Notes to Accounts of Cravatex Ltd.

Mar 31, 2026

j) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate
can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects current
market assessment of time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount
is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted
to reflect the current best estimate.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to
settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also
disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as
contingent liabilities.

Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never
be realised. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and is
recognised.

k) Revenue Recognition:

Effective April 1, 2018, the Company has applied Ind AS 115: Revenue from Contracts with Customers which establishes a
comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind
AS 18 Revenue. The impact of the adoption of the standard on the financial statements of the Company is insignificant.

a. Revenue from sale of goods is recognised when control of the goods are transferred to the customer at an amount that reflects

the consideration to which the Company expects to be entitled in exchange for those goods. The Company assesses promises
in the contract that are separate performance obligations to which a portion of transaction price is allocated.

b. Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts,

allowances and any taxes or duties collected on behalf of the government such as goods and services tax, etc. Accumulated
experience is used to estimate the provision for discounts, probable saleable and non-saleable return of goods from the
customers. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

c. Income from services rendered is recognised based on agreements/arrangements with the customers as the service is

performed and there are no unfulfilled obligations.

d. Interest income is recognised using the effective interest rate (EIR) method.

l) Lease:

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as Operating Leases.

Operating Lease:

Lease rentals are charged or recognised in the Statement of Profit and Loss on a straight-line basis over the lease term, except
where the payments are structured to increase in line with expected general inflation to compensate for the expected inflationary
cost increase.

m) Employee Benefit Expense:

i) Short-term Employee Benefits:

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount
of obligation can be estimated reliably.

ii) Post-employment benefits:

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity
and will have no legal or constructive obligation to pay further amounts. The eligible employees of the Company are entitled to
receive post-employment benefits in respect of provident, in which both the employees and the Company make monthly
contributions at a specified percentage of the employees'' eligible salary (currently 12% of employees'' eligible salary). The
contributions are made to the Regional Provident Fund Commissioner (RPFC) which are charged to the Statement of Profit and
Loss as incurred.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company''s net obligation in
respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current
and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.
When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic
benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (‘the asset ceiling'').
In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding
interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in Other Comprehensive Income. The
Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the
discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit
liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions
and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in Statement of
Profit and Loss.

Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides
a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount
equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs
upon completion of five years of service. The Company has obtained insurance policies with the Life Insurance Corporation of
India (LIC) and makes an annual contribution to LIC for amounts notified by LIC. The Company accounts for gratuity benefits payable
in future based on an independent external actuarial valuation carried out at the end of the year using the projected unit credit
method. Actuarial gains and losses are recognised as Other Comprehensive Income.

iii) Other Long-term employee benefits - Compensated Absences:

The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate
leave subject to certain limits for future encashment / availment. The Company makes provision for compensated absences based
on an independent actuarial valuation carried out at the end of the year. Actuarial gains and losses are recognised in the Statement
of Profit and Loss.

n) Income Taxes:

Income tax comprises of current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it
relates to a business combination or to an item recognised directly in Equity or in Other Comprehensive Income.

Current tax

Current tax comprises expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the
tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount
expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates
(and tax laws) enacted or substantively enacted by the reporting date.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried
forward tax losses and tax credits.

Deferred tax is not recognised for:

i. temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss at the time of the transaction;

ii. taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they
can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore,
in case of a history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable
temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred
tax asset can be realised. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are
recognised/ reduced to the extent that it is probable / no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is
settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects,
at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend
to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

0) Foreign Currency Transactions:

Foreign currency transactions are recorded at exchange rate prevailing on the date of the transaction. Foreign currency
denominated monetary assets and liabilities are restated into the functional currency using exchange rates prevailing on the Balance
sheet date. Gains and losses arising on settlement and restatement of foreign currency denominated monetary assets and liabilities
are recognised in the statement of profit and loss. Non-monetary items carried at fair value that are denominated in foreign
currencies are translated at the rates prevailing at the date when the fair value was determined.

Non-Monetary items that are measured in terms of historical cost in a foreign currency are translated using exchange rate as
at the date of initial transactions.

p) Earnings Per Share:

The Company calculates earnings per share amounts for profit or loss attributable to ordinary equity shareholders.

The basic Earnings Per Share (“EPS”) is computed by dividing the net profit / (loss) after tax for the year attributable to the equity
shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, net profit/(loss) after tax for the year attributable to the equity shareholders
and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential
equity shares.

q) Financial Instruments:

1) Recognition and Initial Measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial
liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

A financial asset or financial liability is initially measured at fair value plus, for an item not at Fair Value through Profit and Loss
(FVTPL), transaction costs that are directly attributable to its acquisition or issue.

ii) Classification and Subsequent Measurement

Financial assets

On initial recognition, a financial asset is classified as measured at

— Amortised cost;

— Fair Value through Other Comprehensive Income (FVOCI) - debt investment;

— Fair Value through Other Comprehensive Income - equity investment; or

— FVTPL

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its
business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

— the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

— the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal

and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

— the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling

financial assets; and

— the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent
changes in the investment''s fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment-
by-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This
includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise
meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces
an accounting mismatch that would otherwise arise.

Financial liabilities: Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is
classified as held for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are
measured at fair value and net gains and losses, including any interest expense, are recognised in Statement of Profit and Loss.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and
foreign exchange gains and losses are recognised in Standalone Statement of Profit and Loss. Any gain or loss on derecognition
is also recognised in Statement of Profit and Loss.

iii) De-recognition
Financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it
transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the Company neither transfers not retains substantially all of the risks
and rewards of ownership but does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or
substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired.

The Company also derecognises a financial liability when it terms are modified and the cash flow under the modified terms are
substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference
between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised
in profit or loss.

iv) Off setting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the
Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or
to realise the asset and settle the liability simultaneously.

Equity Instrument

Equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into
and the definitions of an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets
of the Company after deducting all of its liabilities and includes no obligation to deliver cash or other financial assets.

Measurement of fair values

The Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial
assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. The Company regularly reviews
significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services,
is used to measure fair values, then the Company assesses the evidence obtained from the third parties to support the conclusion
that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should
be classified.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as
follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).

Level 3: inputs for asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs
used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value
measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant
to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the
change has occurred.

r) Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand that are readily convertible into cash which
are subject to insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments.

s) Segment Reporting - Identification of Segments:

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and
incur expenses, whose operating results are regularly reviewed by the company’s management to make decisions for which
discrete financial information is available.

Based on the management approach as defined in Ind AS 108, the management evaluates the Company’s performance and
allocates resources based on an analysis of various performance indicators by business segments and geographic segments.

Terms/rights attached to the Equity Shares

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

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 to all preferential holders. The distribution will be in proportion to the number of equity shares held by the
shareholders.

NOTES — Contd.

Description of nature and purpose of each reserve
Capital Reserve

Capital reserve represents amount received from Government of Karnataka.

Export Profit Reserve

Export profit reserve represents the amount earned from export sales and is to be utilised for the purpose of exports.

Capital Redemption Reserve

Capital Redemption Reserve has been created out of free reserves of the Company on account of redemption of preference shares.
General Reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no
policy of regular transfer.

Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other
distributions paid to shareholders.

(D) Impact of IND AS adjustments on Tax computation:

1. Section 5 of the Income Tax Act states that profits are chargeable only when they accrue, arise or are received. Based on
this provision of the Income Tax Act, it is a settled proposition that tax can be levied on real income and not on any hypothetical
or illusionary income - Shoorji vallabhdas & Co - (1962) 46 ITR 144 (SC) and Godhra Electricity Co. Ltd. - (1997) 225

ITR 746 (SC). These principles have been reiterated in ICDS-IV for revenue recognition under the Income Tax Act.

2. Under IND-AS accounting framework, there are certain mandatory adjustments to incomes and expenditures, which are only
conceptual and do not reflect real income/expenditure as per prevailing provisions of the Income Tax Act.

(E) Other Disclosure:

During the year, the Company has not surrendered or disclosed any income in the tax assessments under the Income Tax Act,
1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961). Accordingly, there are no
transactions which are not recorded in the books of accounts.

NOTE 33 — EMPLOYEE BENEFITS
a. Defined Benefit Plans:

Gratuity:

The gratuity payable to employees is based on the employee''s service and last drawn salary at the time of leaving the services
of the Company and is in accordance with the rules of the Company for payment of gratuity.

Inherent Risk on above:

The plan is defined in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan.
In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience,
inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to the employees
in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risk.

Basis used to determine Expected Rate of Return on Plan Assets: The overall expected rate of return on assets is based
on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the
obligations.

Salary Escalation Rate: The past experience and industry practice considering promotion and demand and supply of employees.

Asset Liability matching strategy: The money contributed by the Company to the Gratuity fund to finance the liabilities of the
plan has to be invested.

The trustees of the plan have outsourced the investment management of the fund to an insurance Company. The insurance
Company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is
within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be
held by the fund, it is not possible to explicitly follow an asset liability matching strategy.

There is no compulsion on the part of the Company to fully prefund the liability of the Plan. The Company’s philosophy is to fund
these benefits based on its own liquidity and the level of underfunding of the plan.

Carrying amount of Investment, Trade Receivables, Cash and Cash Equivalent, Bank balances, Other financial assets, Trade
payables and Other financial liabilities as at March 31, 2026, and March 31, 2025 approximate the fair value because of their short
term nature. Difference between carrying amount and fair values of bank deposits, other financial assets, other financial liabilities
and borrowings subsequenty measured at amortised cost is not significant in each of years presented.

NOTE 36 — FAIR VALUE MEASUREMENT

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation
techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques
which maximize the use of observable market data and rely as little as possible on company specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

The management assessed that cash and bank balances, trade payables, and other financial asset and liabilities approximate their
carrying amounts largely due to the short-term maturities of these instruments.

NOTE 37 — FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial assets include Investments, Loans and Other receivables, Cash and Cash Equivalents, Other
Bank Balances that directly derive from its operations.

The Company is exposed to Market Risk, Credit Risk and Liquidity Risk. The Company’s senior management oversees the
management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed
by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the
Company’s policies and risk objectives.

(A) Market Risk:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of
a financial instrument.

The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates,
equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk
sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.

(1) Foreign Currency Risk:

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which
fluctuate due to changes in foreign exchange rates.

(2) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s doesnot have exposure to this risk since no borrowing.

(B) Credit Risk:

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to
a financial loss. The Company is exposed to credit risk from its operating (primarily Trade Receivables), investing and financing
activities including Bank Balance, Deposits with Bank, Security Deposits, Loans to Employees and other financial instruments.

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer
and based on the evaluation credit limit of each customer is defined.

Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been
managed by the Company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness
of customers to which the Company grants credit terms in the normal course of business. The company allows credit period ranging
from 30 days to 180 days, subject to reasonableness of the receivable. There is no concentration of customers and receivable
amount.

Investments, Cash and Cash Equivalent and Bank Deposit:

Credit Risk on cash and cash equivalent is generally low, as the said deposits have been made with the banks/financial institutions
who have been assigned high credit rating by international and domestic rating agencies.

Investments of surplus funds are made only based on Investment Policy of the Company. Investments consists of Investments
in Subsidiaries & Investment in Short Term liquid Mutual Funds.

(C) Liquidity Risk:

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable
price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of credit facilities to meet obligations when due. The Company’s treasury team is responsible for
liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior
management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows.

The Company’s objectives when managing capital are to

(a) maximise shareholder value and provide benefits to other stakeholders and

(b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves
attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt less investments divided by total equity.

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. During FY 2025-26, MCA has notified several amendments to the
Companies (Indian Accounting Standards) Amendment, Rules, including the Ind AS 1 (Presentation of Financial Statements), Ind
AS 12 (Income Taxes) - Global Minimum Tax, Ind AS 7 & Ind AS 107 (Supplier Finance Arrangements), Ind AS 21 (Effects of
Changes in Foreign Exchange Rates), Ind AS 117 (Insurance Contracts). These amendments do not have any significant impact
on the financial statements.

NOTE 41 — SEGMENT INFORMATION

The Company operates only in one primary business segment i.e. trading of goods.

NOTE 42 — SUBSEQUENT EVENTS

Dividends paid during the year ended March 31, 2026 includes an amount of Rs.12.50/- per equity share towards final dividend
for the year ended March 31, 2025.

Dividends declared by the Company are based on the profit available for distribution. Distribution of dividends out of general reserve
and retained earnings is subject to applicable Tax Deducted at Source. On 15.05.2026, the Board of Directors of the Company
have proposed a final dividend of Rs.13/- per share in respect of the year ended March 31, 2026 subject to the approval of
shareholders at the Annual General Meeting. The proposal is subject to the approval of shareholders at the Annual General Meeting,
and if approved, would result in a cash outflow of approximately Rs.335.94/- Lacs.

NOTE 43 — CORPORATE SOCIAL RESPONSIBILITY

The company is not covered under section 135 of the Companies Act as its net profit is less than Rs.5 Crores during the
immediately preceding financial year as per section 135 of the Companies Act.

NOTE 44 — OTHER DISCLOSURES

There are no transactions to report against the following disclosure requirements as notified by MCA pursuant to amended
Schedule III:

(a) Crypto Currency or Virtual Currency

(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

(c) Registration of charges or satisfaction with Registrar of Companies

(d) the company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or
section 560 of Companies Act, 1956

(e) Relating to borrowed funds:

(i) Wilful defaulter

(ii) Utilisation of borrowed funds & share premium

(iii) Borrowings obtained on the basis of security of current assets

(iv) Discrepancy in utilisation of borrowings

(v) Current maturity of long term borrowings

NOTE 45 — PREVIOUS YEAR’S COMPARABLES

Previous year’s figures have been regrouped/reclassified wherever necessary, to confirm with current years classification/
disclosure.

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Mar 31, 2025

Description of nature and purpose of each reserve Capital Reserve

Capital reserve represents amount received from Government of Karnataka.

Export Profit Reserve

Export profit reserve represents the amount earned from export sales and is to be utilised for the purpose of exports.

Capital Redemption Reserve

Capital Redemption Reserve has been created out of free reserves of the Company on account of redemption of preference shares. General Reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer.

Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

1. Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs.51,25,378 was raised by the Tax authorities in earlier years which had been disputed by the Company and appeals filed with the Hon. High Court, Mumbai. The Company however deposited the demanded amounts in full with the tax authorities.

2. The tax authorities had raised a demand for the assessment year 2013-14 u/s 143 (3) for Rs. 16,43,120. The company has disputed this demand and has filed an appeal with the Commissioner (Appeals) of Income-tax Mumbai against this demand.

3. Demand of Rs.13,50,000 raised in an earlier year by the customs authorities which was disputed by the Company paid under protest. A final order is passed by the custom authorities during the year adjusting Rs.9,82,211/- as differential duty from the amount deposited under protest. Accrdingly refund of balance amount of Rs.3,67,789/- is receivable from the custom authorities.

4. Bond for Rs.1.20 crore executed with the Customs authorities for demand raised by the authorities in an earlier year which was disputed and challenged by the Company. A final order is passed by the custom authorities during the year and this bond of Rs.1.20 crores is cancelled.

5. The Hon’ble Supreme Court of India (“SC”) by their order dated February 28, 2019, in the case of Surya Roshni Limited & others v/EPF, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal.

In view of the management, the liability for the period from date of the SC order to 31 March 2019 is not significant. Further, pending decision on the subject review petition and directions from the EPFO, the impact for the past period, if any, is not ascertainable and consequently no effect has been given in the accounts.

(D) Impact of IND AS adjustments on Tax computation:

1. Section 5 of the Income Tax Act states that profits are chargeable only when they accrue, arise or are received. Based on this provision of the Income Tax Act, it is a settled proposition that tax can be levied on real income and not any hypothetical or illusionary income - Shoorji vallabhdas & Co - (1962) 46 ITR 144 (SC) and Godhra Electricity Co. Ltd. - (1997) 225 ITR 746 (SC). These principles have been reiterated in ICDS-IV for revenue recognition under the Income Tax Act.

2. Under IND-AS accounting framework, there are certain mandatory adjustments to incomes and expenditures, which are only conceptual and do not reflect real income/expenditure as per prevailing provisions of the Income Tax Act.

(E) Other Disclosure:

During the year, the Company has not surrendered or disclosed any income in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961). Accordingly, there are no transactions which are not recorded in the books of accounts.

NOTE 33 — EMPLOYEE BENEFITS a. Defined Benefit Plans:

Gratuity:

The gratuity payable to employees is based on the employee''s service and last drawn salary at the time of leaving the services of the Company and is in accordance with the rules of the Company for payment of gratuity.

Inherent Risk on above:

The plan is defined in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to the employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risk.

Basis used to determine Expected Rate of Return on Plan Assets: The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary Escalation Rate: The past experience and industry practice considering promotion and demand and supply of employees.

Asset Liability matching strategy: The money contributed by the Company to the Gratuity fund to finance the liabilities of the plan has to be invested.

The trustees of the plan have outsourced the investment management of the fund to an insurance Company. The insurance Company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset liability matching strategy.

There is no compulsion on the part of the Company to fully prefund the liability of the Plan. The Company’s philosophy is to fund these benefits based on its own liquidity and the level of underfunding of the plan.

Compensated Absences:

The liability towards compensated absences is provided for based on actuarial valuation carried out by using Projected Accured Benefit Method.

Carrying amount of Investment, Trade Receivables, Cash and Cash Equivalent, Bank balances, Other financial assets, Trade payables and Other financial liabilities as at March 31, 2025, and March 31, 2024 approximate the Fair Value because of their short term nature. Difference between carrying amount and fair values of bank deposits, other financial assets and other financial liabilities subsequenty measured at amortised cost is not significant in each of years presented.

NOTE 36 — FAIR VALUE MEASUREMENT

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates.

Level 3: If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.

The management assessed that cash and bank balances, trade payables, and other financial asset and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

NOTE 37 — FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial assets include Investments, Loans and Other receivables, Cash and Cash Equivalents, Other Bank Balances that directly derive from its operations.

The Company is exposed to Market Risk, Credit Risk and Liquidity Risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

(A) Market Risk:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument.

The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.

(1) Foreign Currency Risk:

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates.

(2) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s doesnot have exposure to this risk since no borrowing.

(B) Credit Risk:

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating (primarily Trade Receivables), investing and financing activities including Bank Balance, Deposits with Bank, Security Deposits, Loans to Employees and other financial instruments.

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined.

Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. The company allows credit period ranging from 30 days to 180 days, subject to reasonableness of the receivable. There is no concentration of customers and receivable amount.

Investments, Cash and Cash Equivalent and Bank Deposit:

Credit Risk on cash and cash equivalent is generally low, as the said deposits have been made with the banks/financial institutions who have been assigned high credit rating by international and domestic rating agencies.

Investments of surplus funds are made only based on Investment Policy of the Company. Investments consists of Investments in Subsidiaries & Investment in Short Term liquid Mutual Funds.

(C) Liquidity Risk:

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows.

The Company’s objectives when managing capital are to

(a) maximise shareholder value and provide benefits to other stakeholders and

(b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt less investments divided by total equity.

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During FY 2024-25, MCA has notified several amendments to the Companies (Indian Accounting Standards) Amendment, Rules, including the introduction of IND AS 117 (Insurance Contracts), updates to Ind AS 116 (Leases), and revisions to other standards such as Ind AS 101, Ind AS 103 and Ind AS 107. These amendments do not have any significant impact on the financial statements.

NOTE 41 — SEGMENT INFORMATION

The Company operates only in one primary business segment i.e. trading of goods.

NOTE 42 — SUBSEQUENT EVENTS

Dividends paid during the year ended March 31, 2025 includes an amount of Rs.3.00/- per equity share towards final dividend for the year ended March 31, 2024.

Dividends declared by the Company are based on the profit available for distribution. Distribution of dividends out of general reserve and retained earnings is subject to applicable Tax Deducted at Source. On 19.05.2025, the Board of Directors of the Company have proposed a final dividend of Rs.12.5/- per share in respect of the year ended March 31, 2025 subject to the approval of shareholders at the Annual General Meeting. The proposal is subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately Rs.323.06/- Lacs.

NOTE 43 — CORPORATE SOCIAL RESPONSIBILITY

The company is not covered under section 135 of the Companies Act as its net profit is less than Rs.5 Crores during the immediately preceding financial year.

NOTE 44 — OTHER DISCLOSURES

There are no transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:

(a) Crypto Currency or Virtual Currency

(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

(c) Registration of charges or satisfaction with Registrar of Companies

(d) the company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956

(e) Relating to borrowed funds:

(i) Wilful defaulter

(ii) Utilisation of borrowed funds & share premium

(iii) Borrowings obtained on the basis of security of current assets

(iv) Discrepancy in utilisation of borrowings

(v) Current maturity of long term borrowings

NOTE 45 — PREVIOUS YEAR’S COMPARABLES

Previous year''s figures have been regrouped/reclassified wherever necessary, to confirm with current years classification/ disclosure.

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Mar 31, 2024

The fair value of investment property has been determined having reference to the market values as prescribed under the ready reckoner published by a competent authority, as the company believes that the current market price of similar properties in the vicinity is the best evidence of the fair value of such investment property.

NOTE 3(d) Details of capital-work-in progress which has exceeded its cost compared to its original plan as at 31st March, 2024

There were no projects under progress therefore reporting under this heading is not applicable to the Company.

Terms/rights attached to the Equity Shares

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

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 to all preferential holders. The distribution will be in proportion to the number of equity shares held by the shareholders.

Description of nature and purpose of each reserve Capital Reserve

Capital reserve represents amount received from Government of Karnataka.

Export Profit Reserve

Export profit reserve represents the amount earned from export sales and is to be utilised for the purpose of exports.

Capital Redemption Reserve

Capital Redemption Reserve has been created out of free reserves of the Company on account of redemption of preference shares.

General Reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer.

Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2024, and no interest payment made during the year to any Micro and Small Enterprises. This 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 identified on the basis of information available with the Company.

1. Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs.51,25,378 was raised by the Tax authorities in earlier years which had been disputed by the Company and appeals filed with the Hon. High Court, Mumbai. The Company however deposited the demanded amounts in full with the tax authorities.

2. For the assessment years 2000-2001, 2002-2003 and 2003-2004 the Income-tax Appellate Tribunal had given relief of Rs.8,74,254 which had been accounted for in an earlier year. The tax authorities had subsequently filed an appeal with the Hon. High Court, Mumbai against the relief of Rs.8,74,254. The matter was set aside by Hon. High Court, in an earlier year and the matter was restored to the Tribunal for disposal. The matter is still pending with the tax authorities.

3. The tax authorities had raised a demand for the assessment year 2013-14 u/s 143 (3) of Rs.16,43,120 against the refund of Rs.16,94,070 claimed by the company in its return of income. The company has disputed this demand and has filed an appeal with the Commissioner (Appeals) of Income- tax Mumbai against this demand.

4. Demand of Rs.13,50,000 raised in an earlier year by the customs authorities for goods imported had been disputed by the Company against which the full amount had been deposited under protest. The matter is still pending with the Customs authorities.

5. Bond for Rs.1.20 crore executed with the Customs authorities for demand raised by the authorities in an earlier year which had been disputed and challenged by the Company. This Bond is to remain in force till finalisation of the value by the Customs authorities of the goods imported by the Company.

6. The Hon’ble Supreme Court of India (“SC”) by their order dated February 28, 2019, in the case of Surya Roshni Limited & others v/self, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal.“In view of the management, the liability for the period from date of the SC order to 31 March 2019 is not significant. Further, pending decision on the subject review petition and directions from the EPFO, the impact for the past period, if any, is not ascertainable and consequently no effect has been given in the accounts.

(D) Impact of IND AS adjustments on Tax computation:

1. Section 5 of the Income Tax Act states that profits are chargeable only when they accrue, arise or are received. Based on this provision of the Income Tax Act, it is a settled proposition that tax can be levied on real income and not any hypothetical or illusionary income - Shoorji vallabhdas & Co - (1962) 46 ITR 144 (SC) and Godhra Electricity Co. Ltd. - (1997) 225

ITR 746 (SC). These principles have been reiterated in ICDS-IV for revenue recognition under the Income Tax Act.

2. Under IND-AS accounting framework, there are certain mandatory adjustments to incomes and expenditures, which are only conceptual and do not reflect real income/expenditure as per prevailing provisions of the Income Tax Act.

(E) Other Disclosure:

During the year, the Company has not surrendered or disclosed any income in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961). Accordingly, there are no transactions which are not recorded in the books of accounts.

NOTE 33 — EMPLOYEE BENEFITS a. Defined Benefit Plans:

Gratuity:

The gratuity payable to employees is based on the employee''s service and last drawn salary at the time of leaving the services of the Company and is in accordance with the rules of the Company for payment of gratuity.

Inherent Risk on above:

The plan is defined in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to the employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risk.

Basis used to determine Expected Rate of Return on Plan Assets: The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary Escalation Rate: The past experience and industry practice considering promotion and demand and supply of employees.

Asset Liability matching strategy: The money contributed by the Company to the Gratuity fund to finance the liabilities of the plan has to be invested.

The trustees of the plan have outsourced the investment management of the fund to an insurance Company. The insurance Company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset liability matching strategy.

There is no compulsion on the part of the Company to fully prefund the liability of the Plan. The Company’s philosophy is to fund these benefits based on its own liquidity and the level of underfunding of the plan.

Compensated Absences:

The liability towards compensated absences is provided for based on actuarial valuation carried out by using Projected Accured Benefit Method.

Terms and conditions of transactions with related parties:

All related party transactions entered during the year are in ordinary course of the business and are on arm’s length basis.

Carrying amount of Investment, Trade Receivables, Cash and Cash Equivalent, Bank balances, Other financial Assets, Trade payables and Other financial liabilities as at 31st March, 2024, and 31st March, 2023 approximate the Fair Value because of their short term nature. Difference between carrying amount and fair values of bank deposits, other financial assets, other financial liabilities and borrowings subsequenty measured at amortised cost is not significant each of year presented.

NOTE 36 — FAIR VALUE MEASUREMENT

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques

which maximize the use of observable market data and rely as little as possible on company specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investements approximate the fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

The management assessed that cash and bank balances, trade payables, and other financial asset and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

NOTE 37 — FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise of Borrowings. The main purpose of these financial liabilities is to finance and support the Company’s operations. The Company’s principal financial assets include Investments, Loans and Other receivables, Cash and Cash Equivalents, Other Bank Balances that directly derive from its operations.

The Company is exposed to Market Risk, Credit Risk and Liquidity Risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

(A) Market Risk:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument.

The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.

(1) Foreign Currency Risk:

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates.

(2) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s doesnot have exposure to this risk since no borrowing

(B) Credit Risk:

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating (primarily Trade Receivables), investing and financing activities including Bank Balance, Deposits with Bank, Security Deposits, Loans to Employees and other financial instruments.

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined.

Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. The company allows credit period ranging from 30 days to 180 days, subject to reasonableness of the receivable. There is no concentration of customers and receivable amount.

Investments, Cash and Cash Equivalent and Bank Deposit:

Credit Risk on cash and cash equivalent is generally low, as the said deposits have been made with the banks/financial institutions who have been assigned high credit rating by international and domestic rating agencies.

Investments of surplus funds are made only based on Investment Policy of the Company. Investments consists of Investments in Subsidiaries & Investment in Short Term liquid Mutual Funds.

(C) Liquidity Risk:

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows.

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

NOTE 38 — CAPITAL MANAGEMENT

The Company’s objectives when managing capital are to

(a) maximise shareholder value and provide benefits to other stakeholders and

(b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt less investments divided by total equity.

NOTE 40 — RECENT ACCOUNTING PRONOUNCEMENTS

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

NOTE 41 — SEGMENT INFORMATION

The Company operates only in one primary business segment i.e. trading of goods.

NOTE 42 — SALE OF SUBSIDIARY

During the previous year 2022-23, on 30.11.2022, the company has sold its investments in subsidiary company, Cravatex Brands Limited ("CBL") at a value of Rs. 999 Lakhs. As a result of sale, CBL ceased to be a subsidiary of the company. The gain or loss of the subsidiary for the period 01.04.2022 to 31.11.2022, has been considered in the profit and loss account of the group in accordance with the provisions of applicable IND AS as exceptional item.

NOTE 43 — SUBSEQUENT EVENT

Dividends paid during the year ended March 31, 2024 includes an amount of Rs. 1.5 per equity share towards final dividend for the year ended March 31, 2023.

Dividends declared by the Company are based on the profit available for distribution. Distribution of dividends out of general reserve and retained earnings is subject to applicable Tax Deducted at Source. On 24.05.2024, the Board of Directors of the Company have proposed a final dividend of Rs.3/- per share in respect of the year ended March 31, 2024 subject to the approval of shareholders at the Annual General Meeting. The proposal is subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately Rs.77.52/- Lacs.

NOTE 44 — CORPORATE SOCIAL RESPONSIBILITY

The company is not covered under section 135 of the Companies Act as its net profit is less than Rs.5 Crores during the immediately preceding financial year.

NOTE 45 — OTHER DISCOLSURES

There are no transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:

(a) Crypto Currency or Virtual Currency

(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

(c) Registration of charges or satisfaction with Registrar of Companies

(d) the company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956

(e) Relating to borrowed funds:

(i) Wilful defaulter

(ii) Utilisation of borrowed funds & share premium

(iii) Borrowings obtained on the basis of security of current assets

(iv) Discrepancy in utilisation of borrowings

(v) Current maturity of long term borrowings

NOTE 46 — PREVIOUS YEAR’S COMPARABLES

Previous year''s figures have been regrouped/reclassified wherever necessary, to confirm with current years classification/ disclosure.

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Mar 31, 2018

NOTE 1 — CORPORATE INFORMATION

Cravatex Limited (“the Company”) was incorporated on 22nd June, 1951 under the Companies Act, 1913 (“the Act”) domiciled in India and headquartered in Mumbai. Cravatex Limited is the Holding Company of two subsidiaries viz. BB (UK) London (BBUK) and Cravatex Brands Ltd Mumbai (CBL). The Company along with its subsidiaries is engaged in the business of Branded sports goods, wellness and fitness equipment with servicing.

Terms/rights attached to the 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 Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

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 to all preferential holders. The distribution will be in proportion to the number of equity shares held by the shareholders.

Description of nature and purpose of each reserve Capital Reserve

Capital reserve represents amount received from Government of Karnataka.

Export Profit Reserve

Export profit reserve represents the amount earned from export sales and is to be utilised for the purpose of exports.

General Reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer.

Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

Term Loan from Bank:

(1) HDFC Bank Ltd - Rs.128.77 Lacs (2017- NIL; 2016-NIL)

— Secured by first charge on the lease rentals from Company’s property at Nariman point, Mumbai and mortgage extended over the company’s property at Nariman point, Mumbai.

— Rate of interest is 11.25% p.a. (linked to 1 year MCLR)

— Repayable in 34 monthly installment starting from July 2017 with last installment payable on April 2020

(2) Axis Bank Ltd. -Rs. NIL (2017- NIL; 2016-Rs.677.38 Lacs)

— Secured by first charge of equitable mortgage of Company’s property at Prabhadevi & Secured by first charge on the lease rentals from Company’s property at Nariman point, Mumbai.

— Rate of interest is base rate plus 2.75%

— Repayable in 66 monthly installment.

Terms/rights attached to the 4% Non-convertible Cumulative Redeemable Preference shares of Rs.10 each

The Company has issued 4% Non-convertible redeemable preference share having a face value of Rs.10/- per each redeemable after a period of 20 years. Preference shareholders shall rank for dividend in priority to the equity shares. The Preference shareholder shall be eligible for 4% fixed cumulative preferential dividend.

Secured

The Overdraft and Working Capital Demand Loan facilities taken by the Company are availed from HDFC Bank and Axis Bank and have been secured by:

I) First pari-passu charge as follows:

1) by way of hypothecation on entire current assets of the Company including stock and book debts, present and future.

2) by way of equitable mortgage of property at Nariman point, Mumbai.

3) by way of hypothecation on entire movable fixed assets of the Company, both present and future except vehicles.

II) Second pari-passu charge on commercial Office located at 4th Floor Sahas, Prabhadevi, Mumbai of Cravatex Limited & first charge on the lease rentals from Company’s property at Nariman point, Mumbai .

The above borrowings carry a rate of interest ranging between 8% to 11.5%.

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2018, and no interest payment made during the year to any Micro and Small Enterprises. This 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 identified on the basis of information available with the Company.

Notes:

1 Labour claim of an earlier year disputed by the Company against which Rs.1,75,000 has been deposited with The High Court, Mumbai.

2 Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs.51,25,378 was raised by the Tax authorities in earlier years which had been disputed by the Company and appeals filed with the Hon. High Court, Mumbai. The Company however deposited the demanded amounts in full with the tax authorities.

3 For the assessment years 2000-2001, 2002-2003 and 2003-2004 the Income-tax Appellate Tribunal had given relief of Rs.8,74,254 which had been accounted for in an earlier year. The tax authorities had subsequently filed an appeal with the Hon. High Court, Mumbai against the relief of Rs.8,74,254. The matter was set aside by Hon. High Court, in an earlier year and the matter was restored to the Tribunal for disposal. The matter is still pending with the tax authorities.

4 The tax authorities had raised a demand for the assessment year 2013-14 u/s 143 (3) for Rs. 16,43,120. The company has disputed this demand and has filed an appeal with the Commissioner (Appeals) of Income- tax Mumbai against this demand.

5 The tax authorities had raised a demand of Rs.25,163/- for the assessment year 2011-12 as per order u/s 201(1)/(1A) dtd.29.03.2018 on account of short deduction of TDS & interest thereon. The company has disputed this demand and has filed an appeal with the Commissioner (Appeals) of Income- tax Mumbai against this demand.

6 Demand of Rs. 13,50,000 raised in an earlier year by the customs authorities for goods imported had been disputed by the Company against which the full amount had been deposited under protest. The matter is still pending with the Customs authorities.

7 Bond for Rs.1.20 crore executed with the Customs authorities for demand raised by the authorities in an earlier year which had been disputed and challenged by the Company. This Bond is to remain in force till finalisation of the value by the Customs authorities of the goods imported by the Company.

8 Demand of Rs.43,06,399 (PY 38,31,386) was raised in an earlier year by the New Maker Chambers IV Premises Co-operative Society Ltd, Mumbai for the difference in BMC tax from 01.04.2000 to 31.03.2015, and the company has paid Rs.17,35,297 so far to the Society under protest. However net liability of the Company against this demand is Rs.25,71,102.

NOTE 2 — OTHER COMMITMENTS

An amount of Rs.40,00,000 was due from a third party in terms of Settlement Agreemnt with this party as a Consultant. During the year an amount of Rs.5,00,000 has been recovered under the said Settlement Agreemnt with the party. Inspite of all assurances given to the company by this party for clearing the balance debt of RS.35,00,000, the party has not yet paid any amount. A legal case is being filed against the party for recovery of balance debt.

NOTE 3 — EMPLOYEE BENEFITS

a. Defined Benefit Plans:

Gratuity:

The gratuity payable to employees is based on the employee’s service and last drawn salary at the time of leaving the services of the Company and is in accordance with the rules of the Company for payment of gratuity.

Inherent Risk on above:

The plan is defined in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to the employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risk.

Weighted Average duration of Defined benefit obligation

* The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet.

Basis used to determine Expected Rate of Return on Plan Assets: The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary Escalation Rate: The past experience and industry practice considering promotion and demand and supply of employees.

Asset Liability matching strategy: The money contributed by the Company to the Gratuity fund to finance the liabilities of the plan has to be invested.

The trustees of the plan have outsourced the investment management of the fund to an insurance Company. The insurance Company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset liability matching strategy.

There is no compulsion on the part of the Company to fully prefund the liability of the Plan. The Company’s philosophy is to fund these benefits based on its own liquidity and the level of underfunding of the plan.

b. Defined Contribution Plans:

Amount recognized as an expense and included in Note 29 under the head “Contribution to Provident and other Funds” of Statement of Profit and Loss is:

Carrying amount of Investment, Trade Receivables, Cash and Cash Equivalent, Bank balances, Other financial Assets, Trade payables and Other financial liabilities as at 31st March, 2018, 31st March, 2017 and 1st April, 2016 approximate the Fair Value because of their short term nature. Difference between carrying amount and fair values of bank deposits, other financial assets, other financial liabilities and borrowings subsequenty measured at amortised cost is not significant each of year presented.

NOTE 4 — FAIR VALUE MEASUREMENT

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The company does not have any such asset or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investements approximate the fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

The management assessed that cash and bank balances, trade payables, and other financial asset and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

NOTE 5 — FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise of Borrowings. The main purpose of these financial liabilities is to finance and support the Company’s operations. The Company’s principal financial assets include Investments, Loans and Other receivables, Cash and Cash Equivalents, Other Bank Balances that directly derive from its operations.

The Company is exposed to Market Risk, Credit Risk and Liquidity Risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

(A) Market Risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument.

The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.

(1) Foreign Currency Risk

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the import of fila and fitness and exports of fila.

The Company evaluates exchange rate exposure arising from foreign currency transactions. The Company follows established risk management policies and standard operating procedures. It uses derivative instruments like forwards contracts to hedge exposure to foreign currency risk.

(2) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s short term borrowing with floating interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

(B) Credit Risk:

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from from its operating (primarily Trade Receivables), investing and financing activities including Bank Balance, Deposits with Bank, Security Deposits, Loans to Employees and other financial instruments.

Trade Receivables:

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined.

Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. The company allows credit period ranging from 60 days to 180 days, subject to reasonableness of the receivable. There is no concentration of customers and receivable amount.

Investments, Cash and Cash Equivalent and Bank Deposit:

Credit Risk on cash and cash equivalent is generally low, as the said deposits have been made with the banks/financial institutions who have been assigned high credit rating by international and domestic rating agencies.

Investments of surplus funds are made only based on Investment Policy of the Company. Investments consists of Investments in Subsidiaries.

(C) Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

NOTE 6 — CAPITAL MANAGEMENT

The Company’s objectives when managing capital are to

(a) maximise shareholder value and provide benefits to other stakeholders and

(b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt less investments divided by total equity.

In addition the Company has financial covenants relating to the borrowing facilities that it has taken from the lenders like interest coverage service ratio, Debt to EBITDA, etc. which is maintained by the Company

NOTE 7 — FIRST TIME ADOPTION OF IND AS (IND AS 101)

As stated in Note 2, these financial statements for the year ended 31 March 2018, are the first financials which Company has prepared in accordance with Ind AS. For periods 1st April 2016 to 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (IGAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. This note explains the principal adjustments made by the Company in restating its IGAAP financial statements as at 1st April 2016 and for the year ended March 31, 2017 and how the transition from IGAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

A. Exemptions Availed:

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has availed the following exemptions:

a. Optional Exemptions availed

i) Deemed cost for PPE and Intangible Assets:

As permitted by Ind As 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets.

ii) Investment in Subsidiary, Joint ventures and Associates:

The Company has elected to adopt the carrying value under previous GAAP as on the date of transition i.e. April 1, 2016 in its separate financial statements.

iii) Fair Value of Financials Assets and Liabilities:

As per Ind AS exemption the Company has not fair valued the financial assets and liabilities retrospectively and has measured the same prospectively.

b. Mandatory Exemptions availed

i) Estimates

Ind AS estimates as at 1st April, 2016 are consistant with the estimates as at the same date made in conformity with the previous GAAP. The Company made estimates for the following items in accordance with the Ind AS at date of transition as these were not required under previous GAAP:

— Fair valuation of financial Instruments carried at FVTPL and/or FVOCI

— Determination of the discounted value for financial instruments carried at amorised cost

ii) De-recognition of financial asets and liabilities

Ind AS 101 requires a first time adopter to apply the de-recognition provision of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind As. Accordingly, the Company has elected to apply the de-recognition provision of Ind AS 109 prospectively from the date of trasition to Ind AS.

iii) Classification and measurement of financial assets

The Company has determined the classification of financial assets based on facts and circumstances that exists on the date of trasition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

B) Reconciliations between Previous GAAP and Ind AS:

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for the period. The following tables represent the reconciliations between previous GAAP and Ind AS:

Notes:

i. Under Previous GAAP, transaction cost related to borrowings were charged to Profit & Loss Account as and when incurred. Under Ind AS, these cost are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying effective interest rate method.

ii. Under the previous GAAP, interest free lease deposits were recorded at their transaction value. On transition to Ind AS, these lease deposits are remeasured at amortised cost using the effective interest rate method. The difference between the transaction value of the deposit and amortised cost is regarded as deferred lease rent and recognised as expense uniformly over the lease period. Interest income, measured by the effective interest rate method is accrued. The effect of these is reflected in total equity and / or profit or loss, as applicable.

iii. Deferred Tax has been recognised on adjustments made on transition to Ind AS.

iv. Under Ind AS, remeasurement i.e. acturial gain and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year.

5) Reconciliation of Statement of Cash flow for the year ended 31st March 2017

There are no material adjustments to the statement of cash flows as reported under the Previous GAAP IGAAP figures have been regrouped / reclassified wherever necessary to confirm with financial statements under Ind AS.

NOTE 8 — RECENT STANDARDS

Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind AS which the Company has not applied as they are effective for annual periods beginning on or after April 1, 2018:

Ind AS 115 Revenue from Contracts with Customers (“Standard”)

Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.

Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 Revenue, Ind AS 11 Construction Contracts when it becomes effective from 1 April 2018.

The core principle of Ind AS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:

Step 1: Identify the contract(s) with a customer

Step 2: Identify the performance obligation in contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer.

The Company is evaluating the impact of this Standard on its financial statements.

NOTE 9 — SEGMENT INFORMATION

The Company has determined following reporting segments based on the information reviewed by the Company’s Chief Operating Decision Maker (‘CODM’)

A) Sports - Trading of footwear, apparels and accessories and

B) Wellness - Gym equipments and accessories

NOTE 10 — DISPOSAL OF GROUP OF ASSETS

During the previous year ended on 31 March 2017, pursuant to a Business Transfer Agreement executed on 6th February 2017, and Subscription and Shareholder Agreement executed on 23rd March 2017 which was approved by the Board of Directors of the Company on 2nd February 2017 and 23rd March 2017 respectively and subsequently by the share holders of CRAVATEX LIMITED on 9th March 2017, CRAVATEX LTD (CL) disposed its Group of Assets to CRAVATEX BRANDS LIMITED (CBL) a wholly owned subsidiary of the Company. The transaction involved in transfer of the business, associated employees and assets and liabilities pursuant to the terms of the business transfer agreement as an inseparable whole, as a going concern on slump sale basis on the lumpsum consideration of Rs.32,68,00,000. The lumpsum consideration is discharged in full by CBL by issuance and allotment to CL 32,68,000 equity shares of Rs.100 each of CBL at face value credited as fully paid up.

Accordingly by the aforesaid transaction company has recognised gain of Rs.4,60,74,156 as an exceptional item in Profit & Loss account.

In view of the above, the figures for the previous year are strictly not comparable.

NOTE 11 — CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act, 2013 are not applicable to the Company as it does not fall under the class of Companies specified under the section.

NOTE 12 — PREVIOUS YEAR’S COMPARABLES

Previous year’s figures have been regrouped/reclassified wherever necessary, to confirm with current years classification/ disclosure.

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Mar 31, 2016

NOTE 1.A

Consequent to the enactment of Companies Act, 2013 (the Act) and its applicability for accounting periods commencing on or after 1 April, 2014 the Company re-worked depreciation with reference to the useful lives of fixed assets as prescribed in Schedule II to the Act. Accordingly the unamortized carrying value is being depreciated over the revised/remaining useful lives.

2. — CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR)

Claims against the Company not acknowledged as debt:

Labor claim of an earlier year disputed by the Company against which Rs.1,75,000 has been deposited with The High Court,

Mumbai.

(i) Guarantees and Letters of Credit:

(a) Outstanding against Indemnity of default loss given to the Axis Bank ltd to the extent of Rs.10 crores on account of factoring of trade receivable from reputed indentified customers of the Company is Rs.3,88,13,852 as on 31 March,

2016 (Previous year Rs.8,96,00,012).

(b) Bank guarantees given to the extent of Rs.1,50,93,190 (Previous year Rs.1,30,70,052)

(c) Letters of Credit outstanding to the extent of Rs.18,88,99,993 (Previous year Rs.11,15,93,267)

(ii) Other money for which the Company is contingently liable:

(a) Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs.51,25,378 was raised by the Tax authorities in earlier years which had been disputed by the Company and appeals filed with the Hon. High Court, Mumbai. The Company however deposited the demanded amounts in full with the tax authorities.

(b) For the assessment years 2000-2001, 2002-2003 and 2003-2004 the Income-tax Appellate Tribunal had given relief of Rs.8,74,254 which had been accounted for in an earlier year. The tax authorities had subsequently filed an appeal with the Hon. High Court, Mumbai against the relief of Rs.8,74,254. The matter was set aside by Hon. High Court, in an earlier year and the matter was restored to the Tribunal court for disposal. The matter is still pending with the tax authorities.

(c) The tax authorities have raised a demand for the assessment year 2013-14 u/s 143 (3) for Rs.16,43,120. The company has disputed this demand and has filed an appeal with the Commissioner (Appeals) of Income- tax Mumbai against this demand.

(d) Demand of Rs.13,50,000 raised in an earlier year by the customs authorities for goods imported had been disputed by the Company against which the full amount had been deposited under protest. The matter is still pending with the Customs authorities.

(e) Bond for Rs.1.20 crore executed with the Customs authorities for demand raised by the authorities in an earlier year which had been disputed and challenged by the Company. This Bond is to remain in force till finalization of the value by the Customs authorities of the goods imported by the Company.

(f) Demand of Rs.38,31,386 (Previous year Rs. 38,31,386) raised by the New Maker Chambers IV Premises Co-operative Society Ltd, Mumbai for the difference in BMC tax from 01.04.2000 to 31.03.2015, and the same has been paid to Society under protest. However net liability of the Company against this demand is Rs.15,66,683.

3. OTHER COMMITMENTS

(i) An amount of Rs.1,55,00,000 was due from a third party in terms of Contract of Engagement with this party as a Consultant against which provision for doubtful debt of Rs.77,50,000 was made and subsequently written off in an earlier year. Though the Contract had been terminated with effect from 1 April 2007, inspite of all assurances given to the Company by this party for clearing this debt, the party has not paid any amount so far against these dues. The Company had initiated an Arbitration proceeding invoking Arbitration in the previous year as per the Contract of Engagement referred to above. The Arbitration proceeding is still in process.

(ii) Buyer''s Credit outstanding to the extent of Rs.7,97,58,205 for goods purchased against the Letter of Undertaking of Banks (Previous year Rs.Nil).

4. TRADE RECEIVABLES

Trade receivables are net of customer''s accepted liability for Rs.2,94,19,719 which are discounted under letter of credit issued

by the customer''s bank.

5. — RELATED PARTY DISCLOSURES

As per Accounting Standard 18, the disclosure of transactions with the related parties are given below:

(a) Names of the related parties: Relationship:

M/s. Proline India Ltd Associated Company

M/s. Proline Exports Pvt Ltd Associated Company

Mr. Rajesh Batra Managing Director

Mr. Rajiv Batra Director

Mrs. Jamna Batra Shareholder

Mrs. Prathima Batra Shareholder

Mrs. Raj Batra Shareholder

Ms. Divya Batra Shareholder

Mr. Rohan Batra Shareholder

Mrs. Sujaya Batra Shareholder

6. — Previous year’s figures have been regrouped / reclassified wherever necessary to conform to the current year presentation.

7. — SEGMENT REPORTING

As per Accounting Standard (AS) 17 on “Segment Reporting” the Company, has identified geographical segment as primary segment. The geographical segment consist of a)Fitness/ Sports Goods/Readymade Garments (Domestic) b) Readymade Garments/ Sports Goods (International)

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Mar 31, 2015

NOTE 1.1A

Consequent to the enactment of Companies Act, 2013 (the Act) and its applicability for accounting periods commencing on or after 1 April, 2014 the Company has re-worked depreciation with reference to the useful lives of fixed assets as prescribed in Schedule II to the Act. Accordingly the unamortised carrying value is being depreciated over the revised / remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April, 2014 have been adjusted in the opening balance of Profit and Loss Account amounting to Rs.38,70,012.

1.2 — CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR)

Claims against the Company not acknowledged as debt:

Labour claim of an earlier year disputed by the Company against which Rs.1,75,000 has been deposited with The High Court, Mumbai.

(i) Guarantees and Letters of Credit:

(a) Outstanding against Indemnity of default loss given to the Axis Bank Ltd to the extent of Rs.10 crores on account of factoring of trade receivable from reputed identified customers of the Company is Rs.8,96,00,012 (Previous year Rs.Nil) as on 31 March, 2015.

(b) Bank guarantees given to the extent of Rs. 1,30,70,052 (Previous year Rs.1,39,23,472)

(c) Letters of Credit outstanding to the extent of Rs.11,15,93,267 (Previous year Rs.11,10,39,818)

(d) Standby LC limit of the amount of 3.98 crore (previous year Rs.4.29 crore) from Axis Bank Ltd in favour of HSBC Bank Plc, UK on behalf of the subsidiary company BB (UK) Ltd for working capital facilities of the subsidiary company.

(ii) Other money for which the Company is contingently liable:

(a) Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs.51,25,378 was raised by the Tax authorities in earlier years which had been disputed by the Company and appeals filed with the Hon. High Court, Mumbai. The Company however deposited the demanded amounts in full with the tax authorities.

(b) For the assessment years 2000-2001, 2002-2003 and 2003-2004 the Income-tax Appellate Tribunal had given relief of Rs.8,74,254 which had been accounted for in an earlier year. The tax authorities had subsequently filed an appeal with the Hon. High Court, Bombay against the relief of Rs.8,74,254. The matter was set aside by Hon. High Court, in an earlier year and the matter was restored to the Tribunal court for disposal. The matter is still pending with the tax authorities.

(c) Demand of Rs.13,50,000 raised in an earlier year by the customs authorities for goods imported had been disputed by the Company against which the full amount had been deposited under protest. The matter is still pending with the Customs authorities.

(d) Bond for Rs.1.20 crore executed with the Customs authorities for demand raised by the authorities in an earlier year which had been disputed and challenged by the Company. This Bond is to remain in force till finalisation of the value by the Customs authorities of the goods imported by the Company.

(e) Demand of Rs.38,31,386 (Previous year Rs. 38,31,386) raised by the New Maker Chambers IV Premises Co-operative Society Ltd, Mumbai for the difference in BMC tax from 01.04.2000 to 31.03.2015, which has been disputed by the Company. However net liability of the Company against this demand is Rs.15,66,683.

1.3 LEASEHOLD IMPROVEMENT

The Management had decided in the previous year that renovation expenditure incurred on premises taken on lease is to be written off over the period of five years in equal installments. Accordingly, one-fifth of the expenditure incurred in the previous year was charged as repairs in the Profit and Loss Account and the balance treated as deferred revenue expenditure. The management has however now adopted the policy to treating such expenditure on leasehold improvement as a fixed assets to be amortized/ depreciated over a period of five years in equal installments.

Accordingly the following adjustments have been made in the accounts:

Fixed Assets (Tangible Assets) : (Note '1.9' on Notes on Financial Statements)

Depreciation:

Rs.9,59,380 for the current year

Rs.7,08,930 of the previous year and adjusted for the period upto 31.03.2014

Previous year figures in the Schedule of fixed assets, in respect of gross block and depreciation for the period upto 31.03.2014, in the Balance Sheet in respect of deferred revenue expenditure and in the Profit and Loss Account in respect of Repairs-others have been regrouped/recast/reclassified accordingly.

1.4 — OTHER COMMITMENTS

An amount of Rs.1,55,00,000 was due from a third party in terms of Contract of Engagement with this party as a Consultant against which provision for doubtful debt of Rs.77,50,000 was made and subsequently written off in an earlier year. Though the Contract had been terminated with effect from 1 April 2007, inspite of all assurances given to the Company by this party for clearing this debt, the party has not paid any amount so far against these dues. The Company had initiated an Arbitration proceeding invoking Arbitration in the previous year as per the Contract of Engagement referred to above. The Arbitration proceeding is still in process.

1.5 — OPERATING LEASE:

The Company has taken certain premises on operating lease, the minimum future lease rentals payable on which are as follows:

1.6 — Previous years figures have been regrouped / reclassified wherever necessary to confirm to the current year presentation.

1.7 — SEGMENT REPORTING

As per Accounting Standard (AS) 17 on "Segment Reporting" the Company, has identified geographical segment as primary segment. The geographical segment consist of (a) Fitness/ Sports Goods/Readymade Garments (Domestic) (b) Readymade Garments/Sports Goods (International)

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Mar 31, 2014

1. CONTINGENT LIABILITIES (to the extent not provided for)

Claims against the Company not acknowledged as debt:

Labour claim of an earlier year disputed by the Company against which Rs. 1, 75, 000 has been deposited with The High Court, Mumbai.

Guarantees and Letters of credit:

(a) Bank guarantees given to the extent of Rs. 1, 39, 23, 472 (Previous year Rs. 1, 44, 93, 309).

(b) Letters of Credit outstanding to the extent of Rs. 11, 10, 39, 818 (Previous year Rs. 11, 03, 44, 102)

(c) Standby LC limit of the amount of Rs. 4. 29 crore from Axis Bank Ltd in favour of HSBC Bank Plc, UK on behalf of the subsidiary company BB (UK) Ltd for working capital facilities of the subsidiary company.

Other money for which the Company is contingently liable:

(a) Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs. 51, 25, 378 was raised by the Tax authorities in earlier years which had been disputed by the Company and appeals filed with the Hon. High Court, Mumbai. The Company however deposited the demanded amounts in full with the tax authorities.

(b) For the assessment years 2000-2001, 2002-2003 and 2003-2004 the Income-tax Appellate Tribunal had given relief of Rs. 8, 74, 254 which had been accounted for in an earlier year. The tax authorities had subsequently filed an appeal with the Hon. High Court, Bombay against the relief of Rs. 8, 74, 254. The matter was set aside by Hon. High Court, in the earlier year the matter was restored to the Tribunal court for disposal. The matter is still pending with the tax authorities.

(c) Demand of Rs. 13, 50, 000 raised in an earlier year by the customs authorities for goods imported had been disputed by the Company against which the full amount had been deposited under protest. The matter is still pending with the Customs authorities.

(d) Bond for Rs. 1. 20 crore executed with the Customs authorities for demand raised by the authorities in an earlier year which had been disputed and challenged by the Company. This Bond is to remain in force till finalisation of the value by the Customs authorities of the goods imported by the Company.

(e) Demand of Rs. 38, 31, 386 (Previous year Rs. 37, 23, 543) raised by the New Maker Chambers IV Premises Co-operative Society Ltd, Mumbai for the difference in BMC tax from 01. 04. 2000 to 31. 03. 2014, which has been disputed by the Company. However net liability of the Company against this demand is Rs. 15, 66, 683.

(f) Forward Contract (Lien on Exchange Rate) outstanding to the extent of Rs. 64, 92, 139 (Previous year Rs. 11, 82, 174).

2. Rs. 39, 23, 225 was incurred for civil work on two premises taken on lease during the year is to be written off over the period of 5 years in equal instalments as decided by the management. Accordingly Rs. 7, 08, 930 being the proportionate amount has been charged as repairs in the Profit and Loss Account and balance of Rs. 32, 14, 295 treated as deferred revenue expenditure.

3 OTHER COMMITMENTS

(a) An amount of Rs. 1, 55, 00, 000 was due from a third party in terms of Contract of Engagement with this party as a Consultant against which provision for doubtful debt of Rs. 77, 50, 000 has been made in an earlier year and written off as bad debt in the accounts for the year ended 31 March 2013. Though the Contract had been terminated with effect from 1 April 2007, inspite of all assurances given to the Company by this party for clearing this debt, the party has not paid any amount so far against these dues. The Company has initiated an Arbitration proceeding invoking Arbitration as per the Contract of Employment referred to above. The Arbitration proceeding is still in process.

4 SEGMENT REPORTING

As per Accounting Standard (AS) 17 on "Segment Reporting" the Company, considering its starting of Exports of Readymade Garments/Sports Goods during the year 2012-13, has identified geographical segment as primary segment. The geographical segment consist of: (a) Fitness/Sports Goods/Readymade Garments (Domestic) (b) Readymade Garments/ Sports Goods (International).

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Mar 31, 2013

1.1 — CONTINGENT LIABILITIES (to the extent not provided for)

Claims against the Company not acknowledged as debt:

Labour claim of an earlier year disputed by the Company against which Rs.1,75,000 has been deposited with The High Court, Mumbai.

Guarantees and Letters of credit:

(a) Bank guarantees given to the extent of Rs.1,44,93,309 (Previous year Rs.44,04,830).

(b) Letters of Credit outstanding to the extent of Rs.11,03,44,102 (Previous year Rs.10,09,75,790)

(c) Standby LC limit of the amount of Rs. 3.53 crore from Axis Bank Ltd in favour of HSBC Bank Plc, UK on behalf of the subsidiary company BB (UK) Ltd for working capital facilities of the subsidiary company.

Other money for which the Company is contingently liable:

(a) Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs.51,25,378 was raised by the Tax authorities in earlier years which had been disputed by the Company and appeals filed with the Hon. High Court, Mumbai. The Company however deposited the demanded amounts in full with the tax authorities.

(b) For the assessment years 2000-2001, 2002-2003 and 2003-2004 the Income-tax Appellate Tribunal had given relief of Rs.8,74,254 which had been accounted for in an earlier year. The tax authorities had subsequently filed an appeal with the Hon. High Court, Bombay against the relief of Rs.8,74,254. The matter was set aside by Hon. High Court, in the previous year the matter was restored to the Tribunal court for disposal. The matter is still pending with the tax authorities.

(c) Demand of Rs.13,50,000 raised in an earlier year by the customs authorities for goods imported had been disputed by the Company against which the full amount had been deposited under protest. The matter is still pending with the Customs authorities.

(d) Bond for Rs.1.20 crore executed with the Customs authorities for demand raised by the authorities in an earlier year which had been disputed and challenged by the Company. This Bond is to remain in force till finalisation of the value by the Customs authorities of the goods imported by the Company.

(e) Demand of Rs.37,23,543 (Previous year Rs. 32,92,171) raised by the New Maker Chambers IV Premises Co-operative Society Ltd, Mumbai for the difference in BMC tax from 01.04.2000 to 31.03.2013, which has been disputed by the Company. However net liability of the Company against this demand is Rs.15,66,683.

(f) Forward Contract (Lien on Exchange Rate) outstanding to the extent of Rs.11,82,174 (Previous year Rs.15,35,606).

1.2 — OTHER COMMITMENTS

(a) An amount of Rs.1,55,00,000 was due from a third party in terms of Contract of Engagement with this party as a Consultant against which provision for doubtful debt of Rs.77,50,000 has been made as at 31 March 2012. Though the Contract had been terminated with effect from 1 April 2007, inspite of all assurances given to the Company by this party for clearing this debt, the party has not paid any amount during the year against these dues. The Company has intiated an Arbitration proceeding invoking Arbitration as per the Contract of Employment referred to above.

1.3 — FINANCE LEASE

(a) The Company has taken on finance lease, cost of assets having an aggregate value of Rs.7,80,000 (Previous year Rs.7,80,000) against which the future obligations aggregate to Rs.4,28,953 (Previous year Rs.7,18,260), including lease charge Rs. 22,751 (Previous year Rs.62,690) and the same are payable as under:

1.4 — Previous years figures have been regrouped / reclassified wherever necessary to conform to the current year presentation.

1.5 — SEGMENT REPORTING

As per Accounting Standard (AS) 17 on "Segment Reporting" the Company, considering its starting of Exports of Readymade Garments/Sports Goods during the year 2012-13, has identified geographical segment as primary segment. The geographical segment consist of: (a) Fitness/Sports Goods/Readymade Garments (Domestic) (b) Readymade Garments/ Sports Goods (International).

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Mar 31, 2012

1.1 - CONTINGENT LIABILITIES (to the extent not provided for)

Claims against the Company not acknowledged as debt:

Labour claim of an earlier year disputed by the Company against which Rs. 1,75,000 has been deposited with The High Court, Mumbai.

Guarantees and Letters of credit:

(a) Bank guarantees given to the extent of Rs.44,04,830 (Previous year Rs.25,49,500)

(b) Letter of credit outstanding to the extent of Rs. 10,09,75,790 (Previous year Rs.6,99,08,462)

(c) Standby LC limit of the amount of Rs. 3.50 crore from Axis Bank Ltd in favour of HSBC Bank Pic, UK on behalf of subsidiary company BB (UK) Ltd for working capital facilities of the subsidiary company.

Other money for which the company is contingently liable:

(a) Demands for Wealth Tax for the Assessment years 1997-98 and 1998-99 amounting to Rs.51,25,378 (Previous year Rs.51,25,378) raised by the Tax authorities have been disputed by the Company and appeals filed with Hon. High Court, Mumbai. The Company has however deposited the demand amounts in full.

(b) For the assessment year 2000-01, 2002-03 and 2003-04, the Income-tax Appellate Tribunal had given relief of Rs.8,74,254 which had been accounted for in previous year. The tax authorities filed an appeal with the Hon. High Court, Mumbai against the relief of Rs.8,74,254. This matter has been set aside by Hon. High Court and restored the matter to the Tribunal for fresh disposal.

(c) Demand of Rs. 13,50,000 raised by the customs authorities for goods imported has been disputed by the Company against which the full amount has been deposited under protest.

(d) Bond for Rs.1.20 crore executed with the customs authorities for demand raised by the authorities which has been disputed and challenged by the Company. This bond is to remain in force till finalization of the value by the Customs authorities of the goods imported by the Company.

(e) Demand of Rs.32,92,171 (Previous year Rs.28,60,799) raised by the New Maker Chambers IV Premises Co-operative Society Ltd, Mumbai for the difference in BMC tax from 01.04.2000 to 31.03.2012, which has been disputed by the Company. However net liability of the Company against this demand is Rs.15,66,683.

(f) Forward Contract ( Lien on Exchange Rate) outstanding to the extent of Rs.15,35,606.

1.2 OTHER COMMITMENTS

(a) An amount of Rs.1,55,00,000 was due as at 31 March 2012 from a third party in terms of Contract of engagement with this party as a Consultant. This Contract was terminated by mutual agreement with effect from 1 April 2007. In spite of all assurances given to the Company by this party for clearing this debt, the party has not paid any amount during the year against these dues. The Company served a legal notice to the party and is in the process of initiating legal proceedings for the recovery of this amount. However a provision of Rs. 77,50,000 has been made in this accounts against Rs.1,55,00,000 due from this party.

1.3 — FINANCE LEASE

(a) The Company has taken on finance lease, cost of assets having an aggregate value of Rs.7,80,000 (Previous year Rs.16,76,089) against which the future obligations aggregate to Rs.7,18,260 (Previous year Rs.2,08,962), including lease charge Rs. 62,690 (Previous year Rs.11,311) and the same are payable as under:

1.4 - Previous year's figures have been regrouped/reclassified wherever necessary to conform to the current

year presentation.

1.5 - SEGMENT REPORTING

As per Accounting Standard (AS) 17 on "Segment Reporting" the Company, considering its starting of Exports of Readymade Garments/Sports Goods during the year 2011-12, has identified geographical segment as primary segment. The geographical segment consist of: (a)Fitness/Sports Goods/Readymade Garments (Domestic) (b) Readymade Garments/Sports Goods (International)

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Mar 31, 2011

1. The Company is contingently liable in respect of:

(a) Bank guarantees given to the extent of Rs.25,49,500 (Previous year Rs.13,56,494)

(b) Letters of credit outstanding to the extent of Rs.6,99,08,462 (Previous year Rs.5,94,25,478)

(c) Labour Claim of an earlier year disputed by the Company against which Rs.1,75,000 has been deposited with The High Court, Mumbai.

(d) Advance on Capital Account of Rs. 1,08,66,198 has been transferred to Building account on completion of the building project.

(e) (i) Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs.51,25,378 (Previous year Rs.51,25,378) raised by the Tax authorities have been disputed by the Company and appeals filed with the relevant authority. The Company has however deposited the demand amounts in full.

(ii) For the assessment years 2000-2001, 2002-2003 and 2003-2004 the Income-tax Appeallate Tribunal has passed an Order in favour of the Company in respect of total demand of Rs. 1,22,00,886 for these assessment years. Against this demand the Company had deposited Rs. 1,13,26,632 with the tax authorities. The relief of Rs. 8,74,254 given by the Tirbunal had been accounted for in these accounts. The tax authrities had filed an appeal with the Hon. High Court, Bombay against the relief of Rs. 8,74,225 which has been set aside by Hon. High Court, and restore the appeal to the Tribunal for fresh disposal.

(f) (i) Demand of Rs.13,50,000 raised by the customs authorities for goods imported has been disputed by the Company against which the full amount has been deposited under protest.

(ii) Bond for Rs.1.20 crore executed with the Customs authorities for demand raised by the authorities which has been disputed and challenged by the Company. This bond is to remain in force till finalisation of the value by the Customs authorities of the goods imported by the Company.

(g) Demand of Rs.28,60,799 (Previous year Rs.24,29,427) raised by the New Maker Chambers IV Premises Co-operative Society Ltd, Mumbai for the difference in BMC tax from 01.04.2000 to 31.03.2011, which has been disputed by the Company. However net liability of the Company against this demand is Rs. 15,66,683.

2. Amounts if any due to Micro Enterprises, Small Enterprises and Medium Enterprises under Micro Enterprises, Small Enterprises and Medium Enterprises Development Act, 2006 could not be disclosed as such parties could not be identified from the records of the Company.

3. (a) Fixed Deposit Account with a Bank include Rs.10,000 (Previous year Rs.NIL) earmarked against repayment of public deposits

(b) National Savings Certificate is held in the name of an employee of the company as under lien of sales tax authorities of Rajasthan.

4. Loans and Advances include:

(a) An amount of Rs.2,14,79,707 was due from a third party in terms of Contract of engagement with this party as a Consultant. This Contract was terminated by mutual agreement with effect from 1 April 2007. On negotiating with the party an amount of Rs. 59,79,707 was written-off in the previous year from these dues showing balance amount of Rs. 1,55,00,000 due as at 31 March 2010. Inspite of all assurances given to the Company by this party for clearing this debt, the party has not paid any amount during the year against these dues. The Company has served a legal notice to the party and is in the process of initiating legal proceedings for the recovery of this amount and therefore no provision has been made in the accounts against this outstanding.

(b) The Company has paid an amount of Rs. 18,00,000 as Security Deposit to M/s Sunrydge India Heritage Pvt. Ltd, and Rs. 3,75,000 to M/s Sunrydge Services Society against rental of one of their properties. The rented property has since been vacated, but the party has not refunded the Deposit amount. The Company has initiated arbitration proceedings before the Delhi High Court Arbitration Centre for the recovery of the Deposit.

5. Goodwill:

In accordance with the Accounting Standard 26 (Intangible Assets) Goodwill has been amortised over a period of ten years.

6. Sales and Services are reported net of trade and turnover discount to dealers and commission on consignment sales.

7.(b) Professional and legal charges include Rs.6,00,000 (previous year Rs.6,00,000) paid as consultancy charges to a Director of the Company.

8. Retirement benefit:

The following tables summarises the components of the net benefit expenses recognised in the Profit and Loss Account, the fund status and amount recognised in the Balance sheet for the gratuity benefit plan pursuant to Accounting Standard-15 (Revised 2005) on "Employee Benefits."

9. Related Party Transactions :

details of transactions with Related Parties:

(A) Companies and Firms in which some directors of this company are interested as directors or partners with whom:

(i) There are transactions during the year:

(1) Proline India Limited,

(2) Big Time Exports

(ii) There are no transactions during the year:

(1) Proline Exports Pvt. Ltd.,

(2) Lezara Trading Ltd.

(3) Promark Fitness & Leisures Pvt. Ltd.,

(4) Rajesh Rajeev Investments Pvt. Ltd.,

(B) Shareholders/Directors and Key Management Personnels

(1) Mr. Rajesh Batra

(2) Mr. Rajiv Batra

(3) Mrs. Prathima Batra

(4) Mrs. Sujaya Batra

(5) Mrs. Jamna Batra

(6) Mrs. Raj Batra

(7) Ms. Divya Batra

(8) Mr. Rohan Batra

(9) Mr. N.R. Mahalingam

(10) Mr. Rajiv Wallia

(11) Mr. Nabankur Gupta

10. Segment Reporting :

As companys business falls under the single segment viz "Fitness and Sports goods", there is no additional disclosure to be provided under Accounting Standard-17 dealing with "Segment Reporting."

11. Previous years figures have been regrouped wherever necessary to conform to this years classifications.

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Mar 31, 2010

1. The Company is contingently liable in respect of:

(a) Bank guarantees given to the extent of Rs. 13,56,494 (Previous year Rs. 9,18,523)

(b) Letters of credit outstanding to the extent of Rs. 5,94,25,478 (Previous year Rs. 98,51,666)

(c) Labour Claim of an earlier year disputed by the Company against which Rs. 1,75,000 has been deposited with The High Court, Mumbai.

(d) Estimated amount of contract remaining to be executed on capital account and not provided for (net of advances) is Rs. 8,57,135 (Previous year Rs. 16,20,132.)

(e) (i) Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs.51,25,378 (Previous year Rs.51,25,378) raised by the Tax authorities have been disputed by the Company and appeals filed with the relevant authority. The Company has however deposited the demand amounts in full.

(ii) For the assessment years 2000-2001, 2002-2003 and 2003-2004 the Income-tax Appellate Tribunal has passed an Order in favour of the Company in respect of total demand of Rs. 1,22,00,886 for these assessment years. Against this demand the Company had deposited Rs. 1,13,26,632 with the tax authorities. The relief of Rs. 8,74,254 given by the Tribunal has been accounted for in these accounts. The tax authorities have however filed an appeal with the Hon. High Court, Bombay against the relief of Rs. 8,74,254.

(f) (i) Demand of Rs.13,50,000 raised by the customs authorities for goods imported has been disputed by the Company against which the full amount has been deposited under protest. (ii) Bond for Rs.1.20 crore executed with the Customs authorities for demand raised by the authorities which has been disputed and challenged by the Company. This bond is to remain in force till finalisation of the value by the Customs authorities of the goods imported by the Company.

(g) Demand of Rs. 24,29,427 (Previous year Rs. 19,98,055) raised by the New Maker Chambers IV Premises Co-operative Society Ltd, Mumbai for the difference in BMC tax from 01.04.2000 to 31.03.2010, which has been disputed by the Company.

2. Amounts if any due to Micro Enterprises, Small Enterprises and Medium Enterprises under Micro Enterprises, Small Enterprises and Medium Enterprises Development Act, 2006 could not be disclosed as such parties could not be identified from the records of the Company.

3. (a) Fixed Deposit Account with a Bank include Rs. Nil (Previous year Rs. 4,00,000) earmarked against repayment of public deposits.

(b) National Savings Certificate is held in the name of an employee of the company as under lien of sales tax authorities of Rajasthan.

4. Advances and amounts recoverable include Rs. 1,55,00,000 due as on 31 March 2010 (Previous year Rs. 2,19,79,078) from a third party in terms of Contract of Engagement with this party as a Consultant. This contract was terminated by mutual agreement with effect from 1 April 2007. In opinion of the management this amount is considered good for recovery.

5. Goodwill:

In accordance with the Accounting Standard 26 (Intangible Assets) Goodwill is being amortised over a period of ten years.

6. (a) Finance Lease :

The Company has taken on finance lease, cost of assets having an aggregate value of

7. Sales and Services are reported net of trade and turnover discount to dealers and commission on consignment sales.

8. Employee Benefits:

The following tables summarises the components of the net benefit expenses recognised in the Profit and Loss Account, the fund status and amount recognised in the Balance Sheet for the gratuity benefit plan persuant to Accounting Standard-15 (Revised 2005) on "Employee Benefits".

Details of transactions with Related Parties.

(A) Companies and Firms in which some directors of this company are interested as directors or partners with whom:

(i) There are transactions during the year:

(1) Proline India Limited,

(2) Integrix B V,

(3) M/s Big Time Exports.

(ii) There are no transactions during the year:

(1) Proline Exports Pvt. Ltd.,

(2) Proline International Ltd. (U.K.),

(3) Promark Fitness & Leisure Pvt. Ltd.,

(4) Crav Apparels Pvt. Ltd.,

(5) Rajesh Rajeev Investments Pvt. Ltd.,

(B) Shareholders/Directors and Key Management Personnels

(1) Mr. Rajesh Batra

(2) Mr. Rajiv Batra

(3) Mrs. Prathima Batra

(4) Mrs. Sujaya Batra

(5) Mrs. Jamna Batra

(6) Mrs. Raj Batra

(7) Ms. Divya Batra

(8) Mr. Rohan Batra

(9) Mr. N.R. Mahalingam

(10) Mr. Rajiv Wallia

(11) Mr. Nabankur Gupta

9. Segment Reporting:

As companys business falls under the single segment viz "Fitness and Sports goods", there is no additional disclosure to be provided under Accounting Standard-17 dealing with "Segment Reporting".

10. Previous years figures have been regrouped wherever necessary to conform to this years classifications.