Notes to Accounts of Hytone Texstyles Ltd.

Mar 31, 2014

1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:-

a The financial statements have been prepared to comply all material aspects with the mandatory accounting standards notified under Companies (Accounting Standards) Rules, 2006 and the relevant provisions of Companies Act, 1956.

b The Company follows mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

c The accounting policies applied by the Company are consistent with those used in the previous year.

d For Preparation and presentation of financial statements for tax purpose, erstwhile Schedule VI to the Companies Act, 1956 was used upto year ended 30th September, 2011. For the year ended 30th September, 2012 the revised schedule VI notified under the Companies Act, 1956 has become applicable to the Company and accordingly the financials for year ended September, 2012 have been prepared in accordance with the Revised Schedule VI. The previous year''s figures have been regrouped to conform to the current year classification.

2. Secured Long Term Borrowings a Vehicle Loan from Banks

Vehicle Loan from Bank is secured by way of exclusive first charge created by hypothecation on vehicle of Company.

* of the above, Vehicle Loan from Union Bank of India is taken @ 12% and 48 Monthly installment of Rs. 20,383/- and out of the same 11 Monthly installment is pending from the end of the period.

* of the above, Vehicle Loan from HDFC is taken @ 11.25% on 48 Monthly installment of Rs. 12,925/- and out of the same all 29 Monthly installment is pending from the end of the period.

* of the above, Vehicle Loan from Tata Capital Financial Services is taken is taken @ 11.25% on 48 Monthly installment of Rs. 12,690/- and out of the same all 37 Monthly installment is pending from the end of the period.

3 In view of positive net-worth, the BIFR Authority vide order no. MA No. / 123/BC/11 dated 10th March, 2011 has de-registered the Company from being recognised as a Sick Company. And so the financial statements are prepared on a going concern basis.

4 As the number of employees during the period is less than 50, provision of the liability for gratuity is made accordance with the Provision of the Payment of Gratuity Act, 1972 and no Actuarial Valuation report is taken from the Actuary valuer as provided in AS -15 Employees Benefits and so no details are required to be given as per AS -15.

5 The directors of the Company were disqualified u/s 274(1 )(g) of the Companies Act, 1956 for nonrepayment of debt to debenture holders, however during the period all the liabilities of the financial institutions and the banks have been repaid.

6 Related party disclosures under Accounting Standard 18 (AS 18) (as identified by the Management) :-

I) Following are the Enterprise/firms over which Key Management Personnel and their relatives have significant influence:

1 Abhay Enterprises

2 Abhishek Capital Pvt Ltd

3 Achal Holdings & Finance Pvt Ltd

4 Anant Synthetics Pvt Ltd

5 Hytone Holdings Pvt Ltd

II) Following are the Individuals having significant influence or are key management personnel or their relatives:

1. Amrut T. Shah

2. Praful K. Dedhia

28 Contingent Liabilities:

All contingent liabilities are adequately disclosed in the Notes on Accounts

SN Contingent Liabilities As at As at 31.03.2014 30.09.2012

a) Bank Guarantees NIL NIL

b) Claims against the Company not acknowledged as debts/disputed NIL NIL

c) Arrears of Dividend on 1% Redeemable Cumulative Preference Shares (Series I) (Dividend are in arrears since 2001) 1937466 1712466

d) Arrears of Dividend on 1% Redeemable Cumulative Preference

Shares (Series II) (Dividend are in arrears since 30th June 2010) 2278750 1198750

7 Balances of Debtors, Creditors and Loans & Advances are subject to confirmation, reconciliation and adjustments if any.

8 In the opinion of the Board, the value on realisation of loans and advances and Current Assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance sheet.

9 In the opinion of the Board, provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

10 CIF Value of Import NIL NIL

11 Expenditure in Foreign Exchange NIL NIL

12 Earnings in Foreign Exchange NIL NIL

13 Directors Remuneration:

14 "Sundry Creditors" in Note ‘8'' to the Accounts include:

a) There are no Micro and Small Enterprises to whom amount is payable and which is outstanding for more than 45 days as at the close of the accounting period.

b) This information is required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006.

15 Figures in brackets relate to the previous period.

16 Previous Periods figures have been reworked, re-grouped, re-arranged and reclassified wherever necessary.

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Sep 30, 2012

1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) The financial statements have been prepared to comply all material aspects with the mandatory accounting standards notified under Companies (Accounting Standards) Rules, 2006 and the relevant provisions of Companies Act, 1956:

b) The Company follows mercantile system of accounting and recognizes income and expenditure on an accrual. basis except those with significant uncertainties.

c) The accounting policies applied by the Company are consistent with those used in the previous year.

d) For Preparation and presentation of financial statements for tax purpose, erstwhile Schedule VI to the Companies Act, 1956 was used upto year ended 30th September, 2011. For the year ended 30th September, 2012 the revised schedule VI notified under the Companies Act, 1956 has become applicable to the Company and accordingly the financials for year ended September, 2012 have been prepared in accordance with the Revised Schedule VI. The previous year''s figures have been regrouped to conform to the current year classification.

2. In view of positive net-worth, the BIFR Authority vide order no. MA No. / 123/BC/11 dated 10th March, 2011 has de- registered the Company from being recognised as a Sick Company. And so the financial statements are prepared on a going concern basis.

3. As the number of employees during the year is less than 50, provision of the liability for gratuity is made accordance with the Provision of the Payment of Gratuity Act, 1972 and no Actuarial Valuation report is taken from the Actuary valuer as provided in AS -15 Employees Benefits and so no details are required to be given as per AS -15.

4. The directors of the Company were disqualified u/s 274(1 )(g) of the Companies Act, 1956 for non-repayment of debt to debenture holders, however during the period all the liabilities of the financial institutions and the banks have been repaid.

5. Related party disclosures under Accounting Standard 18 (AS 18) (as identified by the Management): -

I) Following are the Enterprise/firms over which Key Management Personnel and their relatives have significant influence:

1. Abhishek Synthetics Private Limited

2. UKG & Associated

II) Following are the Individuals having significant influence or are key management personnel:

1. Amrut T. Shah

2. Praful K. Dedliia

6. Contingent Liabilities:

All contingent liabilities are adequately disclosed in the Notes on Accounts.

Contingent Liabilities As at As at 30.9.2012 30.9.2011

a) Bank Guarantees 1,22,250 1,22,250

b) Claims against the Company not acknowledged as debts/disputed NIL NIL

c) Arrears of Dividend on 1 % Redeemable Cumulative Preference Shares 17,12,466 16,37,466 (Series I) (Dividend are in arrears since 2001)

d) Arrears of Dividend on 1% Redesmable Cumulative Preference Shares (Series II) (Dividend arii in arrears since 30th June 2010) 11,98,750 5,13,750

7 Balances of Debtors, Creditors and Loans & Advances are subject to confirmation, reconciliation and adjustments if any.

8 In the opinion of the Board, the value on realisation of loans and advances and Current Assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance sheet.

9 In the opinion of the Board, provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

10 "Sundry Creditors" in Note ''8'' to the Accounts include:

a) There are no Micro and Small Enterprises to whom amount is payable and which is outstanding for more than 45 days as at the close of the accounting period.

b) This information is required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006.

11 Figures in brackets relate to the previous period.

12 Previous Periods figures have been reworked, re-grouped, re-arranged and reclassified wherever necessary.