Notes to Accounts of E-Land Apparel Ltd.

Mar 31, 2025

xv. Provisions and Contingent Liabilities

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an
outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. The amount
recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the
reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows
(when the effect of the time value of money is Material). These are reviewed at each balance sheet date and adjusted to
reflect the current best estimates.

Contingent liabilities are disclosed in the Notes. Contingent assets are not recognised in the financial statements.

xvi. Investment Property:

Investment property is a property held to earn rentals and/or for capital appreciation. Investment property is measured
initially at cost, including transaction costs. Subsequent to initial recognition, investment property is measured in accordance
with Ind AS 16 requirements for cost model. An investment property is derecognised upon disposal or when the investment
property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or
loss arising thereon (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
included in profit or loss in the period in which the property is derecognised.

xvii. Earnings per share

Basic earnings per share are computed by dividing of profit / loss attributable to equity shareholders of the company by the
weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares
considered for deriving basic EPS and also weighted average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning
of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period
presented.

xviii. Operating Cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their
realisation in cash or cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of
classification of its assets and liabilities as current and non-current.

2.3 Approval of financial statements

These financial statements were approved for issuance by the Board of Directors of the Company on May 29, 2025.

3(i) Use of estimates and judgements

In the application of the Company''s accounting policies, which are described in note 2, the directors of the Company are
required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of
the reporting period that may have a Material risk of causing a Material adjustment to the carrying amounts of assets and
liabilities within the next financial year:

Impairment of investments, Property Plant and Equipment and Intangible Assets

The Company reviews its carrying value of investments, Property, Plant and Equipment and Intangible Assets annually, or
more frequently when there is an indication for impairment. If the recoverable amount is less than its carrying amount, the
impairment loss is accounted for.

Useful lives of property, plant and equipment

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the
effect of any changes in estimate accounted for on a prospective basis.

3(ii) 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, 2025, MCA has not notified
any new standards or amendments to the existing standards applicable to the Company.

(ii) Details of rights, preferences and restrictions attached to each class of shares:

The company has only one class of share capital namely Equity Shares having par value of ?10 per share. Each holder of Equity Share is entitled to
one vote per share. The company declares and pays dividends in Indian rupees. In the event of liquidation of the company, the holders of Equity
Shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion
to the number of Equity Shares held by the shareholders.

The company has neither issued bonus shares not has bought back any shares during last 5 years.

a) No ordinary shares have been reserved for issue under options and contracts/ commitments for the sale of shares/ disinvestment as at the Balance
Sheet date.

b) No securities convertible into Equity/ Preference shares have been issued by the Company during the year.

c) No calls are unpaid by any Director or Officer of the Company during the year.

35. Segment reporting
Disclosure on Operating segments

The Company is engaged in the business of manufacturing and sale of garments. The Chief Operating Decision
Maker reviews the operations of the Company as a unit of manufacturing and sale of garments, which is
considered to be the only reportable segment by the Management.

*Non-current assets other than financial instruments, deferred tax assets, post-employment benefit assets
C. Information about major Customers

Revenue from three customers of Company''s Garment Segment represent Rs. 21,144.11/- (PY Rs.15,944.29/-) of
Company''s total revenue.

36. Employee benefit plans
Defined contribution plans

The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees.
Under the said schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognises the
amount paid / payable to such funds in the Statement of Profit and Loss. The contributions made by the Company towards these schemes are as follows:

Defined benefit plans

The Company offers gratuity, a defined employee benefit scheme to its employees. The said plan typically exposes the Company to actuarial risks such as:
interest rate risk, longevity risk and salary risk

Interest risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to
increase.

Longevity risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these
decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is
important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as
compared to a long service employee.

Salary risk:

Higher than expected increases in salary will increase the defined benefit obligation
No other post-retirement benefits are provided to these employees.

The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit
method.

Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1
to Level 3, as described below:

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices
(unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other
than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices).

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using
inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based
on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available
market data.

Financial risk management objectives

The Company''s risk management is carried out by Treasury department under policies laid down by the management. The Company''s activities expose it
to market risk (which includes currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. Treasury department monitors the risk
exposures on a periodical basis and reports to the Board of directors on the risks that it monitors and policies implemented to mitigate risk exposures.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Company''s foreign currency denominated monetary liabilities (Trade payables) and Assets (Trade receivables) at the end of
the reporting period are as follows.

Foreign currency sensitivity analysis

The Company is mainly exposed to USD on account of outstanding trade receivables, trade payables, and borrowings.

The following table details the Company''s sensitivity to a 5% increase and decrease in INR against the USD. 5% is the sensitivity rate used when
reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in
foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at
the period end for a 5% change in foreign currency rates. The amounts given below are the impact on loss and equity where the INR weakens 5%
against USD. Positive number indicates decrease in loss / increase in equity whereas negative number indicates increase in loss / decrease in equity. For
a 5% strengthening of the INR against USD, there would be equivalent amount of loss as mentioned in the below table.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has
adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Ongoing credit
evaluation is performed on the financial condition of accounts receivable. The Company monitors its trade receivables on case to case basis, depending

on the aoeino of days the receivables are due Credit risk also arises from cash and cash equivalents financial instruments and deposits with banks

Liquidity risk

Liquidity risk is the risk that the company could be unable to meet its short term financial demands.

Ultimate responsibility for liquidity risk management rests with the management, which has established an appropriate liquidity risk management
framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The
Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring
forecast and actual short term and long term cash flows, and by matching the maturity profiles of financial assets and liabilities.

Liquidity analysis for non derivative financial liabilities-

The following table details the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The
table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to
pay. The contractual maturity is based on the earliest date on which the Company would be required to pay.

(i) Market risk - 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 debt obligations with floating interest rates. The
Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

Interest rate sensitivity

Interest rate sensitivity The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and
borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings,
as follows:

(ii) Market risk- Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The
Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating and financing activities. The
Company’s exposure to foreign currency changes from investing activities is not material.

(i) The above amount is based on the notice of demand / Assessment Orders by the tax authorities and the Company is contesting these claims.
Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company’s rights for
future appeals before the judiciary.

42 The Company has earned profit of Rs. 1366.39 lakh for the Year ended March 31, 2025 (Year ended March 31, 2024 - Rs. 3982.51 lakhs). For the
Year ended March, 2025, the application of Ind AS 115 has resulted in the Finance costs being higher by Rs. 485.61 lakhs (Year ending March ''24 -
Rs. 4,850.85 lakhs) and profit before tax being lower by a similar amount. Considering that fact and EBIT, Company''s operation are improving in
comparison to past year''s. In-Spite of accumulated losses exceed its paid up capital and other equity as on March 31, 2025, the company and its
holding company has a positive outlook for the garment industry. The Holding company has confirmed financial support to the Company to
continue as a going concern. The Company is therefore being viewed as a going concern and the financial results have been prepared under the
going concern assumption.

46 Audit trail

The Company uses an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the
same has operated throughout the year for all relevant transactions recorded in the accounting software. Further, no instance of audit trail feature being
tampered with was noted in respect of the accounting software.Additionally, the audit trail has been preserved by the company as per the statutory
requirements for record retention.

47 Subsequent Events

Rescheduling of ECB Loan Repayment

Subsequent to the reporting date, the Company has successfully renegotiated the repayment terms of its External Commercial Borrowing (ECB)
facility aggregating to Rs.523.70 lakhs, which was originally scheduled for repayment on 6th April 2025. Pursuant to the revised terms, the repayment
due date has been extended to 8th April 2033, as mutually agreed with the lender.

This represents a non-adjusting event as defined under Ind AS 10 - Events after the Reporting Period, since the modification of terms occurred after
the balance sheet date and does not relate to conditions that existed as at the reporting date. Accordingly, no adjustments have been made to the
financial statements for the year ended 31st March 2025. This disclosure is made to provide users of the financial statements with relevant information
regarding events that may impact the Company’s future liquidity and financial commitments.

48 Other Explainatory Notes

i. No instances during the financial year 2024-25 indicate applicability of provisions of section 230 to 237 of the Companies Act, 2013.

ii No instance of any transactions not being recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax
assessments under the Income Tax Act, 1961 have been found.

iii The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in
favour of the lessee) are held in the name of the company.

iv The company has not granted any loans or advances to promoters, directors, KMPs and other related parties, either severally or jointly with any other
person.

v The provisions of Corporate Social Responsibility (CSR) under section 135 of the Companies Act, 2013 do not apply to the company as neither the net
worth, turnover nor the net profit exceed the threshold limit prescribed under the said section.

vi The company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

vii The comparative figures of previous year have been rearranged / reclassified wherever necessary, to correspond with current year presentation.

viii No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act,
1988 (45 of 1988) and rules made thereunder.

ix The company has not been declared a wilful defaulter by any bank or financial Institution or other lender.

x The company does not have any transactions with the companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies

Act, 1956.

xi There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

^xii No amount has been received from or paid to any person or entity for investing in other companies during the financial year.

xiii Provisions under clause (87) of Section 2 of the Companies Act, 2013 read with Companies (Restriction on number of layers) Rules, 2017 are not
applicable to the company.

As per our report of even date attached

For Singhi & Co . For and on behalf of the Board of Directors

Chartered Accountants E-Land Apparel Limited

FRN- 302049E

Chaitanya Komanduri K Dong Ju Kim ^{Guydeuk Yeon Heegu Shin} Anup Vishwakarma

Partner Managing Director Independent Director Chief Financial officer Company Secretary

Membership No. 228661 DIN: 10747987 DIN: 10551356 DIN: 10747987 Mem No. A46283

Place: Bangalore Place: Bangalore ^{Place: Bangalore Place: Bangalore} Place: Bangalore

Date: 29/05/2025 Date: 29/05/2025 Date: 29/05/2025 Date: 29/05/2025 Date: 29/05/2025

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Mar 31, 2024

xv. Provisions and Contingent Liabilities

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed in the Notes. Contingent assets are not recognised in the financial statements.

xvi. Investment Property:

Investment property is a property held to earn rentals and/or for capital appreciation. Investment property is measured initially at cost, including transaction costs. Subsequent to initial recognition, investment property is measured in accordance with Ind AS 16 requirements for cost model. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising thereon (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognised.

xvii. Earnings per share

Basic earnings per share are computed by dividing of profit / loss attributable to equity shareholders of the company by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic EPS and also weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

xviii. Operating Cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of classification of its assets and liabilities as current and non-current.

2.3 Approval of financial statements

These financial statements were approved for issuance by the Board of Directors of the Company on May 30, 2024.

2.4 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.

3 Use of estimates and judgements

In the application of the Company''s accounting policies, which are described in note 2, the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

Impairment of investments, Property Plant and Equipment and Intangible Assets

The Company reviews its carrying value of investments, Property, Plant and Equipment and Intangible Assets annually, or more frequently when there is an indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.

Useful lives of property, plant and equipment

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

30. Employee benefit plans Defined contribution plans

The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the said schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognises the amount paid / payable to such funds in the Statement of Profit and Loss. The contributions made by the Company towards these schemes are as follows:

Defined benefit plans

The Company offers gratuity, a defined employee benefit scheme to its employees. The said plan typically exposes the Company to actuarial risks such as: interest rate risk, longevity risk and salary risk

Interest risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Longevity risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

Salary risk:

Higher than expected increases in salary will increase the defined benefit obligation No other post-retirement benefits are provided to these employees.

The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

Financial risk management objectives

The Company''s risk management is carried out by Treasury department under policies laid down by the management. The Company''s activities expose it to market risk (which includes currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. Treasury department monitors the risk exposures on a periodical basis and reports to the Board of directors on the risks that it monitors and policies implemented to mitigate risk exposures.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Company''s foreign currency denominated monetary liabilities (Trade payables) and Assets (Trade receivables) at the end of the reporting period are as follows.

Foreign currency sensitivity analysis

The Company is mainly exposed to USD on account of outstanding trade receivables, trade payables, and borrowings.

The following table details the Company''s sensitivity to a 5% increase and decrease in INR against the USD. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. The amounts given below are the impact on loss and equity where the INR weakens 5% against USD. Positive number indicates decrease in loss / increase in equity whereas negative number indicates increase in loss / decrease in equity. For a 5% strengthening of the INR against USD, there would be equivalent amount of loss as mentioned in the below table.

E-LAND APPAREL LIMITED

Notes to financial statements for the Year ended 31st March 2024 Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Company monitors its trade receivables on case to case basis, depending on the ageing of days the receivables are due. Credit risk also arises from cash and cash equivalents, financial instruments and deposits with banks.

Liquidity risk

Liquidity risk is the risk that the company could be unable to meet its short term financial demands.

Ultimate responsibility for liquidity risk management rests with the management, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual short term and long term cash flows, and by matching the maturity profiles of financial assets and liabilities.

Liquidity analysis for non derivative financial liabilities-

The following table details the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to pay. The contractual maturity is based on the earliest date on which the Company would be required to pay.

The Company has incurred loss of Rs. 3982.51 lakhs for the Year ended March 31, 2024 (Year ended March 31, 2023 - Rs.

3986.16lakhs). For the Year ended March, 2024, the application of Ind AS 115 has resulted in the Finance costs being higher by Rs.

4850.85 lakhs (Year ending March ''23 - Rs. 4751.11 lakhs) and profit before tax being lower by a similar amount. Considering that 36 fact and EBIT, Company''s operation are improving in comparison to past year''s . In-Spite of accumulated losses exceed its paid up capital and other equity as on March 31, 2024, the company and its holding company has a positive outlook for the garment industry. The Holding company has confirmed financial support to the Company to continue as a going concern. The Company is therefore being viewed as a going concern and the financial results have been prepared under the going concern assumption.

In view of the accumulated losses and in accordance with Ind AS 12 - "Income Taxes", the Management believes that there is no reasonable certainty supported by convincing evidence for recognising deferred tax asset on carry forward losses.

The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the company.

The Company has not revalued its Property, Plant and Equipment (including Right of use assets) or intangible assets during the year

³⁹ ended March 31, 2024.

40 The company has not granted any loans or advances to promoters, directors, KMPs and other related parties, either severally or jointly with any other person.

.AND APPAREL LIMITED ites to financial statements

No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

42 The Company does not have any borrowings from banks or financial institutions on the basis of security of current assets.

43 The company has not been declared a wilful defaulter by any bank or financial Institution or other lender.

44 The company does not have any transactions with the companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956.

45 There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

46 Provisions under clause (87) of Section 2 of the Companies Act, 2013 read with Companies (Restriction on number of layers) Rules, 2017 are not applicable to the company.

48 No instances during the financial year 2023-24 indicate applicability of provisions of section 230 to 237 of the Companies Act, 2013.

No instance of any transactions not being recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,

49

1961 have been found.

The provisions of Corporate Social Responsibility (CSR) under section 135 of the Companies Act, 2013 do not apply to the company as neither the net worth, turnover nor the net profit exceed the threshold limit prescribed under the said section.

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

51

(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

The Company uses an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all

52

relevant transactions recorded in the accounting software. Further, no instance of audit trail feature being tampered with was noted in respect of the accounting software.

53 The company has not traded or invested in Crypto Currency or Virtual Currency during the financial year

54 The comparative figures of previous year have been rearranged / reclassified wherever necessary, to correspond with current year presentation.

For Singhi & Co For and on behalf of the Board of Directors

Chartered Accountants E-Land Apparel Limited

Firm Registration No. 302049E

Chaitanya Komanduri K Dong Ju Kim Guydeuk Yeon Shin Hee Gu Anup Vishwakarma

Partner Managing Director Independent Director Chief Financial Officer Company Secretary

Membership No. 228661 DIN: 08060629 DIN: 10551356 Membership No.A46283

Place: Bangalore Place: Bangalore Place: Bangalore Place: Bangalore Place: Bangalore

Date: May 30, 2024 Date: 30-05-2024 Date: 30-05-2024 Date: 30-05-2024 Date: 30-05-2024

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Mar 31, 2018

Notes to financial statements

1 CORPORATE INFORMATION

E-land Apparel Limited (“the Company”) is a listed public limited company incorporated in 1997. Its shares are listed on two stock exchanges in India. The Company is primarily engaged in the business of manufacture and sale of garments. The Company caters to both domestic and international markets.

2 BASIS FOR PREPARATION AND PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation and presentation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, as applicable. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with the then applicable Accounting Standards in India (‘previous GAAP’). These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016. Refer Note 41 for the explanations of transition to Ind AS.

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as in value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the asset or liability.

2.2 Standards issued but not yet effective

Ind AS 115, Revenue from Contract with Customers:

The Ministry of Corporate Affairs (MCA), on 28 March 2018, notified Ind AS 115 “Revenue from Contracts with Customers” as part of the Companies (Indian Accounting Standards) Amendment Rules, 2018. The said standard is applicable for the accounting periods beginning on or after April 1, 2018. The Company is in the process of assessing the impact of the said standard on its financial statements.

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

On 28 March 2018, MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The company is in the process of assessing the impact of the said amendment on its financial statements.

2.3 Approval of financial statements

These financial statements were approved for issuance by the Board of Directors of the Company on May 30, 2018.

3 Use of estimates and judgements

In the application of the Company’s accounting policies, which are described in note 2, the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Impairment of investments, Property Plant and Equipment and Intangible Assets

The Company reviews its carrying value of investments, Property, Plant and Equipment and Intangible Assets annually, or more frequently when there is an indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.

Useful lives of property, plant and equipment

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The Management is currently implementing a plan to increase turnover, improve profitability and financial position by selling certain non-core assets. As part of the said plan, the above said assets have been held for sale. The impairment loss recognized by the Company on account of fair valuing the assets held for sale is 82.36 lakhs (2016-17 - Nil ) and the same has been recognised in the statement of profit and loss as “Other expenses” under the line item “Impairment of Property, Plant and Equipment”. The fair value measurements with respect to “Assets classified as held for sale” are categorised as Level - 3 in the fair value hierarchy.

(ii) Details of rights, preferences and restrictions attached to each class of shares:

The company has only one class of share capital namely Equity Shares having par value of ''10 per share. Each holder of Equity Share is entitled to one vote per share. The company declares and pays dividends in Indian rupees. In the event of liquidation of the company, the holders of Equity Shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

Nature and purpose of reserves

Securities Premium

Amounts received on issue of shares in excess of the par value has been classified as securities premium.

General Reserves

The general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

Deficit in the Statement of Profit and Loss

This represents the accumulated losses of the Company.

Revaluation reserves

Revaluation reserves represents the surplus on account of revaluation of land. The balance in revaluation reserves cannot be distributed to the owners.

Capital contribution

Capital contribution represents the benefit that has been passed on by the lenders of interest free loans (i.e., the difference between the actual amount and discounted amount). The said capital contribution is after offsetting the “deemed investment in E-Land Fashion India Private Limited”, a group company, arising on account of fair valuation of the financial guarantee given to the banks in respect of its loans.

ii) Loans from other related parties is interest free and is repayable as per below schedule:

- 10% of the loan amount on or prior to 31 December, 2022

- 20% of the loan amount on or prior to 31 December, 2023

- Balance 70% of the loan amount on or prior to 31 December, 2024

Based on the information available with the Company, there are no outstanding dues in respect of Micro, Small and Medium enterprises at the Balance Sheet date. The above disclosure has been determined to the extent such parties have been identified on the basis of information available with the Company.

Note:

The Company, in the year 2012, had applied for the restructuring of its debts through Corporate Debt Restructuring (CDR) Mechanism as envisaged under the Reserve Bank of India (RBI) guidelines. Pursuant to the same, based on approval of the CDR cell, the Company entered into a Master Restructuring Agreement in September 2012. In 2016, the Company and its fellow subsidiary i.e., E-Land Fashion India Private Limited (“EFIPL”) had applied for One Time Settlement (OTS) with all the banks in the consortium, pursuant to which, approval was received during the year from all the banks for the OTS in respect of the borrowings of both the entities. Based on receipt of the approval for OTS from the consortium of lenders, the Company utilized Export Advances received from E-Land Asia Holdings Pte, the Holding Company, to repay the borrowings from banks and also the borrowings from EFIPL to ensure that the Company complies with the OTS. This has resulted in an accelerated unwinding of the notional interest (net of deemed guarantee commission income Rs 261.74 lakhs) on the interest-free borrowings from EFIPL of Rs.3,872.67 lakhs.

During the year, the OTS formalities, including reconciliation of balances, settlement of dues, final approval from CDR, receipt of ‘No Dues Certificate’ from banks etc. have been completed and accordingly, an amount of Rs.157.61 lakhs has been recorded in the Statement of Profit and Loss towards the benefit arising on account of the OTS. Further, the Company has also reversed the provision for right of recompense amounting to Rs. 104.04 lakhs made in the books in the previous periods.

4. Segment reporting Disclosure on Operating segments

The Company is engaged in the business of manufacturing and sale of garments. The Chief Operating Decision Maker reviews the operations of the Company as a unit of manufacturing and sale of garments, which is considered to be the only reportable segment by the Management.

Geographical information:

The company predominantly operates in India. Revenue earned with in India and outside India are as follows:

5. Employee benefit plans Defined contribution plans

The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the said schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognises the amount paid / payable to such funds in the Statement of Profit and Loss. The contributions made by the Company towards these schemes are as follows:

Defined benefit plans

The Company offers gratuity, a defined employee benefit scheme to its employees. The said plan typically exposes the Company to actuarial risks such as: interest rate risk, longevity risk and salary risk

Interest risk

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Longevity risk

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

Salary risk

Higher than expected increases in salary will increase the defined benefit obligation No other post-retirement benefits are provided to these employees.

The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.

6. Financial Instruments Capital management

The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders. The capital structure of the Company consists of net debt and total equity of the Company. The management of the Company reviews the capital structure on a semi-annual basis.

Financial risk management objectives

The Company’s risk management is carried out by Treasury department under policies laid down by the management. The Company’s activities expose it to market risk (which includes currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. Treasury department monitors the risk exposures on a periodical basis and reports to the Board of directors on the risks that it monitors and policies implemented to mitigate risk exposures.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Company’s foreign currency denominated monetary liabilities (Trade payables) and Assets (Trade receivables) at the end of the reporting period are as follows.

Foreign currency sensitivity analysis

The Company is mainly exposed to USD on account of outstanding trade receivables and trade payables.

The following table details the Company’s sensitivity to a 5% increase and decrease in INR against the USD. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. The amounts given below are the impact on loss and equity where the INR weakens 5% against USD. Positive number indicates decrease in loss / increase in equity whereas negative number indicates increase in loss / decrease in equity.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Company monitors its trade receivables on case to case basis, depending on the ageing of days the receivables are due. Credit risk also arises from cash and cash equivalents, financial instruments and deposits with banks.

Liquidity risk

Liquidity risk is the risk that the company could be unable to meet its short term financial demands. Ultimate responsibility for liquidity risk management rests with the management, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual short term and long term cash flows, and by matching the maturity profiles of financial assets and liabilities.

Liquidity analysis for non derivative financial liabilities-

The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to pay. The contractual maturity is based on the earliest date on which the Company would be required to pay.

Equity Price Risk

The Company is exposed to equity price risks arising from equity investments. If equity prices had been 5% higher/ lower, loss for the year ended March 31, 2018 would increase/decrease by Rs. 1.14 lakhs (for the year ended March 31, 2017: increase/decrease by Rs. 1.87 lakhs) as a result of the changes in fair value of equity investments.

The management considers that the carrying amount of financial assets and financial liabilities recognised in these financial statements approximate their fair values

7 Related Parties Disclosure:

Name of Related Parties and Description of relationship:

A) Key Management Personnel Relationship

Mr. Yangweon Yoo Managing Director (upto February 14, 2017)

Mr. Jae Ho Song Managing Director (w.e.f May 30, 2017)

Mr. Jung Ho Hong Whole Time Director

Mr. Kwang Hyuck Choi Whole Time Director

Mr. Yi Byoung Hoon Chief Financial Officer (from May 30, 2014 to Oct 3, 2016)

Mr. Haeoi Choi Chief Financial Officer (w.e.f. February 14, 2017)

B) Ultimate Holding Company E Land World Co. Ltd.

C) Holding Company

E Land Asia Holdings Pte Ltd

D) Fellow Subsidiary Companies *

E Land Accessories Trading (Shanghai) Co. Ltd.

E Land Fashion India Private Ltd.

E Land Fashion (Shanghai) Co. Ltd E Land Retail Ltd

E.Land International Fashion (Shanghai) Co., Ltd E-Land Fashion Hong Kong Limited Wish Fashion (Shanghai) Co.Ltd WHOAU Holdings Inc.

Wish Trading (Shanghai) Co. Ltd.

(i) The above amount is based on the notice of demand / Assessment Orders by the tax authorities and the Company is contesting these claims. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company’s rights for future appeals before the judiciary. No reimbursements are expected.

8. The Company has incurred losses of 7,842.49 lakhs (before other comprehensive income) for the year ended March 31, 2018 ( Previous year 8,021.03 lakhs) and the accumulated losses amounting to 58,171.19 lakhs (Previous year 50,392.38 lakhs) exceeds the paid up capital and reserves as on that date. These conditions indicate the existence of material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern and, therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. The Management is currently implementing a plan to increase turnover, improve profitability and financial position, sell certain non-core assets and has assessed that it will be able to meet the working capital requirements for the next 12 months based on its cash flow projections. The Holding company has also confirmed financial support to the Company to continue as a going concern. The Company is therefore being viewed as a going concern and the financial statements have been prepared under the going concern assumption.

9. During the year ended 31 March, 2014, the Company had entered into a tripartite agreement with E-Land Asia Holdings Pte Ltd, its holding Company and Mr. Murarilal Agarwal, Mr. Ravindra Agarwal and Mr. Vishwambharlal Bhoot (erstwhile Promoters) whereby the loan outstanding to the erstwhile promoters had been directly paid by the Holding Company on behalf of the Company. The Company had made an application under the applicable provisions of the Foreign Exchange Management Act,1999 (“FEMA”) and the rules and regulations there under for regularising the payment made by the Holding Company. During 2015-16, the Company received approval from the Reserve Bank of India (‘RBI’), treating the liability as External Commercial Borrowing. During the previous year, the Company had received compounding order from the RBI, levying a penalty of 7.40 lacs and the same has been charged to the Statement of Profit and Loss for the year ended 31 March, 2017.

10. During 2015-16, there were certain allegations made by an employee of the Company relating to the disposal of assets and statutory non-compliances for which the Company had appointed an external agency to conduct an investigation. During the previous year, the audit committee / board of directors have considered their report and concluded the investigation and noted that there is no financial or other impact with regard to the alleged matters and no further action was required.

11. In respect of the Company’s leasehold land at Doddaballapura, the Company had entered into a lease cum sale agreement with the Karnataka Industrial Areas Development Board (KIADB) wherein the Company has to develop the land, construct building and set up a manufacturing unit of readymade garments and will provide employment opportunities as per the terms mentioned in the agreement. The Company is in the process of complying with the aforesaid conditions.

12. In view of the accumulated losses and in accordance with Ind AS 12 - “Income Taxes”, the Management believes that there is no reasonable certainty supported by convincing evidence for recognising deferred tax asset on carry forward losses.

Cash flow statement:

There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.

Explanatory Notes

13.1 The Company has received interest free borrowings from “E-Land Asia Holdings Pte Limited” (the holding company) and “E-Land Fashion Indian Private Limited” (a group company). These loans were recorded at face value (i.e., equal to amount received) under the Indian GAAP.Under Ind AS, these borrowings are recognized at fair value on initial recognition and subsequently, carried at amortized cost by applying effective interest rate method. The said method requires the loan to be recognised at present value using applicable discount rate. The benefit that has been passed on by the lenders of interest free loans, i.e., the difference between the actual amount and discounted amount of the loan is recognized as deemed capital contribution as it signifies or indicates infusion by the lenders of interest free loans into the Company. Subsequently, notional interest expense is computed on the discounted amount of the loan and the same is charged to the Statement of Profit and Loss as “Interest expense”.

Further, the Company has given guarantee to banks towards the term loans and working capital facilities availed by “E-Land Fashion India Private Limited”. The total amount of loans and working capital facilities with respect to which the Company has given guarantee to banks is Rs. 40,000 lakhs. Under the previous GAAP, the Company disclosed the said guarantee as Contingent liability in accordance with “AS 29-Provisions, Contingent Liabilities and Contingent Assets”. Under Ind AS, the fair value of the said guarantee is recognised as liability by recognising the corresponding “deemed investment in E-Land Fashion India Private Limited” in accordance with “Ind AS 109 Financial Instruments”. Subsequently, the Company has recognised guarantee commission income as and when it is discharged of its liability towards guarantee on account of repayment of loans by “E-Land Fashion India Private Limited”.Also, “E-Land Fashion India Private Limited” has given guarantee for the working capital facilities availed by the Company from Banks. Under Ind AS, the Company has recognised “deemed guarantee commission expense” towards the same.The amount of impact disclosed above is after offsetting the impact on account of discounting of interest free borrowings and recognition of financial guarantee (given and received).

13.2 Under the previous GAAP, lease deposits given (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets and financial liabilities are required to be recognised at fair value at the initial recognition. Accordingly, the Company has discounted these deposits for the respective lease period. Difference between the discounted value (fair value) and the transaction value of security deposit has been recognised as prepaid rent.The prepaid rent is amortised over the lease term and interest income is recorded on the fair value of the security deposit at the interest rate which was used for discounting of the security deposit. The difference in rent expense and interest income has been adjusted with retained earnings as at April 1, 2016 and with loss for the year ended March 31, 2017.

13.3 Under the previous GAAP, current investments were measured at lower of cost or fair value. Under Ind AS, these financial assets have been measured at Fair Value Through Profit & Loss (FVTPL) on the date of transition and subsequent reporting periods. The fair value changes are recognised in Statement of Profit and Loss as “Gain / (loss) on account of fair valuation of equity investments measured through fair value through profit and loss” under “Other Income”.

13.4 Under previous GAAP, during the financial year 2016-17, the Company had recognised impairment loss of Rs. 1,270.65 lakhs with respect to assets that have been previously revalued, by offsetting the same with revaluation reserves. On transition to Ind AS, i.e., on April 1, 2016, as the Company has transferred the balance outstanding in “revaluation reserves” to retained earnings (i.e., Surplus/ (deficit) in the Statement of Profit and Loss), the Company has charged the said impairment loss to the Statement of Profit and Loss.

13.5 Under the previous GAAP, actuarial gains and losses were recognised in the Statement of Profit or Loss. Under Ind AS, the actuarial gains and losses are recognised in other comprehensive income.

13.6 Under the previous GAAP, the surplus on account of revaluation of an asset is recognised directly in equity as “Revaluation reserves”. However, under Ind AS such revaluation surplus is recognised in other comprehensive income.

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Mar 31, 2016

1. Segment Reporting:-

The Company is engaged in the manufacture of garments, which is the primary business segment, based on the nature of products manufactured and sold. The geographical segments considered for disclosure are domestic and exports (outside India). Revenue from sale of products and receivables are disclosed by location of customers while the other geographical information is based on location of assets. The entire business assets of company are situated in India.

2. Operating Lease

The Company has entered into operating lease arrangements for premises. Lease rental expenses for the year ended 31 March, 2016 was Rs 535.20 Lakhs (31 March 2015 Rs 510.31 Lakhs). The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets are:-

3. Dues to Micro and Small Enterprises as per MSMED Act, 2006

Information required to be disclosed under Micro, Small and Medium Enterprises Development Act, (MSMED) 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors. There are no delays in payment to micro, small and medium enterprises in current year as well as in the previous year.

4. As required under Schedule V of the Companies Act, 2013, the Company had filed an application with the Central Government for approval of managerial remuneration paid to three Whole Time Directors for the year ended March 31, 2015. During the current year, the Company has received approval for managerial remuneration paid to two Whole Time Directors and is awaiting approval for one of the Whole Time Director, where the Company is in the process of filing a revised application with the Central Government. Pending receipt of such approval, the remuneration paid is held in trust by the said director.

5. The Company has incurred losses during the current period and the accumulated losses of the Company at the close of the period exceed its paid up capital and reserves. The Management is currently implementing a plan to increase turnover, improve profitability and financial position of the Company and has assessed that it will be able to meet its funding requirements at least for the next 12 months based on its cash flow projections. The Company is therefore being viewed as a going concern and the financial statements have been prepared under the going concern assumption.

6. During the year ended March 31, 2014, Company had entered into a tripartite agreement with E-Land Asia Holdings Pte Ltd, its holding Company and Mr. Murarilal Agarwal, Mr. Ravindra Agarwal and Mr. Vishwambharlal Bhoot (Old Promoters) whereby the loan outstanding towards the Old Promoters had been directly paid by the holding Company on behalf of the Company. The Company had made a revised application under the applicable provisions of the Foreign Exchange Management Act,1999 (“FEMA”) and the rules and regulations there under for regularizing the same. During the year, Company has received approval from the Reserve Bank of India (‘RBI’), treating the liability as External Commercial Borrowing, subject to the applicable provisions for compounding under the FEMA and the rules and regulations there under. Company has made compounding application and is awaiting final order.

7. Transfer Pricing regulations for computing the Income and Expenditure from International Transactions and specified domestic transactions between ‘Associated Enterprise’ on arms length basis are applicable to the Company. These regulations, interalia, require the maintenance of documents and information, including furnishing a report from an accountant within the due date of filing the Return of Income with the Income Tax Authorities. For the year ended on March 31, 2016, the Company is in the process of undertaking a study to comply with the said transfer pricing regulations. Management is of the opinion that the transactions undertaken during the year with related parties are on arm’s length basis & in compliance with the transfer pricing legislation prevailing as on date of financial statements.

8. In the previous year, Company had entered in to Agreement for Sale of assets for one of its units located in Daman, the conditions of which subsequently have not been complied with and hence terminated. Accordingly, the above sale is being reversed and classified as ‘Asset held for sale’ to reflect the current status.

9. Effective April 1, 2014 the Company had revised the useful life of certain fixed assets based on Schedule II to the Companies Act, 2013 for the purpose of providing depreciation on fixed assets. Accordingly the carrying amount of the assets as on April 1, 2014 had been depreciated over the remaining revised useful life of fixed assets. Consequently, an amount of Rs 33.18 Lakhs (net of refund Rs. Nil) representing the carrying amount of the assets revised useful life as Nil, had been charged to opening reserves as on April 1, 2014 pursuant to the Companies Act, 2013.

10. Tax expense of earlier year includes Rs 2,623.96 Lakhs of deferred tax recognized on unabsorbed depreciation which had been reversed in the previous year as there was no virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

11. Previous year figures have been regrouped/reclassified where necessary to conform to this year’s classification.

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Mar 31, 2015

1. Segment Reporting:-

The Company is engaged in the manufacture of garments, which is the primary business segment, based on the nature of product manufactured and sold. The Company has only one reportable business segment, which is manufacture and selling of garments.

Secondary segments for the Company are geographic, namely domestic and exports. The entire business assets of Company are situated in India.

2. Operating Lease

The Company has entered into operating lease arrangements for premises. Lease rental expenses for the year ended 31 March, 2015 was Rs 510.31 Lacs (31 March 2014 Rs 474.39 Lacs). The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets are:-

3. Dues to Micro and Small Enterprises as per MSMED Act, 2006

Information required to be disclosed under 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. This has been relied upon by the auditors. There are no delays in payment to micro, small and medium enterprises in current year as well as in the previous year.

4. As required under Schedule V of the Companies Act, 2013, the Company has filed an application with the Central Government for approval of managerial remuneration paid to three Whole Time Directors and is in the process of filing revised application with the Central Government for one of the Whole Time Director. Pending receipt of such approval, the remuneration paid is held in trust by the said directors.

5. The Company has incurred losses during the current year and the accumulated losses of the Company at the close of the period exceed its paid up capital and reserves. The Management is currently implementing a plan to increase turnover, improve profitability and financial position of the Company and has assessed that it will be able to meet its funding requirements at least for the next 12 months based on its cash flow projections. The Company is therefore being viewed as a going concern and the financial statements have been prepared under the going concern assumption.

6. During the year ended March 31, 2014, Company had entered into a tripartite agreement with E-Land Asia Holdings Pte Ltd, its holding Company and Mr. Murarilal Agarwal, Mr. Ravindra Agarwal and Mr. Vishwambharlal Bhoot (Old Promoters) whereby the loan outstanding towards the Old Promoters (Rs 1,702.07 lacs) had been directly paid by the holding Company (Rs 1,150.63 lacs) on behalf of the Company. Accordingly the balance of Rs 551.44 lacs was written back in the previous year. Further the Company has made an application under the applicable provisions of the Foreign Exchange Management Act and the rules and regulations there under for regularising the transaction.

7. Transfe r Pricin g regulations for computing the Income and Expenditure from International Transactions between 'Associated Enterprise' on arms length basis are applicable to the Company. These regulations, interalia, require the maintenance of documents and information, including furnishing a report from an accountant within the due date of filing the Return of Income with the Income Tax Authorities. For the year ended on March 31, 2015, the Company is in the process of undertaking a study to comply with the said transfer pricing regulations. Management is of the opinion that international transactions undertaken during the year with related parties are on arm's length basis & in compliance with the transfer pricing legislation prevailing as on date of financial statements.

8. In the previous year, the Company had transferred its D-1 unit at Tarapur to E-Land Fashion India Pvt Ltd under a slump sale agreement for a consideration of Rs 4,649 lacs and the related profit on sale was credited to the statement of profit and loss in the previous year. The results of discontinuing operations (D-1 Tarapur unit) included in the financial statements are as follows:

The numbers for the year ended March 31, 2014 include those relating to the D-1 unit and hence the current year numbers are not strictly comparable with previous year. Simultaneously, the Company entered into a Business Continuation Agreement ('BCA') with E-land Fashion India Private Limited ('Eland India'). As per the agreement, the Company is conducting the Fabric Business of D-1 Unit Tarapur for and on behalf of Eland India for facilitating smooth transition of Fabric Business of D-1 Unit Tarapur to Eland India. Pending certain statutory registrations, the sales, purchases, receipts/payments made by the Company in the capacity of an agent of Eland India have been excluded from the financial statements of the Company.

9. Effective April 1, 2014 the Company has revised the useful life of certain fixed assets based on Schedule II to the Companies Act, 2013 for the purpose of providing depreciation on fixed assets. Accordingly the carrying amount of the assets as on April 1, 2014 has been depreciated over the remaining revised useful life of fixed assets. Consequently, an amount of Rs. 33.18 Lacs (net of refund Rs. Nil) representing the carrying amount of the assets revised useful life as Nil, has been charged to opening reserves as on April 1, 2014 pursuant to the Companies Act, 2013.

10. Tax expense of earlier year includes Rs. 2,623.96 lacs of deferred tax recognised on unabsorbed depreciation which has been reversed in the current year as there is no virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.

11. Previous year figures were audited by a firm of Chartered Accountants other than S R B C & CO LLP. Figures for the previous year have been regrouped where necessary to conform to current year's classification.

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Mar 31, 2014

1. A) CORPORATE INFORMATION

The Mudra Lifestyle Limited ("the Company") is a listed public limited company incorporated in 1997. The company is primarily engaged in the business of manufacturing of textiles consisting of fabric and garment.

Note 2 Contingent Liabilities and Commitments (to the extent not provided for) (Rs. In Lacs)

Particulars 31.03.2014 31.03.2013

(A) Contingent Liabilities

Claims against the company not acknowledged as debts

i) Works Contract Tax 250.22 250.22

ii) Penalty levied by Director General of Foreign Trade -- 6.50

iii) Others 145.07 119.23

iv) Bank Guarantee 231.11 -

Total (A) 626.40 375.95

(B) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 421.29 427.70

Total (B) 421.29 427.70

Total (A B) 1,047.69 803.65

(i) The company has imported machinery and raw material under the Export Promotion Guarantee Corporation Scheme of Central Government. Under the said scheme the company has availed the benefit of payment of import duty at subsidized rates which is dependent upon fulfillment of export obligation.

(ii) Refer Note -11 (i) Fixed Assets of Financial for additional contingent liabilities

(iii) Refer Note -4(iv)- Interest Recompense

Note 3 Related Parties Disclosure:

A) Name of Related Parties and Description of relationship:

Key Management Personnel Relationship

Mr. Yangweon Yoo Managing Director

Mr. Eung Kyun Shin Chairman and Whole Time Director (Resigned w.e.f. 31st March 2014)

Mr. Jung Ho Hong Whole Time Director

Mr. Kwang Hyuck Choi Whole Time Director

B) Ultimate Holding Company : E Land World Co. Ltd.

C) Holding Company : E-Land Asia Holdings Pte Ltd

D) Fellow Subsidiary Company

E Land Accessaries Trading (Shanghai) Co. Ltd.

E Land Fashion China Holdings Ltd.

Thanh Cong Textile Garment Investment Trading Joint Stock Company

E Land Vietnam Co. Ltd.

E Land Fashion India Private Ltd.

JEWOO Manufacturing Co. Ltd.

Wish Hongkong Ltd

E) Entities Under Common Control

E Land Fashion (Shanghai) Co. Ltd

Bright Light Garment Mfg Co. Ltd

E Land International Fashion Co. Ltd.

E Land Retail Ltd

E.Land International Fashion (Shanghai) Co., Ltd

Elphis Lanka Ltd.

Wish Fashion (Shanghai) Co.Ltd

Eland Japan Inc

WHOAU Holdings Inc.

Wish Trading (Shanghai) Co. Ltd.

Wish Trading Co. Ltd

Note 4 Segment Reporting:-

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabric and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile products as reportable segment. The Company operates in Local & Export segments geographically of which the export sales is Rs. 10,390.34 Lacs (P.Y. Rs 4,356.55 Lacs) & Local Sales is Rs. 22,073.16 Lacs (P.Y. Rs. 8,525.34 Lacs). However due to the integrated nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.

Note 5 Lease

The Company has entered into operating lease arrangements for fixed assets and premises. The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets are:-

Note 6

Necessary disclosures of the details pertaining to the discontinuing operations in respect of the D1 unit as required under the Accounting Standard - 24 ''Discontinuing Operations'' (AS-24) are as under:

The Company has entered into a Business Transfer Agreement with its fellow subsidiary M/s. E-Land Fashion India Pvt. Ltd. ("E-Land India") for transfer of D-1 Unit (located at Tarapur, Thane) of its Fabric Business, by way of slump sale, on a going concern basis, w.e.f. 29th March 2014, for a total consideration of Rs. 4,649 Lacs.

The Company has obtained necessary approvals of the Board of Directors and of Shareholders through postal ballot.

The Company has identified total assets amounting to Rs. 41,279.86 Lacs and total liabilities amounting to Rs. 38,466.41 Lacs as on 29th March 2014 pertaining to D1 unit. The profit amounting to Rs. 7,462.45 Lacs arising on sale of D1 Unit has been credited to the Statement of Profit and Loss.

The Company is unable to determine the income, and expenses clearly attributable to the discontinued operations. Accordingly, the Company is unable to disclose separately the profit/(loss) from the continuing and discontinuing operations, tax expense of the discontinuing operations and profit/(loss) from the discontinuing operations (after tax).

Note 7

Balances of Sundry Debtors, Sundry Creditors, Loans and Advances, other Current Assets and Liabilities, Payable and Receivable are subject to confirmation and reconciliation.

Note 8

The Company has received approval for appointment and remuneration of 3 foreign directors and awaiting for the approval 1 director from the Central Government.

Note 9

As per section 92 and 92F of the Income Tax Act, 1961, the Company has policy to maintain the documents and other information as required by the Transfer Pricing Legislations. The international transactions with Associated Enterprises (AE''s) are at arm''s length price as per the independent accountants report for the year ended 31 March, 2013. The management is of the opinion that the international transactions are at arm''s length and that the aforesaid legislation will not have any impact on these financial statements, particularly on the amount of tax expense and on the provision for taxation.

Note 10

The Company has regrouped/ reclassified the previous period figures in accordance with the requirements applicable in the current year. The previous period figures are not comparable since the previous period figures are for 6 Months and current year figures are for 12 Months.

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Mar 31, 2013

Note 1 Segment Reporting:-

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabric and garments.Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile products as reportable segment. The Company operates in Local & Export segments geographically of which the export sales is Rs. 4356.55 Lacs (P.Y. Rs 9,357.01 Lacs) & Local Sales is Rs. 8276.66 Lacs (P.Y. Rs. 21,535.29 Lacs). However due to the integrated nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.

Note 2 Lease

The Company has entered into operating lease arrangements for fixed assets and premises. The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets are:-

Note 3 The Company is investigating the matter of misappropriation of fund of the company in earlier year and has made appropriate provisions for the same in the books.

Note 4 The Company has filed requisite applications to the Central Government along with the Condonation of delay in terms of the provisions of Section 269 read with Schedule XIII of the Companies Act, 1956 to seek approval for the appointment & remuneration of the 4 foreign national Directors. The Company is still awaiting for the approval from the Central Government.

Note 5 Search and seizure operations were carried out by the Income tax authorities on 12 August 2009 at the premises of Mudra Lifestyle Limited.Pursuant to the same, the tax officer re-opened the assessment for tax year 2003-04 to 2009-10 and determined the tax demand of Rs 21.40 crores. Aggrieved by the same, the Company had filed an appeal with the CIT(A) against the above assessment orders.The appeal is pending for disposal before the CIT(A). Further, the Company had filed a rectification application and pursuant to the same, the tax officer rectified the mistakes in the assessment order and issued a revised tax demand of Rs 11.12 crores.Further, MLL has deposited tax demand of Rs 5.56 crores with income tax authorities under protest.The tax officer has agreed to keep the balance tax demand of Rs 5.56 crores in abeyance till March 2013 or disposal of appeal whichever is earlier. Further, penalty proceedings u/s 271(1)(c) of the Income Tax Act,1961 (''Act'') have been initiated for tax year 2003-04 to 2009-10.However, the same has been kept in abeyance until disposal of appeal before the CIT(A). Further, the tax officer had levied penalty of Rs 2.89 crores u/s 271AAA of the Act for tax year 2009-10 , MLL has deposited Rs. 30 lacs under protest. However, MLL has filed an appeal before the CIT(A) against the said penalty order and is pending for disposal before the CIT(A).

Note 6 The Company has regrouped/ reclassified the previous period figures in accordance with the requirements applicable in the current period. The previous period figures are not comparable since the previous period was for 18 Month and current period figures is for 6 Months.

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Sep 30, 2012

1. A) CORPORATE INFORMATION

The Mudra Lifestyle Limited ("the Company"), is a listed public limited company incorporated in 1997. The company is primarily engaged in the business of manufacturing of textiles consisting of fabric and garment.

(i) Terms/ rights attached to Ordinary Shares :-

The company has only one class of share capital namely Ordinary Shares having par value of Rs.10 per share. Each holder of Ordinary Shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. In the event of liquidation of the company, the holders of Ordinary Shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Ordinary Shares held by the shareholders.

(i) Restructuring :

During the financial year under consideration, due to factors affecting economies at macro-economic level and industry downturn and substantial working capital erosion, the Company started facing liquidity crunch and it was not able to fulfill some of its repayment obligations. In order to overcome debt repayment obligations, The Company has made a reference to the Corporate Debt Restructuring (CDR) cell for restructuring of the debts of the Company through CDR Mechanism. The final restructuring package was approved by CDR empowered group on June 01, 2012. The Master Restructuring Agreement has also been signed with the lenders participating in the CDR package (''CDR Lenders'') on September 24, 2012. Some of the salient features of the CDR package are as follows:

Entire principal outstanding as on cutt off date viz October 01, 2011 to be restructured;

Conversion of irregular portion of working capital loan into Working Capital Term Loan (WCTL)

Conversion of interest on Term Loans, WCTL and Working Capital Facilities for first 12 months (i. e from the cut-off date) into Long term loan;

Extension of repayment tenure of term loans, WCTL for a tenure of 10 years from COD -i.e. till 30th September, 2021.

Overall reduction in interest rates on term loans, WCTL and working capital;

Infusion of promoters contribution to support restructuring package amounting Rs.171.00 Crores.

Creation of security in favor of CDR lenders in order to secure the debt obligations of the Company under the CDR Package.

(ii) Nature of Security of Secured Loans:

(a) All existing term loans, SBI corporate loan, Working Capital Term Loan, FITL, and Working Capital facilities to be secured by first charge on pari passu basis on Fixes Assets and Current Assets. Creation of security in favor of CDR lenders as per Corporate Debt Restructuring (CDR) package is under process.

(b) Vehicle Loans are Secured by hypothecation of specified vehicles against which the finance is obtained.

(iii) Terms of repayment of term loan and other loans are as below:

a) Term Loan under TUFF Scheme - Repayment of these loans has commenced from 31st December,2011 In Quarterly Installment as Follows:-

FY12H1-0.1%, FY12 (H2)-0.2%, FY13-0.2%, FY14-1.75%, FY15-3%, FY16-9%, FY17-10%, FY18-16%, FY19-17%, FY20-18%, FY21-18% & FY22 (H1)-6.75%

b) Other Term Loan & WCTL - Repayment of these loans is commencing from June,2013 In Quarterly Installment as Follows:-

FY14-1.75%, FY15-3%, FY16-9%, FY17-10%, FY18-16%, FY19-17%, FY20-18%, FY21-18% & FY22 (H1)-7.25%

c) FITL on TUFS Loans to be paid with in 6 quarters from COD i.e. till 31.03.2013, FITL on SBI corporate loan, IDBI & SIDBI TL facilities, Axis MTM Forex, WCTL & on WC facility to be repaid in 8 equal quarterly installments beginning 30th Septemeber,2014

(Rs. In Lacs)

Note 2 Contingent Liabilities and Commitments (To The Extent Not Provided For)

Particulars 30.09.2012 31.03.2011

(A) Contingent Liabilities

a) Claims against the company not acknowledged as debts

i. Income Tax Act , 1961(1) 289.47 10.96

ii. Works Contract Tax 250.22 187.55

iii. Penalty levied by Director General of Foreign Trade 6.50 5.00

iv. Others 77.71 -

Total (A) 623.90 203.51

(B) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 59.19 276.54

Total (B) 59.19 276.54

Total (A B) 683.09 480.05

(i) The company has imported machinery and raw material under the Export Promotion Guarantee Corporation Scheme of Central Government. Under the said scheme the company has availed the benefit of payment of import duty at subsidized rates which is dependent upon fulfillment of export obligation of Rs. 436.12 Crores, out of which the company has already effected exports of Rs.260.78 Crores thereby the company has pending export obligation of Rs.175.34 Crores which is required to be fulfilled up to 31.3.2018.

B) Ultimate Holding Company

E Land World Co. Ltd.

C) Holding Company

E Land Asia Holdings Pte Ltd (w.e.f. 30th December 2011)

E Land Fashion China Holdings Ltd. (till 30th December 2011)

D) Fellow Subsidiary Company

E Land Fashion (Shanghai) Co. Ltd E Land Retail Ltd WHOAU Holdings Inc.

Elphis Lanka Ltd.

E Land International Fashion Co. Ltd.

JEWOO Manufacturing Co. Ltd.

Wish trading Co. Ltd E Land Fashion India Pvt. Ltd.

Note 3 Segment Reporting:-

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabric and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile products as reportable segment. The Company operates in Local & Export segments geographically of which the export sales is Rs. 9,357.01 Lacs (P.Y. Rs 6,809.02 Lacs) & Local Sales is Rs. 21,535.29 Lacs (P.Y. Rs. 35093.52 Lacs). However due to the integrated nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.

Note 4 Search and seizure operations were carried out by the Income tax authorities on 12 August 2009 at the premises of Mudra Lifestyle Limited. Pursuant to the same, the tax officer re-opened the assessment for tax year 2003-04 to 2009-10 and determined the tax demand of Rs 21.40 crores.Aggrieved by the same, MLL had filed an appeal with the CIT(A) against the above assessment orders. The appeal is pending for disposal before the CIT(A). Further, MLL had filed a rectification application and pursuant to the same, the tax officer rectified the mistakes in the assessment order and issued a revised tax demand of Rs 11.20 crores. Further, MLL has deposited tax demand of Rs 5.6 crores with income tax authorities under protest. The tax officer has agreed to keep the balance tax demand of Rs 5.6 crores in abeyance till December 2012 or disposal of appeal whichever is earlier. Further, penalty proceedings u/s 271(1)(c) of the Income Tax Act,1961 (''Act'') have been initiated for tax year 2003-04 to 2009-10. However, the same has been kept in abeyance until disposal of appeal before the CIT(A). Further, the tax officer had levied penalty of Rs 2.89 crores u/s 271AAA of the Act for tax year 2009-10. However, MLL has filed an appeal before the CIT(A) against the said penalty order and is pending for disposal before the CIT(A)

Note 5 Lease

The Company has entered into operating lease arrangements for fixed assets and premises. The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets are:-

Note 6 During the year ended September 30, 2012 the Revised Schedule VI notified under the Companies Act 1956, has become applicable for preparation and presentation of financial statement. The preparation of financial statements based on the Revised Schedule VI does not impact the recognition and measurement principles followed for preparation of the financial statements. However, it has significant impact on the presentation and disclosures made in the financial statements. The Company has regrouped/ reclassified the previous year figures in accordance with the requirements applicable in the current year. Since the Company has extended its Financial Year from 12 Month to 18 Month. The previous year figures are not comparable.

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Mar 31, 2011

A. Segmental Reporting:

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabric and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile products as reportable segment.

The Company operates in Local & Export segments geographically of which the export sales have amounted to Rs 6,809.02Lacs (P.Y. 3,242.49) & Local Sales have amounted to Rs 35093.52 (P.Y. 32,645.06). However due to the integrated nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.

b. Related Parties Disclosure:

1. Name of Related Parties and Description of relationship: Key Management Personnel:-

Sr. no. Name of Person Relationship

A. Key Management Personnel

1 Shri Murarilal Agarwal Chairman & Managing Director

2 Shri Ravindra Agarwal Joint Managing Director

3 Shri Vishwambharlal Bhoot Executive Director*

4 Eung Kyun Shin Additional Director**

B. Associates

1 E Land Fashion China Holdings Limited Foreign Promoter Company ***

I. Contingent Liability Rs. in Lacs

Particulars 2011 2010

A. Claim against the company not acknowledge as debt

i. Income Tax Act, 1961() 10.96 373.83

ii. Works Contract Tax 187.55 -

iii. Penalty levied by Director General of Foreign Trade 5.00 -

iv. Custom duty on pending export obligation against 11.09 - import of Raw Materials and Machinery

Note:

1) During the year the company has made payment of Rs 107.66 Lac to Income Tax Authorities under protest and without any receipt of any demand or notices from the Income Tax Authorities. Since the payments have been made under protest no provision of Income Tax is made forthe same.

2 The company has imported machinery and raw material under the Export Promotion Guarantee Corporation Scheme of Central Government. Under the said scheme the company has availed the benefit of payment of import duty at subsidized rates which is dependent upon fulfillment of export obligation of Rs. 436.12 Crores, out of which the company has already effected exports of Rs. 167.21 Crores thereby the company has pending export obligation of Rs. 268.91 Crores which is required to be fulfilled up to 31.3.2018.

k. The Company has not made any payment of dividend in Foreign Currency.

I. Secured Loans: i) Term Loans:

Secured by first charge on all fixed assets of the company except specific assets and second charge on current assets and personal guarantee of promoter directors.

ii) Working Capital Loans:

Secured by hypothecation of current assets and second charge on fixed assets of the company and personal guarantee of promoter directors.

iii) Vehicle Loans:

The vehicle loans from banks and others are secured by hypothecation of specified vehicles against which the finance is obtained.

iv) Loan against Fixed Deposit:

The Loan against fixed deposit is secured against security of concerned fixed deposits.

m. Managerial Remuneration

b) During the financial year ended 31st March 2011, the company had inadequate profits. The total remuneration and perquisites paid were Rs 24.96 Lac, the same is in due accordance with Schedule XIII of Company Act 1956 i.e. within Rs. 4 Lacs per month allowed there under.

p. The names of the Micro, Small and Medium Enterprises suppliers defined under "The Micro Small and Medium Enterprises Development Act 2006" could not be identified, as the necessary evidence is not in the possession of the Company.

q. During the previous year fire had occurred at factory unit located at Daman. In the said fire raw material worth Rs.300 Lac had been lost and damage to the machinery worth Rs 199.86Lac has been identified and a claim with the insurer was filed.

r. In the opinion of the Management, the Current Assets, Loans & Advances are approximately of the value stated and are realizable in the ordinary course of business. The provisions for all known liabilities are adequate.

s. During the year, the company implemented processing and garmenting project of phase 2 of mega expansion project.

t. Confirmation letters have been sent by the Company in respect of balances reflected under Sundry Debtors, Sundry Creditors and Loans and Advances. The balance under these heads have been shown as per books of accounts and are subject to reconciliation and adjustment, if any.

u. Figures of previous years have been regrouped, rearranged wherever necessary.

v. Figures in bracket indicate previous year figures.

w. Previous year figures have been audited by a firm other than Churiwala & Co.

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Mar 31, 2010

A. Segmental Reporting:

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabric and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile products as reportable segment.

The Company operates in Local & Export segments geographically of which the export sales have amounted to Rs. 3242.49 lacs. But due to the nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.

b. Related Parties Disclosure:

1. Name of Related Parties and Description of relationship:

Key Management Personnel:-

Sr. No. Name of Person Relationship

1 ShriMurarilalAgarwal CHAIRMAN & MANAGING DIRECTOR

2 ShriRavindraAgarwal . JOINT MANAGING DIRECTOR

3 Shri VJshwambharlal Bhoot DIRECTOR

Relatives of Key Management Personnel

Sr.No. Name of Person Relationship

1 Shri Prakash Agarwal SON OF DIRECTOR (Since died)

D. Security Provided for Secured Loans

i) Term Loans from Banks are secured by first charge on all fixed assets of the company except specific assets and second charge on current assets and personal guarantee of promoter directors.

ii) Working Capital loans from banks are secured by hypothecation of current assets and second charge on fixed assets of the company and personal guarantee of promoter directors.

iii) The vehicle loans from banks and others are secured by hypothecation of specified vehicles against which the finance is obtained.

G. The company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments. The confirmations of the creditors/debtors are awaited.

H. During the year income-tax search was conducted at the business establishment of the company including the residence of the directors on 12/8/2009. A confession from the directors of the company for disclosing an additional sum of Rs. 2.558 Lacs was forcibly obtained by the income tax authorities which is being agitated now. According to the Management, the said disclosure of undisclosed income is bad in law as no incriminating document was found during the search nor the alleged undisclosed stock was found. Therefore, on the impugned disclosure the tax provision of Rs. 362.87 is shown at on income of Rs. 2,558 Lacs by way of contingent liability. The Management is of the view that the impugned liability will not arise in the hands of the company.

I. As approved by the shareholders of Ihe Company in the Extra-Ordinary General meeting held on 18th January 2008 the Board of Directors resolved to allot 30 lacs wan-ants to the promoter directors. Each share warrant entitled Ihe holder to subscribe for and be allotted 1 equity share of Rs.10 each fully paid up at an issue price of Rs.120 per share including premium of Rs. 110 per share. These Warrants were convertible (at the sole option of the warrant holder) at any time, in one or more tranches, within a period of 18 months from 1st February 2008 to 30th June 2009. for which they had made a payment of Rs.12 per Share Warrant at the time of issue of warrants, which represents 10% of the total exercise price. Amount received from the allotees in accordance with the resolutions referred above, was included under Monies pending allotment. The promoters did not exercise their option to convert the warrants into equity shares, as a result the money receipt for the warrants have been forfeited and transferred to the Capital Reserve of Rs. 3.60 Crores.

Note: Production varies according lo product mix and design.

Fabric consumption includes 205.26 Lacs mtrs of Rs. 122.97 Crores outsourced from outsiders in grey cloth form.

(Previous year 154.38 Lacs mtrs. of Rs. 90.54 Crores)

J. The company had to carry out second trail run for its Tarapur project to achieve the desired efficiency and quality in production, hence, actual commercial production started on 30th Sept. 2009 and accordingly trial run period was extended up to 30th September 2009. Trial run expenses pertaining to raw materials and other manufacturing and overheads were capitalised as per detail given below.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Figures of previous years have been regrouped /rearranged wherever necessary. Figures in bracket indicate previousyearfigures.