a) Vardhman Polytex Limited (the Company) is a public limited listed company registered under the erstwhile Companies Act 1956. The Company's principal activity is manufacturing of yarn, garments and to develop residential & commercial colony or project.

b) The company's principal place of business is located at 'Vardhman Park, Chandigarh Road, Ludhiana-141123' & factories/units are located at the following premises:

* Badal Road, Bathinda, Punjab - 151005.

* D295/1, Phase VIII, focal point, Ludhiana, Punjab - 141010 (Unit - Vinayak Textiles Mills -Spinning & Dye house, Amkryon International).

* Village Nangal Nihla/Upperla, Swarghat Road, Nalagarh, Himachal Pradesh - 174101.

c) The company is developing residential and commercial colony/project named as 'Vardhman Park' situated at Chandigarh Road, Ludhiana-141123' during the current year.

d) These financial statements are presented in Indian Rupees (Rs.).

2. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of ' 10 per share. Each shareholder is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. During the year ended 31st March, 2015, the amount of dividend recognized as distribution to equity shareholder was Rs. Nil (Previous year Rs. Nil).

As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares

3. Aggregate number of shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date : Nil (Previous year Nil).

Terms and conditions

a) The holders of each warrant will be entitled and having option to apply for and obtain allotment of one equity share of face value of Rs. 10/- each of the Company against each warrant at any time after the date of allotment but on or before the expiry of 18months from the date of allotment, in one or more tranches. At the time of exercise of entitlement, the warrant holders shall pay the balance of the consideration towards the subscription to each equity share. The amount so paid will be adjusted/ set-off against the issue price of the resultant equity shares.

If the entitlement against the warrants to apply for the equity shares is not exercised within the aforesaid period, the entitlement of the warrant holders to apply for equity shares of the Company along with rights attached thereto shall expire and any amount paid on such warrants shall stand forfeited.

b) The warrant holders shall hold equal rights in respect of future bonus and right issue, if any declared by the company in the same proportion and manner with any other shareholder of the Company.

c) The equity shares issued upon the conversion of warrants shall rank pari passu in all respects including with respect to dividend, with the then fully paid up equity shares of the Company, subject however to the provisions of the Memorandum and Articles of Association of the Company.

d) The warrant(s) by itself until converted into equity shares, does not give to the holder hereof any rights with respect to that of a shareholder of the Company except as specified above.

e) The warrants and equity shares shall be subject to lock-in for a period as prescribed under SEBI (ICDR) Regulations, 2009 (including any amendments thereto or re- enactment thereof)

Number of shares proposed to be issued

24,73,000 warrants optionally convertible into equal numbers of equity shares face value of Rs. 10/- at a premium of Rs. 45/- per share.

Amount of Premium

Rs. 1,112.85 lac

The Period before which shares to be allotted

The allotment of the warrants shall be completed within the prescribed period of 15 days from date of the passing of the resolution by the shareholders provided that in case, the allotment of warrants is pending on account of the pendency of any approval of such allotment by any regulatory authority or the Central Government, the allotment shall be completed within 15 days from the date of the receipt of such approval.

Whether the company has sufficient authorized share capital to cover the share capital amount on allotment of shares out of share application money

Yes

Interest accrued on amount due for refund

NIL

The period for which the share application money has been pending beyond the period for allotment as mentioned in the share application form alongwith the reasons for such share application money being pending

Not applicable

a) Principal and interest accrued on Secured (term loans) have been repaid with in 7 working days of the end of March 31, 2015 which is not a continuing default hence not been considered in default as at March 31, 2015.

b) The company has signed settlement agreement with Foreign Currency Convertible Bond holders of principal value of USD 85,00,000 (Rs. 4,613.80 lacs) worth of bonds and redemption premium of USD 15,64,850 (Rs. 849.40 lacs) aggregating the total of USD 1,00,64,850 (Rs. 5,463.20 lacs) . Under the settlement agreement, the final amount including redemption premium has been settled at USD 51,71,513 which is payable in instalment up to year 2016. Out of the final settled amount of USD 51,71,513 the company had paid an amount of USD 30,57,823 (equivalent value bonds surrendered to the company) out of which an amount of USD 4,50,000 (equivalent value bonds surrendered to the company) has been paid in current financial year and accordingly an amount of USD 32,1 7,939 has been written back in the books of accounts . The Axis Bank bond holders reserves the right to exit the settlement agreement on the balance amount of USD 22,00,000, if there is reasonable ground for it to conclude (at its own discretion) that the company may not fulfil its obligation and retains its rights to recompense.

Profit on write back of bonds has been recognized under the head "Other income".

Detail of securities :

a) Working capital loans from banks are secured by hypothecation of all stocks (except the stock of raw material already pledge with third party), present and future of stores, spare parts, packing materials, raw materials, finished goods, goods in transit/process, book debts, outstanding money receivable, claims, bills etc. and second charge by way of joint equitable mortgage of immovable properties of Company.

b) Personal guarantee given by promoter Director & Mrs. Manju Oswal. (related party).

* Investors Education and Protection Fund under Section 205C of erstwhile Companies Act 1956 will be credited by unclaimed dividend amount expiring on seven years from the dividend declaration, the amount is not due at the year end.

a) The leasehold land includes Rs. 136.77 lac (previous year Rs. 136.77 lac) is forfeited by Maharashtra Industrial Development Corporation (MIDC), due to non compliance of the terms of allotment. Leasehold land was alloted for a period of 95 years.

b) Pursuant to provisions prescribed in Schedule II to the Companies Act, 2013, where the remaining useful life of the asset was determined to be nil as on April 1,2014, the Company has fully depreciated net carrying value as on April 1, 2014 net of residual value and has adjusted an amount of Rs. 500.52 lacs (net of deferred tax ) against the opening retained earnings under the head 'Reserves and surplus'.

However in some of the assets the company has reassessed the estimated useful life of its fixed assets through an independent Chartered Engineers. In such cases the company has not opted for the rates as given by the schedule II of the Companies Act, 2013.

a) Out of total shares held in FM Hammerle Textile Limited (Formerly Known as Oswal F.M. Hammerle Textiles Ltd), 2,28,16,018 shares (Previous year 2,28,16,018 shares) (face value of Rs. 10 each) pledge in favour of State Bank of India (lead banker of FMH) in dematerialisation form.

b) During the year, the company has sold substantial investment in Oswal Industrial Enterprises (P) Ltd. at a consideration of Rs. 915.90 lacs and accounted a loss of Rs. 3,585.01 lacs under the head "Exceptional items" in the Statement of Profit and Loss.

a) Based on legal advice, discussions with the solicitors, etc., the management believes that there are fair chances of decisions in the company's favour in respect of all the items listed above and no value adjustment is considered necessary.

b) Direct taxes refundable represent amounts recoverable from the Income Tax Department for various assessment years. In respect of disputed demands, company has filed appeals which are pending at various levels and the company is hopeful of getting the desired reliefs at various forums. Necessary value adjustments shall be made on final settlement by the department.

c) Provision for Income Tax for earlier years has been made based on the Tax Liability calculated at prevalent rates.

d) Balance with statutory authorities includes Rs. 186.47 lac (Previous year Rs. 188.26 lac) being amount of ESI, Excise Duty, Sales Tax, PSEB deposited under protest. No provision has been made in accounts in respect thereof. The same will be made in the year of settlement.

4. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

Particulars                                        As at      As at
                                                31.03.2015    31.03.2014
                                                 Rs. lac       Rs. lac

a)   Claims against the Company not
     acknowledged as debts                         221.25        477.52

b)   Bills discounted with bankers.             10,325.02      5,837.41

c)   Letter of credit & bank gurantee              187.80          8.53
     issued

d)   Income Tax demands under appeal              599.40         783.55

e)   Demand of PSEB for voltage surcharge         256.24         256.24
     and DSA

g) Corporate guarantee given on behalf 8,233.00 8,233.00 of subsidiary company "FM Hammerle Textiles Ltd (formerly Known as Oswal F.M. Hammerle Textiles Ltd)" pursuant to scheme of CDR

There are no present obligations requiring provisions in accordance with the guiding principles as enunciated in Accounting Standard (AS)-29 'Provisions, Contingent Liabilities & Contingent Assets as it is not probable that an outflow of resources embodying economic benefits will be required.

34. Inventories, loans & advances, trade receivables and other current / non-current assets are reviewed annually and in the opinion of the Management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

Defined Benefit Plan

The Employees' Gratuity Fund scheme managed by a trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations.

5. RELATED PARTY DISCLOSURES:-

i) List of related parties and relationships:-

Particulars                   2014-15

a)   Subsidiary Company      F.M. Hammerle Textiles Ltd (FMH) (Formerly
                             known as

                             Oswal F.M. Hammerle Textiles Ltd)
                             Oswal Industrial Enterprises (P) Ltd.
                             (Upto 30th March, 2015)
                             F M Hammerle Verwaltung Gmbh,     Austria

b)   Key management          Mr. Ashok Kumar Oswal
     personnel
                             Mr. Adish Oswal
                             Mr. Ashok Kumar Goyal
                             Mr. Sushil Sharma
                             Mr. Parvinder Singh
                             Mrs. Rakhi Oswal

c)   Relative of KMP         Mr. Abhinav Oswal
                             Mrs. Manju Oswal
                             Ms. Aketa Oswal

d)   Enterprise over which   Oswal Industrial Enterprises (P) Limited
     KMP is able to exercise (wef. 31st March, 2015)
     significant influence     Panchsheel Textile Mfg & Trading Co.Pvt
                               Enakshi Investments (P) Limited.
                               Liberty Mercantile Co.(P)Ltd.
                               Allepy Investment & Trading Co. (P) Ltd.
                               Kent Investments (P) Limited.
                               Ruby Mercantile Co. (P) Limited.
                               Boras Investment & Trading Co. (P) Ltd.
                               Gagan Mercantile Co. (P) Limited.
                               Pioneer Marcantile India (P) Limited.
                               Adesh Investment & Trading Co. (P) Ltd.
                               Calgary Investment & Trading Co. (P) Ltd.
                               Oswal Infratech (P) Ltd.
                               Oswal Tradecom (P) Ltd.
                               Oswal Holding (P) Ltd.
                               Nightangle Dealcom (P) Ltd.
                               Alma Assets Consultancy (P) Ltd
                               Altfort Merchants (P) Ltd

Particulars                       2013-14

                                Oswal Industrial Enterprises (P) Ltd.

                                F M Hammerle Verwaltung   Gmbh,  Austria

b)   Key management             Mr. Ashok Kumar Oswal
     personnel

                                Mr. Adish Oswal
                                Mr.   Ashok Kumar Goyal
                                -
                                -
                                -

c)   Relative of KMP            Mr.   Abhinav Oswal
                                Mrs.   Rakhi Oswal
                                Mrs.   Manju Oswal

                                 Ms. Aketa Oswal

d)   Enterprise over which      -
     KMP is able to exercise
     significant influence      Panchsheel Textile Mfg & Trading
                                Co.Pvt Ltd

                               Enakshi Investments (P) Limited.
                               Liberty Mercantile Co.(P)Ltd.
                               Allepy Investment & Trading Co. (P) Ltd.
                               Kent Investments (P) Limited.
                               Ruby Mercantile Co. (P) Limited.
                               Boras Investment & Trading Co. (P) Ltd.
                               Gagan Mercantile Co. (P) Limited.
                               Pioneer Marcantile India (P) Limited.
                               Adesh Investment & Trading Co. (P) Ltd.
                               Calgary Investment & Trading Co. (P) Ltd.
                               Oswal Infratech (P) Ltd.
                               Oswal Tradecom (P) Ltd.
                               Oswal Holding (P) Ltd.
                               Nightangle Dealcom (P) Ltd.
                               Alma Assets Consultancy (P) Ltd
                               -

a) Loan received from KMP Rs. 204.00 lacs (Previous year Rs. NIL) includes, Rs. 32.50 lacs (Previous year Rs. NIL) from Mr. Adish Oswal, Rs. 171.50 lacs (Previous Rs. NIL) from Mr. Ashok Kumar Oswal.

Loan received from enterprise over which KMP has significant influence is Rs. 364.00 lacs includes, Rs. 35.00 lacs loan (Previous year Rs. NIL) from Allepy Investment Private Limited,Rs. 280 lacs loan (Previous year Rs. NIL) from Alfort merchants (P) Ltd., Rs. 29 lacs loan (Previous year Rs. NIL) from Nightangle Dealcom Pvt. Ltd. & Rs. 20 lacs loan (Previous year Rs. NIL) from Panchsheel Textiles Mfg & Trading Co. Pvt Ltd.

b) Loan repaid to KMP Rs. 204.00 lacs (Previous year Rs. NIL) includes, Rs. 32.50 lacs (Previous year Rs. NIL) to Mr. Adish Oswal,Rs. 171.50 lacs (Previous Rs. NIL) to Mr. Ashok Kumar Oswal, Loan repaid to enterprise over KMP Rs. 364.00 lacs includes, Rs. 35.00 lacs (Previous year Rs. NIL) to Allepy Investment Private Limited, Rs. 280 lacs (Previous year Rs. NIL) to Alfort merchants (P) Ltd., Rs. 29 lacs loan (Previous year Rs. NIL) to Nightangle Dealcom Pvt. Ltd. & Rs. 20 lacs (Previous year Rs. NIL) to Panchsheel Textiles Mfg & Trading Co. Pvt Ltd.

c) Sale of goods includes transactions with F.M. Hammerle Textiles Limited Rs. 1.19 lacs & Rs. 0.66 lacs with Oswal Industrial Enterprises (P) Ltd. (Previous year Rs. 3.29 lacs with F.M. Hammerle Textiles Limited & Rs. 1.17 lacs with Oswal Industrial Enterprises (P) Ltd.)

d) Purchase of fabrics/bed sheets includes transactions Rs. 0.33 lacs (Previous year Rs. 129.49 lacs) with Oswal Industrial Enterprises (P) Ltd & Rs. 0.05 lacs (Previous year Rs. NIL lacs) with F.M. Hammerle Textiles Limited.

e) Equity shares issued Rs. 1,360.15 lacs inludes Rs. 1,200.10 lacs (Previous year Rs. NIL) issued to Alfort Merchants (P) Ltd., ' 160.05 lacs (Previous year Rs. NIL) to Mr. Adish Oswal & Rs. NIl to Alma Assets Consultancy (P) Ltd. (Previous year Rs. 1,136.02 lacs).

f) Advance given (net of funds received) includes transactions with F.M. Hammerle Textiles Ltd. Rs. 6.39 lacs (Previous year Rs. 461.66 lacs), with Oswal Industrial Enterprise (P) Ltd Rs. (6.29) (Previous year Rs. 175.14) and with F.M. Hammerle Verwaltung GmbH Rs. Nil (Previous year Rs. Nil).

g) Expenses reimbursement to F.M. Hammerle Textiles Ltd. Rs. 124.26 lacs (Previous year Rs. 87.85 lacs) & Rs. 45.70 lacs to Oswal Industrial Enterprises (P) Ltd. (Previous year Rs. 7.44 lacs).

h) Rent paid to Mr. Ashok Kumar Oswal Rs. 37.21 lacs (Previous year Rs. 27.72 lacs).

i) Job charges paid to Oswal Industrial Enterprises (P) Ltd. Rs. 55.99 lacs (Previous year Rs. 21.75 lacs).

j) Rent Received from Oswal Industrial Enterprises (P) Ltd. Rs. 1.56 lacs (Previous year Rs. 1.64 lacs).

k) Interest received from subsidiary includes Rs. 79.19 lacs (Previous year Rs. NIL) from F.M. Hammerle Textiles Limited.

l) Interest paid to enterprises over which KMP has significant influence Rs. 7.28 lacs (Previous year NIL) which includes 0.88 lacs paid to Allepy Investment and Trading Co. (P) Ltd. (Previous year NIL), Rs. 5.07 lacs to Alfort merchants (P) Ltd (Previous year NIL), Rs. 0.73 lacs to Nightangle Dealcom Pvt. Ltd. (Previous year NIL) and Rs. 0.60 lacs to Panchsheel Textile Mfg & Trading Co. Pvt Ltd. (Previous year NIL).

m) Remuneration includes transaction with Mr. Abhinav Oswal Rs. 11.71 lacs (Previous year Rs. 11.21 lacs), Mr. Parvinder Singh Rs. 26.32 lacs(Previous year Nil) & Mr. Sushil Sharma Rs. 11.41 lacs(Previous year Nil).

n) Managerial Remuneration includes transactions with Mr.Ashok Kumar Oswal Rs. 47.90 lacs (Previous year Rs. 47.90 lacs) & arrear Rs. NIL lacs (Previous year Rs. 29.03 lacs), Mr. Adish Oswal Rs. 50.77 lacs (Previous year Rs. 50.72 lacs) & arrear Rs. NIL lacs (Previous year Rs. 30.47 lacs) ,Mr. Ashok Goyal Rs. 41.97 lacs (Previous year Rs. 21.89 lacs).

o) Amount received of Rs. 239.19 lacs includes Rs. 42.77 lacs (Previous year NIL) on behalf of Mr. Adish Oswal and Rs. 196.42 lacs (Previous year NIL) on behalf of Mr. Abhinav Oswal on sale of plots.

p) Development cost recoverable of Rs. 45.25 lacs includes Rs. 23.13 lacs (Previous year Nil) recoverable on account of Mr. Adish Oswal and Rs. 22.12 lacs (Previous year Nil) recoverable on account of Mr. Abhinav Oswal on real estate transaction.

q) Amount received on sale of shares of Oswal Industrial Enterprise Pvt Ltd. includes Rs. 915.89 lacs (pevious year Nil) received from Mr. Adish Oswal.

r) Cheques received against advance includes cheques received from F.M. Hammerle Textiles Ltd. Rs. 350.00 lacs (Previous year Rs. 300.00 lacs).

s) During the year the Company had received Corporate Guarantee from F.M Hammerle Textiles Limited of Rs. 1,000 Lacs (Previous year Rs. 600 lacs).

Closing balance at the year end:-

a) Corporate Guarantee to subsidiary company: Gurantee outstanding given to lenders of F.M. Hammerle Textiles Ltd. Rs. 8,233.00 lacs (Previous year Rs. 8,233.00 lacs).

b) Corporate Guarantee by subsidiary company: Gurantee outstanding received from F.M. Hammerle Textiles Ltd. Rs. 1,600.00 lacs (Previous year Rs. 600 lacs).

c) Loan payable/ fixed deposits includes Rs. NIL lacs payable to Ms. Aketa Oswal (Previous year Rs. 3.00 lacs).

d) Investment of Rs. 9,149.12 lacs includes investment in F.M. Hammerle Textiles Ltd. Rs. 9,126.41 lacs (Previous year Rs. 9,126.41 lacs), in Oswal Industrial Enterprise (P) Ltd. Rs. 0.09 lacs (Previous year Rs. 4,501.00 lacs), in F.M. Hammerle Verwaltung GmbH, Austria Rs. 22.54 lacs (Previous year Rs. 22.54 lacs).

e) Amount payable includes Rs. 1 74.30 lacs (Previous year Rs. NIL) to Mr. Abhinav Oswal and Rs. 19.64 lacs payable to Mr. Adish Oswal (Previous year Nil) on account of real estate transactions.

f) Advance of Rs. 3,293.98 lacs includes, F.M. Hammerle Textiles Ltd. (Previously known as Oswal F.M. Hammerle Textiles Ltd.) Rs. 3,065.01 lacs (Previous year Rs. 2,864.81 lacs), in Oswal Industrial Enterprise (P) Ltd. Rs. 0.07 lacs (Previous year Rs. 2.13 lacs), in F.M. Hammerle Verwaltung GmbH, Austria Rs. 228.90 lacs (Previous year Rs. 285.01 lacs) and Rs. 5.00 lacs includes advance to Mr. Ashok Kumar Oswal (Previous year Rs. 5.00 lacs).

b) During the current year, the company has converted a fixed asset (consisting of land) into stock in trade at rate as assessed by the Management of the Company. The surplus (collector's rate less original cost) arising on such conversion was credited to Capital Reserve of Rs. 4,076.02 lacs and transferred Rs. 1,025.85 lacs to statement of profit and loss.

6. CORPORATE DEBT RESTRUCTURING

i) The Debt Restructuring Scheme (the 'Scheme') under CDR Mechanism had been approved and Letter of Approval issued on 28th Dec'2012. The Scheme inter-alia included restructuring of repayment schedule, interest funding, reduction in interest rates and additional security in favour of CDR lenders by pledge of shares of promoters stipulated. Master Restructuring Agreement ("MRA") had been executed on March 15, 2013 with the lenders. The impact in terms of the approved Scheme has been given effect in financial statements with effect from the cut-off date being January 1, 2012.

ii) Interest has been accounted for based upon terms of package/confirmations received from the banks.

iii) The Funded Interest Term Loan (FITL) has been created on certain credit facilities.

iv) The credit facilities/loans under CDR are further secured by unconditional & irrevocable personal guarantee of promoter director & Mrs. Manju Oswal (related party) and corporate guarantee of M/s FM Hammerle Textiles Ltd., subsidiary company.

v) Other conditions as stipulated under the scheme are being complied with.

7. During the earlier years, the Company had Issued 2% Unsecured Foreign Currency Convertible Bonds (FCCBs) in the aggregate principal amount of United State Dollars 12 (Twelve) Millions in the course of International Offerings. The expenses incurred & premium payable on the redemption of such bonds has been adjusted with share premium reserves in accordance with the provisions of Section 78 of the erstwhile Companies Act, 1956.

43. The company had received a letter from F.M Hammerle Textile Limited, Subsidiary Company, dated 26.03.2013 for considering option for conversion of advance given of Rs. 2,236 lac in different trenches into Preference Shares. The Board of the directors had approved subject to bankers and shareholders for the same.

8. The Central Government vide its letter dated: 30/08/2013 under section 198,309 (3), 310 r/w Section 637A & 637AA of the erstwhile Companies Act,1956 has approved the increase in remuneration of Mr. Ashok Oswal,Managing Director and Mr. Adish Oswal, Executive Director w.e.f 01/04/2012 till 31st March 2015. The remuneration during the current year has been paid considering this approval.

9. The Company is paying rentals for office premises taken on rent which are not in the nature of lease agreements. Therefore, disclosure requirements of Accounting Standard AS-19 are not applicable.

10. In accordance with the provisions of Accounting Standard on impairment of Assets, ( AS-28), the management has made assessment of assets in use & considering the business prospects related thereto, no provision is considered necessary in these accounts on account of impairment of assets.

11. Details of loans and advances in nature of loans to subsidiaries, parties in which Directors are interested and investments by the loanee in the shares of the company (as required by clause 31 of listing agreement)

12. Previous year figures have been regrouped /reclassified wherever necessary to conform to current year classification.