Notes to Accounts of Katare Spinning Mills Ltd.

Mar 31, 2024

2.14 Provisions:

Provisionsare measured at the present value of the management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the liability. The increase in the provisions due to the passage of time is recognized as interest expenses. Provision for litigation related obligation represents liabilities that are expected to materialize in respect of matters in applicable cases.

2.15 Employee benefits:

• The Company’s contribution to Provident Fund and pension fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

• Gratuity is accounted for on actual payment basis.Accordingly, a payment of Rs.56,49,761/- has been made on actual payment basis to the factory workers during the current year.

2.16 Dividend:During the year, the company has not declared the dividend on its shares.

2.17 Contribution to Equity:

Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.18 Earnings per share:

1. Basic earnings per share is calculated by dividing:

• The profit attributable to owners of the company

• By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year.

2. Diluted earnings per share

• Diluted earningsper share adjusts the figures used in the determination of basic earnings per share to take into account:

• The after ’income Tax’ effect of interest and other financing costs associated with dilutive potential equity shares, and

• The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares

2.19 Research and Development:

Revenue Expenditure on research and development is expensed in the period in which it is incurred. Capital expenditure on research and development is shown as additional fixed assets.

2.20 Information pertaining to Profit and Loss Account :

- There were no foreign currency transactions.

2.22 Contingent Liability and Commitments:

• A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

• A present obligation arising from past events, when no reliable estimate possible;

• A possible obligation arising from pastevents, unless the probability of outflow of resources is remote.

2.23 Critical estimates and Judgments:

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgment in applying the Company’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of item which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statement.

The areas involving critical estimates or judgments are:

I. Estimation of current expense and payable

II. Estimation of defined benefit obligations

III. Allowance for uncollected accounts receivable and advances-Trade receivable do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrevocable amounts. Individual trade receivables are written off when management deems them not to be collectible.

Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.

Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

2.24 Corporate Social Responsibility (CSR) Expenditure

In view of continuous losses, the Company has not incurred any expenditure on this aspect during the year under audit.

Through its defined benefit plans, the company is exposed to a number of risk, the most

significant of which are detailed below;

> Interest rate risk: The plan exposes the Company to the risk of change in interest rate of the borrowings

> Salary Escalation Risk: The present value of the defined benefit is not calculated with the assumption of salary increase rate of plan participants in future.

> Demographic Risk: The Company has to use certain mortality and attrition in assumption in valuation of the liability. The company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

> Asset Liability Mismatching or Market Risk: MarketRisk is the risk that changes in market prices such as the prices of cotton and yarn largely depend upon the changes in the market prices.

> Financial Risk Management Objectives and Policies: The Company’s activities expose it to a variety of financial risks, market risk, credit risk and liquidity risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company’s financial liabilities comprise of borrowings, trade payable and other liabilities to manage its operation and financial assets includes trade receivables and other receivables etc. that arise from its operations

> Credit Risk:Credit risk refers to the risk of default on its obligation by the customer / counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is carrying value of respective financial assets. Trade receivables and unbilled revenue are typically unsecuredandarederived from revenue earned from customers. Credit risk has always been managed by each business segment through credit approvals establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in normal course of business. On account of adoption of Ind AS 109 the Company uses expected credit loss model to assess the impairment loss or gain.

> Liquidity Risk: The Company’s principle sources of liquidity are cash and cash equivalents, current investments and the cash flow that is generated from operations. Presently the Company suffers from inadequacy of working capital to meet its current requirements. Accordingly, liquidity risk is perceived but management is trying to find out the end and means to augment the same. The Company is closely monitoring its liquidity position to maintain adequate source of funding.

> Previous period’s figures have been regrouped/ rearranged wherever necessary in order to confirm to the current period’s classification.

for and on behalf of the Board of Directors Chartered Accountants,

G M PAWLE AND ASSOCIATES For and on Behalf of the Board.

CHARTERED ACCOUNTANTS Katare Spinning Mills Limited

FRN: 160253W

SD/- SD/- SD/-

GANESH M PAWLE Kishore T. Katare Sou V. K. Katare

Proprietor Managing Director Director

ICAI Membership No :032561 DIN 00645013 DIN 1443784

Solapur, Solapur Solapur

Date : 30.05.2024 Date:30.05.2024 Date : 30.05.2024

UDIN:24032561BJZXLT6803

SD/- SD/-

K. K. Katare Bhagyshree Rawani

CFO Company Secretary

Solapur Solapur

Date : 30.05.2024 Date : 30.05.2024

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Mar 31, 2023

2.14 Provisions:

Provisionsare measured at the present value of the management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the liability. The increase in the provisions due to the passage of time is recognized as interest expenses. Provision for litigation related obligationrepresents liabilities that are expected to materialize in respect of matters in applicable cases.

2.15 Employee benefits:

• The Company’s contribution to Provident Fund and pension fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

• Gratuity is accounted for on actual payment basis. No provision for gratuity on actuarial basis is made and hence it’s effect on profit or loss cannot be ascertained.

2.16 Dividend: During the year, the company has not declared the dividend on its shares.

2.17 Contribution to Equity:

Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.18 Earnings per share:

1. Basic earnings per share is calculated by dividing:

• The profit attributable to owners of the company

• By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year.

2. Diluted earnings per share

• Diluted earningsper share adjusts the figures used in the determination of basic earnings per share to take into account:

• The after ’income Tax’ effect of interest and other financing costs associated

with dilutive potential equity shares, and • The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares

2.19 Research and Development:

Revenue Expenditure on research and development is expensed in the period in which it is incurred. Capital expenditure on research and development is shown as additional fixed assets.

2.20 Information pertaining to Profit and Loss Account :

- There were no foreign currency transactions.

2.22 Contingent Liability and Commitments:

• A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

• A present obligation arising from past events, when no reliable estimate possible;

• A possible obligation arising from the past events,unless the probability of outflow of resources is remote.

2.23 Critical estimates and Judgments:

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Managements also needs to exercise judgment in applying the Company’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of item which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statement.

The areas involving critical estimates or judgments are:

I. Estimation of current expense and payable

II. Estimation of defined benefit obligations

III. Allowance for uncollected accounts receivable and advances-Trade receivable do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrevocable amounts. Individual trade receivables are written off when management deems them not to be collectible.

Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.

Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

2.24 Corporate Social Responsibility (CSR) Expenditure

In view of continuous losses, the Company has not incurred any expenditure on this

aspect during the year under audit.

2.25 Risk Exposure

Through its defined benefit plans, the company is exposed to a number of risk, the

most significant of which are detailed below;

> Interest rate risk: The plan exposes the Company to the risk of change in interest rate of the borrowings

> Salary Escalation Risk: The present value of the defined benefit is not calculated with the assumption of salary increase rate of plan participants in future.

> Demographic Risk: The Company has to use certain mortality and attrition in assumption in valuation of the liability. The company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

> Asset Liability Mismatching or Market Risk: MarketRisk is the risk that

changes in market prices such as the prices of cotton and yarn largely depend upon the changes in the market prices.

> Financial Risk Management Objectives and Policies: The Company’s activities expose it to a variety of financial risks, market risk, credit risk and liquidity risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company’s financial liabilities comprise of borrowings, trade payable and other liabilities to manage its operation and financial assets includes trade receivables and other receivables etc. that arise from its operations

> Credit Risk: Credit risk refers to the risk of default on its obligation by the

customer / counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is carrying value of respective financial assets. Trade receivables and unbilled revenue are typically

unsecuredandarederived from revenue earned from customers. Credit risk has always been managed by each business segment through credit approvals establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in normal course of business. On account of adoption of Ind AS 109 the Company uses expected credit loss model to assess the impairment loss or gain.

> Liquidity Risk: The Company’s principle sources of liquidity are cash and cash equivalents, current investments and the cash flow that is generated from operations. Presently the Company suffers from inadequacy of working capital to meet its current requirements. Accordingly, liquidity risk is perceived but management is trying to find out the end and means to augment the same. The

Company is closely monitoring its liquidity position to maintain adequate source of funding.

2.26 Additional Note:

> Previous period’s figures have been regrouped/ rearranged wherever necessary in order to confirm to the current period’s classification.

for and on behalf of the Board of Directors Chartered Accountants,

GANESH MALLIKARJUN PAWLE For and Behalf of Board of Directors

CHARTERED ACCOUNTANTS Katare Spinning Mills Ltd

GANESH M PAWLE Director

Proprietor DIN 00645013

ICAI Membership No :032561 Kishore T Katare

Solapur, 30^th May 2023 UDIN:UDIN : 23032561BGTDEJ9776

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Mar 31, 2015

1. Corporate Information

The company is engaged in the business of manufacturing of cotton yarn and is also engaged in hospitality business. The cotton yarn manufacturing unit is situated at Tamalwadi, Taluka Tuljapur District Osmanabad. It's Hotel viz. Hotel Tripursundari is situated at Civil Lines, Solapur.

2. Segment Reporting:

The company operates in two segments viz. Spinning Mill segment and Hotel segment.

Contingent Liabilities:

A provision is recognized 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. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at Balance Sheet Date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

3. Share Capital

a. Terms/rights attached to shares

The company has only one class of equity shares having a par value of Rs. 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 the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to number of equity shares held by the shareholders.

b. Shares reserved for issue under options Nil

c. Employees Stock Option Scheme Nil

d. Bonus shares/Buy Back/Shares for consideration other than Nil cash issued during past five years

4. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

5. Balances of Trade payables,Loans & advances & trade receivables have been taken as per books awaiting respective confirmation & reconciliation.

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Mar 31, 2014

1. Corporate information

The company is engaged in the business o; manufacturing of cotton yarn and is also engaged in hospitality business. The cottcn yarn manufacturing unit is situated at Tamalwadi, Taluka -Uilfcpur, District - Osman aba d and its hotel via1. Hotel Tripursundan is situated at solpur.

2. Term rights attached to shares

The tompa ny has on I y one ^tass 0 f eq li ity shares havi ng a pc r Lti per share, iath holder of equity share b'entitltiU tuunevoleper ihary. Theounpaiiy declares and pdysdivicterd ir TndMn Rupees. The dividend proposed by the Board of Drectcrs is subject to approval oh the soareiofders on the ensuing Anrual Gene'ai Meetirg. In th e even t -of I iqu 1 dat 0 n of the company, th e h oic ers of equity 1 ha res will be e ntitled to receive th e remaining assets of thin curnpar y after d strip jtiori uf all preferential amounts, Trre distributiun will be i n pm portion to num her of equity shares he d by th e sh amholders.

3 Additional nformation to Secured / Uosecured Bomowbg

The to-ig term ponton of term loans are shown under long term borrowing & current maturities of long term borrowing are shown jnd-cr the current liability, as per the disclosure lequircmcnts of the revised schedule VI

4 Details of Securities?! Termsof Repayment

a) Loan from Life Insurance Corporation of India is secured by an assignment of Director's Key-man Life insurance policies in their favor.

b) The cash cxed it I na n f t m oa nt of India i s secured by hypothication of all stock raw material stores work in progress finishing goods book debts.

Details of Securities^ Terms of Reoaymert

a. The cash credit loan fron Bank of India is secured by bypathLOCA on of ell stock of raw material, stones, wot tn process, finished goods, book debts, equitable mortgage of Hotti property & second charge on the immovable properties of the company situated a: Vi I age - Tamaiwadlj District -Osmanabad together with all buildings and structes thereon & all Plant & Machinery and joint aid several guarantee of the Directors 5 hri. V.T, Kata re. 5hn. K,T, katareand Shri 5, T Kata re.

b. Overd raft from ka mala Ca - op Bank is secu red against fh-i ed Deposi t with the sa id Bank.

Note 5 Contingent Liabilities:

a) Fpinnated amount of contracft. remainhlj to at? evecubed on Capital Account and not provided for amount worthofRs. N.L (Previous Year R5. NIl)

U] Provision fur gratuity is nvi made urt actuarial basis tier ice Vi liability till .tie erid or the yea' under aud t could not be ascertained.

Note 6 Disclosure of transactions with related parties :

The nones of related porbes

A. Key Management Personnel

Mr. VIjayT. Katane- Chairman StEvecutive Director

Mr KkhrrT Karar managing director

Mr. Subhash T. Kata re - Director

B. Re l£ Lives or K2y Ma na gemen c Personnel:

Mr. Sachm S. Katare

Mr. Rakc5h V, Katare

C. ALSuciaLe Euler |jt iscs.

Kamala Marketing Pnvate Li-mitec

M/s Katane Cotton Waste Spinn.ng Mills

Company has made provision for defe-red tax dab lity as above

Note 7 Previous year's figures have been negrerupcd/rcclsssificd wherever necessary to corrcspen d wth the cu rrent yea r 5 classfication discloure.

Note 8: Balances otTrade payables, Loans & advances & trade receivaoles nave been taken as per hocks awartirg respective conFi rmatisn & reconciliation

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Mar 31, 2013

1.0 Corporate information

The company is engaged in the business of manufacturing of cotton yam and is also engaged in hospitality business. The cotton yarn manufacturing unit is situated at Tamalwadi, Taluka - Tuljapur, District - Osmanabad and its hotel viz. Hotel Tripursundari is situated at Solapur.

Note 2: Contingent Liabilities:

a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for amount worth of Rs. NIL (Previous Year Rs. NIL).

b) Provision for gratuity is not made on actuarial basis hence its liability till the end of the year under audit could not be ascertained.

Note 3: Disclosure of transactions with related parties : »

The names of related parties are,

A. Key Management Personnel

Mr. Kishor T. Katare (Managing Director)

Mr. Vijay T. Katare (Executive Director)

B. Relatives of Key Management Personnel

Mr. Sachin S Katare ''

Mr. Rakesh V Katare

C. Associate Enterprises Kamal Marketing Private Limited

M/s Katare Cotton Waste Spinning Mills

Company has made provision for deferred tax liability as above

Note 4: The revised schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure & presentation made in financial statements. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.

Note 5: Balances of Trade payables, Loans & advances & trade receivables have been taken as per books awaiting respective confirmation & reconciliation.

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Mar 31, 2012

1 Corporate information

The company is engaged in the business of manufacturing of cotton yarn and is also engaged in hospitality business. The cotton yarn manufacturing unit is situated at Tamalwadi, Taluka - Tuljapur, District - Osmanabad and its hotel viz. Hotel Tripursundari is situated at Solapur.

a. Terms/rights attached to shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity share is entided to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend propsoed by die Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entided to receive the remaining assets of die company after distribution of all preferential amounts. The distribution will be in proportion to number of equity shares held by the shareholders.

2.1 Additional information to Secured/Unsecured Borrowings

The long term portion of term loans are shown under long term borrowings & current maturities of long term borrowings are shown under the current labia. as per the disclosure requirements of the revised schedule VI.

2.2 Details of Secunities & Terms of Repayment

a. The term loan from Bank of India is secured by hypothecation of all stock of raw material, stores, work in process, finished goods, book debts, equitable mortgage of Hotel property & second charge on the immovable properties of the company situated at Village - Tamalwadi, District - Omarabad together with all buildings and striates thereon & all Plant & Machinery and joint and several guarantee of the Directors Shri V.T. Katare, Shri K. T. Katare and Shri S T Kotare.

b. Loan from Life Insurance Corporation of India is secured by an assignment of Director's Key-man Life insurance policies in their favor.

Details of Securities & Terms of Repayment

a. The cash credit loan from Bank of India is secured by hypothecation of all stock of raw material, stores, work in process, finished goods, book debts, equitable mortgage of Hotel property & second charge on the immovable properties of the company situated at Village - Tamalwadi, District - Osmanabad together with all buildings and structes thereon & all Plant & Machinery and joint and several guarantee of the Directors Shri V.T. Katare, Shri K. T. katare and Shri S T Katare.

Note 3: Contingent Liabilities:

a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for amount worth of Rs. NIL (Previous Year Rs. NIL)

b) Provision for gratuity is not made on actuarial basis hence its liability till the end of the year under audit could not be ascertained.

c) The company had availed term loan from ICICI Bank Ltd. for which company's proposal of One Time Settlement at Rs. 350 lacs was accepted against which company made part payments. Meantime ICICI Bank Ltd. assigned the said account to Kotak Mahindra Bank Ltd. and as per the order of Hon. High Court Mumbai, the company deposited Rs. 316 lacs with the High Court, Mumbai. According to company there is no outstanding balance of ICICI Bank Ltd. In the meantime Kodak Mahindra Bank Ltd. filed an application with Debt Recovery Tribunal, Pune for balance payment and DRT issued an order against the company. Company has filed review petition before Debt Recovery Appellate Tribunal, Mumbai which is pending. Kodak Mahindra Bank Ltd. again filed winding up petition with High Court, Mumbai for recovery and the Hon. High Court Mumbai has ordered the company to deposit Rs. 325 lacs against the case in Debt Recovery Appellate Tribunal, Mumbai and has set aside the winding up. The company has deposited the said amount of Rs. 325 lacs in stipulated time.

d) Based on the OTS as acceded in principal by ICICI at Rs. 350 lacs, interest payable till 31.03.2002 was written off and the balance amount of principal loan was transferred to Capital Reserve. In view of the above total dues payable are not ascertained and No provision is made for dues comprising of principle amount of Term Loan and interest payable thereon for the financial year ending on 31.03.2002 to 31.03.2012.

Note 4: Disclosure of transactions with related parties:

The names of related parties are,

A. Key Management Personnel

Mr. Kishor T. Katare - Managing Director Mr. Vijay T. Katare - Executive Director

B. Relatives of Key Management Personnel: Mr. Sachin S Katare

Mr. Rakesh V Katare

C. Associate Enterprises:

Kamal Marketing Private Limited

M/s K atare Cotton Waste Spinning Mills

Company has made provision for deferred tax liability as above.

Note 5: The revised schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure & presentation made in financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.

Note 5: Balances of Trade payables, Loans & advances & trade receivables have been taken as per books awaiting respective confirmation & reconciliation.

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Mar 31, 2010

1. CONTINGENT LIABILITIES:

a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for amount worth of Rs. NIL (Previous Year Rs. NIL)

b) Provision of gratuity is not made on actuarial basis hence its liability till the end of the year under audit could not be ascertained.

c) No provision for dues comprising of principle amount of Term Loan payable to ICICI and interest thereon, which ICICI Bank Limited has assigned in favour of Kotak Mahindra Bank Limited, and Debts Recovery Tribunal, Pune passed an order for Recovery Certificate in favour of it for recovery of Rs. 8.67 millieme together with interest At 10% p.a. from 8th April 2004 till the realization of amount.

The company has preferred an appeal before the Debt Recovery Appellate Tribunal, Mumbai against the said order. Therefore total dues payable are not ascertained.

2) Balances of receivables & payables are subject to confirmation and reconciliation, if any. However the Company has dispatched the confirmation letters and in a very few cases confirmations are responded.

3) a) The Term Loan from the ICICI Ltd. is secured by a first mortgage and charge on all the Companys immovable and movable properties, both present and future, save and except book debts, subject to the charges created/to be created in favour of the companys bankers on current assets for securing borrowings for Working Capital requirements, and shall rank pari-passu with the mortgages and charges created and/or to be created in favour of banks and institution, pledge of the shares of the nominal value of Rs. 171.04 lakhs held by promoters and their associates in Katare Spinning Mills Ltd. and the personal guarantee of Mr. K.T. Katare, Managing Director of the company.

b) The Cash Credit Loan, Working Capital Term Loan and FITL from Bank of India are secured by hypothecation of all stock of raw materials, stores, work in process, finished goods, book debts, equitable mortgage of Hotel Property and second charge on the immovable properties of the Company situated at Village - Tamalwadi, District -

Osmanabad together with all buildings and structures thereon and all Plant and Machinery and joint and several guarantee of the Directors Shri V. T. Katare, Shri K. T. Katare and Shri S. T. Katare.

c) Overdraft from Kamala Co-op Bank Ltd. is secured against Fixed Deposit with the said Bank.

d) Loan from Life Insurance Corporation of India is secured by an assignment of Directors key-man life insurance policies in their favour.

4) a) ICICI in principal had agreed to accept the Companys proposal of one time settlement of its dues at Rs. 35 millions which was to be paid by 31st March, 2003 and accordingly interest payable till 31.03.2002 was written off and the balance amount of principal loan was transferred to Capital Reserve and moreover no provision of interest for the financial year ending on 31.03.2002 to 31.03.2010 was made. The company has paid a sum of Rs. 350 lacs (including Rs. Nil paid during the year under audit) till financial year ending on 31.03.2010. As per judgment of Hon. High Court, Mumbai, company was to deposit Rs. 26 lacs per month till the amount of deposit aggregates to Rs. 35 millions before December 2007 and the company has paid all the stipulated installments in full.

5) In accordance with the Memorandum of Understanding, the equity shares having the face value of Rs. 11,91,400/- comprising of 119140 equity shares of Rs. 10/- each of The Rayalseema Mills Ltd. are agreed to sale to M/s. L.V. Krishna Reddy Group and received a sum of Rs. 76,00,000/- as an advance. However, these shares are not still transferred to the said group due to non-payment of the agreed consideration in full. Pending transfer in the name of the said group, those shares are given for pledge to Bank of India against security for financial assistance already granted to The Rayalseema Mills Ltd.

6) No provision for bad and doubtful debts of Rs. 1,08,80,964/- is made in the accounts against receivables, as the management is still pursuing its recovery.

7) There were no earlier years expenses written off for the year under review as well as in previous year.

I. DISCLOSURE OP TRANSACTIONS WITH RELATED PARTIES:

The name:-- of related parties are,

A. Key Management Personnel

Mr. Kishor T. Katare - Managing Director

Mr. Vijay T. Katare - Executive Director

B. Relatives of Key Management Personnel:

Mr. Sachin S Katare

Mr. Rakesh V Katare

C. Associate Enterprises:

Kamal Marketing Private Limited

M/s Katare Cotton Waste Spinning Mills

8) In the absence of particulars about listing and quoted price of shares of The Rayalseema Mills Limited, the market value of these shares could not be stated.

9) There are no dues payable to the suppliers who constitute small-scale undertakings exceeding Rs. 1 lacs, which is outstanding for more than 30 days. The information in respect of the dues to small scale industries have been determined to the extent such parties has been identified on the basis of information available with the company.

10. Figures for the previous year have been re-casted and regrouped wherever necessary.

11. Information in respect of capacity, production, consumption etc. is enclosed herewith separately.