Notes to Accounts of Mirza International Ltd.

Mar 31, 2025

Note 9A.2 Terms / Rights attached to shares a. Equity Shares

The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of Equity Shares is entitled to one vote per share.

The Company declares and pays dividend 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.

*(1) PNB '' 2,885 Lakhs (1,772 Lakh) Secured By First Charge by way of Hypothecation on entire current assets, present & future including entire stocks of raw materials, stock in process, finished goods, stock-in-transit to be held on pari-passu basis with other Banks, domestic Book Debts , Loans and advances or any other security required for the purpose of execution of export orders received, lying in the company’s godowns, warehouses or shipping agents’ custody waiting dispatch / shipment / and / or in transit etc. The facilities are collaterally secured by the Equitable Mortgagae of Company’s Properties of Unit 1 & Tannery at Magarwara Unnao, UP & Unit 6 at Plot No.1A Sector Ecotech 1, Greater Noida, UP.

(2) HDFC Loan '' 1,300 Lakh (NIL) secured by way of pari-passu charge on stock and book-debts of the Company with other Banks. The second pari-passu charge on all movable fixed assets (present and future) of the Company along with PNB and exclusive PDC.

(3) DBS Bank Loan '' NIL secured by way of pari-passu charge on stock and book-debts of the Company with other banks.

(4) Auto Loan '' 45 Lakh (? 164 Lakh) secured by way of hypothecation of the vehicle purchased against this loan.

3. The discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields / rates available on applicable bonds as on the current valuation date.

4. The salary growth rate indicated above is the Company’s best estimate of an increase in salary of the employees in future years, determined considering the general trend in inflation, seniority, promotions, past experience and other relevant factors such as demand and supply in employment market, etc.

5. Attrition rate indicated above represents the Company’s best estimate of employee turnover in future (other than on account of retirement, death or disablement) determined considering various factors such as nature of business, retention policy, industry factors, past experience, etc.

Sensitivity Analysis

Significant actuarial assumptions for the determination of the define benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determind based on reasonably possible changes of the assumptions occuring at the end of the reporting period, while holding all other assumptions constant. The result of sensitivity analysis is given below :

(i) Change in Reportable Segments Nature and Rationale of the Change:

Effective from the financial year ended March 31, 2025, the Company has revised its segment reporting structure in accordance with the requirements of Ind AS 108 - Operating Segments.

Until the previous reporting period, the Company’s reportable segments were based on geographical markets, namely:

• Export Segment, and

• Domestic Segment, which reflected the primary basis of management’s review of performance and allocation of resources.

I n view of the evolving internal management structure and the manner in which financial information is now being reported to the Chief Operating Decision Maker (CODM), the Company has realigned its internal reporting framework. The CODM now reviews the business on the basis of business verticals, namely:

• Footwear Division, which includes manufacturing, marketing and sale of footwear products across market, and

• Tannery Division, which includes processing and sale of finished leather and related products.

This change better reflects the Company’s core operational focus, strategic decision-making, and the internal performance evaluation mechanism.

The adoption of the new segment structure provides more relevant, reliable, and decision-useful information to stakeholders and aligns with the Company’s business model transformation and resource allocation priorities.

Accordingly, segment information is now presented based on the above revised classification. Where practicable, comparative figures for the previous period have been restated to ensure consistency with the current year’s presentation. Where restatement is not practicable, appropriate disclosures have been made.

(ii) Segmental Revenue, Results, include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

The aggregate depreciation expense on ROU assets amounting to '' 38 Lakh is included under depreciation and amortization expense in the Statement of Profit and Loss.

During the year ended 31 March 2025, the Company reassessed certain lease arrangements due to mutation of property due to its amalgamation with T N S Hotels And Resorts Private Limited. As a result, the carrying amount of ROU assets was remeasured in accordance with Ind AS 116. The impact of the remeasurement resulted in:

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

NOTE 39 Amalgamation of T N S Hotels And Resorts Private Limited (Subsidiary) with Mirza International Limited (Holding Company)

Pursuant to the order dated January 24, 2025 passed by the Hon’ble National Company Law Tribunal (NCLT), Allahabad Bench, the Scheme of Amalgamation of T N S Hotels And Resorts Private Limited (the Subsidiary) with Mirza International Limited (the Holding Company) has been duly approved. The Scheme became effective upon filing with the Registrar of Companies, with the Appointed Date being 1st April 2023.

1) Nature of the Transaction

The Amalgamation qualifies as a common control business combination in accordance with Appendix C to Ind AS 103 - Business Combinations, and has been accounted for using the pooling of interests method.

2) Accounting Treatment

As per the provisions of the Scheme and Ind AS 103 (Appendix C), the following accounting treatment has been adopted:

• The investment of ''1.00 Lakh made by the Holding Company in the equity share capital of the Subsidiary has been eliminated against the share capital of the Subsidiary.

• An unsecured loan of ''1,482.82 Lakh outstanding as on 31st March 2024, provided by the Holding Company to the Subsidiary, along with the corresponding liability in the books of the Subsidiary, has been fully eliminated.

• The interest income of ''47.01 Lakh recognised by the Holding Company on such loan, and the corresponding capitalisation of interest in Capital Work-in-Progress (CWIP) in the books of the Subsidiary, have been reversed, resulting in an appropriate reduction in CWIP

• All other inter-company balances and transactions between the Holding Company and Subsidiary have been fully eliminated.

• All assets, liabilities, and reserves, including goodwill, of the Subsidiary as on 1st April 2023 have been taken over at their respective book values in the books of the Holding Company.

• The goodwill appearing in the books of the Subsidiary, which arose due to the consideration paid by the Holding Company at the time of acquisition of the Subsidiary, has been retained at its existing carrying value. No new goodwill has been recognised as a result of the Amalgamation.

• As the Subsidiary was wholly owned, no shares were issued and no change occurred in the share capital structure of the Holding Company.

3) Restatement of Comparative Figures

In compliance with Ind AS 103 (Appendix C), the comparative figures for the year ended 31st March 2024 have been

restated as if the Amalgamation had occurred from 1st April 2023.

4) Strategic Rationale for the Amalgamation

The Amalgamation was undertaken to:

• Consolidate the business operations and financial resources under a single legal entity;

• Facilitate seamless implementation of the real estate project at Sector 136, Noida;

• Reduce regulatory and administrative compliance requirements;

• Strengthen governance and simplify the overall corporate structure.

NOTE 40 Impairment of Assets

During the financial year ended 31st March 2025, the Company relocated its corporate office from A-7, Mohan Co-operative Industrial Area, Mathura Road, New Delhi to A-71, Sector 136, Noida. As a result of the relocation, all assets at the old premises were assessed for impairment under Ind AS 36 - Impairment of Assets.

The assessment indicated that the recoverable amount of these assets was lower than their carrying amount, as they are no longer in use, have limited resale value and had been physically removed from their respective locations. The Company has assessed that no future economic benefits are expected to be derived from these assets, and accordingly, an impairment loss of '' 30.20 Lakh has been recognised on the following assets:

The recoverable amount was determined based on estimated fair value less costs of disposal, considering the current condition and usability of the assets.

This loss has been recognized in the Statement of Profit and Loss under “Other Expenses.”

No reversal of impairment loss has been recognized during the year.

NOTE 41 Ind AS 107, Financial risk management objective and policies

The Company’s principal financial instruments are as follows:

Financial assets: Investments, Cash and bank balance, Loans, Trade and other receivables,

Financial liabilities: Borrowings, Trade and other payables.

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

The Company’s risk management is carried out by a central treasury department (of the Company) under policies approved by the board of directors. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk and credit risk.

(i) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Company’s exposure to market risk is primarily on account of foreign currency exchange rate risk.

Foreign currency exchange rate risk Company uses forward exchange contracts to hedge its foreign exchange risk of anticipated sales transactions in the normal course of business, which occur within the next twelve months, for which it has a firm commitment from a customer.

The terms of these contracts are consistent with the timing of the transactions being hedged. The hedges related to forecasted transactions are designated and documented at the inception of the hedge as cash flow hedges.

(ii) Interest rate risk

The Company’s policy is to minimize interest rate cash flow risk exposures on long-term financing. Further Company’s has no major investments in any interest-bearing instrument. Hence, the Company is not significantly exposed to interest rate risk.

(iii) Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents and financial assets measured at amortized cost. The Company continuously monitors default of other counter parties and incorporates this information into its credit risk controls.

a) Credit risk management

The Company assesses and manages credit risk of financial assets based on the following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A. Low Credit Risk

B. Moderate Credit Risk

(iv) Other financial assets

Loans and receivable from related parties are periodically reviewed by the management in conjunction with the remeasured fair values of the Company’s investments in those parties. Where the carrying amount of any receivable exceeds the re-measured fair value of investment, an impairment loss, to that extent, is provided for in the financial statements.

Cash and bank balances are managed by the Company’s treasury department. Concentration risk is constantly monitored to mitigate financial loss.

The Company’s maximum exposure to credit risk for the components of the financial assets as at, March 31,2025 and March 31,2024 is to the extent of their respective carrying amounts as disclosed in respective notes.

C. High Credit Risk

(v) Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements, both immediate and long-term. The finance needs are monitored and managed by the Company’s treasury department, in consultation with the project teams and management. The Company takes support from its secured lenders to finance and support the Company’s operations.

Note 42 Micro, Small and Medium Enterprises as defined under the MSMED Act, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED) which came into force from 2 October 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. Based on the information and records available with the management, there are no dues outstanding to Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises development Act, 2006, beyond the statutory period of 45 days except below:

Note 43 Capital Management

The Company’s objectives when managing capital are to

- Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

The Company manages its capital structure and make adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amounts of dividends paid to shareholders, return capital to shareholders.

Financial instruments- Fair value hierarchy

The Company categorizes financial assets and financial liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed in their measurement which are described as follows:

i) Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

ii) Level 2 - Inputs are inputs that are observable, either directly or indirectly, other than quoted prices included within level 1 for the financial asset or financial liability.

iii) Level 3 - Inputs are unobservable inputs for the asset or liability reflecting significant modifications to observable related market data or Company’s assumptions about pricing by market participants.

Notes:

i) Fair valuation of current financial liabilities is considered as approximate to respective carrying amount due to the short-term maturities of these instruments.

ii) Fair value of non-current financial assets has not been disclosed as these are bank deposits with maturity more than 12 months, and there are no significant differences between their carrying value and fair value.

iii) Trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets, trade payables and other financial liabilities have fair values that approximate to their carrying amounts due to their short-term nature.

There are no transfers between Level 1, Level 2 and

Level 3 during the year ended March 31, 2025 and

March 31,2024.

Note 45 Fraud

No fraud is being reported by the company or any fraud on the company has been noticed or reported during the year.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinarily transactions between market participants at the measurement date.

Fair value measurement under Ind AS are categorized as below 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:

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

Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the assets or liability, either directly or indirectly and

Level 3 inputs are unobservable inputs for the valuation of assets/liabilities.

4) USE OF ESTIMATES AND JUDGEMENT:

The preparation of the financial statements requires the Management to make certain estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Accounting estimates could change from period to period. Actual results may differ from these estimates.

This note provides an overview of the areas that involved a higher degree of judgment or complexity and of items 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 the relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

5) PROPERTY PLANT AND EQUIPMENT

1. Freehold Land is carried at historical cost. All other items of Property, Plant and Equipment of

the Company are valued at cost of acquisition or construction net of recoverable taxes, trade discounts and rebates less accumulated depreciation and impairment loss, if any.

2. The cost of fixed assets includes purchase price, borrowing cost of Capitalization allocated / apportioned direct and indirect expenses incurred in relation to bringing the fixed assets to its working condition for its intended life. The said cost is not reduced by specific Grants/ subsidy received against the assets.

3. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as separate asset is derecognized when replaced. All other repairs and maintenance are charged to Profit or Loss during the reporting period in which they are incurred.

4. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other gains/ (losses).

5. The useful lives, residual values and method of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively.

6. Capital Work in Progress - All costs attributable to the assets or incurred in relation to the assets under completion are aggregated under Capital work in progress to be allocated to individual assets on completion.

7. Spare parts which meet the definition of Property, plant and equipment are capitalized as Property, plant and equipment. In other cases, the spare parts are categorised as inventory on procurement and charged to Statement of Profit and Loss on consumption.

8. Lease hold land is capitalized with the lease premium paid; direct expenses/interest allocable to it till it is put to use.

6) DEPRECIATION & AMORTIZATION

1) Depreciation on Building, Plant and machinery, Furniture & fixtures, Vehicles and Computers is provided as per the Straight-Line Method (SLM), over the estimated useful lives of assets.

Sl. No.	Description	Useful Life as per Schedule II of the Companies Act, 2013
1	Office Buildings	60 years
2	Factory Buildings	30 years
3	Plant and Machinery	15 years
4	Other Equipment	10 years
5	Furniture and fittings	10 years
6	Office equipment	05 years
7	Vehicles- Four wheelers	08 years
8	Vehicles- Two wheelers	10 years
9	Computers and peripherals	Servers- 03 years Others-03 years
10	Computer software	As per Ind-AS 38

2) Lease hold land are amortized over the useful life remaining from the date, it put to use. The useful life of leasehold land is lease term remaining unexpired. Improvements on leased premised are depreciated over the lease period or useful life of the fixtures, whichever is lower.

3) The Company depreciates its property, plant and equipment (PPE) over the useful life in the manner prescribed in Schedule II to the Act. Management believes that useful life of assets are same as those prescribed in Schedule II to the Act.

4) The residual values are not more than 5% of the original cost of the asset. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

5) Depreciation on additions / deletions is calculated pro-rata from the month of such addition / deletion, as the case maybe.

6) Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.

7) CASH AND CASH EQUIVALENTS

Cash and short-term deposits in the balance sheet

comprise cash at banks and cash in hand and short-

term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

Cash and cash equivalents include bank overdrafts are form an integral part of Company’s cash management.”

8) BORROWING AND BORROWING COST

Borrowings are initially recognized at fair value, net of transaction cost incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction cost) and the redemption amount is recognized in profit or loss over the period of the borrowings, using the effective interest method. Fees paid on the established loan facilities are recognized as transaction cost of the loan, to the extent that it is probable that some or all the facility will be drawn down.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of cost of such assets, all other Borrowing cost are charged to the Statement of Profit & Loss. Borrowing costs comprise of interest and other costs incurred in connection with borrowing of funds.

9) LEASES

The Company’s lease assets largely contain leases for buildings/showrooms taken for warehouses and retail stores. At inception of a contract, the Company assesses whether a contract contains a lease. If the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration, then the contract is considered as lease. Following factors are considered to determine whether a contract conveys the right to control the use of an identified asset:

(i) The contract encompasses the use of an identified asset.

(ii) The Company has extensively all of the economic benefits from use of the asset during the period of the lease; and

(iii) The Company is in position to direct the use of the asset.

On the beginning of the lease, except for leases with a term of twelve months or less and low value leases, the Company recognizes a right-of-use asset (“ROU”) and

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Mar 31, 2024

Cash flows are reported using indirect method, thereby profit for the year is adjusted for the effects of the transactions of a non-cash nature, any deferrals of accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated. The company considers all highly liquid investments that are readily convertible to known amount of cash to be cash equivalents.

* With respect to the Scheme of Amalgamation of T N S Hotels and Resorts Pvt Ltd with Mirza International Ltd: The Board of Directors of the Company proposed a Scheme of Amalgamation of T N S Hotels and Resorts Pvt Ltd with and into Mirza International Ltd. The requisite Company Petition [being CP (CAA) 20/ALD of 2023; connected with CA (CAA) 21/ALD of 2023] has been filed with the Hon’ble National Company Law Tribunal, Allahabad Bench, Prayagraj for approval of the aforesaid Scheme of Amalgamation jointly by both the Companies. The Petition is pending with the Hon’ble NCLT.

It may be noted that the Transferor Company-T N S Hotels and Resorts Pvt Ltd is a wholly owned subsidiary of the Transferee Company-Mirza International Ltd. Hence, no new share will be issued pursuant to the Scheme of Amalgamation. Hence, there will not be any change in the issued share capital of Mirza International Ltd pursuant to the proposed amalgamation.

Note 9A.2 Terms / Rights attached to shares

a. Equity Shares

The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of Equity Shares is entitled to one vote per share.

The Company declares and pays dividend 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.

* (1) PNB '' 1772 Lakhs (2276 Lakhs) Secured By First Charge by way of Hypothecation on entire current assets, present & future including entire stocks of raw materials, stock in process, finished goods, stock-in-transit to be held on pari-passu basis with other Banks, domestic Book Debts, Loans and advances or any other security required for the purpose of execution of export orders received, lying in the company’s godowns, warehouses or shipping agents’ custody waiting dispatch / shipment / and / or in transit etc. The facilities are collaterally secured by the Equitable Mortgagae of Company’s Properties of Unit 1 & Tannery at Magarwara Unnao, UP & Unit 6 at Plot No.1A Sector Ecotech 1, Greater Noida, UP.

3. The discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields / rates available on applicable bonds as on the current valuation date.

4. The salary growth rate indicated above is the Company’s best estimate of an increase in salary of the employees in future years, determined considering the general trend in inflation, seniority, promotions, past experience and other relevant factors such as demand and supply in employment market, etc.

5. Attrition rate indicated above represents the Company’s best estimate of employee turnover in future (other than on account of retirement, death or disablement) determined considering various factors such as nature of business, retention policy, industry factors, past experience, etc.

Sensitivity Analysis

Significant actuarial assumptions for the determination of the define benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determind based on reasonably possible changes of the assumptions occuring at the end of the reporting period, while holding all other assumptions constant. The result of sensitivity analysis is given below :

NOTE 32 FORWARD CONTRACTS

Forward Exchange Contracts enetred into by the Company and outstanding as at Balance Sheet date Forward contracts EURO '' 12.29 Lakhs (Euro '' 28.45 Lakhs) Sell Hedging Forward contracts GBP '' 119.95 Lakhs (GBP '' 122.27 Lakhs) Sell Hedging Forward contracts USD '' 89.83 Lakhs (USD '' 147.77 Lakhs) Sell Hedging

NOTE 33 THERE ARE NO IMMOVABLE PROPERTIES WHOSE TITLE DEEDS ARE NOT HELD IN THE NAME OF COMPANYNote 33.1 Scheme of Amalgamation

The Board of Directors of the Company proposed a Scheme of Amalgamation of T N S Hotels and Resorts Pvt Ltd with and into Mirza International Ltd. The requisite Company Petition [being CP (CAA) 20/ALD of 2023; connected with CA (CAA) 21/ ALD of 2023] has been filed with the Hon’ble National Company Law Tribunal, Allahabad Bench, Prayagraj for approval of the aforesaid Scheme of Amalgamation jointly by both the Companies. The Petition is pending with the Hon’ble NCLT. It may be noted that the Transferor Company-T N S Hotels and Resorts Pvt Ltd is a wholly owned subsidiary of the Transferee Company- Mirza International Ltd. Hence, no new share will be issued pursuant to the Scheme of Amalgamation. Hence, there will not be any change in the issued share capital of Mirza International Ltd pursuant to the proposed amalgamation.

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

NOTE 39 Ind AS 107, FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIESThe Company’s principal financial instruments are as follows:

Financial assets: Investments, Cash and bank balance, Loans, Trade and other receivables, Financial liabilities: Borrowings, Trade and other payables.

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

The Company’s risk management is carried out by a central treasury department (of the Company) under policies approved by the board of directors. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk and credit risk.

(i) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Company’s exposure to market risk is primarily on account of foreign currency exchange rate risk.

Foreign currency exchange rate risk Company uses forward exchange contracts to hedge its foreign exchange risk of anticipated sales or purchase transactions in the normal course of business, which occur within the next twelve months, for which it has a firm commitment from a customer or to a supplier.

The terms of these contracts are consistent with the timing of the transactions being hedged. The hedges related to forecasted transactions are designated and documented at the inception of the hedge as cash flow hedges.

(ii) Interest rate risk

The Company’s policy is to minimize interest rate cash flow risk exposures on long-term financing. Further Company’s has no major investments in any interest-bearing instrument. Hence, the Company is not significantly exposed to interest rate risk.

(iii) Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents and financial assets measured at amortized cost. The Company continuously monitors default of other counter parties and incorporates this information into its credit risk controls.

a) Credit risk management

The Company assesses and manages credit risk of financial assets based on the following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A. Low Credit Risk

B. Moderate Credit Risk

C. High Credit Risk

Cash and cash equivalents and bank deposits:

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country:

(iv) Other financial assets

Loans and receivable from related parties are periodically reviewed by the management in conjunction with the re-measured fair values of the Company’s investments in those parties. Where the carrying amount of any receivable exceeds the re-measured fair value of investment, an impairment loss, to that extent, is provided for in the financial statements.

Cash and bank balances are managed by the Company’s treasury department. Concentration risk is constantly monitored to mitigate financial loss.

The Company’s maximum exposure to credit risk for the components of the financial assets as at, March 31,2024 and April 01,2023 is to the extent of their respective carrying amounts as disclosed in respective notes.

(v) Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements, both immediate and long-term. The finance needs are monitored and managed by the Company’s treasury department, in consultation with the project teams and management. The Company takes support from its secured lenders to finance and support the Company’s operations.

Note 40 MICRO, SMALL AND MEDIUM ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED) which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. Based on the information and records available with the management, there are no outstanding dues to the Micro, Small and Medium Enterprises development Act, 2006. Beyond the statutory period of 45 days

Note 41 CAPITAL MANAGEMENT

The Company’s objectives when managing capital are to

- Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

The Company manages its capital structure and make adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amounts of dividends paid to shareholders, return capital to shareholders.

Financial instruments- Fair value hierarchy

The Company categorizes financial assets and financial liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed in their measurement which are described as follows:

i) Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

ii) Level 2 - Inputs are inputs that are observable, either directly or indirectly, other than quoted prices included within level 1 for the financial asset or financial liability.

iii) Level 3 - Inputs are unobservable inputs for the asset or liability reflecting significant modifications to observable related market data or Company’s assumptions about pricing by market participants.

The following table provides the fair value measurement hierarchy of the financial assets and financial liabilities of the Company:

Quantitative disclosures fair value measurement hierarchy for assets/liabilities as at period end:

i) Fair valuation of current financial liabilities is considered as approximate to respective carrying amount due to the short-term maturities of these instruments.

ii) Fair value of non-current financial assets has not been disclosed as these are bank deposits with maturity more than 12 months, and there are no significant differences between their carrying value and fair value.

iii) Trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets, trade payables and other financial liabilities have fair values that approximate to their carrying amounts due to their short-term nature.

There are no transfers between Level 1, Level 2 and Level 3 during the year ended March 31, 2024 and March 31,2023.

Note 43 FRAUD

No fraud is being reported by the company or any fraud on

the company has been noticed or reported during the year.

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Mar 31, 2018

Note A:- Notes to first-time adoption Re-measurements of post-employment benefit obligations

Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability, also effective gain & losses of hedging instruments in a cash flow hedge are recognized in other comprehensive income. Under the previous GAAP, these re-measurements were forming part of the profit or loss for the year and part of reserve and surplus as hedging reserve respectively. As a result of this change, the profit for the year ended March 31, 2016 increased by Rs, 54 Lakh and reserve and surplus decreased by 459 lakh. However due to tax effect on effective gain & losses of hedging instruments in a cash flow hedge the total equity is reduced by 160 lakh as at 31.03.2017.

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Mar 31, 2017

Note 1. TERMS / RIGHTS ATTACHED TO SHARES

a. Equity Shares

The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of Equity Shares is entitled to one vote per share.

The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing general meeting.

I n 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.

b. Preference shares

Pursuant to the Scheme of Amalgamation of Genesis footwear Enterprises Private Limited and Mirza International Limited as approved by Hon’ble Allahabad High Court vide its order dated 15.12.2015, 12000000 0% Compulsory Convertible Preference Shares (“CCPS”) of '' 2/- each fully paid up converted into Equity shares on 01.04.2016 which rank pari passu with the existing equity shares of the Company.

Note 1.4 INFORMATION REGARDING ISSUE OF SHARES IN THE LAST FIVE YEARS

a. shares allotted as fully paid up pursuant to scheme without payment being received in cash

1 Pursuant to the Scheme of Amalgamation of Genesis footwear Enterprises Private Limited with Mirza International Limited as approved by Hon’ble Allahabad High Court order dated 15.12.2015 12000000, 0% Compulsory Convertible Preference Shares (“CCPS”) of '' 2 each fully paid converted into equity shares on 01.04.2016 which rank pari passu with the existing equity shares of the Company.

2 15600000 equity shares of '' 2 each fully paid were allotted on 18.02.2016 pursuant to the Scheme of amalgamation as approved by Hon’ble Allahabad High Court vide its order dated 15.12.2015. 12000000, 0% Compulsory Convertible Preference Shares (“CCPS”) of '' 2 each fully paid were allotted on 18.02.2016 pursuant to the Scheme of amalgamation as approved by Hon’ble Allahabad High Court vide its order dated 15.12.2015.

b. The Company has not issued any bonus shares

c. The Company has not undertaken any buy back of shares.

* Secured by 1st Charge on Fixed Assets, created out of various Term Loans and block of assets charged to the bank from time to time for Term Loans and extension of charge on all current assets. Equitable mortgage of Land, Building, Plant & Machinery at Co’s Unit No.1 & 2, Kanpur Unnao Link Road, Unnao, Unit No.3 (Plot No. C-4,5, 36 & 37) Sector 59, NOIDA, Unit No.6 at Plot No.1A Sector Ecotech-1, Greater NOIDA Industrial Area, Gautam Budh Nagar, U.P.

All the above secured Loans are guaranteed by some of the Directors.

# Secured against the assets purchased under the arrangements.

* Secured By 1st Charge by way of Hypothecation on entire current assets, present & future including entire stocks of raw materials, stock in process, finished goods, stock-in-transit, domestic Book Debts , Loans and advances or any other security required for the purpose of execution of export orders received, lying in the company’s godowns, warehouses or shipping agents’ custody waiting dispatch / shipment / and / or in transit etc.

All the above secured Loans are guaranteed by some of the Directors.

* These Figures do not include any amounts due and outstanding, to be credited to Investor Education & Protection Fund

# Outstanding Liabilities include Employee Benefits payable of Rs, 70.29 Lakh (Previous Year Rs, 40.59 Lakh), Export Expenses payable Rs, 39.01 Lakh ( Previous Year Rs, 19.02 Lakh) & Power & Electricity charges of Rs, 114.17 Lakh (Previous Year Rs, 126.41 Lakh).

* The Company’s major leasing arrangements are in respective of commercial premises (including furniture and fittings therein wherever applicable). These leasing arrangements which are cancellable, range 11 months to 3 years, or longer and are usually renewable by mutually agreed terms and conditions

* Includes Export incentive received on Export Notes :

(i) The Company is organized into two main business segments, namely:

Tannery Division - Manufacturing Finished Leather from Raw Hides, Wet Blue & Crust.

Shoe Division - Manufacturing Finished Leather & PU Shoes.

Segments have been identified and reported considering the distinct nature of products and differing risks and returns accruing there from, the organization structure, and the internal financial reporting systems.

(ii) Segmental Revenue in each of the above business segments primarily include domestic and export sales, export incentives and other miscellaneous income and also includes inter Segment transfers, priced at cost plus a predetermined rate of profit.

(iii) The Segmental Revenue in the geographical segments considered for disclosure are as follows:

(a) Revenue within India includes sales to customers located within India and earnings in India.

(b) Revenue outside India includes sales to customers located outside India and earnings outside India.

(iv) Segmental Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

Note 3 INCOME TAX

A) The Company has recognized and accounted for cumulative net deferred tax liability in accordance with Accounting Standard (AS-22) issued by the Institute of Chartered Accountants of India, “Accounting for Taxes on Income” in respect of net aggregate timing differences as on 31st Mar, 2017.

Note 4 FORWARD CONTRACTS

Forward Exchange Contracts enetred into by the Company and outstanding as at Balance Sheet date Forward contracts EURO INR 16.46 lakhs (19.14 lakhs) Sell Hedging Forward contracts GBP INR 94.77 lakhs (98.68 lakhs) Sell Hedging Forward contracts USD INR 62.93 lakhs (82.38 lakhs) Sell Hedging

(1) For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated November 8, 2016.

Note 5 Figures of previous year have been regrouped/rearranged wherever necessary to make them comparable with the figures of current year.

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Mar 31, 2016

* Includes Export incentive received on Export Notes :

(i) The Company is organized into two main business segments, namely:

Tannery Division - Manufacturing Finished Leather from Raw Hides, Wet Blue & Crust.

Shoe Division - Manufacturing Finished Leather Shoes.

Segments have been identified and reported considering the distinct nature of products and differing risks and returns accruing there from, the organization structure, and the internal financial reporting systems.

(ii) Segmental Revenue in each of the above business segments primarily include domestic and export sales, export incentives and other miscellaneous income and also includes inter Segment transfers, priced at cost plus a predetermined rate of profit.

(iii) The Segmental Revenue in the geographical segments considered for disclosure are as follows:

(a) Revenue within India includes sales to customers located within India and earnings in India.

(b) Revenue outside India includes sales to customers located outside India and earnings outside India.

(iv) Segmental Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

Note 1 COMPANIES UNDER AMALGAMATION

Mirza International Limited (“MIL” or “the Company”) a Company incorporated under the provisions of Companies Act, 1956 and is engaged in the business of manufacturing of leather and leather footwear and dealing in Apparels. MIL’s equity shares are listed on National Stock Exchange of India Ltd. and BSE Ltd. in India. Apart from supplying products to global retailers, MIL also has global in-house brands - Red Tape and Oaktrak - in its portfolio.

Genesis footwear Enterprises Private Limited (“GEPL”) was engaged in the manufacturing and marketing of high-end leather footwear and other related activities. The Company had an in-house Design Studio and Research & Development facilities in the state of Uttarakhand.

AMALGAMATION SCHEME:

As per the Scheme of Amalgamation of Genesis footwear Enterprises Private Limited (“GEPL”) with the Company as approved by the Hon’ble Allahabad High Court vide its order dated December 15, 2015, the provisions of the Scheme became applicable and came into operation from Appointed Date i.e. April 01, 2015. The Scheme has been given effect to in the financial statements for the year ended March 31, 2016

The other Features are

(i) All assets, debts and liabilities of GEPL have been deemed transferred to and vested in the Company with effect from appointed date i.e. April 01, 2015.

(ii) GEPL stands dissolved without winding up with effect from February 04, 2016, on the effective date.

(iii) GEPL carried on the business for and on behalf of the Company for the period from the appointed date to the effective date, in trust as per the Scheme.

(iv) In accordance with the Scheme, MIL has issued and allotted to the shareholders of GEPL as follows

(a) 52 (fifty two) Equity Shares of '' 2 each, credited as fully paid up, for every 100 (One Hundred) Equity Shares of '' 2 each held in GEPL; and

(b) 40 (forty) 0% Compulsory Convertible Preference Shares (hereinafter referred to as “CCPS”) of '' 2 each, credited as fully paid up, for every 100 (One Hundred) Equity Shares of '' 2 each held in transferor company. One CCPS of '' 2 each will convert into Equity Shares of '' 2 each on 01.04.2016.

(v) The amalgamation has been accounted under the ‘Pooling of Interests’ method as envisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamations notified under the relevant provisions of the Companies Act 1956/2013

(a) All the assets and liabilities recorded in the books of the GEPL are transferred and vested in the MIL at the respective book values as reflected in the books of GEPL as on April 01, 2015.

(b) Inter-company balances have been cancelled & profit element in inter transfers have been removed.

All the reserves of GEPL under different heads became the corresponding reserves of MIL. Similarly, balance in the Profit & Loss Accounts of GEPL and MIL are also clubbed together. Difference between the amount of share capital of GEPL and Shares of MIL issued to the shareholders of GEPL has been credited/debited to reserves of the Company.

Note 2 INCOME TAX

A) The Company has recognized and accounted for cumulative net deferred tax liability in accordance with Accounting Standard (AS-22) issued by the Institute of Chartered Accountants of India, “Accounting for Taxes on Income” in respect of net aggregate timing differences as on 31^st March, 2016.

Note 3 FORWARD CONTRACTS

Forward Exchange Contracts entered into by the Company and outstanding as at Balance Sheet date Forward Contracts EURO INR 19.14 lakhs (31.33 lakhs) Sell Hedging Forward Contracts GBP INR 98.68 lakhs (107.40 lakhs) Sell Hedging Forward Contracts USD INR 82.38 lakhs (81.69 lakhs) Sell Hedging

Note 4 Figures of previous year have been regrouped/rearranged wherever necessary to make them comparable with the figures of current year.

Note 5 SIGNIFICANT ACCOUNTING POLICIES A) BASIS OF ACCOUNTING:

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and comply with the Generally accepted Accounting Principles in India (Indian GAAP), including Accounting Standards notified under the Companies Act, 2013 and other pronouncements of the Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the Companies Act, 2013.

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Mar 31, 2015

Note 1 : Employee benefits :

The Company is providing the following benefits to their employees :

a) Gratuity

b) Provident Fund

c) Leave encashment

Note 2 : CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(Rs. in Lacs)

Particulars As at As at 31 March,2015 31 March,2014

A BILLS DISCOUNTED 19124 13093

B IMPORT DUTY PAYABLE 58 882

In case of non-fulfillment of export obligation under EPCG Scheme (not yet due)

C BANK GUARANTEES / LETTER OF CREDITS 282 1092

D Two cases of employees are pending at Indeter Indeter Industrial Tribunal II, Lucknow minate minate

One case of employee is pending at Indeter Indeter Labour Court, Lucknow minate minate

One case of employee is pending at D.L.C. Indeter Indeter office, Lucknow minate minate

One case of employee is pending at Labour Indeter Indeter Court, Noida minate minate

E Deficiency in stamp duty demanded by state revenue authorities for purchase of land at Hapur was Rs. 44 lakhs. Out of this the Company has deposited Rs. 14.67 Lacs as per Interim order of Hon'ble Allahabad High Court. The court 44 44 remanded the case to the Collector Stamps, Ghaziabad with the instruction to re-assess the case. The case is now pending with Asst. Commissioner Stamps, Ghaziabad

F TAXES

(I) ENTRY TAX - Total liability Rs. 28.13 lacs out of which paid under protest Rs. 14.22 balance lying unpaid Rs. 13.91 lacs 28 28

(ii) income tax -

(a) Total liability in various Assessment 582 598 years Rs. 581.85 lacs which has been paid.

(b) Total liability of penalty pertaining 6 to A.Y 2009-10.

(c) Total liability of TDS pertaining to 57 A.Y. 2012-13.

(Ill) SERVICE TAX - Total liability of F.Y 2004-05, 2005-06, F.Y 2007-08 & 2009-10 Rs. 34.33 lacs out of which Rs. 14.52 34 17 lacs already paid and Rs. 19.82 lacs is lying unpaid.

(iv) branch taxes

AHMEDABAD BRANCH : F.Y. 2010-11 Rs.32.68 lacs. 33 Company has preferred appeal against the said Demand.

KOLKATA BRANCH : CST Demand of Rs. 2.48 lacs 2 against which revision appeal has been filed.

KERALA BRANCH : VAT Demand of Rs. 4.91 lacs against which 30% amount of Rs. 1.47 lacs has 5 been paid and for balance Bank Guarantee has been provided. Against which the company has preferred an appeal.

G COMMITMENT

A capital expenditure (Net of fund already 584 2000 deployed)

B UNCLAIMED DIVIDEND 33 28

NOTE 3: Income TAX

A) The Company has recognized and accounted for cumulative net deferred tax liability in accordance with Accounting Standard (AS-22) issued by the Institute of Chartered Accountants of India, "Accounting for Taxes on Income" in respect of net aggregate timing differences as on 31st March, 2015.

B) There were Income Tax demands aggregating to Rs. 581.85 lakhs pertaining to various assessment years, which arose due to Direct Taxes ( Amendment ) Act. 2006, these demands have been adjusted by the department against the refunds due to the Company, pertaining to various assessment years. The department / Company went into Appeals before the Hon'ble Income Tax Appellate Tribunal (ITAT). Hon'ble iTAT has remanded the case back to Assessing officer in view of Hon'ble Supreme Court judgment in Topman Exports which nullifies the demands against the Company. In view of Hon'ble Supreme Court judgment, Company has an stay case in its favor and is expecting to nullify the demand and to get the total amount refunded. However Appeal order effect is yet to be given.

NOTE 4 : forward CONTRACTS

Following are the outstanding forward exchange contracts entered Into by the Company

Forward contracts EURO INR 31.33 lakhs (42.24 lakhs) Sell Hedging

Forward contracts GBP INR 107.40 lakhs (99.61 lakhs) Sell Hedging

Forward contracts USD INR 81.69 lakhs (94.18 lakhs) Sell Hedging

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Mar 31, 2014

Note 1 : CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(Rs. in Lacs)

Particulars As at 31 March 2014 As at 31 March 2013

A BILLS DISCOUNTED 13093 14656

B IMPORT DUTY PAYABLE 882 350

In case of non-fulfi llment of export obligation under EPCG Scheme (not yet due)

C BANK GUARANTEES / LETTER OF CREDITS 1092 1153

D Two cases of employees are pending at Industrial Tribunal Indeterminate Indeterminate II, Lucknow

One case of employee is pending at Labour Court, Lucknow Indeterminate Indeterminate

One case of employee is pending at D.L.C. office, Lucknow Indeterminate Indeterminate

One case of employee is pending at Labour Court, Noida Indeterminate Indeterminate

One case of employee is pending at A.L.C. offi ce, Unnao Indeterminate Indeterminate

E Deficiency in stamp duty demanded by state revenue authorities for purchase of land at Hapur was Rs. 44 lakhs. Out of this the Company has deposited Rs. 14.67 Lacs as per Interim order of Hon''ble Allahabad High Court. The court 44 44 remanded the case to the Collector Stamps, Ghaziabad with the instruction to re-assess the case. The case is now pending with Asst. Commissioner Stamps, Ghaziabad

F TAXES

(I) ENTRY TAX - Total liability 28.13 lacs out of which paid under protest Rs. 14.22 balance lying unpaid Rs. 13.91 28 20 lacs

(II) INCOME TAX - Total liability in various Assessment years 598.23 lacs out of which Rs. 581.85 lacs is paid and 598 604 balance Rs. 16.38 lacs is still lying unpaid.

(III) SERVICE TAX - Total liability of F.Y. 2004-05, 2005-06 & F. Y. 2007-08 Rs. 17.29 lacs out of which Rs. 14.52 lacs 17 17 already paid and Rs. 2.77 lacs is lying unpaid.

G COMMITMENT

A CAPITAL EXPENDITURE (Net of fund already deployed) 2000 1920

B UNCLAIMED DIVIDEND 28 28

NOTE 2: INCOME TAX

A) The Company has recognized and accounted for cumulative net deferred tax liability in accordance with Accounting Standard (AS-22) issued by the Institute of Chartered Accountants of India, "Accounting for Taxes on Income" in respect of net aggregate timing differences as on 31st March, 2014.

B) There were Income Tax demands aggregating to Rs. 581.85 lakhs pertaining to various assessment years, which arose due to Direct Taxes ( Amendment ) Act. 2006, these demands have been adjusted by the department against the refunds due to the company, pertaining to various assessment years. The department / company went into Appeals before the Hon''ble Income Tax Appellate Tribunal (ITAT). Hon''ble ITAT has remanded the case back to Assessing offi cer in view of Hon''ble Supreme Court judgment in Topman Exports which nullifi es the demands against the company. In view of Hon''ble Supreme Court judgment, Company has an stay case in its favor and is expecting to nullify the demand and to get the total amount refunded. However Appeal order effect is yet to be given. Further Two appeals related to A.Y. 2005-06 and A.Y. 2009-10 involving tax liability of Rs. 10.43 lacs and Rs. 5.95 lacs are pending before hon''ble ITAT and CIT (A) respectively

NOTE 3 : FORWARD CONTRACTS

Following are the outstanding forward exchange contracts entered into by the Company Forward contracts EURO INR 42.24 lakhs (47.16 lakhs) Sell Hedging Forward contracts GBP INR 99.61 lakhs (103.07 lakhs) Sell Hedging Forward contracts USD INR 94.18 lakhs (43.94 lakhs) Sell Hedging

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Mar 31, 2013

Note 1.1 : Employee benefts :

The Company is providing the following benefts to their employees :

a) Gratuity

b) Provident Fund

c) Leave encashment

Actuarial valuation of gratuity has been done with the following assumptions.

NOTE 2: Income Tax

A) The Company has recognized and accounted for cumulative net deferred tax liability in accordance with Accounting Standard (AS-22) issued by the Institute of Chartered Accountants of India, "Accounting for Taxes on Income" in respect of net aggregate timing differences as on 31st March, 2013.

B) There were Income Tax demands aggregating to Rs. 581.85 lakhs pertaining to various assessment years, which arose due to Direct Taxes (Amendment) Act, 2006. These demands have been adjusted by the department against the refunds due to the company, pertaining to various assessment years. The department / company went into Appeals before the Hon''ble Income Tax Appellate Tribunal (ITAT). Hon''ble ITAT has remanded the case back to Assessing offcer in view of Hon''ble Supreme Court judgement in Topman Exports which nullifes the demands against the company. However Appeal order effect is yet to be given. Further, another demand of Rs. 614.67 lakhs relating to assessment year 2008-09 is pending before appellate authorities of the department. Out of Rs. 614.67 lakhs, Rs. 11.06 lakhs has been adjusted by the department against the refunds due to the company pertaining to various assessment years.

NOTE 3 : FORWARD CONTRACTS

Following are the outstanding forward exchange contracts entered into by the Company Forward contracts EURO INR 47.16 lakhs (38.52 lakhs) Sell Hedging. Forward contracts GBP INR 103.07 lakhs (120.45 lakhs) Sell Hedging. Forward contracts USD INR 43.94 lakhs (22.20 lakhs) Sell Hedging.

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Mar 31, 2012

Note 1 : CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(Rs.in Lacs)

Particulars 2012 2011

A BILLS DISCOUNTED 10614 10708

B IMPORT DUTY PAYBLE 103 293

In case of non' fulfillment of export obligation under EPCG Scheme(not yet due)

C BANK GUARANANTEES/LETTER OF CREDITS 25 140

D Two cases of employees are pending at Industrial Tribunal II,Lucknow Indeterminate Indeterminate

One case of employee is pending at Labour Court,Noida E Deficiency in stamp duty demanded by state revenue authorities

for purchase of land at Hapur. Out of this the Company has 15 15

deposited Rs 14.67 Lacs as per Interim order of Hon'ble Allahabad High Court. The court remanded the case to the Collector Stamps,

Ghaziabad with the instruction to pass fresh order for releasing Rs. 14.66 Lacs deposited by the Company. The case is now pending with Asst. Commissioner Stamps, Ghaziabad F COUNTER GUARANTEE 339 232

Given by the Company to its directors against their guarantee given to bank G DEMANDS RAISED

(I) ENTRY TAX,COMMERCIAL TAX DEPARTMENT 41 41

(II) INCOME TAX, ITAT LUCKNOW 604 644

(III) TRADE TAX,COMMERCIAL TAX DEPARTMENT 25 25

II. COMMITMENT

A CAPITAL EXPENDITURE (Net of fund already deployed) 3506 686

B UNCLAIMED DIVIDEND 27 44

Notes :

(i) The Company is organized into two main business segments, namely:

Tannery Division ' Manufacturing Finished Leather from Raw Hides & Wet Blue.

Shoe Division ' Manufacturing Finished Leather Shoes.

Segments have been identified and reported considering the distinct nature of products and differing risks and returns accruing there from, the organization structure, and the internal financial reporting systems.

(ii) Segment Revenue in each of the above business segments primarily includes domestic and export sales, export incentives and other miscellaneous income. It also includes inter Segment transfers priced at cost plus a predetermined rate of profit.

(iii) The Segment Revenue in the geographical segments considered for disclosure are as follows:

(a) Revenue within India includes sales to customers located within India and earnings in India.

(b) Revenue outside India includes sales to customers located outside India and earnings outside India.

(iv) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

Note 2 : INCOME TAX

A The Company has recognized and accounted for cumulative net deferred tax liability in accordance with Accounting Standard (AS' 22) issued by the Institute of Chartered Accountants of India, "Accounting for Taxes on Income" in respect of net aggregate timing differences as on 31st March, 2012 .

B There was outstanding Income Tax demand of Rs. 581.85 lakhs pertaining to various assessment years, which arose due to Direct Taxes (Amendment) Act. 2005. Appeals of the cases related to Assessment year 1999' 2000, 2002' 03, 2003' 04 & 2004' 05 have been allowed by the Hon'ble CIT (Appeals) and demands of Rs. 412.79 lakhs are dropped against the Company and due refund orders are passed by the department. A demand of Rs. 604.20 Lakhs relating to Assessment year 2008' 09 is pending before appellate authorities of the department.

Note 3 : FORWARD CONTRACTS

Following are the outstanding forward exchange contracts entered into by the Company Forward contracts EURO INR 38.52 lakhs (54.54 lakhs) Sell Hedging Forward contracts GBP INR 120.45 lakhs (96.74 lakhs) Sell Hedging Forward contracts USD INR 22.20 lakhs (NIL) Sell Hedging

NOTE 4 : Presentation and disclosure of financial statements:

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

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Mar 31, 2011

I. Contingent Liabilities

a) Bills discounted with the Company's bankers- Rs. 10708 Lacs (Rs. 7760 Lacs).

b) Import duty payable in case of non-fulfillment of export obligation under EPCG Scheme(not yet due) - Rs. 293 Lacs (Rs. 98 Lacs).

c) Bank guarantees / LCs issued by the company's bankers outstanding at the balance sheet date – Rs. 139.5 Lacs (Rs. 110 Lacs).

d) Out of Labour cases of 158 employees pending during last year, 157 has been dropped by the labour department Noida. However one case is still pending - amount indeterminable. 6 (5) cases pending at industrial Tribunal – II Lucknow amount indeterminate. One case pending at labour court Kanpur -Amount indeterminate.

e) Deficiency in stamp duty demanded by state revenue authorities for purchase of land at Hapur - Rs. 44.05 Lacs. Out of this the company has deposited Rs. 14.67 Lacs as per Interim order of Hon'ble Allahabad High Court. The court remanded the case to the collector stamps, Ghaziabad with the instruction to pass fresh order for releasing Rs. 14.67 Lacs deposited by the company. The case is now pending with Asst. Commissioner stamps, Ghaziabad

f) Counter guarantee given by the company to its directors against their guarantee given to bank – Rs. 232 Crores (Rs. 227 Crores).

g) Demands raised by the authorities contested at various levels:- i) Entry tax – Rs. 65.45 Lacs (Rs. 65.45 Lacs)

ii) Income tax – Rs. 644.18 Lacs (Rs. 1118.60 Lacs) (Detail at Note L)

II. Notes

A) Capital Commitments net of funds already deployed – Rs. 686 Lacs (Rs. 720 Lacs).

B) Unclaimed Dividend Rs. 44.47 Lacs (Rs. 42.35 Lacs) includes dividend retained by the Company in exercise of its lien on unpaid calls Rs. 9.10 Lacs (Rs.7.70 Lacs).

C) Amount of Interest capitalized during the year Rs. 14.25 Lacs (Rs. 130.61 Lacs).

D) SEGMENT REPORTING

Segment Information for the Year ended 31st March, 2011 (I) Information about Primary Business Segments

(III) Notes :

(i) The Company is organised into two main business segments, namely:

Tannery Division - Manufacturing Finished Leather from Raw Hides & Wet Blue.

Shoe Division - Manufacturing Finished Leather Shoes.

Segments have been identified and reported considering the distinct nature of products and differing risks and returns accruing there from, the organisation structure, and the internal financial reporting systems.

(ii) Segment Revenue in each of the above business segments primarily includes domestic and export sales, export incentives and other miscellaneous income. It also includes inter Segment transfers priced at cost plus a predetermined rate of profit.

(iii) The Segment Revenue in the geographical segments considered for disclosure are as follows:

(a) Revenue within India includes sales to customers located within India and earnings in India.

(b) Revenue outside India includes sales to customers located outside India and earnings outside India.

(iv) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

E) Related Party Disclosures

Related Party Disclosures, as required by AS-18, "Related Party Discloures", are given below:

1. Relationships:

(i) Associate Company : Mirza (UK) Ltd.

(ii) Key Management personnel & Relatives

: Mr Irshad Mirza (Chairman), Mr Rashid A. Mirza (Managing Director), Mr Shahid A. Mirza, Mr Tauseef A. Mirza, Mr Tasneef A. Mirza, Mr N.P. Upadhyay (Whole Time Directors), Mr Shuja Mirza (Vice President-Marketing), Mr Faraz Mirza (Vice President-Production), Ms. Ramsha Mirza (Manager Garments).

iii) Related Companies : Euro Footwear Ltd, Shoemax Engg. Ltd, Achee Shoes Pvt. Ltd., Emgee Projects Pvt. Ltd. Mirza Holdings Pvt. Ltd., Mirza Agrotech Pvt. Ltd., Genesis Infra Projects Pvt. Ltd.,Gemini Products Limited, Red Tape International Pvt. Ltd., Shoemac Leather Tech Engineers Ltd., Mayfair Leather Exports Ltd., Azad Multispeciality Hospital & Reserch Centre Pvt. Ltd.

iv) Related Parties/Firms : Mrs Jamil Ara Begum, Mrs Sabiha Hussain, Mirza Projects, Genesis International, Mars International, Genesis Developers, Genesis River View Resorts, LLP.

H) Bills discounted include bills of Rs. 8931 Lacs (Rs. 6824 Lacs) drawn on Mirza (UK) Ltd.

I) Sundry Debtors include dues from the following companies under the same management arising under the normal course of business.

K) Income Tax

The Company has recognized and accounted for cumulative net deferred tax liability in accordance with Accounting Standard (AS-22) issued by the Institute of Chartered Accountants of India, "Accounting for Taxes on Income" in respect of net aggregate timing differences as on 31st March, 2011.

L) There was outstanding Income Tax demand of Rs. 1108.85 lakhs pertaining to various assessment years,which arose due to Direct Taxes ( Amendment ) Act. 2006. Appeals of the cases related to Assessment Year 2000–01 & 2001–02 have been allowed by the Hon'ble CIT (Appeals) and demands of Rs. 468.16 Lacs are dropped against the company and due refund orders are passed by the department Balance demand of Rs. 640.68 Lacs relating to various Assessment years are pending before appellate authorities of the department.

M) Exchange fluctuation Difference of Rs.1131.21 Lacs (Rs. 602.92 Lacs) consists of Profit on cancellation of Forward Contracts (net) Rs. 0.60 Lacs (Loss of Rs.782.30 Lacs), and profit on exchange fluctuation on export/import/others Rs.1130.61 Lacs. (Rs. 179.38 Lacs)

N) The Company does not owe any dues outstanding for more than the period specified in Micro Small & Medium Enterprises Development Act, 2006 as at 31st March 2011, to any Micro and Small & Medium Enterprises. This information is based on data available with the company.

O) Following are the outstanding forward exchange contracts entered into by the Company

Forward contracts EURO INR 54.54 lakhs (NIL) Sell Hedging Forward contracts GBP INR 96.74 lakhs (NIL) Sell Hedging Forward contracts USD INR NIL (35.12 lakhs) Sell Hedging Forward contracts GBP USD NIL (6.5 lakhs) Sell Hedging

P) Employee benefits :

The Company is providing the following benefits to their employees :

a) Gratuity

b) Provident Fund

c) Leave encashment

Q) Figures of previous year have been regrouped/rearranged wherever necessary to make them comparable with the figures of current year.

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Mar 31, 2010

I. Contingent Liabilities

a) Bills discounted with the Companys bankers- Rs. 7760 Lacs (Rs.7681 Lacs).

b) Import duty payable in case of non-fulfillment of export obligation under EPCG Scheme (not yet due) - Rs. 98 Lacs (Rs. 3 Lacs).

c) Bank guarantees / LCs issued by the Companys bankers outstanding at the balance sheet date - Rs .110 Lacs (Rs. 7 Lacs).

d) Labour cases of 158 employees are pending in various courts - Amount indeterminate. However 5 (3) cases pending at industrial Tribunal - II Lucknow amount indeterminate. One case pending at labour court Kanpur - Amount indeterminate.

e) Deficiency in stamp duty demanded by state revenue authorities for purchase of land at Hapur - Rs. 44.05 Lacs. Out of this the company has deposited Rs 14.67 Lacs as per Interim order of Honble Allahabad High Court. The court remanded the case to the collector stamps, Ghaziabad with the instruction to pass fresh order for releasing Rs. 14.67 Lacs deposited by the company. The case is now pending with Asst. Commissioner stamps, Ghaziabad.

f) Counter guarantee given by the Company to its directors against their guarantee given to bank - Rs.227 Crores (197 Crores).

g) Demands raised by the authorities contested at various levels:- i) Entry tax - Rs. 65.45 Lacs (Rs. 37.55 Lacs)

ii) Income tax - Rs. 1118.60 (Rs. 1082.24 Lacs) (Detail at Note M)

h) Related Party Disclosures

Related Party Disclosures, as required by AS, 18- "Related Party Disclosures", issued by Institute of Chartered Accountants of India are given below:

1. Relationships:

(i) Associate Company Mirza (UK) Ltd.

(ii) Key Management personnel Mr. Irshad Mirza (Chairman), Mr. Rashid Mirza (Managing Director), Mr. Shahid & Relatives Mirza, Mr. Tauseef Mirza, Mr Tasneef Mirza, Mr N.P. Upadhyay (Whole Time Directors), Mr. Shuja Mirza, (Vice President Marketing), Mr. Faraz Mirza (Vice President- Production)

iii) Related Companies Euro Footwear Ltd, ShoemaxEngg. Ltd, Achee Shoes Pvt. Ltd., Emgee Projects Pvt. Ltd. Mirza Holding Pvt. Ltd., Mirza Agrotech Pvt. Ltd., Gemini Products Limited, Red Tape International Pvt. Ltd., Shoemac Leather Tech Engineers Ltd., Mayfair Leather Exports Ltd.

iv) Related Parties/Firms Mrs Jamil Ara Begum, Mrs Sabiha Hussain, Mirza Projects, Genesis International Mars International, Genesis Developers, Genesis River View Resorts, LLP.

i) No provision has been made for interest receivable on allotment money in arrears.

k) Income Tax

The Company has recognised and accounted for cumulative net deferred tax liability in accordance with Accounting Standard (AS-22) issued by the Institute of Chartered Accountants of India, "Accounting for Taxes on Income" in respect of net aggregate timing differences as on 31st March, 2010 .

k) The companys challenge to the constitutional validity of the provisions of Direct Tax laws Amendment Act 2006 is still pending before the Honble Allahabad High Court. The demands raised by the authorities under the provisions of the said Act aggre- gate Rs. 1108.85 Lakhs. The Honble Court has restrained the authorities from recovering the demand. Similar orders have been passed by other High Courts in the country.The Central Government has applied to the Honble Supreme Court to transfer all cases involving similar challenges before itself. The matter is pending with the Honble Supreme Court. In the meanwhile the company has also appealed against each assessment order before the appropriate appellate authority.

l) Exchange Fluctuation Difference of Rs.602.92 Lacs (Rs. 2496.60 Lacs) consists of Loss on cancellation of Forward Con- tracts (net) Rs 782.30 Lacs (Rs. 2095.26 Lacs ), Loss due to Exchange Fluctuation Rs. Nil (Rs. 343.56 Lacs) and Profit on Exchange Fluctuation on Export/ Import/ Others Rs.179.38 Lacs. (Rs. 57.78 Lacs).

m) The company does not owe any dues outstanding for more than the period specified in Micro Small & Medium Enterprises Development Act, 2006 as at 31st March 2010, to any Micro and Small & Medium Enterprises. This information is based on data available with the company.

n) Following are the outstanding forward exchange contracts entered into by the Company

Forward contracts USD INR 35.12 lakhs Sell Hedging

Forward contracts GBP USD 6.50 lakhs Sell Hedging