b) GRATUITY

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, a non -funded, defined benefit retirement plan (the gratuity plan) covering all employees. The plan, subject to the provisions of the Act, provides a lump sum payment to vested employees at retirement or termination of employment with the company.

The Company estimates its liability on adhoc basis in the interim financial reports and on an actuarial valuation basis as of yearend balance sheet date carried out by an independent actuary, and is charged to Profit & Loss Account in accordance with AS-15 (revised).

c) LEAVE ENCASHMENT

Leave encashment cost is a defined benefit, and is accrued on adhoc basis in the interim financial reports and on An actuarial valuation basis as of yearend balance sheet date carried out by an independent actuary, and is charged to Profit & Loss Account in accordance with AS-15 (revised).

NOTE NO. 2- CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

CASH AND CASH EQUIVALENTS

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid time deposits that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

(b) Terms / Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of ? 2/- per share. The equity shareholders of the Company have voting rights and are subject to the preferential rights as prescribed under law, if any. The equity shares are also subject to restriction as prescribed under the Companies Act, 2013. 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 31st March 2016, no dividend is declared by Board of Directors. (Previous year - Nil)

(c) Shares held by Holding / Ultimate holding company and/or their subsidiaries/associates: Nil (Previous year -Nil)

(A) NATURE OF SECURITY (I) PRIMARY SECURITY

Term Loan from IDBI is secured by first charge on immovable & movable assets, present and future except book debts, subject to the charge created or to be created in favor of bankers for securing working capital loan on stocks of raw material, semi finished goods, finished goods, stores and spares, consumables, book debts and other current assets held by the Company both present and future in the ordinary course of the business and further guaranteed by the Managing Director, Promoter Directors and an independent Director.

(B) Terms of Repayments :-

Repayable in equated quarterly installments of Rs 55,68,000/- each from the date of loan. Interest will be payable at 10%.

NATURE OF SECURITY :-

The Working Capital Loan taken from State Bank of India is secured by first exclusive hypothecation charge on all existing and future current assets, second hypothecation charge on all movable fixed assets (other than specially charged with other lenders) and personal guarantee of directors -Mr. Rita Mittal, Mr. Vinay Mittal and Mr. Atul Mittal.

NOTE 28 : OTHER NOTES

A. CONTINGENT LIABILITIES

(a) No provision has been made in the books of accounts by the company for a sum of Rs.5902380/-, Rs.1205225/- , Rs.4080705/- & Rs.1353174/- for which the demand has been raised by the Income Tax Department for the A.Y. 2000-01, A.Y.2003-04, A.Y.2007-08 & A.Y. 2012-13 respectively, against which a sum of Rs 5859356/- Rs.1205225/- & Rs.40,00,000/- has already been paid for A.Y 2000-01, A.Y.2003-04 & A.Y.2007-08 under protest. All the above liabilities stands before the Appellate Authority/Delhi High Court.

b) Guarantees

The company has guaranteed a sum of Rs. 80,746 Lacs (Previous Year Rs. 77,384 Lacs) against secured Loans taken by SSA International Ltd. from financial institutions; these are wholly owned subsidiaries of the Company.

B. DEFINED BENEFIT PLANS/LONG TERM COMPENSATED ABSENCES

The employee gratuity fund & leave encashment scheme 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 services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

As per actuarial valuations as on 31st March 2016 and recognized in the financial statement in respect of employee benefit schemes :-

C. RELATED PARTY DISCLOSURES

I. Related Parties with Whom Transactions have been Taken Place and Relationships.

S. No. Name of Related Parties Relationship

1 SSA International Limited Wholly owned Subsidiary company

2 Sam Buildcon Limited Wholly owned Subsidiary company

II. Related Parties with Whom Transactions have been Taken Place and Nature of Transactions (Amount in INR)

D. SEGMENT REPORTING

The company has identified a geographical reportable segment viz M/S Samtex Fashions Ltd. New York. Segments have been identified and reported taking into account the Differing risk and returns and the Financial business reporting systems. The accounting policies adopted for segment reporting are in line with the Accounting Policy of the Company. Except the Accounting period which is for the Segment is calendar year.

E. IMPAIRMENT OF ASSETS

The Company has revised the future discounted cash flows based on value in use of fixed assets and is hopefully sure that the recoverable amount is more than the amount carried in the books. Accordingly, no provision is required to be made for the impairment in the accounts.

L. TRANSACTION WITH MICRO, SMALL AND MEDIUM ENTERPRISES

The Company has not received information from vendors regarding their status and status under the Micro, Small and Medium

Enterprises Development Act, 2006. Hence necessary disclosures under this Act have not been given.

M. OTHERS

(i) Fixed assets installed and put to use have been certified by the management and relied upon by the auditors, being a technical matter.

(ii) In the opinion of the directors, current assets, loans and advances are of the value stated if realized in the ordinary course of business except otherwise stated. The provision for all the known liabilities is adequate and not in excess of the amount considered reasonably necessary.

(iii) The personal accounts of the parties are subject to their respective confirmations

(iv) Security deposit includes Rs. 26,36,950/- (Previous Year Rs. 1857055/-) equivalent US$ 39815 (Previous Year US$ 30920) representing security given by the New York Trading Office of the company.

(v) The Company had applied for Issue of exemption cetficate from service tax and under notification no. 12/2013 on November 21, 2014 the issuance of certificate is still pending. According the company has not deposited service tax under reverse charge mechanism on payment made for service availed and covered under reverse charge mechanism.

(vi) Investment of Rs. 60 lakhs invested in M/S Yogendra Worsted Limited are valued at cost since the said company is unlisted company accordingly management is unable to ascertain the market value of the investment.

(vii) The Amount of sale and purchase includes Inter Branch transaction of Rs. 20,95,93,144 during the year and in previous year of Rs. 24,48,69,795.(Refer Note No. 28 (D).

(viii) Balances of Debtors & Creditors are subject to confirmation and reconciliation consequential effect (if any) on the account remained unascertained.

N. PREVIOUS YEAR FIGURES

The Company has regrouped/reclassified the previous year figures to make them comparable with current year figures.