKNL International B.V. 11.05 1,990.18 SKNL Italy S.p.A. Anjaneya Foundation

Nil0.15

572.03Nil

Total 11.20 2,562.21Fixed Assets Sold S. Kumars Textiles Ltd. Nil 29.32

Total Nil 29.32Advances given and received back S. Kumars Textiles Ltd. 52.45 Nil

Total 52.45 NilAdvances Taken Anjaneya Holdings Pvt. Ltd. 1,245.93 9,079.47 Chamundeshwari Mercantile Pvt. Ltd 15.42 77.76 Tulja Enterprises Pvt. Ltd. 2.62 206.68 Ingenious Finance & Investm Pvt. Ltd 15.42 93.74 Chamundeshwari Trading & Finance Pvt. Ltd. 305.89 52.48 Verve Properties & Investment Pvt Ltd 15.42 Nil N Essence Holdings Ltd 378.47 Nil Nitin S. Kasliwal Jyoti N. Kasliwal Anjani N. Kasliwal Kartikeya N. Kasliwal

962.00396.91162.9884.69

150.24NilNilNil

Total 3,585.75 9,660.37Advances Repaid Anjaneya Holdings Pvt. Ltd. Nitin S. Kasliwal

NilNil

629.6955.85

Total Nil 685.54Balances Written Back SKNL (UK) Ltd. Nil 3,176.68

Total Nil 3,176.68Balances Written Off SKNL International B.V. 32,257.16 Nil

Total 32,257.16 NilOutstanding at the year endTrade Receivables – Refer Note 49 (A) 767.62 967.29Creditors – Brandhouse Retails Ltd. 1,452.08 13.40Advances Receivable – Refer Note 49 (B) 300.11 41.35Loan Taken – Reid & Taylor (India) Ltd. 23,250.00 23,250.00Interest on Loan Taken – Reid & Taylor (India) Ltd. Nil 1,048.86Advances Payable – Reid & Taylor (India) Ltd. 6,394.19 10,062.07Unsecured Advances from Promoters (Refer Note 30) – Anjaneya Holdings Pvt. Ltd. 10,469.71 9,223.78 – Chamundeshwari Mercantile Pvt. Ltd. 93.17 77.76 – Tulja Enterprises Pvt. Ltd. 209.29 206.68 – Ingenious Finance & Investm Pvt. Ltd. 109.15 93.74 – Chamundeshwari Trading & Finance Pvt. Ltd. – N’Essence Holdings Ltd.

358.37378.47

52.48Nil

– Nitin S. Kasliwal – Anjani N. Kasliwal – Verve Properties & Investment Pvt. Ltd.

1,056.3970.0015.42

94.39NilNil


(` in lacs)



Nature of Transactions As at 30.09.2014 As at 31.03.2013Investments - – Reid & Taylor (India) Ltd. 4,005.00 4005.00 – SKNL Italy S.p.A. 12,719.67 12,719.67 – SKNL Internationals B.V. * 3,366.75 3,355.70 – SKNL Europe B.V. 1,801.31 1,801.31 – Brandhouse Retails Ltd. 100.00 100.00 – Belmonte Retails Ltd. 5.00 5.00 – Anajaneya Foundation 5.10 4.95Managerial RemunerationNitin S. Kasliwal – Chairman and Managing Director Nil NilAnil Channa – Deputy Managing Director (Up to 14th August, 2014) Nil Nil

*Net of Diminution in the value of Overseas Investments. (Related party relationships are as identifi ed by the Management and have been relied upon by the Auditor.)51. Value of Raw Materials, Spares and Components Consumed:

Particulars Current Period ended 30.09.2014 Previous Year ended 31.03.2013% Amount % Amount

Raw Material / Fabric Purchases Indigenous 99.99 451,882.61 99.98 2,68,389.46 Imported 0.01 36.36 0.02 59.34

Total 100.00 451,918.97 100.00 2,68,448.8052. Value of Imports on CIF Basis:

Particulars Current Period ended 30.09.2014 Previous Year ended 31.03.2013i) Raw material 36.36 9.62ii) Stores & Spares, Dyes and Chemicals 139.43 49.73

53. Expenditure in Foreign Currency (Accrual basis): Particulars Current Period ended 30.09.2014 Previous Year ended 31.03.2013 Foreign Travelling 96.58 44.75 Interest Nil 7.53 Professional Fees 110.39 28.92Commission and Brokerage 59.27 -

54. Earnings in Foreign Currency (Accrual basis):Particulars Current Period ended 30.09.2014 Previous Year ended 31.03.2013F.O.B. Value of Exports 1,493.58 436.48

55. Computation of Earnings Per Share:Basic Current Period ended 30.09.2014 Previous Year ended 31.03.2013Net Profi t attributable to Equity Shareholders (Net of Preference Dividend and Tax on Preference Dividend ) (` in Lacs)

(185,397.45) (41,416.55)

Weighted average number of Equity Shares of ` 10 each outstanding during the period (Nos. in Lacs)

2,974.03 2,974.03

Basic Earnings per Share `(62.34) `(13.93)

Diluted Current Period ended 30.09.2014 Previous Year ended 31.03.2013Net Profi t attributable to Equity Shareholders (Net of Preference Dividend and Tax on Preference Dividend ) (` in Lacs)

(185,397.45) (41,416.55)

(Nos. in Lacs)Number of shares outstanding on the beginning of the periodAdd : Weighted average number of potential equity shares on

conversion of Equity WarrantsAdd : Weighted average number of potential equity shares on account of employee stock options

2,974.03Nil

Nil

2,974.03Nil

1.10

Weighted average number of shares outstanding at the end of the period 2,974.03 2,975.13Diluted Earnings per Share ` (62.34) ` (13.92)


(` in lacs)

46


56. Particulars of Derivative Instruments. a. No derivative instruments are acquired for hedging purposes

b. No derivative instruments are acquired for speculation purposesc. Foreign Currency exposures that are not hedged by derivative instruments or otherwise are:

(Figures in Lacs)Particulars / Currency As at 30.09.2014 As at 31.03.2013Unsecured Foreign Currency Loan Euro 30.87 30.98 Equivalent to INR 2,389.94 2,168.69Receivables Euro 9.92 9.92 Equivalent to INR 767.87 694.13 USD Nil 0.01 Equivalent to INR Nil 0.59Payables Euro Nil 0.00 Equivalent to INR Nil 0.09

57. The Company has adopted the Accounting Standard - 15 (Revised 2005) “Employee Benefi ts” effective from 1st April, 2007. The Company has classifi ed the various benefi ts provided to employees as under: I. Defi ned Contribution Plans: a. Provident Fund & Employees Pension Scheme 1995 b. Employers’ Contribution to Employees’ State Insurance The Company has recognised the following amounts in the Statement of Profi t and Loss account: (` in Lacs)

Particulars As at 30.09.2014 As at 31.03.2013Employer’s contribution to Provident Fund & Pension Scheme 301.17 337.91Employer’s contribution to Employees’ State Insurance 49.06 54.57

II. Defi ned Benefi t Plans: a. Contribution to Gratuity Fund (Funded Scheme) b. Leave Encashment (Non - Funded Scheme) In accordance with the Accounting Standard - 15 (Revised 2005), actuarial valuation was performed in respect of the aforesaid defi ned benefi t plans

based on the following assumptions:Particulars As at 30.09.2014 As at 31.03.2013Discount Rate (% per annum) 8.85 8.25Rate of increase in compensation levels (% per annum) 5.00 5.00% Rate of return on Plan Assets (for Funded Scheme) 8.85 8.70Expected Average remaining working lives of the employees (years) 16.00 17.00

A. Change in the Present Value of Obligation:Particulars As at 30.09.2014 As at 31.03.2013

FundedScheme (Gratuity)

Non - Funded Scheme (Leave

encashment)


Non - Funded Scheme (Leave

encashment)Present Value of Defi ned Benefi t Obligation as at the beginning of the period 727.28 175.16 704.96 212.26

Interest Cost 90.00 - 61.68 -Current Service Cost 93.39 71.68 66.76 64.38Past Service Cost (Vested Benefi t) - - - -Benefi ts Paid (145.85) (131.29) (94.18) (101.48)Actuarial (gain) / loss on Obligations 3.95 - (11.94) -Present Value of Defi ned Benefi t Obligation as at the end of the period 768.77 115.55 727.28 175.16

B. Changes in the Fair Value of Plan Assets (For Funded Scheme)

Particulars As at 30.09.2014 As at 31.03.2013Present Value of Plan Assets as at the beginning of the period 446.27 489.39Expected Return on Plan Assets 58.24 42.08Contributions 16.14 10.40Benefi ts Paid (145.85) (93.88)Actuarial gains / (losses) (6.42) (1.72)Assets distributed on Settlement - -Fair Value of Plan Assets as at the end of the period 368.38 446.27




C. Reconciliation of Present Value of Defi ned Benefi t Obligation and the Fair Value of Assets:(` in Lacs)

Particulars As at 30.09.2014 As at 31.03.2013Present Value of Funded Obligation as at the end of the period 768.77 727.28Fair Value of Plan Assets as at the end of the period 368.38 446.27Funded Asset recognised in the Balance Sheet included in provision - -Present Value of Unfunded Obligation as at the end of the period 400.39 281.01Unrecognized Actuarial gains / (losses) - -Unfunded Liability recognized in the Balance Sheet, included in provisions 400.39 281.01

D. Amount recognised in the Balance Sheet:

Particulars As at 30.09.2014 As at 31.03.2013Funded Scheme

(Gratuity)Non-Funded Scheme (Leave Encashment)

Funded Scheme (Gratuity)

Non-Funded Scheme (Leave Encashment)

Present Value of Defi ned Benefi t Obligation as at the end of the period

768.77 115.55 727.28 175.16

Fair Value of Plan Assets as at the end of the period

368.38 - 446.27 -

Liability/ (Net Asset) recognised in the Balance Sheet

400.39 115.55 281.01 175.16

Current Liability 183.83 42.98 227.38 60.33Non Current Liability 216.56 72.57 53.63 114.84

E. Expenses recognized in Statement of Profi t and Loss Account:

Particulars Current Period ended on 30.09.2014 Previous Year ended on 31.03.2013Funded Scheme

(Gratuity)Non-Funded Scheme (Leave Encashment)


Non-Funded Scheme (Leave Encashment)

Current Service Cost 93.39 71.68 66.76 64.38Past Service Cost - - - -Interest Cost 90.00 - 61.68 -Expected Return on Plan Assets (58.24) - (42.08) -Curtailment Cost / (Credit) - - - -Settlement Cost / (Credit) - - - -Net Actuarial (gain) / Loss recognised in the Period

10.37 - (10.22) -

Total Expenses recognised in the Statement of Profi t and Loss

135.52 71.68 76.14 64.38

F. Actual Return on Plan Assets :Particulars As at 30.09.2014 As at 31.03.2013Expected Return on Plan Assets 58.24 42.08Actuarial gain / (losses) on Plan Assets (6.42) (1.72)Actual Return on Plan Assets 51.82 40.36

G. Recognition of Actuarial (Gain) / Loss

Particulars As at 30.09.2014 As at 31.03.2013Actuarial (Gain) / Loss on Obligation 3.95 (11.94)Actuarial (Gain) / Loss on Asset 6.42 1.72Actuarial (Gain) / Loss in Statement of Profi t &Loss 10.37 (10.22)

H. Experience Adjustment

Particulars As at 30.09.2014 As at 31.03.2013 As at 31.03.2012 As at 31.03.2011 As at 31.03.2010On Plan Liability (Gain) / Loss 37.28 38.56 (43.55) (1.56) (122.44)On Plan Liability (Loss) / Gain (6.42) (1.72) (2.96) 2.73 (11.19)

The Company has own managed funds as well as insurer managed funds for certain divisions and hence it is not possible to give a break-up of investments in debt instruments and bank deposits.

The expected rate of return on plan assets is based on market expectations at the beginning of the period. The rate of return on long term government bonds is taken as reference for this purpose.

It is estimated that the contribution during fi nancial period 2014-15 would be ` 183.83 lacs (Previous year: ` 227.40 lacs) on account of the funded benefi ts.


48

58. Contingent Liabilities: a) Guarantees: (` in Lacs)

Particulars As at 30.09.2014 As at 31.03.2013i) In respect of concessional custom duty availed under EPCG Scheme (Covered by Bank

Guarantee) 22.50 22.50

ii) In respect of concessional custom duty availed under EPCG Scheme (Covered by Bond) 4,489.00 4,489.00iii) Guarantees extended by the banks based on the Company’s counter guarantees 139.85 414.62iv) Corporate Guarantee extended by the Company to the lenders of Shree Maheshwar Hydel

Power Corporation Limited 30,752.00 30,752.00

v) Corporate Guarantees given to the lenders of Reid & Taylor (India) Ltd. 103,092.10 118,053.83vi) Corporate Guarantees given to the lenders of Brandhouse Retails Ltd. 15,750.00 15,215.92

b) Claims not acknowledged as debts:

Particulars As at 30.09.2014 As at 31.03.2013i) Income Tax, Sales Tax, Service Tax and Entry Tax demand – disputed in appeal 10,312.25 3,326.03ii) Demand Order of Central Excise Authorities disputed by the Company 137.87 137.87 iii) Labour matter pending in court 164.84 164.84iv) Civil matter pending in court Nil Nilv) Writ petition fi led before Hon’ble High Court, Indore against the order of Industrial Court Nil Nilvi) Matter in respect of Gratuity pending before controlling authorities 3.20 3.20

c) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance), as certifi ed by the management is ` Nil (Previous Year ` 1,267.10 lacs).

d) Arrears of Dividend on 6% Cumulative Redeemable Preference Shares are ` 78.23 Lacs (Previous Year ` 44.70 Lacs)

59. In the opinion of the management the current & noncurrent assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

60. In view of the inadequacy of profi t for the period no dividend is being proposed to be paid.

61. Previous year fi gures have been reclassifi ed to conform to this year’s classifi cation. However the current accounting period is for 18 months. The fi gures are not comparable with the previous years’ fi gures which were for a period of 12 months.

For and on behalf of the Board of Directors

NITIN S. KASLIWAL Chairman and Managing Director


DINESH DARJI Company Secretary

Place : MumbaiDate : 6th October, 2015




Part

icul

ars

of S

ubsi

diar

y C

ompa

nies

as

requ

ired

by

orde

r no

.51/

12/2

007-

CL

-III

dat

ed 0

8.02

.201

1, o

f Min

istr

y of

Cor

pora

te A

ffai

rs, G

over

nmen

t of I

ndia

issu

ed u

nder

Sec

tion

212(

8) o

f the

Com

pani

es A

ct, 1

956

for

the

fi nan

cial

yea

r 20

13-1

4 ar

e as

follo

ws:

(` in

Lac

s unl

ess o

ther

wis

e st

ated

)

Sr.

No.

Nam

e of

the

Subs

idia

ry

Com

pany

Rei

d &

Ta

ylor

(I

ndia

) Ltd

.

Anj

aney

a Fo

unda

tion

#

Bel

mon

te

Ret

ails

L

imite

d

SKN

L In

tern

atio

nal

B.V

.

SKN

L E

urop

e B

.V.

SKN

L It

aly

S.p.

A.

Leg

giun

o S.

p.A

. @SK

NL

Glo

bal

Hol

ding

s B

.V. *

SKN

L N

orth

A

mer

ica

B.V

. **

Fina

ncia

l yea

r of t

he S

ubsi

diar

y C

ompa

nies

end

ed o

n9/

30/2

014

3/31

/201

43/

31/2

014

3/31

/201

43/

31/2

014

6/30

/201

46/

30/2

014

3/31

/201

43/

31/2

014

Exch

ange

rate

as o

n 31

st M

arch

20

14 N

.A.

N.A

. N

.A.

1 E

uro

= `

82.7

3 1

Eur

o =

` 82

.73

1 E

uro

= `

82.2

4 1

Eur

o =

` 82

.24

1 E

uro

= `

82.7

3 1

Eur

o =

` 82

.73

(a)

Shar

e C

apita

l (in

clud

ing

shar

e ap

plic

atio

n m

oney

pen

ding

al

lotm

ent)

13,

459.

75 5

.00

5.0

0 4

4,71

1.87

2,3

15.2

4 1

4,96

7.53

2,4

30.1

7 4

0,47

9.73

18,

937.

69

(b)

Shar

e C

apita

l Sus

pens

e -

- -

- -

- -

- -

(c)

Res

erve

s and

Sur

plus

(net

of

debi

t bal

ance

of P

rofi t

and

Los

s A

ccou

nt)

(32,

291.

79)

(46.

51)

(0.9

1) (3

44.3

1) (1

,059

.45)

255

.59

(3,3

99.1

6) (1

9,36

7.73

) (1

9,49

5.49

)

(d)

Tota

l Ass

ets (

Fixe

d A

sset

s +

Cur

rent

Ass

ets)

212

,149

.63

0.2

1 4

.63

3,9

73.8

7 2

,748

.01

1,4

64.1

3 1

8,98

8.57

2,6

97.2

8 1

33.8

2

(e)

Tota

l Lia

bilit

ies (

Deb

ts

+ C

urre

nt L

iabi

litie

s and

Pr

ovis

ions

)

230

,981

.77

41.

72 0

.53

86.

04 4

,131

.78

3,8

11.4

2 1

9,96

1.75

522

.97

691

.62

(f)

Det

ails

of I

nves

tmen

ts

(exc

ludi

ng in

vest

men

ts in

the

subs

idia

ry c

ompa

nies

)

-Eq

uity

/ Pr

efer

ence

Sha

res

- -

- 4

0,47

9.73

2,6

39.5

6 1

7,57

0.41

4.1

9 1

8,93

7.69

-

-G

over

nmen

t Sec

uriti

es 0

.10

- -

- -

- -

- -

-B

onds

/ M

utua

l Fun

d U

nits

- -

- -

- -

- -

-

(g)

Turn

over

104

,543

.89

- -

- -

- 2

4,59

8.49

- -

(h)

Profi

t / (

Loss

) bef

ore

Taxa

tion

(209

,712

.76)

(0.4

8) (0

.19)

(30.

24)

(13.

44)

(71.

12)

(2,5

68.6

7) 2

85.6

8 0

.76

(i)Pr

ovis

ion

for T

axat

ion

(1,7

04.0

6) -

- -

- -

105

.56

- -

(j)Pr

ofi t

/ (Lo

ss) a

fter T

axat

ion

(208

,008

.70)

(0.4

8) (0

.19)

(30.

24)

(13.

44)

(71.

12)

(2,6

74.2

3) 2

85.6

8 0

.76

(k)

Prop

osed

Div

iden

d (in

clud

ing

Cor

pora

te D

ivid

end

Tax)

- -

- -

- -

- -

-

NO

TE

S TO

FIN

AN

CIA

L ST

ATE

ME

NT

S FO

R T

HE

PE

RIO

D O

F 18

MO

NT

HS

EN

DE

D 3

0th S

EPT

EM

BE

R, 2

014

Statement Pursuant to Section 212

50

STAT

EMEN

T PU

RSUA

NT T

O S

ECTI

ON

212 O

F TH

E CO

MPA

NIES

ACT

, 195

6 REL

ATED

TO

SUB

SIDI

ARY

COM

PANI

ES A

S AT

30TH

SEP

TEM

BER,

2014

.(`

in L

acs u

nles

s oth

erwi

se st

ated)

Sr.

No.

Nam

e of

the

Subs

idia

ry C

ompa

nyR

eid

& T

aylo

r (I

ndia

) Ltd

.A

njan

eya

Foun

datio

n #

Bel

mon

te R

etai

ls

Lim

ited

SKN

L In

tern

atio

nal

B.V

.

SKN

L E

urop

e B

.V.

SKN

L It

aly

S.p.

A.

Leg

giun

o S.

p.A

. @

SKN

L G

loba

l H

oldi

ngs B

.V. *

SKN

L N

orth

A

mer

ica

B.V

. **

1Fi

nanc

ial y

ear o

f the

Sub

sidi

ary

Com

pani

es e

nded

on

9/30

/201

43/

31/2

014

3/31

/201

43/

31/2

014

3/31

/201

46/

30/2

014

6/30

/201

43/

31/2

014

3/31

/201

4

2Sh

ares

of t

he S

ubsi

diar

y he

ld b

y SK

NL

on th

e ab

ove

date

(a.)

Num

ber o

f Sha

res F

ully

Pai

d 6

4,19

9,55

0 4

9,50

0 5

0,00

0 4

,964

,910

2

,573

,604

1

8,20

0,00

0 Fa

ce V

alue

Equi

ty S

hare

s of

` 10

/- e

ach

Equi

ty S

hare

s of

` 10

/- e

ach

Equi

ty S

hare

s of

` 10

/- e

ach

Equi

ty S

hare

s of

Euro

1 e

ach

Equi

ty S

hare

s of

Euro

1 e

ach

Equi

ty S

hare

s of

Euro

1 e

ach

(b)

% sh

ares

hel

d by

SK

NL

and

its

subs

idia

ries

## 4

7.70

%

99%

100%

100%

100%

100%

100%

100%

100%

3N

et a

ggre

gate

am

ount

of

the

profi

ts /

(Los

ses)

of

the

Subs

idia

ry C

ompa

ny

so f

ar a

s it

conc

erns

the

mem

bers

of

the

SKN

LI

For t

he F

inan

cial

Yea

r of S

ubsi

diar

y en

ded

on

9/30

/201

43/

31/2

014

3/31

/201

43/

31/2

014

3/31

/201

46/

30/2

014

6/30

/201

43/

31/2

014

3/31

/201

4

(a.)

Dea

lt w

ith A

ccou

nts o

f SK

NL

amou

nted

to -

- -

- -

- -

- -

(b.)

Not

dea

lt w

ith A

ccou

nts o

f SK

NL

amou

nted

to (2

08,0

08.7

0) #

(0

.19)

(30.

24)

(13.

44)

(71.

12)

(2,6

74.2

3) 2

85.6

8 0

.76

IIFo

r the

pre

viou

s fi n

anci

al y

ear o

f the

Su

bsid

iary

sinc

e it

beca

me

subs

idia

ry

of S

KN

L(a

.) D

ealt

with

Acc

ount

s of S

KN

L am

ount

ed to

- -

- -

- -

- -

-

(b.)

Not

dea

lt w

ith A

ccou

nts o

f SK

NL

amou

nted

to -

- -

- -

- -

- -

4C

hang

es i

n th

e in

tere

st o

f th

e SK

NL

betw

een

the

end

of t

he S

ubsi

diar

y’s

fi nan

cial

yea

r an

d 30

th S

epte

mbe

r, 20

14

N.A

.N

.A.

N.A

.N

.A.

N.A

.N

.A.

N.A

.N

.A.

N.A

.

Num

ber o

f sha

res a

cqui

red

Mat

eria

l cha

nges

bet

wee

n th

e en

d of

th

e Su

bsid

iary

’s fi

nan

cial

yea

r an

d 30

th S

epte

mbe

r, 20

14(a

.) Fi

xed

Ass

ets (

net a

dditi

ons)

- -

- -

- -

- -

- (b

.) In

vest

men

ts (n

et)

- -

- -

- -

- -

- (c

.) M

oney

’s le

nt b

y th

e Su

bsid

iary

- -

- -

- -

- -

- (d

.) M

oney

s bo

rrow

ed

by

the

Subs

idia

ry C

ompa

ny o

ther

tha

n fo

r the

mee

ting

curr

ent l

iabi

litie

s

- -

- -

- -

- -

-

Not

es:

1.

The

Min

istry

of C

ompa

ny A

ffairs

, Gov

ernm

ent o

f Ind

ia, N

ew D

elhi

, vid

e its

ord

er n

o.51

/12/

2007

-CL-

III d

ated

08.

02.2

011,

issu

ed u

nder

Sec

tion

212(

8) o

f the

Com

pani

es A

ct, 1

956,

has

exe

mpt

ed th

e C

ompa

ny fr

om

atta

chin

g th

e ac

coun

ts o

f sub

sidi

arie

s of

the

Com

pany

. How

ever

, ann

ual a

ccou

nts

of th

e su

bsid

iary

com

pani

es a

nd th

e re

late

d de

taile

d in

form

atio

n w

ill b

e m

ade

avai

labl

e to

the

inve

stor

s of

the

Com

pany

and

the

subs

idia

ries o

f the

Com

pany

seek

ing

such

info

rmat

ion

at a

ny p

oint

of t

ime.

The

ann

ual a

ccou

nts o

f the

subs

idia

ry c

ompa

nies

are

ava

ilabl

e fo

r ins

pect

ion

by a

ny in

vest

or a

t the

Reg

iste

red

Offi

ce o

f the

Com

pany

and

of

the

conc

erne

d su

bsid

iary

of t

he C

ompa

ny.

*

Subs

idia

ry C

ompa

ny o

f SK

NL

Inte

rnat

iona

l B.V

.**

Su

bsid

iary

Com

pany

of S

KN

L G

loba

l Hol

ding

s B.V

.@

Su

bsid

iary

Com

pany

of S

KN

L Ita

ly S

.p.A

. #

Anj

aney

a Fo

unda

tion

is C

ompa

ny u

/s. 2

5 of

the

Com

pani

es A

ct, 1

956

and

its fi

nanc

ials

are

not

con

solid

ated

with

the

Com

pany

’s fi

nanc

ial s

tate

men

ts.

##

Ref

er N

ote

30 &

31

of th

e N

otes

to C

onso

lidat

ed F

inan

cial

Sta

tem

ents

. For

and

on b

ehal

f of t

he B

oard

of D

irec

tors

Niti

n S.

Kas

liwal

Cha

irm

an a

nd M

anag

ing

Dire

ctor

Har

esh

Isra

niD

irect

or

Din

esh

Dar

jiC

ompa

ny S

ecre

tary

Plac

e: M

umba

iDa

te: 1

5th

Octo

ber,

2015

Statement Pursuant to Section 212


Consolidated Financial Statements


52


INDEPENDENT AUDITORS’ REPORTON THE CONSOLIDATED FINANCIAL STATEMENTS OF S. KUMARS NATIONWIDE LIMITEDTo Board of Directors of S. Kumars Nationwide LimitedI. Report on the Consolidated Financial Statements We have audited the accompanying Consolidated Financial Statements of S. KUMARS NATIONWIDE LIMITED (hereinafter referred to as “the Company”) and

its subsidiaries (the Company and its subsidiaries together referred to as “the Group”), comprising of the Consolidated Balance Sheet as at 30th September 2014, the Consolidated Statement of Profi t and Loss and the Consolidated Cash Flow Statement for the period of 18 months ended on that date along with the summary of the Signifi cant Accounting Policies and Other Explanatory Information (hereinafter referred to as “the Consolidated Financial Statements.”)

II. Management’s Responsibility for the Consolidated Financial Statements The Company’s Board of Directors is responsible for the preparation of these Consolidated Financial Statements on the basis of separate Financial Statements and other

fi nancial information regarding components that give a true and fair view of the consolidated fi nancial position, consolidated fi nancial performance and consolidated cash fl ows of the Group in accordance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 (“the Act”), read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility also includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the Consolidated Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

III. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated fi nancial statements based on our audit. We conducted our audit in accordance with the Standards on

Auditing issued by the Institute of Chartered Accountants of India (ICAI). Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Consolidated Financial Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the consolidated fi nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the consolidated fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our qualifi ed audit opinion.Basis of Qualifi ed Opinion1) In case of the Company and its unlisted Indian subsidiary (RTIL) Note No. 21 comprising of Sales of Fabrics net of Returns and Note No. 23 comprising of Purchases

of Fabrics including the incidental costs, to the consolidated fi nancial statements, we were unable to validate the impact of the said transactions as the Company and its unlisted Indian subsidiary (RTIL) does not have adequate documentation / supportings and internal control system to substantiate such transactions. Consequently, any adjustment to such amount of Sales ` 686,689.65 Lacs, Sales Returns `. 235,538.33 Lacs and Purchases of `. 638,446.76 Lacs and Purchase Return of ` 20,590.76 Lacs in the Consolidated Financial Statements and the corresponding elements if any, making up the Consolidated Statement of Profi t and Loss and Consolidated Cash Flow Statement and further, their effect on Trade Receivables, Trade Payables and Inventories and their confi rmation and recoverability is unascertainable and therefore the same cannot be quantifi ed.

2) As explained in Notes No. 4, 8, 10, 40 and 41 of the consolidated fi nancial statements, the Company and one of its unlisted Indian subsidiary (RTIL) have defaulted in payment of dues to Banks, Financial Institutions, Debenture Holders, Unsecured Loans from Bodies Corporate and Trade Payables. Some of the lenders/suppliers/ service providers have fi led legal cases against the Company and its unlisted Indian subsidiary (RTIL) for recovery of their dues. The Company is in discussion with the Consortium of lenders and has submitted a scheme for restructuring of debts of the Company under Section 230 of the Companies Act, 2013 to the Hon. High Court of Judicature Bombay. While approval of the said scheme is critical to the ability of the Company to continue as a going concern, the consolidated fi nancial statements are continued to be prepared during the aforesaid period by the Company on Going Concern basis.

3) The amount standing to the credit of the Company’s promoters in the books of the Company as at the end of the accounting period amounting to ` 12,759.96 Lacs, as per Note No. 33 of the consolidated fi nancial statements, arising on account of the sale of pledged shares of the promoters by the lenders. In our opinion, this attracts provisions of Section 73 and 76 of the Companies Act, 2013 and may have to be refunded by the Company to the promoters.

4) As stated in Note No. 41 of the consolidated fi nancial statements that the Company and its unlisted Indian subsidiary (RTIL) has been facing mismatch in the cash fl ows which has led to non- servicing of interest and installments to the Banks and Financial Institutions and as a result, the accounts have become non-performing assets (NPAs). The Banks/ Financial institutions have stopped charging interest on the Company’s and its Indian subsidiary’s various cash credit and term loan facilities. The Company and its above stated subsidiary have not provided in their books of accounts a gross interest amounting to ` 98,094.21 Lacs for the period ended up to 30th September, 2014, as a consequence of which, loss of the Company and Other Current Liabilities have been understated by the said extent.

5) As stated in Note No. 53 of the consolidated fi nancial statements, the Company in its earlier years had issued 6% Redeemable Preference Shares, which were due for redemption on 1st October, 2013. In view of the fi nancial stress faced by the Company, the said preference shares were not redeemed on the above due date amounting to ` 3.72 Lacs. The preference shareholders have not extended the aforesaid due date.

6) The Company has invested ` 17,887.73 Lacs in one of the step down Foreign Subsidiary Companies viz. Leggiuno S.p.A. through its direct subsidiaries SKNL International B.V., SKNL Italy S.p.A. and SKNL Europe B.V., has gone through fi nancial reconstruction as per the applicable local laws. In view of the above, there is a need to provide for diminution in the value of long term investment and for Goodwill of ` 11,929 Lacs arising on acquisition, which is not in accordance with para 87 of Accounting Standard (AS) 28 ‘Impairment of Assets’. To the extent of the required provision, which is unascertainable, the loss incurred by the Company has been understated and Investments have been overstated.

7) Statement confi rming the balances appearing under the heads (i)Borrowings and Other Current Liabilities pertaining to Banks and Financial Institutions of the Company and its unlisted Indian subsidiary company (RTIL) amounting to ` 396,120.47 Lacs (ii)Cash & Cash Equivalents of the unlisted Indian subsidiary Company (RTIL) comprising of bank Current account amounting to ` 27.56 Lacs are not available with the Company and the said subsidiary as the said bank accounts have become non-performing assets/ taken over by Asset Reconstruction Companies, resulting in the inabilility to confi rm book balances appearing as on 30th September, 2014.

8) In case of the Company and its Indian subsidiary (RTIL), the Outstanding balances of Trade Receivables, Trade Payables and their balances having been adjusted with each other, Loans & Advances and Borrowings are subject to confi rmation, reconciliation and recovery. The Consequential adjustments, if any, arising out of these are not quantifi able.

9) Inventories lying with third parties have not been physically verifi ed in totality by the Company and its unlisted Indian subsidiary (RTIL) during the period. Also, the fi xed assets have not been completely covered with regard to physical verifi cation and updation of records as at the close of the period. Further, no exercise of valuation of the Company’s and its unlisted Indian subsidiary (RTIL) fi xed assets has been carried out, even though the respective entities claims that there is no material impairment in respect of its fi xed assets, other than what is provided for in the books. In view of the above, the consequential write down in respect of the inventory and the material impairment in respect of the fi xed assets, if any, is not quantifi able. Refer Notes No. 39 (b) and 49 of the consolidated fi nancial statements.



10) Promoters and other shareholders have pledged their shares with lenders mainly with IDBI bank against the loans given by them to the Company. The lenders have invoked the pledge and sold the pledged shares to recover their dues from the Company. The Company is liable to compensate the loss incurred by the parties who have pledged the shares. However, no provision in the books of the Company has been made to recognize the said loss and the amount of the same is unascertainable.

11) The Group’s cashfl ows for the period under review as shown in the Consolidated Cash Flow Statement include net impact of certain transactions carried out by the Group by way of journal entries.

12) The unlisted Indian subsidiary (RTIL) of the Company has not made provision for Royalty expenses and Technical fees amounting to ` 72.94 Lacs as the company is confi dent that waiver letter would be received for the same thereby understating the loss of the Group by ` 72.94 Lacs and Trade payable to the said extent.

13) As stated in Note No. 49(d) of the consolidated fi nancial statement, in case of one of its unlisted Indian subsidiary (RTIL) states that the consolidated fi nancial statement includes unaudited amount for assets, liabilities, income and expenditure for Bengaluru suit factory and Ready-to-Wear Garments Business as the same has been shut down. Hence, we are unable to verify and comment on the existence and valuation and recover abilities of assets, accurate quantifi cation and reporting of liabilities, accuracy and correctness of income and expenditure amounting to ` 3,157.58 Lacs, ` 16,608.38Lacs, ` 103.05 Lacs and ` 1,668.01 Lacs respectively.

14) We have relied on the unaudited Financial Statements of 7 subsidiaries, included in Consolidated Financial Statements. Out of which two subsidiaries are for the period ended on 30th June, 2014 and fi ve subsidiaries are for the period ended on 31st March, 2014. These Financial Statements refl ect total assets of ` 34,933.49 Lacs, total revenues of ` 24,599.28 Lacs and cash infl ows amounting to ` 1,486.53 Lacs.

The information with respect to disclosures to be made in the Notes to Financial Statements as required under various statutes/ Accounting Standards in relation to the above subsidiaries are not available.

The aforesaid Financial Statements have been furnished to us by the Management as duly approved by the Board of Directors of the respective Companies.15) As stated in Note No. 28 of the Consolidated Financial Statements of the Group, that during the period, accounts of 14 out of 20 overseas subsidiaries are not included

in consolidation, as explained in Note No. 1 (i) of signifi cant accounting policies, in view of the liquidation of businesses of these subsidiaries. We are unable to ascertain the consequential fi nancial impact of the above on the loss, assets and liabilities of the Consolidated Financial Statements of the Group as

at 30th September, 2014.Emphasis of Matter1) We were appointed as the Auditors of the Company as well as one of its unlisted Indian subsidiary (RTIL) after 30th September, 2014 and thus could not observe the

counting of physical Inventories and Fixed Assets at the beginning and end of the period and hence we have relied on the certifi cation of the management or documents produced before us. The value of Inventories and Fixed Assets as at the Balance Sheet date are ` 1,30,041.09 Lacs and ` 91,699.13 Lacs respectively.

2) As stated in Note No. 30 & 31 of the Consolidated Financial Statements, lenders have invoked 35,925,450 shares pledged to them, equivalent to 26.69% the Company’s holding in its unlisted Indian Subsidiary (RTIL) and adjusted the proceeds, towards the principal and interest due. The Company and RTIL continue to show the liability of the Term Loan availed from the Lenders without giving impact to the invocation of shares. The Company currently holds 47.70% share in equity of RTIL however, the consolidation has been based on original holding.

3) As stated in Note No. 49 (a-c) of the consolidated fi nancial statements, the Company’s business operations of (i) Spinning and Weaving Complex at Chamunda Standard Mills, Balgarh, Dewas, (M.P.) have been shut down since July, 2013 (ii) Garment factory situated at Bengaluru has been closed due to the fi nancial troubles faced by the Company (iii) Menswear and Home Textiles Complex, 3B Industrial Area No. 2, Agra Bombay Road, Dewas, (M.P.) has been partially operating for some part of the accounting period on account of disconnection of power. Hence, we are unable to verify and comment on the existence and valuation of assets, accurate quantifi cation and reporting of liabilities, accuracy and correctness of income and expenditure amounting to ` 29,334.28 lacs, ` 3,374.01 lacs, ` 356.20 lacs and ` 10,096.59 lacs respectively. The same have been incorporated in the Balance Sheet of the Company based on the management estimates.

4) (i) As stated in Note No. 34 and 35 of the Consolidated Financial Statement and considering the fact that various legal cases are fi led against the Company for recovery of debts, the amount given to the Company may not be recovered, the unlisted Indian subsidiary (RTIL) on conservative basis has made a provision for doubtful recovery of loans & advances given to the Company amounting to ̀ 23,250 Lacs. Out of the aforesaid total loans and advances extended to the Company, ` 19,250 Lacs was interest bearing loan for which the above stated subsidiary has not recognized interest income amounting to ` 3,412.65 Lacs for the period and has also reversed interest income recognized in the earlier years amounting to ` 5,743.75 Lacs.

(ii) For the reason stated above, the unlisted Indian subsidiary (RTIL) of the Company has also made provision for the amounts receivable from Group Companies shown under the Head Short Term Loans & Advances & Trade Receivables having a closing balance of ` 8,887.36Lacs and ` 11,665.80 Lacs.

5) As stated in Note No. 38 of the Consolidated Financial Statement, Company’s unlisted Indian subsidiary (RTIL) during the period under review has returned Fixed Assets grouped under the head Capital Work in Progress purchased from various parties amounting to ` 21,338.51 Lacs due to the fact that the Company has abandon the proposed new project for manufacture of high quality fabric for export to USA markets. This project was in view of forward integration with its group Company in USA which is HMX Inc. However, the project abandon as HMX Inc., went in to administration. The said balance as on the current date is still pending to be received from the said parties and hence the above stated subsidiary of the Company has fi led legal cases against them, based on prudence the above stated subsidiary of the Company has made provision for doubtful advances under the head Long Term Loans & Advances.

OpinionIn our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualifi ed Opinion paragraph refer point number 1 to 15 above, the aforesaid Consolidated Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:(a) in the case of the state of the Consolidated Balance Sheet, of the state of affairs of the Group as at 30th September, 2014;(b) in the case of the state of the Consolidated Statement of Profi t and Loss, of the loss for the period ended on that date.(c) in the case of the state of the Consolidated Cash Flow Statement, of the cash fl ows for the period ended on that date.

For Shyam Malpani & AssociatesChartered Accountants

Firm Registration No. 120438 W

Shyam MalpaniPlace : Mumbai ProprietorDate : 15th October, 2015 Membership No. F- 34171

54

CONSOLIDATED BALANCE SHEET AS AT 30TH SEPTEMBER, 2014(` in lacs)

Note Current Year As at 30.09.2014


EQUITY AND LIABILITIES SHAREHOLDERS' FUND Share Capital 2 34,498.99 34,498.99 Reserves and Surplus 3 (110,105.18) 216,255.89

(75,606.19) 250,754.88

MINORITY INTEREST - 48,500.41 NON-CURRENT LIABILITIES Long Term Borrowings 4 19,535.88 74,438.71 Deferred Tax Liabilities (Net) 5 3,419.34 6,642.06 Other Long Term Liabilities 6 335.70 328.83 Long Term Provisions 7 670.88 494.29

23,961.80 81,903.89 CURRENT LIABILITIES Short Term Borrowings 8 170,933.72 197,690.67 Trade Payables 9 57,126.47 46,898.55 Other Current Liabilities 10 343,093.19 215,642.32 Short Term Provisions 11 35,414.40 32,416.77

606,567.78 492,648.31 TOTAL 554,923.39 873,807.49

ASSETS NON-CURRENT ASSETS Fixed Assets 12 (i) Tangible Assets 94,325.64 132,420.63 (ii) Intangible Assets 11,954.21 12,213.93 (iii) Capital Work-in-Progress 1,160.33 22,413.50 Non-Current Investments 13 109.39 108.77 Deferred Tax Assets (Net) 5 1,091.87 1,078.89 Long Term Loans and Advances 14 1,139.65 94,390.27 Other Non-Current Assets 15 211.17 141.77

109,992.26 262,767.76 CURRENT ASSETS Inventories 16 137,100.51 206,151.29 Trade Receivables 17 288,299.41 271,207.42 Cash and Bank Balances 18 2,433.37 1,239.81 Short Term Loans and Advances 19 17,092.03 132,404.05 Other Current Assets 20 5.81 37.16

444,931.13 611,039.73 TOTAL 554,923.39 873,807.49

Signifi cant Accounting Policies & Notes to Financial Statements 1 - 69The accompanying notes are an integral part of the Financial Statements.








CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE PERIOD OF 18 MONTHS ENDED 30th SEPTEMBER, 2014(` in lacs)

Note For the period of 18 months ended

30.09.2014


31.03.2013INCOME Revenue from operations (Gross) 21 501,400.90 499,271.53 Less : Excise Duty - 262.46 Revenue from operations (Net) 501,400.90 499,009.07 Other income 22 716.12 963.96

Total Revenue 502,117.02 499,973.03 EXPENSES Cost of Materials consumed 23 662,022.30 371,798.45 Changes in Inventories of Finished Goods and Work-in-Progress 24 42,855.39 (23,451.83) Employee Benefi t Expenses 25 19,553.81 16,026.44 Finance Costs 26 38,526.45 73,567.55 Depreciation and Amortization Expenses 12 22,276.03 16,922.30 Other Expenses 27 75,027.33 44,630.96 Prior Period (Income)/ Expenses 7,612.32 -

Total Expenses 867,873.63 499,493.87 Profi t/ (Loss) before Tax and Exceptional Items (365,756.61) 479.16 Exceptional Itemsa) Provision for Diminution in the value of Overseas Investments (Net of write back) - (29,080.49)b) Reversal of Provision for Diminution in the value of Overseas Investments (Net of write

back) 29,080.49

c) Amount of Overseas Investments written off during the period 28(c) (29,080.49)d) Investment written off during the period 28(d) 439.25 - e) Reversal of NPV Gain - (3,334.14)Profi t/ (Loss) before Tax (365,317.36) (31,935.47)Tax Expense: Current Tax 1 (xx) - 3,001.85 Deferred Tax 5 (3,142.60) 457.23 Short/ (Excess) Provision of Earlier Years 2,709.23 -

Total Tax Expenses (433.37) 3,459.08

Profi t/(Loss) for the Period (364,883.99) (35,394.55)(-) Minority Interest 61 (48,500.40) 1,557.62 Profi t/(Loss) for the Period after Minority Interest (316,383.59) (36,952.17)Earnings per Equity Share: Basic 1(xix) &

59` (106.38) ` (12.42)

Diluted ` (106.38) ` (12.42)(Nominal Value of Shares ` 10/- each)Signifi cant Accounting Policies & Notes to Financial Statements 1 - 69The accompanying notes are an integral part of the Financial Statements.







56

CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD OF 18 MONTHS ENDED 30TH SEPTEMBER, 2014 (` in lacs)


30.09.2014


31.03.2013A Cash Flow from Operating Activities

Profi t/ (Loss) Before Tax and Extraordinary Items (365,317.36) (31,935.47)Adjustments for:a) Depreciation and Amortisation Expenses 22,276.03 16,922.30 b) Loss on Sale of Fixed Assets (net) 250.33 198.28 c) Sundry Balances Written Back (51.55) (105.54)d) Sundry Balances Written off 5,431.38 60.85 e) IPO Expenses Charged off - 426.98 f) ESOP Compensation (Credited)/ Debited to Statement of Profi t & Loss (140.45) (209.69)g) Foreign Currency Translation Reserve (Credited)/ Debited to Statement of Profi t & Loss (1,181.00) - h) Balances not recoverable Written Off 23.80 4,599.34 i) Provision for Doubtful Receivables /Amounts not Recoverable {Refer Note 35 & 39 (a)} 14,376.59 3,114.45 j) Provision for Doubtful Loans & Advances (Refer Note 35 & 38) 21,338.51 k) Finance Costs 38,526.45 73,567.55 l) Interest Income (50.67) (91.12)m) Exchange Rate Fluctuation (Net) 99.86 227.45 n) Reduction in Goodwill {Refer Note 12 & 28(e)} 81.00 260.35 o) Provision for Diminution in the value of Overseas Investments/ Reversal thereof {Refer Note 13 & 28} (32,257.16) 32,257.16 p) Amount of Overseas Investments written off during the period {Refer Note 13 & 28} 32,257.16 - q) Reversal of NPV Gain - 3,334.14 Operating Profi t before Working Capital Changes (264,337.08) 102,627.03 Movements in Working Capitala) (Increase) / Decrease in Inventories 69,050.78 (30,575.34)b) (Increase) / Decrease in Trade Receivables (29,314.84) (45,166.22)c) (Increase) / Decrease in Advances & Deposits 206,463.39 (13,761.43)d) Increase / (Decrease) in Trade Payables 10,227.91 (3,622.48)e) Increase / (Decrease) in Other Payables & Liabilities 587.62 2,524.74 Cash Generated From/ (Used in) Operating Activities (7,322.22) 12,026.30 Direct Taxes Paid 235.70 (605.98)Net cash Flow From/ (Used in) Operating Activities Total (A) (7,086.52) 11,420.32

B Cash Flow from Investing Activitiesa) Acquisition of Fixed Assets (Including CWIP & Capital Advances) (298.08) (4,872.79)b) Sale/ Adjustments of Fixed Assets 1,872.68 327.78 c) Non Current Investments (0.62) (2,322.80)d) Interest Income 50.67 91.14 Net cash Flow From/ (Used in) Investing Activities Total (B) 1,624.65 (6,776.67)

C Cash Flow from Financing Activitiesa) Proceeds from Long Term Borrowings 1,297.50 6,525.64 b) Change in Long Term Borrowings due to Reschedulement (Refer Note 52) (4,988.54) 7,429.37 c) Repayment of Long Term Borrowings (672.87) (20,118.55)d) Changes in Short Term Borrowings (Net) 4,110.04 35,083.38 e) Movement in Debt Service Reserve Account 57.50 935.58 f) Unsecured Advances from Promoters (Refer Note 33) 3,011.15 9,748.81 g) Redemption of Preference Shares - (474.80)h) Interest Paid (4,051.36) (40,116.32)i) Changes in Interest Liability due to Reschedulement & Reversal (Refer Note 41 & 52) 8,165.71 - j) Reversal of NPV Gain - (3,334.14)Net cash Flow from / (Used in) Financing Activities Total (C) 6,929.13 (4,321.03)Net Increase in Cash and Cash Equivalents Total (A+B+C) 1,467.26 322.62 Cash & Cash Equivalent at the beginning of the period 739.63 417.01 Cash & Cash Equivalent at the end of the period 2,206.89 739.63 Net Change in Cash & Cash Equivalent 1,467.26 322.62

Notes :1 The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in the Acconting Standard-3 (AS-3) "Cash Flow Statement".2 Cash and cash equivalents comprise cash at bank, cash in hand and short- term investments with an original maturity of three months or less. (Refer Note 18).3 This cash fl ow statement is also comprising of and has impact of fund fl ow/ journal entries transactions.4 Previous year fi gures have been recasted/ restated wherever necessary.As per our report of even date For and on behalf of the Board of Directors







NOTE : 1 - SIGNIFICANT ACCOUNTING POLICIES i. Basis of Preparation of Consolidated Financial Statements

The Consolidated Financial Statements relate to S. Kumars Nationwide Limited (“the Company”) and its subsidiary Companies. The Consolidated Financial Statements have been prepared on the following basis:

− The fi nancial statements of the Company and its subsidiary Companies have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating the intra-group balances and intra-group transactions resulting in unrealised profi ts or losses as per Accounting Standards 21- “Consolidated Financial Statements” notifi ed by Companies (Accounting Standards) Rules, 2006.

− The Consolidated Financial Statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as holding Company’s separate fi nancial statements, as far as possible, except as specifi cally mentioned in notes to fi nancial statements.

− In case of foreign subsidiaries, being non-integral operations, revenue items are consolidated at the average rate prevailing during the year. All assets and liabilities are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognised in the foreign currency translation reserve.

− The difference between the cost of investment in the subsidiaries and the Company’s share of net assets at the time of acquisition of shares in the subsidiaries is recognised in the fi nancial statement as Goodwill or Capital Reserve.

− Minority interest in the net assets of consolidated subsidiaries is identifi ed and presented in the consolidated balance sheet separately from liabilities and the equity of the company’s shareholders.

Minority interest in the net assets of consolidated subsidiaries consists of: (a) The amount of equity attributable to the minorities at the date on which investment in subsidiaries is made; and(b) The minorities’ share of movements in the equity since the date the parent-subsidiary relationship comes into existence.− Minority interest in the net profi t for the year of consolidated subsidiaries is identifi ed and adjusted against the profi t after tax of the group.− The fi nancial statements of the subsidiaries used into the consolidation are drawn up to the same reporting date as that of the company i.e. 30th September,

2014, except for certain subsidiaries, for which audited fi nancial statements as on reporting dates are not available, have been consolidated based on fi nancial statement drawn by the management as on 31st March, 2014 (Indicated as *) and as on 30th June, 2014 (Indicated as #).

List of subsidiary companies which are included in the consolidation and the Company’s holdings therein are as under:

Sr. No.

Name of Subsidiary Companies Ownership in % either directly or through Subsidiaries

Country of Incorporation

2013-14 2012-131. Reid & Taylor (India) Limited (RTIL) 47.70 56.17 India2. Belmonte Retails Limited 100.00 100.00 India3. SKNL International B.V. * 100.00 100.00 Netherlands4. SKNL Europe B.V. * 100.00 100.00 Netherlands5. SKNL Italy S.p.A# 100.00 100.00 Italy6. Leggiuno S.p.A# 100.00 100.00 Italy7. SKNL North America B.V. * 100.00 100.00 Netherlands8. SKNL Global Holdings B.V. * 100.00 100.00 Netherlands

The Company’s ownership percentage in the shares of Reid & Taylor (India) Limited (RTIL) is after giving effect to the invocation of shares pledged to the lenders of the Company and RTIL, as per Note 30 & 31.

List of subsidiary companies which are not included in the consolidation during the period as the underlying business Companies are liquidated. The Company’s holdings therein are as under:

Sr. No.

Name of Subsidiary Companies Ownership in % either directly or through Subsidiaries

Country of Incorporation

2013-14 2012-131. SKNL UK Ltd. 80.00 80.00 UK2. Global Apparel (US) Ltd. 80.00 80.00 USA3. Global Apparel (France) Ltd. 80.00 80.00 France4. 7172931 Canada Ltd. 80.00 80.00 Canada5. Global Apparel (Hong Kong) Ltd. 80.00 80.00 Hong Kong6. Remala Trading B.V. 95.00 95.00 Netherlands7. HMX Poland 95.00 95.00 Poland8. Coppley Corp. 95.00 95.00 Canada9. HMX Acquisition Corp. 95.00 95.00 USA10. HMX LLC 95.00 95.00 USA11. HMX Des Plaines LLC 95.00 95.00 USA12. Quartet Real Estate LLC 95.00 95.00 USA13. HMX DTC Co. 95.00 95.00 USA14. Marling & Evans Ltd., UK 65.00 65.00 Netherlands



58

The consolidated fi nancial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as holding company’s separate fi nancial statements, as far as possible, except as provided under Signifi cant Accounting Policies v (e), (f), xii (c), xvii (b) and xx (b).

ii. Use of Estimates The presentation of fi nancial statements requires estimates and assumptions to be made that affect the value of assets and liabilities as well as revenues and

expenses as reported in the fi nancial statements. The difference between the actual result and estimates are recognized during the period in which they are materialised/ known.

iii. Tangible Assets Tangible Assets are stated at their original cost, net of Cenvat / Value Added Tax and includes amounts added on revaluation, less accumulated depreciation

and impairment loss, if any. The cost includes interest, fi nancial charges, freight, taxes and other incidental expenses incurred for acquisition and installation of the assets. Tangible Assets revalued are stated at values determined by the Independent valuers.

iv. Intangible Assets Intangible assets are recognised when it is probable that the future economic benefi ts that are attributable to the asset will fl ow to the enterprises and the cost

of the asset can be measured reliably.v. Depreciation and Amortisation

(a) Depreciation on Tangible assets including revalued assets have been provided on Straight Line Method at the rates and in the manner prescribed in the Schedule XIV to the Companies Act, 1956 and Schedule II of Company’s Act 2013. Depreciation on additions to Tangible Assets is provided for on pro-rata basis from the date of addition/acquisition till the end of the year and on assets sold/discarded/demolished to the date of disposal. The depreciation on revalued portion of assets is adjusted against the revaluation reserve.

(b) Depreciation on assets whose actual cost does not exceed `5,000/- each is provided at 100% of the cost as specifi ed in Schedule XIV to the Companies Act, 1956.

(c) Computer software/System Development: Amortized Over a period of fi ve years.(d) Leasehold improvements are amortised over the terms of the respective leases or useful lives, whichever is shorter.(e) In case of Leggiuno S.P.A., Intangible assets comprised of Start-up and expansion costs, Industrial patent rights and right for the use of know-how are

amortised over fi ve years and licences, concessions, trademarks and other tangible assets are amortised over ten years.(f) In case of foreign subsidiaries, the depreciation on Tangible assets is provided for on SLM basis over the estimated useful life at rates permissible under

applicable local laws.(g) No depreciation is to be provided on the Assets held for Sale under applicable laws of the country.

vi. Capital Work-In-Progress Projects under commissioning and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses, interest and other

fi nancing costs payable on funds specifi cally borrowed to the extent they relate to the period till assets are ready for intended use.vii. Impairment of Assets The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/ external factors. An

impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value at the weighted average cost of capital.

viii. Valuation of Inventories(a) Raw materials (including goods-in-transit) are valued at cost, on fi rst-in-fi rst-out basis.(b) Work-in-process is valued at cost. Cost for this purpose includes direct cost and attributable overheads.(c) Finished goods are valued at lower of cost or net realisable value. Cost for this purpose includes direct cost, attributable overheads and excise duty.(d) Stores, fuel, dyes, chemicals and packing materials are valued at cost on fi rst-in-fi rst-out basis.

ix. Cash and Cash Equivalents Cash and cash equivalents for the purpose of cash fl ow statement comprise cash at bank, cash in hand and short- term investments with an original maturity of

three months or less.x. Recognition of Income and Expenditure

(a) Domestic sales are recognized on transfer of risk and reward which generally coincides with dispatch of goods to the customers.(b) Export sales are accounted on transfer of risk and reward which generally coincides on the date of bill of lading.(c) Sales are inclusive of dyeing charges, conversion charges and are net of shortage and discounts excluding value added tax.(d) Interest income is recognized on time proportion basis taking in to account the amount outstanding and the rate applicable(e) Cost/expenditure is recognized on accrual, as they are incurred except payments of leave travel allowances and reimbursement of medical expenses to

the staff, being immaterial, are accounted on cash basis.(f) The claims against the company are accounted on acceptance basis.

xi. Foreign Exchange Transactions Transactions in foreign currencies are accounted at the exchange rate prevailing on the date of transaction. Gains and losses resulting from the settlement of

such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in Statement of profi t and loss. In case of forward contracts (non speculative), the exchange differences are dealt with in Statement of profi t and loss account over the period of contracts.





xii. Employee Benefi ts(a) Employee benefi ts comprise both defi ned contribution and defi ned benefi t plans. Defi ned contribution plan: Contribution to defi ned contribution plans are recognised as expenses in statement of profi t and loss, as they are incurred. Defi ned benefi t plan: The Company’s liability towards gratuity & Leave encashment is accounted for on the basis of an actuarial valuation done at the year end and is charged

to the Statement of Profi t and Loss.(b) All short term employee benefi ts are accounted for on undiscounted basis during the accounting period based on services rendered by employees.(c) In case of foreign subsidiary companies the provision for liability is provided in accordance with law of country in which Company is operating.

xiii. Research & Development Revenue expenditure, including overheads on Research and Development, is charged out as an expense in the year in which incurred. Expenditure which

results in the creation of capital assets is taken as Fixed assets.xiv. Investments Investments are classifi ed into Current and Non Current Investments. Current Investments are stated at lower of cost and fair value. Long-term Investments

are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of N on Current Investments.xv. Borrowing costs Borrowing costs, which are directly attributable to acquisition, construction or production of a qualifying asset, are capitalized as a part of the cost of the

asset. Other borrowing costs are recognised as expenses in the period in which they are incurred.xvi. Debt issue costs Debt issue costs are charged to the Statement of Profi t & Loss under administration expenses during the year in which incurred.xvii. Lease

(a) Operating Lease: Leases where the lessor effectively retains substantially all the risks and benefi ts of ownership over the leased term are classifi ed as operating leases.

Operating lease rentals are recognized as an expense, as applicable, over the lease period.(b) Finance Lease: Finance leases, where substantially all the risks and benefi ts incidental to ownership of the leased item, are transferred to the company, are capitalized

at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between fi nance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged to income. Lease management fees, legal charges and other initial direct costs are capitalised.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease item, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

xviii. Segment Reporting The Company is engaged in manufacturing (in house and outsourced) fabrics, ready to wear garments and home textiles. Considering the overall nature,

the management is of the opinion that the entire operation of the Company falls under one reportable business segment i.e. Textiles and as such there are no separate reportable business segments for the purpose of disclosures as required under Accounting Standard-17 “Segment Reporting”.

xix. Earnings per share Basic earnings per share are calculated by dividing the net profi t or loss for the period attributable to equity shareholders by the weighted average number of

equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profi t or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

xx. Income Tax(a) Tax expense comprises of current tax and deferred tax. Current tax and Deferred tax are accounted for in accordance with Accounting Standard 22

on “Accounting For Taxes on Income”, notifi ed under the Companies (Accounting Standards) Rules 2006. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income taxes refl ect the impact of the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years / period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that suffi cient future taxable income will be available except that deferred tax assets arising on account of unabsorbed depreciation and losses are recognised if there is virtual certainty that suffi cient future taxable income will be available to realise the same. Deferred Tax is measure based on the tax rate and tax laws, enacted or substantively enacted at the Balance Sheet date.

(b) In case of foreign subsidiaries and step down subsidiary companies Income Tax / Deferred Tax have been provided in accordance with laws of country in which company is operating.

xxi. Employee Stock Option Schemes The Company has granted Stock Options to its employees under Employees Stock Option Scheme, 2007 - Series ‘A’ (“ESOP, 2007”). In respect of Options

granted under the Employees Stock Options Plan, in accordance with guidelines issued by the SEBI and in compliance with the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accounts of India in the year 2005 and applicable for the period on or after 1st April 2005, the cost of stock options granted to employees are accounted by the Company using the intrinsic value method and the cost based on excess of market value over the exercise price is recognized in the Statement of Profi t & Loss, over vesting period on time proportion basis and included in the ‘Salaries, wages, bonus etc.’ in Note 25 of the Financial Statements. Should any employee leave in the subsequent year, before exercise of the Option, the value of Option accrued in their favour is written back to the General Reserve.

xxii. Provisions and Contingent Liabilities A provision is recognised when an enterprise has a present obligation as a result of past event, it is probable that an outfl ow of resources embodying economic

benefi t will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to refl ect the current best estimates. A contingent liability is disclosed, unless the possibility of an outfl ow of resources embodying the economic benefi t is remote.


60


( ` in lacs)

NOTE : 2 - SHARE CAPITAL Current Year


As at 31.03.2013 No. of Shares Amount No. of Shares Amount

Authorised Capital Equity Shares of ` 10 each 370,000,000 37,000.00 370,000,000 37,000.00 Preference Shares of ` 100 each 9,000,000 9,000.00 9,000,000 9,000.00

Total 379,000,000 46,000.00 379,000,000 46,000.00 Issued, Subscribed & Paid up CapitalEquity Shares of ` 10 each, fully Paid up 297,403,377 29,740.34 297,403,377 29,740.34 6% Cumulative Redeemable Preference Shares of ` 100 each, fully Paid up 372,500 372.50 372,500 372.50 0.01% Redeemable Preference Shares of ` 100 each, fully Paid up 4,386,147 4,386.15 4,386,147 4,386.15

Total 302,162,024 34,498.99 302,162,024 34,498.99

Note 2.1 - Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period;( ` in lacs)

Particulars Equity Shares As at 30.09.2014 As at 31.03.2013

No. of Shares Amount No. of Shares AmountShares outstanding at the beginning of the period 297,403,377 29,740.34 297,403,377 29,740.34 Shares Issued during the period upon conversion of warrants - - - - Shares outstanding at the end of the period 297,403,377 29,740.34 297,403,377 29,740.34

Particulars 6% Cumulative Redeemable Preference Shares As at 30.09.2014 As at 31.03.2013

No. of Shares Amount No. of Shares AmountShares outstanding at the beginning of the period 372,500 372.50 527,500 527.50 Shares Issued during the period - - - - Shares redeemed during the period - - 155,000 155.00 Shares outstanding at the end of the period 372,500 372.50 372,500 372.50

Particulars 0.01% Redeemable Preference Shares As at 30.09.2014 As at 31.03.2013

No. of Shares Amount No. of Shares AmountShares outstanding at the beginning of the period 4,386,147 4,386.15 4,705,947 4,705.95 Shares Issued during the period - - - - Shares redeemed during the period - - 319,800 319.80 Shares outstanding at the end of the period 4,386,147 4,386.15 4,386,147 4,386.15

Note 2.2 - Details of Preference shareholders holding more than 5% in 6% Cumulative Redeemable Preference Shares of the Company Name of Shareholder As at 30.09.2014 As at 31.03.2013

No. of Shares held % of Holding No. of Shares held % of Holding Anjaneya Holdings Private Limited 372,500 100.00 372,500 100.00

Details of Preference shareholders holding more than 5% in 0.01% Redeemable Preference Shares of the CompanyName of Shareholder As at 30.09.2014 As at 31.03.2013

No. of Shares held % of Holding No. of Shares held % of Holding IDBI Bank Limited 4,306,627 98.19 4,306,627 98.19

Details of Equity Shareholders holding more than 5% Shares of the CompanyName of Shareholder As at 30.09.2014 As at 31.03.2013

No. of Shares held % of Holding No. of Shares held % of HoldingAnjaneya Holdings Private Limited 25,416,031 8.55 Copthall Mauritius Investment Limited 24,034,445 8.08 IDBI Bank Limited 15,827,419 5.32 IL& FS Financial Services Limited 17,656,051 5.94 22,467,505 7.55 Finquest Financial Solutions Private Limited 14,966,000 5.03 Bharat Jayantilal Patel 34,787,546 11.70




Note 2.3 - Term/rights attached to equity sharesThe Company has only one class of equity shares having a par value of ` 10 per Share. Each holder of equity shares is entitled to one vote per share. The Dividend, if and when declared, is declared and paid in Indian rupees. The Board of directors have neither declared nor proposed any Dividend. 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 distributions will be in proportion to the number of equity shares held by the shareholders. Note 2.4 - Terms of Redemption of Preference sharesDuring the period, the company has redeemed 6% Redeemable Preference Shares aggregating to ` NIL Lacs (Previous year ` 155.00 Lacs)Outstanding 6% Cumulative Redeemable Preference Shares was redeemable by 1st October 2013 ( Refer Note 53).During the period, the company has redeemed 0.01% Redeemable Preference Shares aggregating to ` NIL Lacs (Previous year ` 319.80 Lacs).Outstanding 0.01% Cumulative Redeemable Preference Shares are to be redeemed @ 25% in each year between October 2016 to September 2020.Note 2.5 - Shares reserved for issue under options {Refer Note 1 (xxi)}The Company has issued stock options to the permanent employees exercisable into 1,911,000 numbers of equity shares of the Company under ‘Employees Stock Option Scheme 2007 – Series A’ (“ESOP 2007”). Each option when exercised would be convertible into one equity share of a face value of ` 10 each fully paid-up. The important features of the ESOP scheme are as follows:

Parameters/Terms ExplanationI Vesting period Minimum period of one year and a maximum period of fi ve years from the date of grant i.e. 31.10.2007.II Vesting schedule The actual Vesting Schedule of Options will be as follows:

Year Period and Date % of Vesting1st Year 31.10.2007 to 30.10.2008 30%2nd Year 31.10.2008 to 30.10.2009 30%3rd Year 31.10.2009 to 30.10.2010 40%

III Exercise price 30% discount on the prevailing market price of ` 128/- of the shares as on the date prior to the date of the Compensation Committee resolution.

IV Exercise Period Exercise period will be three years from the date of vesting.V ESOP Price per share ` 89.60

Particulars Current Year As at 30.09.2014


a) Number of Options outstanding beginning of the period 365,760 911,820b) Options exercised NIL NILc) Total number of shares arising as a result of exercise of Options NIL NILd) Options Lapsed/cancelled * 365,760 546,060e) Money realised by exercise of options NIL NILf) Total number of options in force NIL 365,760

* ESOP Scheme stands closed.



NOTE : 3 - RESERVES & SURPLUSa. Capital Reserve Opening Balance 2,810.78 2,810.78 Closing Balance 2,810.78 2,810.78 b. Capital Redemption Reserve Opening Balance 13,742.29 13,267.49 (+) Current period Transfer - 474.80 Closing Balance 13,742.29 13,742.29 c. Securities Premium Account Opening Balance 147,601.02 147,601.02 Closing Balance 147,601.02 147,601.02 d. Debenture Redemption Reserve Opening Balance 4,752.80 4,752.80 Closing Balance 4,752.80 4,752.80 e. Revaluation Reserve Opening Balance 1,064.32 1,082.00 (-) Written back on account of depreciation on revalued portion of Fixed Assets {Refer Note 12 (ii)} 1,064.32 17.68 Closing Balance - 1,064.32 f. Employees Stock Options Outstanding Account Opening Balance 140.45 350.14 (-) Written Back due to lapse/ cancellation of employee shared based payment plan (Refer Note 2.5) 140.45 209.69 Closing Balance - 140.45


62




g. Foreign Currency Translation Reserve (1,803.31) (622.31)h. Surplus Opening Balance 46,766.54 80,688.62 (+) Adjustment of depreciation as per schedule II of Companies Act. {Refer note 12 (i)} (7,591.71) - (+) Net Profi t/(Loss) for the period (316,383.59) (36,952.17) (+) Reversal of Proposed Preference & Equity Dividend and tax thereon - 3,504.89 (-) Transfer to Capital Redemption Reserves - 474.80 Closing Balance (277,208.76) 46,766.54

Total (110,105.18) 216,255.89

NOTE : 4 - LONG TERM BORROWINGSSECURED(a) Term Loans Term Loans under Technology Upgradation Fund Scheme (Refer Note 4.1) 16,901.59 29,783.65 Term Loan under Overseas Investment Finance Programme (Refer Note 4.2) - 11,764.16 Rupee Term Loans from Banks (Refer Note 4.3) 2,634.29 27,657.95 Funded Interest Term Loans (Refer Note 4.4) - 5,219.37 Equipment Finance (Refer Note 4.5) - 13.58

Total 19,535.88 74,438.71 Notes :Nature of Security and Terms of Repayment for Long Term Borrowings:



Nature of Security / Terms of Repayment / Applicable Rate of Interest Long Term Borrowings


Liabilities



Liabilities4.1 Term Loans under Technology Upgradation Fund Scheme(a) Secured by fi rst pari passu charge on the Fixed Assets of existing Jhagadia Unit,

second pari passu charge on all other Fixed Assets and Current Assets of the Company, both present and future, personal guarantee of Chairman & Managing Director of the Company and corporate guarantee of Anjaneya Holdings Pvt. Ltd.

(i) 32 Equal Quarterly Installment (EQI) starting from April 2010 to January 2018. The applicable interest rate is in the range of 13.3% to 15.0% p.a. The Installments due against the loan from 01/01/2013 amounting to ` 1,005.63 lacs have not been paid.

1,562.50 1,630.63 2,500.00 693.13

(ii) 32 EQI starting from July 2010 to April 2018. The applicable interest rate is in the range of 13.3% to 15.0% p.a. The Installments due against the loan from 01/04/2013 amounting to ` 468.75 lacs have not been paid.

859.38 781.25 1,328.12 312.50

(iii) This facility has been recalled by lender on 11th December, 2013 (Refer Note 10.2, 40 & 45).

- - 3,079.23 1,250.00

(iv) 78 Equal Monthly Installment (EMI) starting from June 2011 to November 2017. The applicable interest rate is 14.75% p.a.The Installments due against the loan from 01/11/2012 amounting to ` 2,211.54 lacs have not been paid.

2,500.00 3,365.39 5,961.54 -

(v) 78 EMI starting from June 2011 to November 2017. The applicable interest rate is 14.75% p.a. The Installments due against the loan from 01/11/2012 amounting to ` 530.77 lacs have not been paid.

600.00 348.38 971.46 -

(vi) 23 EQI starting from July 2011 to June 2017. The applicable interest rate is 14.25% p.a. The Installments due against the loan from 01/01/2013 amounting to ` 327.18 lacs have not been paid.

313.04 532.57 622.78 222.83


(` in lacs)







Liabilities



Liabilities(vii) 78 EMI starting from June 2011 to December 2017. The applicable interest rate

is 15.0% p.a. The Installments due against the loan from 01/07/2012 amounting to ` 2,146.15 lacs have not been paid.

2,066.67 3,100.00 3,497.44 1,669.23

(b) Secured by specifi c charge on the Fixed Assets of the Weaving Unit at Dewas, Process House and Stiching Unit at Jhagadia, fi rst pari passu charge on all other Fixed Assets (excluding Fixed Assets of existing Jhagadia Unit), second pari passu charge on Current Assets of the Company, both present and future, personal guarantee of Chairman & Managing Director of the Company and corporate guarantee of Anjaneya Holdings Pvt. Ltd.32 EQI starting from June 2012 to March 2020. The applicable interest rate is in the range of 14.0% to 14.25% p.a.

(i) The Installments due against the loans from 30/09/2012 amounting to ` 1,563.92 lacs have not been paid.

3,375.00 2,137.00 4,323.08 1,188.92

(ii) The Installments due against the loans from 30/06/2012 amounting to ` 3,125.00 lacs have not been paid.

5,625.00 4,375.00 7,500.00 2,500.00

Total 16,901.59 16,270.22 29,783.65 7,836.61 4.2 Term Loans Under Overseas Investment Finance Programme(a) Secured by fi rst pari passu charge on the Fixed Assets (excluding fi xed assets of

existing Jhagadia Unit) of the Company, both present and Future, pledge of promoter's shares held in the Company, pledge of shares of overseas subsidiary company and personal guarantee of Chairman & Managing Director of the Company.

- - 6,375.00 5,093.68

This facility has been recalled by lender on 11th December, 2013 (Refer Note 10.2, 40 & 45).

(b) Secured by fi rst pari passu charge on the Fixed Assets (excluding Fixed Assets of existing Jhagadia Unit) of the Company, second pari passu charge on the Fixed Assets of existing Jhagadia Unit, second pari passu charge on Current Assets of the Company, both present and future, pledge of promoter’s shares held in the Company, pledge of shares of overseas subsidiary Company and personal guarantee of Chairman & Managing Director of the Company.

- 5,389.16 5,389.16 -

The Loan was repayable in 41 EMI starting from January 2011 to May 2014. The applicable interest rate is 14.75% p.a.The Installments due against the loan from 01/11/2012 amounting to ` 5,389.16 lacs have not been paid.

Total - 5,389.16 11,764.16 5,093.68 4.3 Rupee Term Loans from Banks(a) Secured by fi rst pari passu charge on the Fixed Assets (excluding Fixed Assets of

existing Jhagadia Unit) of the Company, second pari passu charge on the Fixed Assets of existing Jhagadia Unit, second pari passu charge on Current Assets of the Company, both present and future, personal guarantee of Chairman & Managing Director of the Company and corporate guarantee of RTIL, fi rst pari passu charge on the Fixed Assets of RTIL, second pari passu charge on Current Assets of RTIL and pledge of promoter's shares held in RTIL.

- - 3,480.00 8,540.00

This facility has been recalled by lender on 3rd January, 2014 (Refer Note 40 & 45).(b) Secured by specifi c fi rst charge on Offi ce property, second pari passu charge on

Current Assets of the Company, both present and future, and personal guarantee of Chairman & Managing Director of the Company and corporate guarantee of Anjaneya Holdings Pvt. Ltd.

- 502.55 - 502.54

The Loan was repayable in 20 EQI starting from January 2010 to October 2014. The applicable interest rate is 14.25% p.a. The Installments due against the loan from 01/01/2013 amounting to ` 502.13 lacs have not been paid.


(` in lacs)

64






Liabilities



Liabilities(c) Secured by fi rst pari passu charge on the Fixed Assets of the Company and second

pari passu charge on Current Assets of the Company, both present and future.(i) The Loan was repayable in 101 EMI starting from November 2005 to March

2014. The applicable interest rate is 10.0% p.a. The Installments due against the loan from 01/05/2013 amounting to ` 13.76 lacs have not been paid.

- 13.76 - 13.76

(ii) The Loan is repayable in 36 EMI starting from October 2013 to September 2016. The Installments due against the loan from 01/10/2013 amounting to ` 23.86 lacs have not been paid.

31.81 47.71 67.59 11.93

(d) Secured by fi rst pari passu charge on the Fixed Assets of the Company and second pari passu charge on Current Assets of the Company, both present and future.The Loan is repayable 30%,30% & 40% by September 2014, September 2015 & September 2016 respectively. The Installments due against the loan from 30/09/2014 amounting to ` 1,951.86 lacs have not been paid.

2,602.48 3,903.72 6,506.20 -

(e) Secured by fi rst pari-passu charge on the Current Assets, second pari passu charge on the Fixed Assets of the Company, personal guarantee of Chairman & Managing Director of the Company and corporate guarantee of Anjaneya Holdings Pvt. Ltd.

- - 542.45 -


(f) As per the sanctioned terms, this loan is secured by fi rst pari passu charge on the Fixed Assets, second pari passu charge on Current Assets of RTIL, both present and future, pledge of 26% promoter’s shares held by the Company in RTIL which will be on pari passu basis with the same lender for the Rupee Term Loan availed by the Company, specifi c charge on Debt Service Reserve Account (DSRA) opened for this Loan and personal guarantee of Managing Director of RTIL.

- - 9,758.21 2,096.29

This Loan has been recalled by lender on 27th February, 2014 on account of default in repayment of Principal and Interest by RTIL. (Refer Note 31, 40 & 45)

(g) As per the sanctioned terms, this loan is secured by fi rst pari passu charge on the Fixed Assets, second pari passu charge on Current Assets of RTIL, both present and future and personal guarantee of Managing Director of RTIL.

- - - 7,485.55

This Loan has been recalled by lender on 19th October, 2013 on account of default in repayment of Principal and Interest by RTIL. (Refer Note 40 & 45)

(h) As per the sanctioned terms, this loan is secured by fi rst pari passu charge on the Fixed Assets, second pari passu charge on Current Assets of RTIL, both present and future, pledge of 38,30,045 shares held by the Company in RTIL, personal guarantee of Managing Director of RTIL and corporate guarantee of the Company.

- - 3,163.26 1,632.66

This Loan has been recalled by lender on 08th May, 2013 on account of default in repayment of Principal and Interest by RTIL. (Refer Note 36, 40 & 45)

(i) Secured by mortgage on building of the Company's Overseas Subsidiary at overseas. - 5,857.26 4,140.24 1,053.29 The Loan is repayable in 12 EQI starting from September 2011 to March 2017. The applicable interest rate is 8.1% p.a.

Total 2,634.29 10,325.00 27,657.95 21,336.02 4.4 Funded Interest Term Loans

Secured by fi rst pari passu charge on the Current Assets, second pari passu charge on the Fixed Assets of the Company, Personal Guarantee of Chairman & Managing Director of the Company and Corporate Guarantee of Anjaneya Holdings Pvt. Ltd.

- - 5,219.37 -


Total - - 5,219.37 - 4.5 Equipment Finance

Secured by hypothecation of specifi c equipments / assets. - 2.08 13.58 75.01 Total - 2.08 13.58 75.01


(` in lacs)





NOTE : 5 5.1 DEFERRED TAX LIABILITIES (NET)

Deferred Tax Liabilities {Refer note 1 (xx)} : Impact of Difference between Tax depreciation & Depreciation/ Amortisation charged as per Companies Act

2,866.15 6,256.43

Deferred Tax Assets {Refer note 1 (xx)} :Disallowance under section 43B of Income Tax Act for Employee Benefi ts 177.79 319.91

Deferred Tax Liabilities (Net) 2,688.36 5,936.52 5.2 Overseas SubsidiariesThe Deferred Tax Asset of Leggiuno S.p.A. is ` 1,091.87 lacs and the Deferred Tax Liability of Leggiuno S.p.A. is ` 730.98 lacs.

NOTE : 6 - OTHER LONG TERM LIABILITIES

Deposits received from Customers/Dealers 253.88 266.50 Other liabilties 81.82 62.33

Total 335.70 328.83

NOTE : 7 - LONG TERM PROVISIONSProvision for Employee Benefi ts {Refer Note 1(xii) & 62}

Gratuity (Unfunded) 532.95 276.08 Leave Encashment (Unfunded) 137.93 218.21

Total 670.88 494.29

NOTE : 8 - SHORT TERM BORROWINGSSECURED(a) Repayable on Demand Working Capital Loans from Banks Cash Credit Loan (Refer Note 8.1) 169,209.09 195,833.37 (b) Short Term Loan from Others 1,409.44 1,542.11 (Refer Note 8.2)

170,618.53 197,375.48 UNSECURED(a) Repayable on Demand from Others 315.19 315.19

315.19 315.19 Total 170,933.72 197,690.67

Notes : Nature of Security / Applicable Rate of Interest for Short Term Borrowings:8.1 Working Capital Loans from Banks Working Capital Loans (WCL) of the Company, RTIL and Overseas Subsidiaries are Secured primarily by fi rst pari passu charge on Current Assets and second pari

passu charge on all movable and immovable properties of respective Companies. In addition to above, WCL of the Company are secured by corporate guarantee from Anjaneya Holding Pvt. Ltd. and personal guarantee of Chairman &

Managing Director of the Company and WCL of RTIL are secured by corporate guarantee from the Company, Anjaneya Holding Pvt. Ltd. and personal guarantee of Managing Director of RTIL.

Average Interest rate on above Working Capital Loan is in the range of 12% to 15.75% p.a.8.2 Short Term Loans from Others Secured by pledge of shares held by promoters in the Company.

NOTE : 9 - TRADE PAYABLESTrade Payables for Goods Purchased & Services Received {Refer Note 39 (a) & 45}Due to Micro, Small and Medium Enterprises (Refer Note 9.1) - 481.80 Due to Others 57,126.47 46,416.75

Total 57,126.47 46,898.55


(` in lacs)

66




NOTE : 10 - OTHER CURRENT LIABILITIESCurrent Maturities of Long Term BorrowingsSECURED

Term Loans under Technology Upgradation Fund Scheme (Refer Note 4.1) 16,270.22 7,836.61 Term Loans under Overseas Investment Finance Programme (Refer Note 4.2) 5,389.16 5,093.68 Rupee Term Loans from Banks & Institutions (Refer Note 4.3) 10,325.00 21,336.02 Equipment Finance (Refer Note 4.5) 2.08 75.01

Recalled Non-Convertible Debentures (Refer Note 10.1, 29, 40 & 45) 15,137.34 15,078.81 Recalled Long Term Borrowings including Interest (Secured ) (Refer Note 10.2, 40 & 45) 79,463.78 18,920.19 Recalled Short Term Borrowings including Interest (Secured) (Refer Note 10.3, 40 & 45) 139,536.32 95,860.89 Recalled Unsecured Term Loan from Banks (in foreign currency) (Refer Note 10.4, 40 & 45) 2,407.07 2,168.69 Interest accrued but not due on Borrowings - 248.51 Interest accrued and due on Borrowings (Refer Note 10.6 & 41) 46,841.24 24,557.09 Short Term Loan from Others - 150.00 Unsecured Advances from Promoters (Refer Note 10.5 & 33) 12,759.96 9,748.81 Debentures Redemption premium Payable (Refer Note 10.1, 29, 40 & 45) 3,932.73 3,932.73 Unclaimed Dividends 7.40 7.42 Payables for Expenses 5,320.60 3,553.05 Creditors for Capital GoodsOther Liabilities

225.99 245.58

Statutory Dues Payable (Refer Note 40) 1,004.57 3,101.43 Other Payables* 4,469.73 3,727.80

Total 343,093.19 215,642.32 *Other payable includes Advance/deposit received from customers/dealers and amount payable to employees.Notes : Nature of Security and terms of repayment for Secured Long Term Borrowings:



10.1 Redeemable Debentures Non-Convertible Debentures (NCDs) are secured by fi rst pari passu charge on all the Fixed Assets of the Company and on all the Fixed Assets of RTIL, simple mortgage on the property situated at Mehsana, Gujarat, pledge of promoters' shares held in the Company, pledge on entire shareholding (present and future) held by Sansar Holding Inc. in the Company non-disposal undertaking for "Reid & Taylor" trade mark and fi rst pari passu charge on brands held by Company except "S. Kumars" brand. Current interest rate is 19.0% p.a.

15,137.34 15,078.81

The NCDs are recalled on 3rd January, 2013. (Refer Note 29, 40 & 45)Total 15,137.34 15,078.81

10.2 Recalled Long Term Borrowings including interestRefer Note 4.1 (a) (iii), 40 & 45 5,196.09 - Refer Note 4.2 (a), 40 & 45 13,748.96 - Refer Note 4.3 (a), 40 & 45 12,503.28 - Secured by fi rst pari passu charge on the Fixed Assets (excluding assets having specifi c charge) of the Company, and second pari passu charge on Current Assets of the Company, both present and future.This Facility has been recalled by lender on 16th May 2013. (Refer Note 40 & 45) 8,803.00 7,813.87 Refer Note 4.3 (f), 40 & 45 13,560.94 - Refer Note 4.3 (g), 40 & 45 8,558.83 - As per the sanctioned terms, this loan is secured by fi rst pari passu charge on the Fixed Assets, second pari passu charge on Current Assets of RTIL, both present and future and personal guarantee of Managing Director of RTIL. This loan has been recalled by lender on 08th March, 2013 on account of default in repayment of Principal and Interest by RTIL. (Refer Note 40 & 45)

12,196.65 11,106.32

Refer Note 4.3 (h), 40 & 45 4,896.03 - Total 79,463.78 18,920.19


(` in lacs)





10.3 Recalled Short Term Borrowings including interest(a) Working Capital Loans (WCL) of the Company, RTIL and Overseas Subsidiaries are Secured primarily

by fi rst pari passu charge on Current Assets and second pari passu charge on all movable and immovable properties of respective Companies. In addition to above, WCL of the Company are secured by corporate guarantee from Anjaneya Holding Pvt. Ltd. and personal guarantee of Chairman & Managing Director of the Company and WCL of RTIL are secured by corporate guarantee from the Company, Anjaneya Holding Pvt. Ltd. and personal guarantee of Managing Director of RTIL. Average Interest rate on above Working Capital loan is in the range of 15.20% to 16.45% p.a.This facility has been recalled by lender on 16th May, 2013. (Refer Note 40 & 45) 1,834.99 1,633.59 This facility has been recalled by lender on 13th May, 2013. (Refer Note 40 & 45) 4,972.32 4,404.92 This facility has been recalled by lender on 28th December, 2012. (Refer Note 40 & 45) 18,251.32 16,050.62 This facility has been recalled by lender on 06th March, 2013. (Refer Note 40 & 45) 19,187.81 17,010.01 This facility has been recalled by lender on 11th December, 2013. (Refer Note 40 & 45) 5,921.74 - This facility has been recalled by lender on 6th March, 2013. (Refer Note 40 & 45) 12,180.50 10,858.69 This facility has been recalled by lender on 28th December, 2012. (Refer Note 40 & 45) 20,513.75 18,119.19 This facility has been recalled by lender on 11th November, 2013. (Refer Note 40 & 45) 28,599.76 -

(b) As per the sanctioned terms, this Short Term Loan including interest accrued thereon, is secured by fi rst pari passu charge on all Fixed Assets of the Company (excluding exclusively charged Fixed Assets), second pari passu charge on exclusively charged Fixed Assets, second pari-passu on all Current Assets (both Present and future), Demand Promissory Note, personal guarantee of Chairman & Managing Director along with pledge of Equity shares held by the Company in RTIL.The applicable interest rate is 15.0% p.a.

11,681.77 11,391.51

This loan has been recalled by lender on 31st March 2013. (Refer Note 40 & 45)(c) As per the sanctioned terms, this Short Term Loan including interest accrued thereon, is secured by, personal

guarantee of Managing Director of RTIL, corporate guarantee from the Company and fi rst pari passu charge on all the fi xed assets of RTIL & second pari passu charge on all the present & future current assets of RTIL along with pledge of Equity shares held by the Company in RTIL. The Applicable Rate of Interest is 16.00 % p.a.

16,392.36 16,392.36

This facility had been recalled by lender on 05th November, 2012 on account of default in repayment of Principal and Interest by RTIL. (Refer Note 40 & 45)

Total 139,536.32 95,860.89 10.4 Recalled Unsecured Term Loan from Banks (in foreign currency)

This loan has been recalled by lender on 31st December 2012. (Refer Note 40 & 45) 2,407.07 2,168.69 Total 2,407.07 2,168.69

10.5 Unsecured Advances from PromotersThe lenders of the Company to whom equity shares of the Company were pledged by the promoters as a collateral security (in addition to the security of Fixed and Current Assets of the Company) have invoked and or sold the shares pledged to them and adjusted the proceeds amounting to ` 12,759.96 lacs (Previous Year ` 9,748.81 lacs) against the dues owed by the Company. The amount of funds so realized by them by the invocation/sale of shares has been treated as amount advanced by the promoters to the Company as advance against share application money for the issue of equity shares to the promoters after due completion of the required formalities and approvals. (Refer Note 33)

12,759.96 9,748.81

Total 12,759.96 9,748.81 10.6 Interest accrued and due on all borrowings including debentures

There is a default in Interest payment amounting to ` 46,841.24 lacs. (Refer Note 41) 46,841.24 24,557.09 Total 46,841.24 24,557.09

NOTE : 11 - SHORT TERM PROVISIONS(a) Provision for Employee Benefi ts {Refer Note 1(xii) & 62} Gratuity (Funded) 330.33 389.79 Leave Encashment (Unfunded) 66.27 93.47 Salary & Reimbursements 1,446.76 1,400.50 (b) Others Provision for Taxation (Net of Advance Tax and MAT Credit utilised) {Refer Note 1(xx)} 33,569.48 30,531.46 Provision for FBT (Net of Advance Tax) 1.56 1.55

Total 35,414.40 32,416.77


(` in lacs)

68


NOTE : 12 - FIXED ASSETS{Refer Note 1(iii), 1(iv), 1(v), 1(vi), 1(vii), 1(xv) and 39 (b)} (` in lacs)

Particulars Gross Block Accumulated Depreciation Net BlockBalance as at

01.04.2013Additions (Disposals)/

AdjustmentsBalance

as at 30.09.2014

Balance as at 01.04.2013

Depreciation/Amortisation

Charge for the period

Adjustment due to

revaluations

Adjustment in Retained

Earnings

On (Disposals)/ Adjustments

Balance as at

30.09.2014

Balance as at

30.09.2014

Balance as at

31.03.2013

Not Under lease, unless stated otherwisea) Tangible Assets

LandFreehold 1,172.34 - - 1,172.34 - - - - - - 1,172.34 1,172.34 Leasehold 1,718.55 - - 1,718.55 3.10 - - - - 3.10 1,715.45 1,715.45

Buildings 20,590.02 50.99 - 20,641.01 4,000.40 1,065.03 1,064.32 - - 6,129.75 14,511.26 16,589.62 Plant and Equipments 172,065.16 116.93 (8,035.47) 164,146.62 62,963.25 20,142.44 - 7,104.85 (1,206.90) 89,003.64 75,142.98 109,101.91 Furniture and Fixtures 3,355.74 30.81 (198.02) 3,188.53 1,365.99 428.02 - 8.49 (76.39) 1,726.11 1,462.42 1,989.75 Vehicles 1,296.23 0.63 (774.79) 522.07 653.48 95.41 - 54.50 (356.64) 446.75 75.32 642.75 Offi ce Equipments 594.86 11.06 (5.05) 600.87 143.69 135.16 - 87.06 (1.28) 364.63 236.24 451.17 Leasehold Improvements 1,171.67 - (85.81) 1,085.86 568.25 267.50 - 278.91 (28.80) 1,085.86 - 603.42 Computers 628.08 2.09 (52.74) 577.43 473.86 67.33 - 57.90 (31.29) 567.80 9.63 154.22 Total 202,592.65 212.51 (9,151.88) 193,653.28 70,172.02 22,200.89 1,064.32 7,591.71 (1,701.30) 99,327.64 94,325.64 132,420.63 Previous year Total 201,379.06 2,766.87 (1,553.28) 202,592.65 54,426.64 16,760.06 17.68 - (1,032.36) 70,172.02 132,420.63

b) Intangible AssetsComputer software 1,180.88 0.23 (173.22) 1,007.89 976.95 75.14 - - (69.41) 982.68 25.21 203.93 Goodwill 12,010.00 - (81.00) 11,929.00 - - - - - - 11,929.00 12,010.00 Total 13,190.88 0.23 (254.22) 12,936.89 976.95 75.14 - - (69.41) 982.68 11,954.21 12,213.93 Previous year Total 13,501.05 155.83 (466.00) 13,190.88 814.70 162.25 - - - 976.95 12,213.93

c) Capital Work In Progress (Refer Note 38)

22,413.50 85.34 (21,338.51) 1,160.33 - - - - - - 1,160.33 22,413.50

Notes :- (i) The Company and its unlisted Indian Subsidiary (RTIL) have revised useful life of assets as per the useful life specifi ed in the Schedule II of the Companies

Act ,2013 or as reassessed by the Company .As prescribed in Schedule II, an amount of ` 7,591.71 lacs has been charged to the opening balance of the retained earnings for the assets in respect of which the remaining useful life is Nil as on April,2014.

(ii) Gross Block includes certain Fixed assets for which revaluation was carried out in the year 1997, by the valuer. The carried forward balance in Revaluation reserve amounting to ` 1,064.32 lacs has been written of fully during the period.

(iii) Based on the internal estimate and assessments the management worked out impairment in relation to its assets of HVFC/HT Unit at Jhagadia and made a provision of ` 609 lacs in the books as on 30.06.2014. {Refer Note 39(b)}

(iv) RTIL has during the year impaired/ written off assets, pertaining to Bengaluru Suit Factory and Bengaluru Garment Division which have been shut down during the year.

(v) During the year the Company has capitalized interest of ` NIL (Previous Year ` 2,167.54 Lacs which has been paid to TUFs Lenders. The borrowing was exclusively used for the HVFC/HT project, process house & stitching unit at Jhagadia and weaving unit at Dewas).

(vi) Freehold land of RTIL represents land originally leased out for 21 years (35.16 acres) by Karnataka Industrial Areas Development Board (KIADB) which has been converted to Freehold Land by virtue of an absolute sale deed executed on 28th September, 2008 between KIADB and the Company.

(vii) Leasehold Land amounting to ` 32.97 lacs (P.Y. ` 32.97 lacs) of RTIL represents land meant for Industrial project (17.26 acres) for which Lease Deed has been executed on 23rd April, 2009 by KIADB for a period of 10 years in favour of the Company. Management expects the said Leasehold land to be converted into Freehold based upon fulfi llment of certain conditions. Hence cost of Leasehold land is not amortised over the lease period.

(viii) Leasehold Land amounting to ` 859.06 lacs (P.Y. ` 859.06 lacs) of RTIL represents the land allotted by KIADB at Plot No.55, Bidadi Industrial Area, Bengaluru for setting up of Garment Manufacturing unit for a period of 10 years. Execution of lease deed is under process and cost of land will be amortised over lease period once legal formalities are completed.



NOTE : 13 - NON CURRENT INVESTMENTSTrade Investments {Refer Note 13.1 & 1(xiv)}

Investment in Equity instruments 100.00 100.00 Other Non-Trade Investments {Refer Note 13.2 & 1(xiv)}

Investment in Equity instruments 9.29 8.67 Investments in Government or Trust securities (Unquoted) 0.10 0.10

Total 109.39 108.77 Aggregate amount of quoted investments {Market value of ` 6.80 Lacs (Previous Year ` 41 Lacs)} 100.00 100.00 Aggregate amount of unquoted investments 9.39 8.77




13.1 Details of Trade Investments (` in lacs)Name of the Body Corporate




Partly Paid /

Fully paid



CostYes / No



2014 2013 2014 2013 2014 2013

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)Investment in Equity InstrumentsBrandhouse Retails Limited, Equity Shares of ` 10 each

Having Signifi cant infl uence

1,000,000 1,000,000 Quoted Fully paid 0.19 0.19 100.00 100.00 Yes NA

Total 100.00 100.00 13.2 Details of Other Non-Trade Investments Name of the Body Corporate




Partly Paid /

Fully paid



CostYes / No



2014 2013 2014 2013 2014 2013 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

Investment in Equity InstrumentsAnjaneya Foundation, Equity Shares of ` 10 each


Industria e Universita S.r.l. Others 10,000 10,000 Unquoted Fully paid 0.04 0.04 4.19 3.72 Yes NA

Investments in Government or Trust securities (Unquoted)

0.10 0.10

Total 9.39 8.77



NOTE : 14 - LONG TERM LOANS AND ADVANCESUnsecured, considered good, unless stated otherwisea. Capital Advances {Refer Note 39(a) & 40} 67.07 92,953.59 b. Security Deposits 899.35 992.40 c. Other Loans and Advances Loans and Advances to Staff 14.47 33.71 Advances Recoverable in Cash or Kind for value to be received 56.71 97.65 Prepaid Expenses - 60.60 Service Tax Receivable 2.53 162.25 Insurance Claim Receivable 9.45 - Custom and excise duty paid under protest 90.07 90.07

Total 1,139.65 94,390.27

NOTE : 15 - OTHER NON CURRENT ASSETSBank Deposits as Margin Money 197.25 80.97 Interest receivable on Fixed Deposit with Banks 12.10 28.87 Miscellaneous Expenditure not written off 1.82 31.93

Total 211.17 141.77

NOTE : 16 - INVENTORIES(As taken, valued and certifi ed by the Management)Valued at Lower of Cost and Net Relisable Value {Refer note 1(viii) & 39(b)}a. Raw Materials and Components 50,072.33 76,348.72 b. Work-in-Progress 21,115.32 35,324.66 c. Finished Goods 65,297.73 93,943.78 d. Stores and Spares, Fuel and Packing Materials 615.13 534.13

Total 137,100.51 206,151.29


70




NOTE : 17- TRADE RECEIVABLESTrade Receivables outstanding for a period less than six months from the date they are due for payment {Refer note 39(a) & 56}

Unsecured, Considered Good 204,486.27 233,738.26 Unsecured, Considered Doubtful 698.37 156.24 Less: Provision for Doubtful Receivables (698.37) (156.24)

204,486.27 233,738.26 Trade Receivables outstanding for a period exceeding six months from the date they are due for payment {Refer note 35(b), 39(a) & 56}

Unsecured, Considered Good 83,813.14 37,469.16 Unsecured, Considered Doubtful 13,449.50 1,768.78 Less: Provision for Doubtful Receivables (13,449.50) (1,768.78)

83,813.14 37,469.16 Total 288,299.41 271,207.42

NOTE : 18 - CASH AND BANK BALANCESA. Cash and Cash Equivalents {Refer note 1(ix)} Cash on Hand 8.74 7.93 With Banks in Current Accounts 2,198.15 731.70

2,206.89 739.63B. Other Bank Balances

Bank Deposit against Margin money (with maturities more than 3 months and less than 12 months) 205.51 350.77 Bank Deposits against Bank Guarantees (with maturities more than 3 months and less than 12 months) - 70.92 with Bank (Earmarked for Dividend) 7.40 7.42 Earmarked Balances (DSRA)* - 57.50 Balances with Scheduled Banks in current account # 13.57 13.57

226.48 500.18Total 2,433.37 1,239.81

NOTE : 19 - SHORT TERM LOANS & ADVANCESUnsecured, considered good, unless stated otherwiseAdvances to Related Party (Refer Note 55)

Subsidiary -Anjaneya Foundation (Section 25 Company) a) 41.35 41.35 Advances Recoverable in Cash or Kind for value to be received (Net of Provisions) {Refer Note 39(a) & 40}

Unsecured, Considered Good b) 13,824.47 129,477.30 Others

Deposits 117.83 185.64 Prepaid Expenses 50.28 298.27 Loans and Advances to Staff 106.13 72.33 Custom Deposits/ Modvat/ Vat receivable 680.88 508.54 Loans and advances to franchisees and others 305.59 369.65 Cenvat Receivable 188.26 114.36 Tax Receivables 475.91 278.51 Others 1,169.02 1,002.54 Export Incentives 132.31 55.56 c) 3,226.21 2,885.40

Total (a+b+c) 17,092.03 132,404.05

NOTE : 20 - OTHER CURRENT ASSETSInterest receivable on TUF Loan - 22.86 Interest receivable on Fixed Deposit with Banks 5.81 14.30

Total 5.81 37.16


(` in lacs)





NOTE : 21 - REVENUE FROM OPERATIONSSale of Products {Refer Note 1(x) (a) & (b)} 501,067.40 498,042.55 Sale of Services {Refer Note 1(x) (c)} 130.75 1,097.11 Other Operating Revenue :

Export Benefi ts 202.75 88.99 Sale of Scrap - 42.88

Revenue from operations (Gross) 501,400.90 499,271.53 Less: Excise duty - 262.46

Revenue from operations (Net) 501,400.90 499,009.07

NOTE : 22 - OTHER INCOMEInterest Income {Refer Note 1(x) (d)} 50.67 91.12 Balances Written Back - 10.95 Other Non Operating Income 613.90 767.30 Liability no longer required 51.55 94.59

Total 716.12 963.96

NOTE : 23 - COST OF MATERIALS CONSUMEDOpening Inventory 76,348.72 69,255.19 Add : Purchases 635,745.91 378,891.98 Less: Closing Inventory 50,072.33 662,022.30 76,348.72 371,798.45

Total 662,022.30 371,798.45

NOTE : 24 - CHANGES IN INVENTORIESClosing Inventory of :

- Semi-Finished Fabrics 21,115.32 35,324.66 - Finished Fabrics, Garments and Made-ups 65,297.73 86,413.05 93,943.78 129,268.44

Opening Inventory of :- Semi-Finished Fabrics 35,324.66 32,970.27 - Finished Fabrics, Garments and Made-ups 93,943.78 129,268.44 72,846.34 105,816.61

(Increase)/Decrease in Inventories 42,855.39 (23,451.83)

NOTE : 25 EMPLOYEE BENEFIT EXPENSESSalaries and Incentives 18,375.80 15,015.67 Contributions to -

(i) Provident Fund 709.22 587.28 (ii) ESIC Fund 49.06 122.02

Gratuity Expenses 342.45 221.95 Social Security and Other Benefi t Plans for Overseas Employees - 1.49 Staff Welfare Expenses 77.28 78.03

Total 19,553.81 16,026.44

NOTE : 26 FINANCE COSTSInterest Expenses 38,506.62 72,799.88 Other Borrowing Costs 19.83 767.67

Total 38,526.45 73,567.55

NOTE : 27 OTHER EXPENSES MANUFACTURING EXPENSES Conversion Charges 5,096.96 5,022.92 Freight and Octroi 1,262.80 552.84 Water, Power & Fuel 7,624.26 5,964.52 Stores and Spares 2,320.28 1,509.42 Excise and Entry Tax 14.83 274.63 Other materials/ Expenses 1,269.04 1,283.30 Insurance 231.28 149.06

Total (A) 17,819.45 14,756.69


(` in lacs)

72




ADMINISTRATIVE EXPENSESRent 496.58 783.58 Rates & Taxes 100.48 118.23 Repairs and Maintenance

- to Buildings 83.29 45.93 - to Machinery 7.20 7.06 - to Others 284.83 375.32 221.21 274.20

Travelling Expenses 340.45 374.43 Electricity Charges 74.66 80.56 Vehicles Maintenance 304.72 273.28 Directors' Sitting Fees 3.28 19.35 Remuneration to Auditors - Audit Fees 107.04 89.38 - Other Services - 34.09 - Reimbursement of Expenses 0.36 107.40 9.87 133.34

Bank Charges 448.87 1,000.72 Conveyance Expenses 225.75 174.92 Legal & Professional Charges 1,151.84 905.00 Listing Fees 10.76 6.29 Printing and Stationery 105.37 111.86 Telephone Expenses 94.63 103.46 Postage and Telegrams 124.03 107.21 Sales Tax 21.71 63.20 Sundry Balances Written Off 5,431.38 60.85 License and Registration Fees 5.97 140.09 Balances not Recoverable written off {Refer Note 39 (a)}

23.80 4,599.34

Provision for Doubtful Receivables / Amounts not Recoverable {Refer Note 35 & 39 (a)}

14,376.59 3,114.45

Provision for Doubtful Loans & Advances (Refer Note 35 & 38) 21,338.51 - Loss on Sale of Assets (Net) 250.33 198.28 Service Tax 44.86 27.60 Exchange Rate Fluctuation (Net) 99.86 227.45 IPO Expenses Charged Off - 426.98 Other Miscellaneous Expenses 1,084.57 282.66

Total (B) 46,641.72 13,607.33 SELLING AND DISTRIBUTION EXPENSES Dealers Incentives 2,866.19 2,561.46 Discounts, Rebates and Allowances 1,518.35 2,531.57 Commission and Brokerage 2,283.78 2,346.54 Conference/Publicity and Business Promotion Expenses 1,616.51 2,056.83 Other Selling Expenses 2,281.33 6,770.54

Total (C) 10,566.16 16,266.94 Total -(A + B+ C) 75,027.33 44,630.96


(` in lacs)


28. (a) On 19th October 2012, HMX Poland sp. Z.o.o., and its subsidiary, HMX Acquisition Corp., along with step down subsidiaries of the Company have fi led Voluntary Petition under Chapter 11 with the United States Bankruptcy Court. Consequent to the above, the assets, brands and business of HMX Acquisition Corp. were sold through a bidding process motion fi led with the Bankruptcy Court. Upon the execution of a Liquidating Trust Agreement the assets of the HMX related Companies were transferred in to Liquidation Trust as per the notice dated 29th October, 2014. The Company refers to the United States Bankruptcy Court’s “stipulation and order” dated 2nd September, 2014 regarding settlement of SKNL related Companies claims.

(b) SKNL (UK) Limited, a subsidiary of the Company has, subsequent to the cessation of the Licence Agreement for the usage of DKNY Brand with Donna Karan Studio LLC., New York, fi led a winding up petition in the High Court of Justice, Chancery Division, Companies Court, UK. The winding up process was concluded on 22nd December, 2014.

(c) The Company has, therefore, reversed the provision made in the previous year for diminution in the value of the investments earlier made through a structure of holding companies in the above subsidiaries amounting to ` 29,080.49 lacs net off write back of amount payable to SKNL (UK) Ltd. of ` 3,176.68 lacs and during the period written off the investments amounting to ` 29,080.49 lacs (Net) in view of the liquidation of the above businesses held through subsidiary Companies and have also not consolidated the accounts of the subsidiaries associated with the above businesses as detailed in point (f) below.

(d) During the period, Leggiuno S.p.A., a subsidiary of the Company has written off its investment in its step down subsidiary by the name “Marling & Evans Ltd.”, amounting to ` 439.25 lacs, as the business conditions do not indicate that the step down subsidiary is a Going Concern.

(e) The Goodwill of ` 11,929.00 lacs (Previous year ` 12,010.00 lacs) arising out of the acquisition of Leggiuno S.p.A. has not been written off since there has been no erosion or impairment in the value of the business. However during the period, goodwill arising out of the acquisition of Marling & Evans Ltd. amounting to ` 81.00 lacs has been written off.

(f) During the period, accounts of 14 out of 20 overseas subsidiaries are not included in consolidation, as explained in Note 1 (i) of signifi cant accounting policies, in view of the liquidation of businesses of these subsidiaries.

29. India Debt Management Private Ltd. and IDBI Trusteeship Services Ltd. (Security Agents) have fi led an interlocutory application No. 3 before the Hon’ble Vacation Court at Mysore, and the Hon’ble Vacation Judge has granted an ex parte order for temporary injunction, restraining Reid & Taylor (India) Ltd. (RTIL) & the Company from selling, transferring, alienating, encumbering, creating any third party rights on the mortgaged properties of RTIL till 30th October, 2015. The above matter is being challenged and defended by the Company and other lenders.

30. (a) The Company has availed a Short Term Loan facility of ` 10,000 Lacs from IL&FS Financial Services Ltd. (IL&FS) as per the sanction letter dated 24th August, 2011, against the security of 26% (34,995,838 shares) unquoted equity shares held by the Company in RTIL. The lender has, on 31st March, 2013, invoked 24,523,656 shares pledged to them and adjusted the proceeds, calculated by them, towards the principal and interest due on the above Short Term Loan facility, amounting to ̀ 11,691.51 Lacs. IL&FS vide their letter dated 15th April, 2013 has intimated to the Company to pay holding cost on the Loan so adjusted by them @ 15% p.a. The Company, therefore, continues to show the liability of the Short Term Loan availed from the Lender. Consequently, the investment in the equity shares of RTIL is shown at cost on the asset side without giving impact to the invocation.

(b) RTIL has availed a Term Loans facility of ` 14,000 Lacs (sanctioned amount) from ICICI Bank Ltd as per the sanction letter dated 28th September, 2011, against the security of 34,995,338 unquoted equity shares held by the Company in RTIL. The Security is pari-passu with the Rupee Term Loan of ̀ 24,000 Lacs (sanctioned amount) extended to the Company by ICICI. The lender has invoked 11,401,794 shares pledged to them and adjusted the proceeds, calculated by them, towards the principal and interest due to them, amounting to ` 857.15 Lacs in RTIL and ` 3,039.98 Lacs in SKNL as communicated to the Company vide their letter dated 26th November, 2013. The Company and RTIL continue to show the liability of the Term Loan availed from the Lender without giving impact to the invocation of shares.

31. After accounting for the invocation of shares as stated in Note 30(a) & (b) above, Company currently holds 47.70% share in equity of RTIL and RTIL continues to be a Subsidiary of the Company by virtue of Company’s ability to control the composition of Board of Directors of RTIL. The fi nancial statements of RTIL have been consolidated accordingly. However, the loss attributable to Minority Interest has been provided without accounting for the invocation of shares, since both the Companies continue to show their liability to lenders.

32. The Company had given a corporate guarantee to India Debt Management Private Ltd. for the purpose of debt availed by Brandhouse Retails Ltd. (BHRL) and the same has been invoked on 26th March, 2013. The outstanding balance of the loan in the books of BHRL as on 30th September, 2014 stands at ` 10,063.03 lacs.

33. For the loans availed by the Company, the promoters have pledged the shares held by them in the Company with various Banks and Lenders, mainly IDBI Bank. The pledge was created over and above the primary security given by the Company on its fi xed assets and current assets to the lenders. The lenders have invoked and sold the pledged shares to recover their dues from the Company. The amounts standing to the credit of the promoters in the books of the Company as at the end of accounting period is ` 12,759.96 lacs (Previous year ` 9,748.81 lacs).

34. India Debt Management Pvt. Ltd. (and some other creditors) has fi led Company Petitions in the High Court of Judicature at Bombay seeking winding-up of the Company as well as Brandhouse Retails Ltd. (BHRL). The Hon’ble High Court has, while admitting the petitions on 15th September, 2014 appointed Offi cial Liquidator as Provisional Liquidator for both the Companies with effect from that date. The Company is taking effective steps to protect its position legally.

35. (a) In the light of the admission of winding up petition against the Company by the Hon’ble High Court, its subsidiary Company RTIL has made a provision for doubtful recovery of loans and advances amounting to ` 23,250 Lacs extended to its Holding Company, SKNL. RTIL has also not recognized interest income amounting to ` 3,412.65 Lacs for the period on the above loans and advances and has also reversed interest income recognized in the earlier years amounting to ` 5,743.74 Lacs.

Further, for the reason stated above, RTIL has also made provision for the amounts receivable from the Company, shown under the heads Short Term Loans & Advances having a closing balance of ` 8,887.36 lacs.

The Company has, however, given corresponding effect to the above provisions, while consolidating the fi nancial statements.(b) In the light of the admission of winding up petition against Brandhouse Retails Ltd. (BHRL) (refer note 34) by the Hon’ble High Court, RTIL has made

a provision for doubtful recovery of Trade Receivables amounting to ` 11,587.93 Lacs.36. L&T Finance Ltd. and some other creditors have fi led Company Petitions in the High Court of Judicature at Bombay seeking winding-up of RTIL. The Hon’ble

High Court has, while admitting the petitions on 22nd December, 2014 appointed Offi cial Liquidator as Provisional Liquidator with effect from that date.



74

37. The Company and RTIL, with a view to seek remedial steps and to take the Companies out of the Provisional Winding-up have fi led Scheme of compromise and arrangement under Section 391 of the Companies Act 1956 (or under Section 230 of the Companies Act, 2013) for restructuring of debts of the lenders with defi ned programme for raising fi nance required under the scheme. Once the scheme is approved and the Company is removed from the provisional liquidation, the Company is hopeful that the temporary suspension placed on the trading of the shares of SKNL on the stock exchanges, shall come to an end.

38. RTIL, during the period under review, returned Fixed Assets grouped under the head Capital Work-in-Progress purchased from various parties amounting to ` 21,338.51 Lacs due to the fact that it has abandoned the proposed new project for manufacture of high quality fabric for export to US markets. This project was undertaken keeping in mind the requirements of forward integration with its group Company in US, HMX Inc. However, the project was abandoned as HMX Inc., went in to liquidation. The said balance as on the current date is still pending to be received from the said parties and hence RTIL has fi led legal cases against them, based on prudence RTIL has made provision for doubtful advances under the head Long Term Loans & Advances.

39. (a) In case of the Company and RTIL, the confi rmation, reconciliation and adjustment of balances pertaining to trade receivables and payable through the accounts of collecting agents, loans & advances and capital advances is an ongoing process and additionally, to the extent possible, signifi cant portion of the outstanding balances as at the Balance Sheet date are independently confi rmed. Based on the above, during the period, the companies have identifi ed and made provision amounting to ` 14,400.39 lacs {including ` 11,587.93 lacs covered under Note 35(b)} (Previous year ` 7,713.79 lacs) for unconfi rmed/ non-recoverable balances. As regards the outstanding trade receivables, loans & advances and capital advances, the management of the concern companies are of the opinion that the same are fully recoverable and consequential adjustments and provisioning, if any, are not likely to be material given the nature and size of its operations.

(b) The company has a regular programme of verifi cation of fi xed assets including capital work in progress, wherein all fi xed assets are verifi ed once in a period of three years. The Company maintains proper records of fi xed assets and same are in the process of being updated for the period after 31 March 2011. Based on the verifi cation of fi xed assets during the period vis-a-vis the underlying records, the Company has impaired assets amounting to ` 609 lacs (Previous year ` 226.25 lacs).

Further, the inventories, including those lying with third parties aggregating ` 55,214.45 lacs (Previous year ` 129,352.30 lacs) are physically verifi ed by the Management. In view of the verifi cation process consistently followed, as regards the fi xed assets, capital work in progress and inventories as at the Balance Sheet date, the Company is of the opinion that the same are fully realizable and consequential adjustments and write down/impairment, if any, are not likely to be material given the nature and size of its operations.

40. The Company and RTIL are facing a mismatch in its cash fl ows mainly on account of the delay in the planned Initial Public Offer of shares of Reid & Taylor (India) Ltd. (RTIL) and offer for sale of shares held by the Company in RTIL. The Company had invested in Overseas Businesses - HMX in the US and joint venture with DKNY in the UK, mainly from debt funds and during the period, the Company had to write off ` 29,080.49 Lacs (Net), after reversing the provision for diminution of the value of investments made during the earlier years of these overseas investments as well as receivables due from them. (Refer to Note 28 in this regard). The Company and RTIL have not been able to raise the assessed working capital limits thereby creating further constraints in the cash fl ows of the Companies. The above reasons have affected the timely servicing of dues to the lenders and resulted in delays in the payment of statutory dues. Consequently, loans aggregating ` 236,544.51 lacs have been recalled and the related securities have been invoked by the concerned lenders. The Company and RTIL are in the process of making necessary arrangements to obtain adequate fi nancial resources for managing its day to day operations and discharging its liabilities as and when due. In the event, the required fi nancial resources are not raised on a timely basis and/ or the debts of the Companies are not restructured in tune with cash fl ows, the operations of the Company and RTIL may get impacted thereby, affecting the assumptions of Going Concern.

41. For the reasons explained in Note 40 the Company and RTIL have been facing mismatch in the cash fl ows which has led to non-servicing of interest and instalments to the Banks and Financial Institutions and as a result the accounts have become Non Performing Assets (NPA). The Banks have stopped charging interest on the various cash credits and term loan accounts maintained with them by the Company and RTIL. However, the Company and RTIL continued to provide interest up to 31st December, 2013 and thereafter the Companies too have stopped providing for interest on the borrowing/ reversed the interest provided in the earlier period with a view to be aligned with the records of the Banks. The net amount of such interest not provided in the books of accounts works out to ` 98,100.21 lacs (including penal interest) for the period ended up to 30th September, 2014.

42. Bank of India acting under Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) has taken symbolic possession of Company’s offi ce premises at B2, 501 & C 501, 5th Floor, Marathon Innova, Off Ganpatrao Kadam Marg, Lower Parel (West), Mumbai - 400013 on 14th March, 2014.

43. ICICI Bank acting under Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) has taken symbolic possession of the properties pertaining to RTIL’s Worsted Fabrics factory at Thandavapura, Nanjangud Taluka, Mysore on 26th February, 2015.

44. IDBI Bank acting under Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) has taken symbolic possession of the properties pertaining to the Company’s factories at Spinning and Weaving Complex, Chamunda Standard Mills, Balgarh, Dewas, (M.P.); Menswear and Home Textiles Complex, 3B Industrial Area No. 2, Agra Bombay Road, Dewas, (M.P.); Bharuche Superfi ne Cottons (BSFC), Jhagadia Industrial Estate, GIDC, Ankleshwar, Gujarat and pieces or parcels of non-agricultural vacant land situate, lying at Dongergaon, District Pune during the month of January to March 2015.

45. Few of the creditors/ lenders of the Company and RTIL have sent legal notices or recalled their loans or fi led legal cases for recovery of the money due to them. The liabilities due to these creditors/ lenders have been fully refl ected in the fi nancial accounts and the Company does not anticipate any material additional liability in this respect.

46. Some of the lenders to whom the Company and RTIL had earlier issued cheques / post dated cheques have fi led cases under Section 138 of the Negotiable Instruments Act, 1881 for the recovery of their dues. The principal amount due to the lenders along with the interest till a specifi ed period are fully refl ected in the fi nancial statements. Please also refer to Note 41 in this respect.

47. Some of the lenders have fi led suits for recovery of their debts at various Debts Recovery Tribunals (DRT). The Company and RTIL are taking necessary steps to defend its position.

48. Two suppliers and in another instance the Income Tax Department have fi led criminal cases against the Company and RTIL and its directors for recovery of some alleged dues; the Company and RTIL have taken effective steps to defend their position and do not expect any material liability on these counts.




49. Owing to the fi nancial troubles faced by the Company and RTIL the following business operations could not be adequately funded resulting in their closure:(a) Spinning and Weaving Complex at Chamunda Standard Mills, Balgarh, Dewas, (M.P.) has been shut down due to disconnection of electricity and labour

unrest since July, 2013.(b) Similarly, the garment factory situated at Bengaluru has been closed due to the fi nancial troubles faced by the Company. Consequently, the Ready-to-wear

Garments based under the brand Belmonte is also closed down.(c) Menswear and Home Textiles Complex, 3B Industrial Area No. 2, Agra Bombay Road, Dewas, (M.P.) has been partially operating for some part of the

accounting period and was closed on account of disconnection of power.(d) The Suit Factory of RTIL, situated at Bengaluru has been shut down since February, 2013 as also the Ready-to-Wear Garments Business conducted from

Bengaluru. Consequently, the books of account of the said business places couldn’t be accessed and updated. The fi nancial statements include assets, liabilities, income

and expenditure for the said businesses amounting to ` 32,490.67 lacs, ` 19,982.39 lacs, ` 562.30 lacs and ` 26,764.60 lacs respectively, prepared by the management on the best estimate basis. These accounts could not be subjected to audit. The Company is of the opinion that the consequential adjustments, if any, on retrieval of records and completion of audit are not likely to be material given the nature and size of its operations.

50. In view of the fi nancial stress faced by the Company and RTIL, the business operations could not be adequately funded resulting in uneconomical operations and hence the Companies have incurred cash losses during the period. The closure of the above mentioned businesses/ factories have added to the losses suffered by them. The accumulated loss of ` 215,373.95 lacs and ` 112,738.59 lacs of the above Companies respectively, at the end of the accounting period, has resulted in the erosion of the net worth of both the Companies.

51. The Group is engaged in the manufacture (in house and outsourced) and sale of fabrics, ready to wear garments and home textiles. Considering the overall nature, the management is of the opinion that the entire operation of the Company falls under one business segment i.e. Textiles and as such there are no separate reportable segments for the purpose of disclosures as required under Accounting Standard – 17 “Segment Reporting”.

52. IDBI Bank had rescheduled, the Term Loans and Working Capital Facilities given by them with cut-off-date, 1st October, 2012 and converted the outstanding dues into Funded Interest Term Loan (FITL) and Working Capital Term Loan (WCTL). The effect of the same was carried out in the books in the previous year. However, the same has been reversed during the current period by the Company, since the restructuring has been revoked by IDBI Bank, to reinstate the accounts position prior to restructuring.

53. 6% Cumulative Redeemable Preference Shares was due for redemption on 1st October, 2013, in view of the fi nancial stress faced by the Company, these Preference Shares were not redeemed on the above due date.

54. As per the approval received from Registrar of Companies, the accounting year of the Company and as well as RTIL ending 31st March, 2014 has been extended to a period of 18 months to end on 30th September, 2014. The extension of the accounting period has been earlier approved by the board on 21st March, 2014.

55. Disclosure as per clause 32 of the Listing agreement: Loans and Advances in the nature of loans given to Subsidiaries, Associates and Others : Name of the Company : Anjaneya Foundation Relationship : Subsidiary (Sec 25) Company Amount outstanding as at 30.09.2014 : ` 41.35 lacs (PY. ` 41.35 lacs) Maximum balance outstanding during the period : ` 41.35 lacs (PY. ` 41.35 lacs) Investment in Shares of the Company : 49,500 Shares (PY. 49,500 Shares) (No. of Shares)56. Trade receivables and advances due from fi rms and companies in which Directors are/ were interested: (` in Lacs)

Name of the Company As at 30.09.2014 As at 31.03.2013(A) Trade Receivables (in RTIL):

Brandhouse Retails Ltd. 11,587.93 29,732.16Coppley Corp 111.01 111.01HMX LLC 634.93 908.29

Total 12,333.87 30,478.10(B) Advances:

Anjaneya Foundation 41.35 41.35Total 41.35 41.35

Grand - Total 12,375.22 30,519.45



76

57. Related parties Disclosures required under Accounting Standard 18 –“Related Party Transactions”(a) Related parties

Sr. No. Name of the Related Party Relationship1. Brandhouse Retails Limited

Enterprises over which Key Managerial Personnel are able to exercise signifi cant infl uence

2. Brandhouse Oviesse Limited3. S. Kumars Enterprises (Synfabs) Limited4. S. Kumars Textiles Limited5. N’Essence Holdings Limited6. Rosewood Holdings Pvt. Limited7. Anjaneya Holdings Pvt. Limited

(Formerly known as Anjani Finvest Pvt. Ltd.)8. Verve Properties & Investment Pvt. Limited9. Ingenious Finance & Investment Pvt. Limited10. Natty Finance & Investment Pvt. Limited11. S. K. Worsteds Pvt. Limited12. Tulja Enterprises Pvt. Limited13. Sansar Exim Pvt. Limited14. Chamundeshwari Mercantile Pvt. Limited15. Maverick Mercantile Pvt. Limited16. Chamundeshwari Trading and Finance Pvt Limited17. SKNL Foundation18. Anajaneya Foundation Subsidiary19. SKNL UK Ltd. Subsidiary of SKNL Global Holdings B.V.20. Global Apparel (US) Ltd.

Wholly Owned Subsidiary of SKNL (UK) Ltd.21. Global Apparel (France) Ltd.22. 7172931 Canada Ltd.23. Global Apparel (Hong Kong) Ltd.24. Remala Trading B.V. Subsidiary of SKNL North America B.V.25. HMX Poland sp. Z.o.o Wholly Owned Subsidiary of Remala Trading B.V.26. Coppley Corp.27. HMX Acquisition Corp. Wholly Owned Subsidiary of HMX Poland sp Z.o.o28. HMX LLC

Wholly Owned Subsidiary of HMX Acquisition Corp.29. HMX Des Plaines LLC30. Quartet Real Estate LLC31. HMX DTC Co.

(b) Key Management Personnel Shri Nitin S. Kasliwal – Chairman & Managing Director Shri Jagadeesh S. Shetty – Director (till 27th December, 2013), President - Finance & Group CFO(c) Details of Transactions

(` in Lacs)Nature of Transactions For the period of 18 months


ended 31.03.2013Sales

GoodsBrandhouse Retails Ltd. (Net) 38,082.14 82,197.47HMX LLC Nil 387.10

Total 38,082.14 82,584.57Investment

Anjaneya Foundation 0.15 NilTotal 0.15 Nil

Fixed Assets SoldS. Kumars Textiles Ltd. Nil 29.32

Total Nil 29.32Advances given and received back

S. Kumars Textiles Ltd. 52.45 NilTotal 52.45 Nil

Advances TakenAnjaneya Holdings Pvt. Ltd. 1,245.93 9,079.47Chamundeshwari Mercantile Pvt. Ltd. 15.42 77.76Tulja Enterprises Pvt. Ltd. 2.62 206.68Ingenious Finance & Investment Pvt. Ltd. 15.42 93.74




(` in Lacs)Nature of Transactions For the period of 18 months


ended 31.03.2013Chamundeshwari Trading & Finance Pvt. Ltd. 305.89 52.48Verve Properties & Investment Pvt. Ltd. 15.42 -N’Essence Holdings Ltd. 378.47 - Nitin S. Kasliwal 962.00 200.24Jyoti N. Kasliwal 396.91 -Anjani N. Kasliwal 162.98 -Kartikeya N. Kasliwal 84.69 -

Total 3,585.75 9,710.37Advances Repaid

Anjaneya Holdings Pvt. Ltd. Nil 629.69Nitin S. Kasliwal Nil 105.85

Total Nil 735.54Investments Written Off/ (Written back)

SKNL International B.V. 32,257.16 NilSKNL (UK) Ltd. (3,176.68) Nil

Total 29,080.48 NilOutstanding at the period endTrade Receivables - Refer Note 56 (A) 12,333.87 30,478.10Trade Payables - Brandhouse Retails Ltd. 1,452.08 13.40Advances Receivables - Refer Note 56 (B) 41.35 41.35Unsecured Advances from Promoters - Refer Note 33

- Anjaneya Holdings Pvt. Ltd. 10,469.71 9,223.78- Chamundeshwari Mercantile Pvt. Ltd. 93.17 77.76- Tulja Enterprises Pvt. Ltd. 209.29 206.68- Ingenious Finance & Investment Pvt. Ltd. 109.15 93.74- Chamundeshwari Trading & Finance Pvt. Ltd. 358.37 52.48- N Essence Holdings Ltd. 378.47 Nil- Nitin S. Kasliwal 1,056.39 94.39- Anjani N. Kasliwal 70.00 Nil

- Verve Properties & Investment Pvt. Ltd. 15.42 NilInvestments

- Brandhouse Retail Limited 100.00 100.00- Anajaneya Foundation 5.10 4.95

Managerial RemunerationNitin S. Kasliwal - Chairman and Managing Director Nil NilAnil Channa - Deputy Managing Director (Up to 14th August, 2014) Nil Nil

(Related party relationships are as identifi ed by the Management and have been relied upon by the Auditor.) During the period the Company and RTIL have made provision for Doubtful Debts for Related Parties which are as follows: (` in Lacs)

Name of the Related Party As at 30.09.2014 As at 31.03.2013In S. Kumars Nationwide Ltd. (SKNL)

HMX LLC - 908.29Coppley Corp. - 111.01

In Reid & Taylor (India) Ltd. (RTIL)Brandhouse Retails Ltd. 11,587.93 -

58. The Micro, Small and Medium Enterprise Development Act, 2006: The Information as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties

have been identifi ed on the basis of the information available with RTIL. The amount of principal & interest outstanding during 2013-14 is given below:

As at 30.09.2014 As at 31.03.2013Amounts unpaid Principal 391.37Amount of interest accrued and unpaid

Opening Balance - 30.44Add: Accrued Interest - 73.38Less: Paid/ Adjusted during the period - 13.39

Closing Balance Interest - 90.43Total Amount outstanding - 481.80

* Opening balance of MSME pertains to RTIL Garment Division and movement of MSME not available due to non availability of RTIL Garment Division records.



78

59. Computation of Earnings Per Share:

Basic For the period of 18 months ended 30.09.2014


Net Profi t attributable to Equity Shareholders(Net of Preference Dividend and Tax on Preference Dividend) (` in lacs)

(316,383.59) (36,952.17)

Weighted average number of Equity Shares of ` 10 each outstanding during the period (Nos. in lacs) 2,974.03 2,974.03Basic Earnings per Share ` (106.38) ` (12.42)

Diluted For the period of 18 months ended 30.09.2014


Net Profi t attributable to Equity Shareholders(Net of Preference Dividend and Tax on Preference Dividend) (` in lacs)

(316,383.59) (36,952.17)

(Nos. in Lacs)Number of shares outstanding on the beginning of the periodAdd : Weighted average number of potential equity shares on conversion of Equity WarrantsAdd : Weighted average number of potential equity shares on account of employee stock

options

2,974.03NilNil

2,974.03Nil

1.10

Weighted average number of shares outstanding at the end of the period 2,974.03 2,975.13Diluted Earnings per Share ` (106.38) ` (12.42)

60. Leggiuno S.p.A., a step down subsidiary of the Company, has fi led an application for composition with its creditors (Debt Restructuring Programme) with the registry of the Varese Court on 18th April, 2014. This was ably supported by a Business Plan which was assessed and accepted by the Local Authorities, thereby putting in place a restructuring plan matched with the projected cash fl ows of the Company.

The Company is required to inject € 3 million for settlement of secured creditors, before 10th March, 2016, as per the condition imposed by the local authority.61. The losses applicable to Minority Shareholders in the Subsidiary RTIL, exceeds the Minority Interest in the Equity of the Subsidiary and hence, the excess is

adjusted against the Majority Interest. The Minority Interest is, therefore, ` NIL at the end of accounting period.62. The Company and RTIL adopted the Accounting Standard -15 (Revised 2005) “Employee Benefi ts” effective from 1st April, 2007. The Company and RTIL have classifi ed the various benefi ts provided to employees as under:I. Defi ned Contribution Plans:

a. Provident Fund & Employees’ Pension Scheme 1995b. Employer’s Contribution to Employees’ State Insurance The Company and RTIL have recognised the following amounts in Statement of Profi t and Loss Account:

(` in lacs)Particulars As at 30.09.2014 As at 31.03.2013Employer’s contribution to Provident Fund & Pension Scheme 633.19 587.28Employer’s contribution to Employees’ State Insurance 147.70 122.02

II. Defi ned Benefi t Plans:a. Contribution to Gratuity Fund (Funded Scheme)b. Leave Encashment (Non - Funded Scheme) In accordance with the Accounting Standard - 15 (Revised 2005), actuarial valuation was performed in respect of the aforesaid defi ned benefi t plans based

on the following assumptions:

Particulars As at 30.09.2014 As at 31.03.2013Discount Rate (% per annum) 8.86 8.25Rate of increase in compensation levels (% per annum) 5.00 5.00% Rate of return on Plan Assets (for Funded Scheme) 8.86 8.70Expected Average remaining working lives of the employees (years) 17.00 18.00

A. Change in the Present Value of Obligation:

Particulars As at 30.09.2014 As at 31.03.2013Funded

Scheme (Gratuity)Non - Funded

Scheme (Leave Encashment)


Non - Funded Scheme (Leave Encashment)

Present Value of Defi ned Benefi t Obligation as at the beginning of the period

1,258.30 311.67 1,173.75 394.80

Interest Cost 155.71 - 102.70 -Current Service Cost 170.29 88.16 125.89 95.14Past Service Cost (Vested Benefi t) - - - -Benefi ts Paid (249.64) (195.63) (178.52) (178.27)Actuarial (gain) / loss on Obligations 5.74 - 34.47 -Present Value of Defi ned Benefi t Obligation as at the end of the period

1,340.40 204.20 1,258.30 311.67




B. Changes in the Fair Value of Plan Assets: (For Funded Scheme)

(` in Lacs)Particulars As at 30.09.2014 As at 31.03.2013Present Value of Plan Assets as at the beginning of the period 592.42 688.72Expected Return on Plan Assets 77.31 59.22Contributions 21.75 26.88Benefi ts Paid (249.64) (164.27)Actuarial gains / (losses) 35.28 (18.12)Assets distributed on Settlement - -Fair Value of Plan Assets as at the end of the period 477.12 592.42

C. Reconciliation of Present Value of Defi ned Benefi t Obligation and the Fair Value of Assets: Particulars As at 30.09.2014 As at 31.03.2013Present Value of Funded Obligation as at the end of the period 1,340.40 1258.30Fair Value of Plan Assets as at the end of the period 477.12 592.42Funded Asset recognised in the Balance Sheet - -Included in provision (Schedule )Present Value of Unfunded Obligation as at the end of the period 863.28 665.87Unrecognized Actuarial gains / (losses) - -Unfunded Liability recognized in the Balance Sheet 863.28 665.87included in provision

D. Amount recognised in the Balance Sheet:Particulars As at 30.09.2014 As at 31.03.2013


Non Funded Scheme (Leave Encashment)



Present Value of Defi ned Benefi t Obligation as at the end of the period

1,340.40 204.20 1,258.30 311.67

Fair Value of Plan Assets as at the end of the period 477.12 - 592.42 -Liability/ (Net Asset) recognised in the Balance Sheet 863.28 204.20 665.87 311.67

Current Liability 330.33 66.27 612.24 93.47Non Current Liability 532.95 137.93 53.63 218.20

E. Expenses recognized in the Statement of Profi t and Loss:Particulars Current Period of 18 months ended

30.09.2014Previous Period of 12 months ended

31.03.2013Funded Scheme

(Gratuity)Non Funded Scheme (Leave Encashment)



Current Service Cost 170.29 88.16 125.89 95.14Past Service Cost - - - -Interest Cost 155.71 - 102.70 -Expected Return on Plan Assets (77.31) - (59.22) -Curtailment Cost / (Credit) - - - -Settlement Cost / (Credit) - - - -Net Actuarial (gain) / Loss recognised in the Period (29.54) - 52.59 -Total Expenses recognised in the statement of Profi t and Loss * 219.15 88.16 221.95 95.14

F. Actual Return on Plan Assets:Particulars As at 30.09.2014 As at 31.03.2013Expected Return on Plan Assets 77.31 59.22Actuarial gain / (losses) on Plan Assets 35.28 (18.12)Actual Return on Plan Assets 112.59 41.10

G. Recognition of Actuarial (Gain) / LossParticulars As at 30.09.2014 As at 31.03.2013Actuarial (Gain) / Loss on Obligation 5.74 34.47Actuarial (Gain) / Loss on Asset (35.28) 18.12Actuarial (Gain) / Loss in statement of Profi t& loss (29.54) 52.59

H. Experience AdjustmentParticulars As at 30.09.2014 As at 31.03.2013 As at 31.03.2012 As at 31.03.2011 As at 31.03.2010On Plan Liability (Gain) / Loss 80.97 56.02 42.84 42.29 (116.63)On Plan Liability (Loss) / Gain 35.28 (18.12) (18.53) 8.19 (8.21)

The Company and RTIL have own managed funds as well as insurer managed funds for certain divisions and hence it is not possible to give a break-up of investments in debt instruments and bank deposits.



80

The expected rate of return on plan assets is based on market expectations at the beginning of the period. The rate of return on long-term government bonds is taken as reference for this purpose.

It is estimated that the contribution during the fi nancial year 2014-15 would be ` 330.33 lacs (Previous year ` 612.27 lacs) on account of the funded benefi ts.

63. Contingent Liabilities:a. Guarantees: (` in Lacs)

Particulars As at 30.09.2014 As at 31.03.2013i) In respect of concessional custom duty availed under EPCG Scheme (Covered by Bank

Guarantee) 35.03 35.03

ii) In respect of concessional custom duty availed under EPCG Scheme (Covered by Bond) 4,489.00 4,489.00iii) Guarantees extended by the banks based on the Company’s counter guarantees 139.85 414.62iv) Corporate Guarantee extended by the Company to the lenders of Shree Maheshwar Hydel Power

Corporation Limited 30,752.00 30,752.00

v) Corporate Guarantees given to the lenders of Brandhouse Retails Ltd. 15,750.00 15,215.92b. Claims not acknowledged as debts: (` in Lacs)

Particulars As at 30.09.2014 As at 31.03.2013i) Income Tax, Sales Tax, Service Tax and Entry Tax demand – disputed in appeal 20,621.06 8,159.45ii) Demand Order of Central Excise Authorities disputed by the Company 574.67 574.67iii) Labour matter pending in court 164.84 164.84iv) Civil matter pending in court Nil Nilv) Writ petition fi led before Hon’ble High Court, Indore against the order of Industrial Court Nil Nilvi) Matter in respect of Gratuity pending before controlling authorities 3.20 3.20vii) Custom CVD disputed 21.16 21.16

c. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance), as certifi ed by the management is ` Nil (Previous Year ` 1,267.10 lacs).

d. Arrears of Dividend on 6% Cumulative Redeemable Preference Shares are ` 78.23 lacs (Previous Year ` 44.70 lacs )e. Few of the creditors/lenders of the Company and RTIL have sent legal notices or recalled their loans or fi led legal cases for recovery of the monies due to

them. The liabilities due to these creditors/lenders have been fully refl ected in the fi nancial accounts and the Companies do not anticipate any additional liabilities in this respect.

64. In case of RTIL, Income Tax provided for earlier years amounting to ` 9,893.82 lacs (Previous Year ` 23,223.57 lacs) will be adjusted based on the fi nalization of the assessments by the Tax authorities in the year when assessments are completed.

65. As per Accounting Standard – 19 “Leases”, the total of future minimum lease payment commitments under operating non cancellable operating lease agreements for a period of 1 to 9 years to use offi ces, warehouses and guest house, are as under:

(` in Lacs)Period As at 30.09.2014 As at 31.03.2013

i)ii)iii)

not later than one yearlater than one year but not later than fi ve years later than fi ve years

141.31284.3292.05

678.611,847.60

688.97 The above amounts are exclusive of taxes and duties. During the year, the Company has incurred an expense of ` 79.83 lacs (Previous year ` 665.93 lacs) as

rent in respect of cancellable leases.66. In the opinion of the management the current & non-current assets have a value on realisation in the ordinary course of business at least equal to the amount at

which they are stated.67. Anjaneya Foundation is Company u/s. 25 of the Companies Act, 1956 and its fi nancials are not consolidate with the Company’s consolidated fi nancial

statements68. There are no events subsequent to the balance sheet date, which would materially affect the accounts and related disclosure for the period of 18 months ended

30th September, 2014.69. Previous year fi gures have been reclassifi ed to conform to this year’s classifi cation. However the current accounting period is for 18 months, the fi gures are not

comparable with the previous years’ fi gures which were for a period of 12 months.

For and on behalf of the Board of Directors

NITIN S. KASLIWAL Chairman and Managing Director


DINESH DARJI Company Secretary

Place : MumbaiDate : 15th October , 2015



.

CIN No. : L17120MH1990PLC058361

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www.sknl.co.in

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