Spice Islands Apparels Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on three stock exchanges in India. The company is engaged in the manufacturing and selling of knitted and woven garments. The company caters to both domestic and international markets. The Company also deploys its surplus funds in financial activities.

2. Basis of preparation

The financial statements of the company have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles ('GAAP') under the historical cost convention on the accrual basis. GAAP comprises accounting standards notified by the Central Government of India under the Companies (Accounting Standards) Rules, 2006, (as amended), other pronouncements of Institute of Chartered Accountants of India and the relevant provisions of Companies Act, 2013.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The Management evaluates and adopts all recently issued or revised accounting standards on an ongoing basis.

3. Terms/Rights attached to Equity shares

The company has only one class of equity shares having par value of ?. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2015, the amount of per share dividend recognised as distributions to equity shareholders was Rs. 1.50 (31 March 2014: Rs. 1.00)

In the event of Liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

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

4. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date: Nil (31 March 2014: Nil)

5. Share reserved for issue under options and contracts/commitments are: Nil (31 March 2014: Nil)

6. Contingent liabilities not provided for:

As per the order of Hon'ble Bombay High Court, the claim of Apparel Export Council has been guaranteed by furnishing bank guarantee of equivalent amount: Rs. 7,26,310 (31 March 2014: Rs. 7,26,310)

Disputed claims/levies (excluding interest, if any), in respect of Income tax Rs. 1,10,04,774 (31 March 2014: Rs.97,14,906)

The Company is also involved in other lawsuits, claims, investigations and proceedings, which arise in the ordinary course of business, however, there are no such matters pending that the company expects to be material in relation to its business.

7. Balances of Sundry debtors, sundry creditors, loans and advances, receivables and payables are subject to confirmation/reconciliation, if any.

8. In the opinion of the Board of Directors adequate provision has been made in the accounts for all known liabilities and the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the value stated in the balance sheet.

9. The Company's significant leasing arrangements are in respect of operating leases for Guest houses and office premises. These are cancelable operating leases and these lease agreements are normally renewed on expiry. The aggregate lease rentals payable are charged as rent under note 24.

The company conduct its factory operations from facility that is leased under a 72 month non-cancellable lease expiring in December, 2016 for which lump sum interest free deposit of ? 50 lacs has been given, refundable after the expiry of the lease period.

10. During the financial year 2010-2011, the company sold all the shares of M/s. Bhupco Alloys Limited., its erstwhile subsidiary Company, to M/s. Emer Hotels & Suites Pvt Ltd., pursuant to approval for the same by the Board of Directors of the Company vide its resolution dated 04/02/2011 for an amount Rs. 1,16,20,843, against which an amount of Rs. 70,00,000 was received from M/s. Emer Hotels & Suites Pvt Ltd., during the year 2011-2012.

The management is of the opinion that an amount of Rs. 20,00,000 though not received till date shall be received during the year 2015-16. The remaining balance of Rs. 26,20,843 is to be received from them only on receipt of rental deposit from landlord in Bhupco Alloys Ltd. Since, the consideration of Rs. 26,20,843 is contingent on happening of an event in future, the outcome of which cannot be ascertained accurately as at balance sheet date, the same has not been recognized in the books of account as at 31 March 2015.

11. Effective from 1 April 2014, the Company has changed the depreciation charge based on revised remaining useful lives of the assets as per requirement of schedule II of the Companies Act, 2013. Due to this, the depreciation charge for the year ended 31 March 2015 is higher by Rs. 15,43,127. Further, based on transitional provisions as provided in Schedule II, an amount of Rs. 19,17,525 (net of deferred tax) has been charged to accumulated retained earnings (Surplus) in respect of asset whose remaining useful life is nil as on 1 April 2014.

12. Related party disclosures:

A. Name of the related parties and related party relationship

Related parties with whom transactions have taken place during the year: (As identified by the Management and relied upon by auditors)

* Key managerial Personnel represented on the board:

* Mr. Umesh M. Katre - Managing Director

*   Mr. AshokDaryanani                  -  Director

*   Mr. Carl Dantas                     -  Director

*   Mr. Charuchandra Patankar           -  Director

*   Mr. Rahul L Mehta                   -  Director

*   Mrs. Seema Katre                    - Whole-Time Director

* Mr. Rohan U Katre - Managing Director's son

13. Based on the information available with the company, principal amount due to micro and small enterprises as defined under MSMED Act, 2006 is Rs. Nil (31 March 2014: Nil). Further interest paid during the year and interest due at the end of the yearto micro and small enterprises is Rs. Nil (31 March 2014: Rs. Nil).

14. The Company's operations predominantly comprises of export of manufactured garments. Company also deploys its surplus funds in financial activities. Accordingly, garments & finance have been identified as primary basis for segment information. The Company does not have any secondary segment.

15.The company has re-classified/re-grouped/re-arranged the previous year figures wherever necessary.