| 1 The above Cash Flow Statement has been prepared under the "Indirect
Method" as set out in the Accenting 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 Figures in brackets represent outflows.
4 Previous year figures have been recanted/restated wherever necessary.
Note 5 - Terms/rights attached to Equity Shares
The Company has only one class of equity shares having a par value of Rs.
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 distribution will
be in proportion to the number of equity shares held by the
Shareholders.
Note 6 - Terms of Redemption of Preference Shares
During the year, the Company has redeemed 6% Redeemable Preference
Shares aggregating to Rs. 155.00 lacs.
(Previous Year Rs. Nil).
Outstanding 6% Cumulative Redeemable Preference Shares are redeemable
by 1st October, 2013.
During the year, the Company has redeemed 0.01% Redeemable Preference
Shares aggregating to Rs. 319.80 lacs.
(Previous Year Rs. Nil).
Outstanding 0.01% Redeemable Preference Shares are to be redeemed @ 25%
in each year between October 2016 to September 2020.
* Proposed Dividend on Equity and Preference Shares and Tax thereon is
reversed in the Current year as the payment of dividend was not
approved in the adjourned Annual General Meeting held on 20th December,
2012.
Notes:
Nature of Security/Applicable Rate of Interest for Short Term
Borrowings:
7 Working Capital Loans from Banks
Secured primarily by frst 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 have also been provided. Average Interest rate on above
Working Capital Loan is in the range of 12% to 15.75% p.a.
8 Short Term Loans from Others
Secured by pledge of shares held by promoters in the Company. The
weighted average interest rate is 19.22% p.a.
Note 9
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.
*Other Payables include Advances/deposits received from
customers/dealers and an amount payable to employees.
2 Based on the internal estimates and assessments, the management is of
the opinion that there is no impairment in relation to its assets and
hence no provision is considered necessary.
3 During the year the Company has capitalized interest of Rs. 2,167.54
(Previous Year Rs. 1,415.41 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.
4 Out of the above leasehold improvements, no lease agreement has been
renewed for an amount to Rs. 536.88 lacs (Net WDV). These assets have
been depreciated on the basis of previous lease period. The management
is of the view that the lease agreement would be renewed soon.
(Previous year Rs. Nil)
*Earmarked Balances (DSRA) with EXIM bank are fully utilized for
servicing of interest on Secured Term Loan during the year.
Note : Excise Duty on Sales amounting to Rs. 111.80 lacs (Previous year Rs.
441.21 lacs) has been reduced from Sales in Statement of Profit & Loss
and Excise Duty on Increase or Decrease in Inventories has been charged
to Manufacturing Expenses.
10. (a) On 19th October, 2012 HMX Poland sp. Z.o.o., and its
subsidiary, HMX Acquisition Corp., along with step down subsidiaries
have fled 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 filed with the Bankruptcy Court.
(b) SKNL (UK) Ltd., a subsidiary of the Company has, subsequent to the
cessation of the Licensee Agreement for the usage of DKNY Brand with
Donna Karan Studio LLC., New York, fled a winding up petition in the
High Court of Justice, Chancery Division, Companies Court, UK.
The Company has therefore, made a provision for diminution in the value
of the investments amounting to Rs. 32,257.17 lacs in respect of the
investments earlier made through a structure of holding companies and
written back amount payable to SKNL (UK) Ltd. of Rs. 3,176.68 lacs.
11. The Company, as per the approval for exit from Corporate Debt
Restructuring (CDR), had kept in Fixed Deposits Rs. 5,554.37 lacs with a
Bank which was equivalent to the Net Present Value (NPV) of 0.01%
Redeemable Preference Shares and Funded Interest Term Loan (FITL)
redeemable/payable in the future. During the year the Bank has
withdrawn prematurely the above Fixed Deposits and utilized the
proceeds to adjust their current dues. Hence, the proportionate gain
(between the NPV and the face value of Preference Shares and FITL)
amounting to Rs. 3,334.14 lacs booked at the time of CDR exit has been
reversed during the year and accounted as an Exceptional Expense.
12. (a) India Debt Management Private Ltd. and IDBI Trusteeship
Services Ltd. (Security Agents) have fled 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 8th August, 2013.
The above matter is being challenged and defended by the Company and
other lenders.
(b) The Company had given a corporate guarantee 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 31st March, 2013 stands at Rs. 10,237.99 lacs.
13. The Company has availed a Short Term Loan facility of Rs. 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% (3,49,95,838
shares) Unquoted Equity Shares held by the Company in its subsidiary
Reid & Taylor (India) Ltd. (RTIL). The lender has, on 31st March, 2013
invoked 2,45,23,656 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 Rs. 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 full 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.
The above amounts are exclusive of taxes and duties. During the year,
the Company has incurred an expense of Rs. 502.10 lacs (Previous year Rs.
778.12 lacs) as rent in respect of cancellable leases.
14. (a) The confirmation, 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, significant portion of
the outstanding balances as at the Balance Sheet date are independently
confirmed. Based on the above, during the year, the Company has
identified and made provision amounting to Rs. 4,063.46 lacs for
unconfirmed/ non-recoverable balances. As regards the outstanding trade
receivables, loans & advances and capital advances, the Company is 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 verification of fixed assets
including capital work in progress, wherein all fixed assets are verified
once in a period of three years. The Company maintains proper records
of fixed assets and the same are in the process of being updated for the
period after 31st March, 2011. Based on the verification of fixed assets
during the year vis-…-vis the underlying records, the Company has
impaired assets amounting to Rs. 226.25 lacs. Further, the inventories,
including those lying with third parties aggregating Rs. 129,352.30 lacs
are physically verified by the Management. Based on such verification
during the year, the Company has written down inventories amounting to
Rs. 344.26 lacs. In view of the verification process consistently
followed, as regards the fixed 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.
15. 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".
16. The Company is facing a mismatch in its cash flows 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 year the Company had to make provisions of Rs.
32,257.17 lacs for write off of these overseas investments as well as
receivables due from them. (Refer to Note 28 in this regard).
Considering the expansion plan for projects and business operations,
the Company has extended advances to suppliers for capital goods
amounting to Rs. 54,725.89 lacs and suppliers of goods amounting to Rs.
20,627.62 lacs, however, due to cash flow constraints expansion plans
have been kept on hold till further cash flows are augmented. The
Company has not been able to raise the assessed working capital limits
thereby creating further constraints in the cash flows of the Company.
The above reasons have affected the timely servicing of dues to the
lenders and resulted in some delays in the payment of statutory dues.
Consequently, loans aggregating Rs. 82,946.55 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 financial resources for managing its day to day operations and
discharging its liabilities as and when due. In the event, the required
financial resources are not raised on a timely basis and/ or the debts
of the Company are not restructured in tune with cash fowls, the
operations of the Company may get impacted thereby, affecting the
assumptions of going concern.
17. Few of the creditors/ lenders of the Company have sent legal
notices or recalled their loans or fled legal cases for recovery of the
money due to them. The liabilities due to these creditors/ lenders have
been fully reflected in the financial accounts and the Company does not
anticipate any additional liability in this respect.
18. The Garment Factory situated at Bengaluru has temporarily been
shut down since February 2013, due to labour unrest. Consequently, the
books of accounts of the said factory couldn't be accessed. The
financial statements include assets, liabilities, income and expenditure
for the said factory amounting to Rs. 435.42 lacs, Rs. 379.37 lacs, Rs.
162.60 lacs and Rs. 594.23 lacs respectively, prepared by the Management
on the best estimate basis as per the financial results subjected to
Ltd. review till 31st December, 2012. These amounts have not been
subjected to audit. The Company is of the opinion that the
consequential adjustments, if any, are not likely to be material given
the nature and size of its operations.
19. IDBI Bank Ltd. has 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 Bank has also rescheduled the
repayment of the principal and servicing of interest thereon with a
moratorium of one year. The effect of the same has been carried out in
the books.
20. 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 31.03.2013 : Rs,41.35 lacs (Previous Year Rs,41.35 lacs)
Maximum balance
outstanding during
the year : Rs 41.35 lacs (Previous Year Rs,41.35 lacs)
Investment in
Shares of the
Company : 49,500 Shares (Previous Year 49,500 Shares)
(No. of Shares)
(b) Key Management Personnel
Shri Nitin S. Kasliwal - Chairman and Managing Director
Shri Anil Channa - Deputy Managing Director
Shri Jagadeesh
S. Shetty - Director - Finance and Group CFO
* Net of provision for Diminution in the value of Overseas Investments.
(Related party relationships are as identified by the Management and
have been relied upon by the Auditor.
During the year, a Provision for Doubtful Receivables has been made for
debts recoverable from HMX LLC amounting to Rs. 273.36 lacs).
21. Particulars of Derivative Instruments
a. No derivative instruments are acquired for hedging purposes
b. No derivative instruments are acquired for speculation purposes
c. Foreign Currency exposures that are not hedged by derivative
instruments or otherwise are:
22. The Company has adopted the Accounting Standard - 15 (Revised 2005)
"Employee Benefits" effective from 1st April, 2007.
The Company has classified the various benefits provided to employees as
under:
I. Defend Contribution Plans:
a. Provident Fund & Employees' Pension Scheme 1995
b. Employers' Contribution to Employees' State Insurance
49. Contingent Liabilities:
a) Guarantees: (Rs,in lacs)
Particulars As at 31.03.2013 As at 31.03.2012
i) In respect of
concessional custom
duty availed under
EPCG Scheme 22.50 22.50
(Covered by Bank
Guarantee)
ii) In respect of
concessional custom
duty availed under
EPCG Scheme 44.89 44.89
(Covered by Bond)
iii) Guarantees
extended by the
banks based on the
Company's counter 414.62 2,836.74
guarantees
iv) Corporate Guarantee
extended by the
Company to the lenders
of Shree 30,752.00 28,294.00
Maheshwar Hydel Power
Corporation Ltd.
v) Corporate Guarantees
given to the lenders of
Reid & Taylor (India) 118,053.83 96,681.69
Ltd. & SKNL
International B.V. -
Subsidiary Companies
vi) Corporate
Guarantees given to the
lenders of Brand house
Retails Ltd. 15,215.92 9,494.19
c. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advance), as certified by the
Management is Rs,1,267.10 lacs (Previous Year Rs,1,367.09 lacs).
d. Arrears of Dividend on 6% Cumulative Redeemable Preference Shares
are Rs,44.70 Lacs (Previous Year Rs, 31.65 Lacs).
23. In the opinion of the Management the current & noncurrent assets
have a value on realization in the ordinary course of business at least
equal to the amount at which they are stated.
24. In view of the inadequacy of profit for the year no dividend is
being proposed to be paid.
25. Previous year figures have been reclassified to conform to the
current year classification.
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