Notes to Accounts of Evinix Industries Ltd.

Mar 31, 2011

1. Background

The company operates two manufacturing units at Mewla, third manufacturing unit situated at Noida Special Economic Zone. The company also has a retail division the head office of which is located at Mumbai. In addition, the company has a Trading Division located at Mewla, Faridabad.

1. The Company's shares are listed for trading with National Stock Exchange and Bombay Stock Exchange.

2. Income of duty draw back has been shown as part of Other Income.

3. The Expenses of Head office known as Corporate Office have been apportioned to different units of the company on the basis of Sales of each unit.

4. Secured Loans:

A. (a) Term Loan: Term Loan relates to Loan on Vehicles. Such loan is secured by Hypothecation of the loaned Vehicles.

(b) Working Capital Loans: The fund and non-fund based limits have been availed by the company from State Bank of India and Punjab National Bank (with SBI – being lead bank)

The loans are primarily secured by First pari-passu charge over entire current assets of the Company including receivables. Omnibus Indemnity for LC opening/Counter Guarantee in case of LC/BG limits. The loans are also secured by Collateral charge as First pari passu charge (negative lien) over land situated at Plot No. 138, NSEZ, Noida, UP, and entire fixed assets of the company including assets at NSEZ (excluding land at NSEZ) and including Equitable Mortgage over land and building situate at KH -43 Sector 45, Mewla Maharajpur, Faridabad. The loans are further secured by Personal Guarantees of Shri Raujeev Taneja and Shri K.M. Gupta, Directors of the Company and corporate guarantee of Ambros Exports P. Ltd, and Personal Guarantee of Shri Sanjay Taneja, former director of the company for loans from Punjab National Bank.

5. Contingent Liabilities

Particulars As at 31.3.2011 As at 31.3.2010 As at 31.3.2011

(Rs.) (Rs.) (Rs.)

Letters of Credit 5,79,15,110 3,88,90,350

Bank Guarantees (Net of 6,61,500 41,76,334

Margin

Money)

Pending Cases in Labour Court 0 1,92,000

Direct Tax (A.Y. 05-06) (Under 32,62,297 32,62,297

Appeal)

Direct Tax (A.Y. 08-09) (Under 3,23,74,026 0

Appeal)

Excise Demand (Under appeal) 23,80,759 23,80,759

Capital Contracts under 0 40,00,000

execution

(Net of Advances)

6. The Balances of debtors and creditors are subject to confirmation.

7. In the opinion of the Management, all current assets, loans and advances have a realizable value, in the ordinary course of business, at least equal to the amount at which they have been stated.

8. The Company has not received any information from suppliers or service providers, whether they are covered under the Micro, Small and Medium Enterprises (Development) Act, 2006 (MSMED Act). Disclosure relating to amount unpaid at the year end together with interest payable, if any, as required under the said Act are not ascertainable.

9. Segment Reporting

A. Business Segment Based on the guiding principles, as contained in the Accounting Standard (AS) 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India, the Company's business segments are "Accessories, Apparel & Garments" and "Fabric" pursued through wholesale and Retail trade.

10. Related Party Disclosers Key Management Personnel:

1. Shri K. M. Gupta – Managing Director (w.e.f. 1.10.2010)

2. Shri Raujeev Taneja -- Director Finance & Accounts (w.e.f. 1.10.2010) Other Personnel

1. Shri Sanjay Taneja -- President – Marketing

The company has not entered into any transactions with related parties as per Accounting Standard-18 except that of payment of Salary to them.

15. Additional information required under Para 3 and 4 of Part II of schedule VI, to the Companies Act, 1956

A. Capacity (as ascertained by the management)

Company's manufacturing capacity is variable and depends on the product mix, complexity of product and extent of outside job work and therefore it is difficult to determine the capacity. However on presumed parameters the Capacity can be considered as under:

Raw material consumption shown in Profit & Loss Account includes sale of raw material and items of traded goods.

The consumption of yarn is for conversion into fabrics on job work basis.

16. Previous year figures have been re-arranged, recast & regrouped wherever considered necessary.

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Mar 31, 2010

1. The name of the company has been changed to Evinix Industries Limited during the year from Evinix Accessories Limited. The company operates manufacturing units at Mewla which has been de-bonded during the year from 100% Export Oriented undertaking and manufacturing unit by name Evinix Consolidated. Also manufacturing & Service unit is situated at Noida Special Economic Zone, Noida. The company also has a retail division the main office of same is located at Mumbai. In addition, the company has a Trading Division located at Mewla, Faridabad.

The Companys shares are listed for trading with National Stock Exchange and Bombay Stock Exchange.

2. Income of duty draw back has been adjusted with consumption of Material as, the incentive is meant to compensate the incidence of duty on inputs used for Exports. The Income has been shown under head Other Income.

3. The Expenses of Head office known as Corporate Office have been apportioned to different units of the company on the basis of Capital Employed at each such unit.

4. Secured Loans:

A. (a) Term Loan: Term Loan relates to Loan on Vehicles. Such loan is secured by Hypothecation of the loaned Vehicles.

(b) Working Capital Loans : The fund and non-fund based limits have been availed by the company from State Bank of India and Punjab National Bank (with SBI - being lead bank)

The loans are secured by First pari-passu charge over entire current assets of the company including receivables. Omnibus Indemnity for LC opening/Counter Guarantee in case of LC/BG limits. First charge over companys fixed assets (excluding fixed assets at unit and vehicles financed by other banks) including Equitable Mortgage over land and building in the companys name situated at KH-43, Sector 45, Mewla Maharajpur, Faridabad and second charge over (excluding negative lien) company fixed assets at NSEZ unit. The loans is further secured by Personal Guarantees of Shri Raujeev Taneja and Shri Sanjay Taneja and corporate guarantee of Ambros Exports P. Ltd. In case of Corporate loan the loan is secured by First charge (negative lien) over land at NSEZ, First charge over factory building and Plant & Machinery at NSEZ unit.

5. Contingent Liabilities

Particulars ( As at 31.3.2010 As at 31.3.2009 Rs. in lacs Rs. in lacs

Letters of Credit 388.90 43.09

Bank Guarantees (Net of Margin Money) 41.76 105.56

Pending Cases in Labour Court 1.92 24.35

Pending Cases in Civil Court 0 1.11

Direct Tax (A.Y. 05-06) (Under Appeal) 32.62 32.62

Excise Demand (Under appeal) 23.80 0

Capital Contracts under execution (Net of Advances) 40.00 0

6. The Balances of debtors and creditors are subject to confirmation.

7. In the opinion of the Management, all current assets, loans and advances have a realizable value, in the ordinary course of business, at least equal to the amount at which they have been stated.

8. The Company has not received any information from suppliers or service providers, whether they are covered under the Micro, Small and Medium Enterprises (Development) Act, 2006 (MSMED Act). Disclosure relating to amount unpaid at the year end together with Interest payable, If any, as required under the said Act are not ascertainable.

9. Segment Reporting

A. Business Segment

Based on the guiding principles, as contained in the Accounting Standard (AS) 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India, the Companys business segments are "Accessories, Apparel & Garments" and "Fabric" pursued through wholesale and Retail trade.

10. RELATED PARTY DISCLOUSRES Key Management Personnel :

1. Raujeev Taneja - Managing Director

2. K. M. Gupta - Executive Director Finance & Account

3. Sanjay Taneja - Director Operations

4. Umesh Aggarwal - Director (Operations) (for first three months)

11. Previous year figures have been re-arranged, recast & regrouped wherever considered necessary.