Notes to Accounts of Dhar Textile Mills Ltd.

Mar 31, 2014

Right, Preferences and Restriction attached to shares

Equity shares

The company has only one class of Equity having a par value Rs. 10.00 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the Equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Preference shares

The company has only one class of Preference having a par value Rs. 10.00 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the Preference shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

2. Contingent Liabilities

(Rs. in Lacs)

S. Particulars 2014 2013 No.

a. Guarantees issued by bankers 2.00 2.00

b. Lease rent payable over the unexpired 17.55 17.55 portion of the lease agreements on leased Plant & Machinery

c. Excise Duty in respect of which the 18.28 18.28 company is in appeal

d. Cumulative Preference Dividend (to 555.5 555.5 become payable when the dividend would be declared)

e. Damerages for delayed payment of 9.72 9.72 Provident Fund in respect of which company is in appeal

3. Information related to Related Parties has not been produced before us.

4. Sales and Purchases include inter-division transfer of yarn and waste material of Rs is Nil

5. As per Accounting Standard (AS) 5 "Net profit or loss for the period, prior period items and changes in accounting policies" Prior period expenses of Rs. NIL

6. Accounting Standard (AS) 17 "Segment Reporting" is not applicable as the company operates in a single segment Textiles.

7. As per Accounting Standard (AS) 22 "Accounting for Taxes on Income". The deferred tax assets have, however not been recognized and carried forward in the absence of a reasonable or virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

8. In view of insufficient information from the suppliers regarding their status as SSI unit, amount overdue to them as on 31.03.14 cannot be ascertained.

9. The Company has not transferred the amount of Unclaimed Dividend to Investor Education and Protection Fund established under sub-section (1) of section 205C of the Companies Act, 1956 and the same is shown under the head of current liabilities.

10. Balances of Debtors, Unsecured Loans, Creditors and Loans & Advances are as per books of accounts and subject to confirmation.

11. The financial statements of the company are prepared on the basis of Going concern

(Yarn Division) and its textile (Fabric) division is closed.

12. No provision for Income tax has been made due to accumulated business losses and unabsorbed depreciation as per the Income Tax Act 1961.

13. The company is a sick company within the meaning of Sick Industrial Companies (special Provision) Act, 1985, as its accumulated losses exceeded fifty percent of its Net Worth at the end of the financial year. The Company has incurred cash losses during the current year as also during the immediately preceding financial year. Reference file under section 15(1) of sick Industrial Companies (special Provision) Act, 1985 was registered as case no. 353/2004 vide letter No. 3 (T-22)/BC/2004 dated 30/11/2004 issued by Registrar, Board of Industrial and Financial Reconstruction, New Delhi. The bench has declared that the Company is a sick Industrial Company in terms of 3 (1) (O) of the Act w.e.f. 2.05.2006.

14. Figures have been rounded to the nearest rupee.

15. Previous year figures have been regrouped, reworked, rearranged and reclassified wherever necessary.

16. Schedules "A" to "O" are under the same signatures as Balance Sheet.

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Mar 31, 2013

1. Share Capital

The 14.5% Cumulative Redeemable Preference Shares of Rs. 350 Lacs redeemed at par in 3 annual installments commencing from February 1, 2005, installment failing due on February 2005 is in arrears. The subscribers reserve the right to convert CRPS assistance into rupee term loan after one event of default with respect to payment of dividend/ redemption and/or into Equity shares at par after two consecutive defaults with respect to payment of dividend/redemption. Payment of dividends on these shares is in arrears since 01.04.1999.

2. Secured Loans

a) The company''s debts from banks/IDBI had been restructured involving carving out of working capital term loans (WCTLs) from the existing working capital limits, reduction in interest rates, waiver of liquidated damages/ penal interest etc., funding of interest and reschedulement of term loans under the Corporate debt restructuring (CDR) mechanism of the Reserve bank of India. However it could not be implemented.

b) Foreign currency Loan and Rupee Term Loans (other than Working capital term loans interest term loan) from State Bank of India* and IDBI are secured by first charge ranking pari passu by way of mortgage/hypothecation of the fixed assets (excluding assets acquired under hire purchase agreements) of the Company at Pithampur and pologround, Indore. Working capital term loans and funded interest term loans from State Bank of India*, Canara Bank and State Bank of Saurashtra* and funded interest term loan from Industrial Development Bank of India are secured by pari passu charge on the assets of the Company.

c) Working Capital Limits from State Bank of India*, Canara Bank and State Bank of Saurashtra* are secured by second charge ranking pari passu by way of Mortgage/ Hypothecation of the fixed assets of the Company at Pithampur and pologround, Indore.

*Standard Chartered Bank has takeover account of State Bank of India, State Bank of Indore and State Bank of Saurashtra and Kotak Mahindra Bank Ltd. has takeover account of IDBI.

d) All the above loans are further secured by way of personal guarantees of Managing Director, one director and others.

e) Sales tax deferred is secured by first available charge by way of hypothecation of the fixed assets of the Company.

The investments being long term investments are valued at cost of acquisition. Accordingly, no provision is made for temporary diminution in value of such investments to the tune of Rs. 4, 69,187/-. There is no market value of these investments and as per Accounting Standard (AS) 13 "Accounting for Investments" it should be shown at market value.

3. Information related to Related Parties has not been produced before us.

4. Sales and Purchases include inter-division transfer of yarn and waste material of Rs is Nil

5. Contingent Liabilities

(Rs. in Lacs)

Particulars 2013 2012

a. Guarantees issued by bankers 2.00 2.00

b. Lease rent payable over the 17.55 17.55 unexpired portion of the lease agreements on leased Plant & Machinery

c. Excise Duty in respect of which 18.28 18/28 the company is in appeal

d. Cumulative Preference Dividend 555.5 555/5 (to become payable when the dividend would be declared

e. Damerages for delayed payment of 9.72 9/72 Provident Fund in respect of which company is in appeal

6. As per Accounting Standard (AS) 5 "Net profit or loss for the prior period items and changes in accounting policies" Prior period expenses of Rs. NIL

7. Accounting Standard (AS) 17 "Segment Reporting" is not applicable as the company operates in a single segment Textiles.

8. As per Accounting Standard (AS) 22 "Accounting for Taxes on Income". The deferred tax assets have, however not been recognized and carried forward in the absence of a reasonable or virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

9.In view of insufficient information from the suppliers regarding their status as Subunit, amount overdue to them as on 31.03.13 cannot be ascertained.

10. The Company has not transferred the amount of Unclaimed Dividend to Investor Education and Protection Fund established under sub-section (1) of section 205C of the Companies Act, 1956 and the same is shown under the head of current liabilities.

11. Balances of Debtors, Unsecured Loans, Creditors and Loans & Advances are as per books of accounts and subject to confirmation.

12. The financial statements of the company are prepared on the basis of Going concern (Yarn Division) and its textile (Fabric) division is closed.

13.Interest on secured loan from banks and financial institution is provided on suomoto estimated basis for Rs. 31,22,36,669/- (Previous year Rs. 27,63,19,897/-).

14.No provision for Income tax has been made due to accumulated business losses and unabsorbed depreciation as per the Income Tax Act 1961.

15.Figures have been rounded to the nearest rupee.

16.Previous year figures have been regrouped, reworked, rearranged and reclassified wherever necessary.

17.Schedules "A" to "O" are under the same signatures as Balance Sheet.

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Mar 31, 2012

Right, Preferences and Restriction attached to shares

Equity shares

The company has only one class of Equity having a par value Rs. 10.00 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the Equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Preference shares

The company has only one class of Preference having a par value Rs. 10.00 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the Preference shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

1. Share Capital

The 14.5% Cumulative Redeemable Preference Shares of Rs. 350 Lacs redeemed at par in 3 annual installments commencing from February 1, 2005, installment failing due on February 2005 is in arrear. The subscribers reserve the right to convert CRPS assistance into rupee term loan after one event of default with respect to payment of dividend/ redemption and/or into Equity shares at par after two consecutive defaults with respect to payment of dividend/redemption. Payment of dividends on these shares is in arrears since 01.04.1999.

2. Secured Loans

a) The company's debts from banks/IDBI had been restructured involving carving out of working capital term loans (WCTLs) from the existing working capital limits, reduction in interest rates, waiver of liquidated damages/ penal interest etc., funding of interest and reschedulement of term loans under the Corporate debt restructuring (CDR) mechanism of the Reserve bank of India. However it could not be implemented.

b) Foreign currency Loan and Rupee Term Loans (other than Working capital term loans interest term loan) from State Bank of India*, IDBI and State Bank of Indore* are secured by first charge ranking pari passu by way of mortgage/hypothecation of the fixed assets (excluding assets acquired under hire purchase agreements) of the Company at Pithampur and pologround, Indore. Working capital term loans and funded interest term loans from State Bank of India*, State Bank of Indore*, Canara Bank and State Bank of Saurashtra* and funded interest term loan from Industrial Development Bank of India are secured by pari passu charge on the assets of the Company.

c) Working Capital Limits from State Bank of India*, State Bank of Indore*, Canara Bank and State Bank of Saurashtra* are secured by second charge ranking pari passu by way of Mortgage/ Hypothecation of the fixed assets of the Company at Pithampur and pologround, Indore.

*Standard Chartered Bank has takeover account of State Bank of India, State Bank of Indore and State Bank of Saurashtra and Kotak Mahindra Bank Ltd. has takeover account of IDBI.

d) All the above loans are further secured by way of personal guarantees of Managing Director, one director and others.

e) Sales tax deferred is secured by first available charge by way of hypothecation of the fixed assets of the Company.

3. Contingent Liabilities

(Rs. in Lacs) S.No. Particulars 2012 2011

a. Guarantees issued by bankers 2.00 2.00

b. Lease rent payable over the 17.55 17.55 unexpired portion of the lease agreements on leased Plant & Machinery

c. Income Tax in respect of which the 7.40 7.40 company is in appeal

d. Excise Duty in respect of which 18.28 18.28 the company is in appeal

e. Cumulative Preference Dividend 555.5 555.5 (to become payable when the dividend would be declared)

f. Damerages for delayed payment of 9.72 9.72 Provident Fund in respect of which company is in appeal



*The investments being long term investments are valued at cost of acquisition. Accordingly, no provision is made for temporary diminution in value of such investments to the tune of Rs. 469187. There is no market value of these investments and as per Accounting Standard (AS) 13 "Accounting for Investments" it should be shown at market value.

4. Information related to Related Parties has not been produced before us.

5. Sales and Purchases include inter –division transfer of yarn and waste material of Rs is Nil

6. As per Accounting Standard (AS) 5 "Net profit or loss for the prior period items and changes in accounting policies" Prior period expenses of Rs. NIL

7. Accounting Standard (AS) 17 "Segment Reporting" is not applicable as the company operates in a single segment Textiles

8. As per Accounting Standard (AS) 22 "Accounting for Taxes on Income". The deferred tax assets have, however not been recognized and carried forward in the absence of a reasonable or virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

9. In view of insufficient information from the suppliers regarding their status as SSI unit, amount overdue to them as on 31.03.12 cannot be ascertained.

10. The Company has not transferred the amount of Unclaimed Dividend to Investor Education and Protection Fund established under sub-section (1) of section 205C of the Companies Act, 1956 and the same is shown under the head of current liabilities.

11. Balances of Bank, Debtors, Creditors and Loans & Advances are as per books of accounts and subject to confirmation.

12. The financial statements of the company are prepared on the basis of Going concern (Yarn Division) and its textile (Fabric) division is closed.

13. Interest on secured loan from banks and financial institution is provided on suomoto estimated basis for Rs.27,63,19,897/-. (Previous year Rs. 24,44,66,965).

14. No provision for Income tax has been made due to accumulated business losses and unabsorbed depreciation as per the Income Tax Act 1961.

15. Figures have been rounded to the nearest rupee.

16. Previous year figures have been regrouped, reworked, rearranged and reclassified wherever necessary.

17. Schedules "A" to "O" are under the same signatures as Balance Sheet.

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Mar 31, 2011

1. Share Capital

The 14.5% Cumulative Redeemable Preference Shares of Rs.350 Lacs redeemed at par in 3 annual installments commencing from February 1, 2005, installment failing due on February 2005 is in arrear. The subscribers reserve the right to convert CRPS assistance into rupee term loan after one event of default with respect to payment of dividend/ redemption and/or into Equity shares at par after two consecutive defaults with respect to payment of dividend/redemption. Payment of dividends on these shares is in arrears since 01.04.1999.

2. Secured Loans

a) The company's debts from banks/IDBI had been restructured involving carving out of working capital term loans (WCTLs) from the existing working capital limits, reduction in interest rates, waiver of liquidated damages/ penal interest etc., funding of interest and reschedulement of term loans under the Corporate debt restructuring (CDR) mechanism of the Reserve bank of India. However it could not be implemented.

b) Foreign currency Loan and Rupee Term Loans (other than Working capital term loans interest term loan) from State Bank of India*, IDBI and State Bank ofIndore* are secured by first charge ranking pari passu by way of mortgage/hypothecation of the fixed assets (excluding assets acquired under hire purchase agreements) of the Company at Pithampur and pologround, Indore. Working capital term loans and funded interest term loans from State Bank of India*, State Bank of Indore*, Canara Bank and State Bank of Saurashtra* and funded interest term loan from Industrial Development Bank of India are secured by pari passu charge on the assets of the Company.

c) Working Capital Limits from State Bank of India*, State Bank of Indore*, Canara Bank and State Bank of Saurashtra* are secured by second charge ranking pari passu by way of Mortgage/ Hypothecation of the fixed assets of the Company at Pithampur and pologround, Indore.

Standard Chartered Bank has takeover account of State Bank of India, State Bank of Indore and State Bank of Saurashtra and Kotak Mahindra Bank Ltd. has takeover account of IDBI.

d) All the above loans are further secured by way of personal guarantees of Managing Director, one director and others.

e) Sales tax deferred is secured by first available charge by way of hypothecation of the fixed assets of the Company.

3. Contingent Liabilities

(Rs. in Lacs)

S.No. Particulars This Previous Year Year

a. Guarantees issued by bankers 2.00 2.00

b. Lease rent payable over the unexpired 17.55 17.55 portion of the lease agreements on leased Plant & Machinery is in appeal

d. Excise Duty in respect of which the 18.28 18.28 company is in appeal

e. Cumulative Preference Dividend (to become 403.00 403.00 payable when the dividend would be declared)

f. Damerages for delayed payment of 9.72 9.72 Provident Fund in respect of which company is in appeal

The investments being long term investments are valued at cost of acquisition. Accordingly, no provision is made for temporary diminution in value of such investments to the tune of Rs. 469187. There is no market value of these investments and as per Accounting Standard (AS) 13 "Accounting for Investments" it should be shown at market value.

4. Information related to Related Parties has not been produced before us.

5. Sales and Purchases include inter -division transfer of yarn and waste material of Rs. is Nil

6. As per Accounting Standard (AS) 5 "Net profit or loss for the prior period items and changes in accounting policies" Prior period expenses of Rs. NIL

7. Accounting Standard (AS) 17 "Segment Reporting" is not applicable as the company operates in a single segment Textiles

8. As per Accounting Standard (AS) 22 "Accounting for Taxes on Income". The deferred tax assets have, however not been recognized and carried forward in the absence of a reasonable or virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

9. In view of insufficient information from the suppliers regarding their status as SSI unit, amount overdue to them as on 31.03.11 cannot be ascertained.

10. Balances of Bank, Debtors, Creditors and Loans & Advances are as per books of accounts and subject to confirmation.

11. The financial statements of the company are prepared on the basis of Going concern (Yarn Division) and its textile division is closed.

12. Interest on secured loan from banks and financial institution is provided on sum amount estimated basis for Rs.24,44,66,965. (Previous year Rs.21,63,71,672).

13. No provision for Income tax has been made due to accumulated business losses and unabsorbed depreciation as per the Income Tax Act 1961.

14. Figures have been rounded to the nearest rupee.

15. Previous year figures have been regrouped, reworked, rearranged and reclassified wherever necessary.

16. Schedules "A" to "O" are under the same signatures as Balance Sheet.

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Mar 31, 2010

1. Share Capital

The 14.5% Cumulative Redeemable Preference Shares of Rs. 350 Lacs redeemed at par in 3 annual installments commencing from February 1st, 2005. installment failing due on February 2005 is in arrear. The subscribers reserve the right to convert CRPS assistance into rupee term loan after one event of default with repect to payment of dividend/ redemption and/or into Equity shares at par after two consecutive defaults with respect to payment of dividend/redemption. Payment of dividends on these shares is in arrears since 01.04.1499.

2. Secured Loans

a) The company's debts from banks/lDBI had been restructured involving caring out of working capital term loan(WCTLs) from the existing working capital limits, reduction in interest rates, waiver of Liquidated damages/ penal interest etc. funding of interest and reschedulement of term loans under the Corporate debt restructuring (CDR) mechanism of the Reserve bank of India, However it could not be implemented.

b) Foreign currency Loan and Rupee Term Loans (other than Working capital term loan interest term loan) from State Bank of India*, IDBI and State Bank of Indore* are secured by first charge ranking part persue by way mortgage/hypothecation of the fixed assets (excluding assets acquired under hire purchase agreements) of the Company at Pithampur and pologround, Indore. Working capital term loans and funded interest term loans from State Bank of India*,State Bank of Indore, Canara Bank and State Bank of Saurastra*, and funded interest term loan from Industrial Development Bank of India are secured by pari passu charge on the assets of the Company.

c) Working Capital Limits from State Bank of India*, State Bank of lndore, Canara Bank and State Bank of Saurastra* are secured by second charge ranking pari passu by way of "Mortage/ Hypothecation of the fixed assets of the Company at Pithampur and pologround Indore.

*Standard Chartered Bank has takeover account of State Bank of India, State Bank of Indore and State Bank of Saurashtra and Kotak Mahindra Bank Ltd, has takenover account of IDBI.

d) All the above loans are further secured by way of personal Guarantees of Managing Director. one director and others.

e) Sales Tax deferred is secured by first available charge by way of hypothecation of the fixed assets of the Company.

3. Contingent Liabilities

(Rs.in Lacs)

SL. Particulars This Year Previous Year No a. Guarantees issued by bankers 2.00 2.00

b. Lease rent payable over the unexpired portion of the lease Agreements on on leased plant & 17.55 17.55 Machinery

c. Income Tax in respect of the company is in appel 7.40 7.40

d. Excise Duty in respect of which the company is appeal 18.28 18.28

e. Cumulative preference Divide -nd (to become payable when 403.00 403.00 the dividend would be declar -ed)

f. Damerages for delayed payment of Provident Fund in respect 9.72 9.72 of which company is in appeal



4. Information related to Related Parties has not been produced before us.

5. Sales and Purchases include inner-division transfer of yarn and waste material of Rs is Nil.

6. As per Accounting Standard (AS) 5 "Net profit or loss for the prior period items and changes in accounting policies" Prior period expenses of Rs. NIL

7. Accounting Standard (AS) 17 "Segment Reporting" is not applicable as the company operates in a single segment Textiles

8. As per Accounting Standard (AS) 22 " Accounting for Taxes on Income". The deferred tax assects have been recognized and carried forward in the absence of a reasonable or virtual certainty that sufficient future taxable income will be available against which such deferred tax assects can be realized.

9. In view of insufficient information from the suppliers regarding their status as SSI unit, amount overdue to them as on 31.03.10 cannot be ascertained.

10. Balance of Bank, Debtors, Creditors and loans & Advances are as per books of accounts and subject to confirmation.

11. The financial statements of the company are prepared on the basis of Going concern (Yarn Division) and its textile division is closed.

12.Interest on secured loan from banks and financial institution is provided on suomolo estimated basis for Rs, 21,63,71,672. (Previous year Rs. 18,95,16,752).

13. No provision for Income tax has been made due to accumulated business losses and unabsorbed depreciation as per the Income Tax Act 1961. 14.Figures have been rounded to the nearest rupee.

15. Previous year figures have been regrouped, reworked, rearranged and reclassilied wherever necessary.