ABC LIMITED

Balance Sheet as at September 30, 2012 Particulars I EQUITY AND LIABILITIES 1 Shareholders Funds (a) Share capital (b) Reserves and surplus 2 Non-current liabilities (a) Long-term borrowings (b) Long-term provisions 3 Current liabilities (a) Short-term borrowings (b) Trade payables (c) Other current liabilities (d) Short-term provisions Note
September 30, 2012

Amount in Rupees
September 30, 2011

1 2

179,303,740 (439,802,591) (260,498,851) 47,162,991 4,606,655 51,769,646 262,897,831 178,938,815 325,632,815 904,864 768,374,325 559,645,120

179,303,740 (336,752,061) (157,448,321) 230,032,735 5,828,447 235,861,182 245,573,792 174,632,293 112,563,249 1,179,817 533,949,151 612,362,012

3 4

5 6 7 8

II ASSETS 1 Non-current assets (a) Fixed assets (i) Tangible assets (ii) Capital work in progress (b) Deferred tax assets (net) (c) Long-term loans and advances 2 Current assets (a) Current investments (b) Inventories (c) Trade receivables (d) Cash and Bank Balances (e) Short-term loans and advances

9 9 10 11

307,764,317 372,830 4,065,407 312,202,554 408,000 154,013,655 8,899,224 4,419,025 79,702,662 247,442,566 559,645,120

347,211,380 4,050,700 351,262,080 410,500 121,461,075 44,737,482 5,730,457 88,760,418 261,099,932 612,362,012

12 13 14 15 16

Significant accounting policies and other notes to account The notes are an integral part of these financial statements As per our report of even date Chartered Accountants

24

For and on behalf of the Board of Directors of

Director Partner Place: Date:

ABC LIMITED
Statement of Profit and Loss for the year ended September 30, 2012 Note Particulars Year ended on September 30, 2012 Amount in Rupees Six Months period ended on September 30, 2011

Revenue from operations Other income Total Revenue Expenses: Cost of materials consumed Changes in inventories of finished goods and work-in-progress Employee benefits expense Finance costs Depreciation Other expenses Total expenses

17 18

1,232,727,831 5,424,388 1,238,152,219

486,491,210 4,017,517 490,508,727

19 20 21 22 9 23

870,636,873 10,903,286 81,214,522 91,111,369 41,532,343 245,804,356 1,341,202,749

391,337,053 103,214,701 33,496,168 34,068,740 22,535,639 93,172,515 677,824,816

Loss before tax Tax expense: (1) Current tax (2) Deferred tax Loss for the year Earnings per equity share: Equity Share of par value of Rs. 10/- each Basic and Diluted Significant accounting policies and other notes to account The notes are an integral part of these financial statements As per our report of even date For B.R.Shah & Associates Firm Registration No: 129053W Chartered Accountants

(103,050,530) (103,050,530)

(187,316,089) 130,045,301 (317,361,390)

10

(5.75) 24

(17.70)

Bharat R. Shah Partner Membership No : 5806

Place: Ahmedabad Date: November 29, 2012

ABC LIMITED
Cash Flow Statemet For the Year ended September 30, 2012 Particulars A. CASH FLOW FROM OPERATING ACTIVITIES Net Loss before tax Add/Less : Adjustments Interest paid Depreciation Interest Received (Profit) / Loss on Revaluation of Current Investment (Profit) / Loss on Fixed Assets Sold OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES ADJUSTMENT FOR : Trade & Other Receivables Inventories Trade and Other Payables CASH GENERATED FROM OPERATIONS Income tax paid (Net of Refund) NET CASH FLOW FROM OPERATING ACTIVITIES B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets Proceeds from the Sale of Fixed Assets Interest Received NET CASH FLOW USED IN INVESTING ACTIVITIES C. CASH FLOW FROM FINANCING ACTIVITIES Increase / (Repayment) in borrowings Interest Paid NET CASH USED IN FINANCING ACTIVITIES Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) Cash and Cash Equivalents as at Beginning of the Year Cash and Cash Equivalents as at End of the Year September 30, 2012 (103,050,530) 91,111,369 41,532,343 (1,131,280) 2,500 (29,571) 28,434,831 44,803,043 (32,552,580) (10,639,105) 30,046,189 78,264 30,124,453 (2,766,162) 337,623 1,131,280 (1,297,259) 10,172,677 (40,311,303) (30,138,626) (1,311,432) 5,730,457 4,419,025 Amount in Rupees September 30, 2011 (187,316,091) 34,068,740 22,535,639 (862,416) 89,500 (131,484,628) (29,248,021) 168,447,478 106,856,520 114,571,349 (86,242) 114,485,107 (2,529,186) 862,416 (1,666,770) (73,081,990) (37,623,740) (110,705,730) 2,112,607 3,617,850 5,730,457

Notes: 1. The above Cash Flow Statement has been prepared under the 'Indirect Method ' set out in Accounting Standard 3Cash Flow Statement referred to in The Companies Accounting Standard Rules, 2006. 2. Cash and cash Equivalents represent cash and bank balances only. As per our report of even date For B.R.Shah & Associates Firm Registration No: 129053W Chartered Accountants

Bharat R. Shah Partner Membership No : 5806 Charulata Kabra Company Secretary Place: Ahmedabad Date: November 29, 2012

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 1 Share Capital (a) Details of authorised, issued, subscribed and fully paid up shares As at Particulars September 30, 2012 Amount Number September 30, 2011 Amount Number Amount in Rupees

Authorised Equity Shares of Rs. 10 each Issued, Subscribed and Paid up Equity Shares of Rs. 10 each fully paid

18,500,000

185,000,000

18,500,000

185,000,000

17,930,374 17,930,374

179,303,740 179,303,740

17,930,374 17,930,374

179,303,740 179,303,740

(b) Terms/rights attached to equity shares The company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. (c) Details of shareholders holding more than five percent of shares Name of Shareholder September 30, 2012 September 30, 2011 % of Holding No. of Shares % of Holding No. of Shares held held 4,008,929 3,314,291 1,528,150 1,500,000 1,326,429 1,000,000 422,895 22.36% 18.48% 8.52% 8.37% 7.40% 5.58% 2.36% 489,065 3,314,291 1,528,150 1,500,000 1,326,429 1,000,000 1,822,895 2.73% 18.48% 8.52% 8.37% 7.40% 5.58% 10.17%

B.T Investments Pvt Ltd Jainex Securities Pvt.Ltd Cosmos Resources Pvt Ltd Magenta Nirman Pvt Ltd E T Resources Pvt Ltd

2 Reserves and Surplus Particulars a. Capital Reserves b. Securities Premium Account c. General Reserves d. Surplus: Opening balance Add: Profit / (Loss) transferred from Statement of Profit and Loss Closing Balance

Amount in Rupees As at
September 30, 2012 September 30, 2011

2,500,000 25,000,000 186,152,937 (550,404,998) (103,050,530) (653,455,528) (439,802,591)

2,500,000 25,000,000 186,152,937 (233,043,608) (317,361,390) (550,404,998) (336,752,061)

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 3 Long-Term Borrowings Particulars I Secured Term loans from banks (A) I.D.B.I. Rupee Term Loan(A)&(B) S.B.I. Rupee Term Loan(A)&(B) S.B.I. Corporate Loan(A)&(B) I.D.B.I. Rupee Term Loan (WCTL)(A)&(B) (A)&(B) S.B.I. Rupee Term Loan (F.I.T.L.) (B) HDFC Bank Ltd. - Car Loan
(C)

Amount in Rupees As at September 30, 2012 September 30, 2011

78,825,000 66,250,000 6,000,000 33,000,000 184,075,000 45,957,735 45,957,735 230,032,735

II Unsecured Term loans from related parties (interest free)

47,162,991 47,162,991 47,162,991

(i) Nature of Security (A) Secured against joint equitable mortgage of all immovable properties both present and future ranking pari passu inter se and Hypothecation of all movable properties both present and future (Save and Except Book Debts) including movable machinery, machinery spares, tools and accessories, subject to prior charge created and/or to be created in favour of Company's Bankers for Working Capital Facilities. (B) Loans are guaranteed by the Manging Director. (C) Secured by Hypothecation of Motor cars purchased against said loans. (ii) Terms of Re-payment of Loan Particulars I.D.B.I. Rupee Term Loan I.D.B.I. Rupee Term Loan (WCTL) S.B.I. Rupee Term Loan S.B.I. Corporate Loan S.B.I. Rupee Term Loan (F.I.T.L.) HDFC Bank Ltd. - Car Loan HDFC Bank Ltd. - Car Loan Original Loan Amount Repayment Terms 150,000,000 32 Quarterly Installment of varying amount starting from October, 2007 interest rate 10.25% 30,000,000 18 Monthly Installment of varying amount starting from ,April 2010 interest rate 15.25% 115,800,000 32 Quarterly Instalment of varying amount starting from December, 2007 interest rate 15.25% 30,000,000 10 Quarterly Installment of equal amount starting from December, 2010 interest rate 15.75% 47,000,000 24 Quarterly Installment of varying amount starting from June, 2010 interest rate 12.75% 450,000 36 Monthly Installment of varying amount starting from March, 2009 interest rate 11.47% 460,000 36 Monthly Installment of varying amount starting from May, 2009 interest rate 11.48%

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. (iii) Details of continuing default as on the balance sheet date in repayment of loans 30-Sep-12 Outstanding Since Period of Default as on Particulars September 30, 2012 (In days) Oct-11 IDBI - Rupee Loan 366 Jan-12 274 Apr-12 183 Jul-12 92 Sep-11 SBI - Rupee Loan 367 Dec-11 275 Mar-12 184 Jun-12 93 Sep-12 1 Sep-11 S.B.I. Corporate Loan 367 Dec-11 275 Mar-12 184 Jun-12 93 Sep-12 1 Sep-12 S.B.I. - Rupee Loan (FITL) 1 I.D.B.I. Line Of Credit Aug-11 427 Sep-11 396 Aug-11 I.D.B.I. Rupee Term Loan (WCTL) 427 Sep-11 396 Total Principle amount Interest Accrued and due on above loans Total

Amount of Default Loan Rupees 5,400,000 5,400,000 5,400,000 5,400,000 2,650,000 3,750,000 3,750,000 4,250,000 4,250,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 1,500,000 5,000,000 5,000,000 1,670,000 1,610,000 70,030,000 46,680,987 116,710,987

(iv) During the year State Bank of India has recalled the loan on account of breach of loan covenant, while the company has made default in repayment of term loan from IDBI Bank, so the same loans have been classified as current maturities of long term borrowings for the current year. Interest has been provided as per last communicated rates or at the rate debited by Bank. 4 Long Term Provisions As at Particulars Provision for employee benefits Unavailed Leave Gratuity (Refer note 24(1)(h) & 24(2)(g)) 1,914,294 2,692,361 4,606,655 5 Short Term Borrowings Particulars I Secured(i) & (ii) Loan from Banks S.B.I. (P.C.F.C.) S.B.I. (Export Packing Credit) I.D.B.I. Line Of Credit State Bank of India II Unsecured (a) Term loans from related parties (b) Term loans from other parties As at September 30, 2012 September 30, 2011 1,030,676 4,797,771 5,828,447 Amount in Rupees September 30, 2012 September 30, 2011 Amount in Rupees

90,016,384 10,000,000 44,881,447 144,897,831 84,000,000 34,000,000 118,000,000 262,897,831

46,030,001 56,148,069 15,000,000 55,395,722 172,573,792 29,000,000 44,000,000 73,000,000 245,573,792

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. Nature of Security (i) Secured by hypothecation of all tangible assets including movable machinery, stock in trade, stores, book debts, etc and second charge on entire fixed assets, present and future, and guaranteed by Managing Director. (ii) Loans are guaranteed by the Manging Director (iii) Terms of Re-payment of Loan Particulars I.D.B.I. Line Of Credit State Bank of India S.B.I. (Export Packing Credit) S.B.I. (P.C.F.C.) Repayment Terms 6 Monthly Installment of equal amount starting from April, 2011 Interest rate 15.25% Repayable on demand Repayable on demand Repayable on demand

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 6 Trade Payables Particulars Payable to Micro, Small and Medium Enterprises (1) Payable to Others As at
September 30, 2012

178,938,815 178,938,815

(1) The Company has not received any intimation from the suppliers regarding status under the Micro, Small & Medium Enterprises Development Act, 2006 (The Act ) and hence disclosures regarding : a) Amount due and outstanding to suppliers as at the accounting period, b) Interest paid during period, c) Interest payable at the end of the accounting period and d) Interest accrued at the end of accoutning period, has not been disclosed or provided. 7 Other Current Liabilities Particulars (a) Current maturities of long-term debt Term loans from banks(1) (A) I.D.B.I. Rupee Term Loan S.B.I. Rupee Term Loan S.B.I. Corporate Loan I.D.B.I. Rupee Term Loan (WCTL) S.B.I. Rupee Term Loan (F.I.T.L.) (B) HDFC Bank Ltd. - Car Loan 100,425,000 84,900,000 21,000,000 3,280,000 34,499,895 244,104,895 52,541,282 10,834,776 568,064 11,402,840 1,878,917 6,354,387 9,350,494 17,583,798 325,632,815 (1) For disclosure regarding, Security, amount guaranteed by directors and others, repayment terms of loan and amount of continuing defaults, refer Note 3. (2) Includes Rs. 25,000/- (Previous Year 25,000) payable to Director. 8 Short Term Provisions Particulars Provision for employee benefits Unavailed Leave Gratuity (Refer note 24(1)(h) & 24(2)(g)) As at
September 30, 2012

As at
September 30, 2012

(b) Interest accrued and due on borrowings (c) Accrued Salaries and benefits Salaries Contribution of Provident and other funds (d) Other payables Statutory Obligation Advance from Customers Others Payable(2)

250,983 653,881 904,864

forming part of the Balance Sheet as at and Statement of Profit and Loss for the year

Amount in Rupees As at
September 30, 2011

174,632,293 174,632,293

ved any intimation from the suppliers regarding status under the Micro, Small & Medium 006 (The Act ) and hence disclosures regarding : a) Amount due and outstanding to period, b) Interest paid during period, c) Interest payable at the end of the accounting at the end of accoutning period, has not been disclosed or provided. Amount in Rupees As at
September 30, 2011

27,000,000 19,750,000 15,000,000 4,950,000 1,500,000 186,513 68,386,513 1,741,216 10,918,985 1,735,803 12,654,788 590,885 3,565,109 25,624,738 29,780,732 112,563,249

curity, amount guaranteed by directors and others, repayment terms of loan and

Amount in Rupees As at
September 30, 2011

1,179,817 1,179,817

ABC LIMITED Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 9 Fixed Assets Gross Block As at October Additions Disposal 1, 2011 during the year Amount in Rupees Depreciation Net Block As At As at As at October For the year On disposals As at September 30, September 30, September 30, 1, 2011 September 30, 2012 2011 2012 2012

Particulars

Tangible Assets Land Buildings(1) Plant and Equipment Furniture and Fixtures Vehicles Office equipment 4,076,694 189,352,993 791,307,982 3,286,989 5,544,847 5,281,078 998,850,583 997,221,322 1,329,933 702,206 226,786 58,357 76,050 2,393,332 372,830 1,629,261 1,906,759 843,056 2,749,815 4,076,694 190,682,926 790,103,429 3,513,775 4,760,148 5,357,128 998,494,100 372,830 998,850,583 46,432,836 595,805,473 2,437,492 3,376,720 3,586,682 651,639,203 629,103,564 5,449,708 35,153,601 352,834 373,964 202,236 41,532,343 22,535,639 1,811,421 630,342 2,441,763 51,882,544 629,147,653 2,790,326 3,120,342 3,788,918 690,729,783 651,639,203 4,076,694 138,800,382 160,955,776 723,449 1,639,806 1,568,210 307,764,317 372,830 347,211,380 4,076,694 142,920,157 195,502,509 849,497 2,168,127 1,694,396 347,211,380 -

Capital work in progress

Previous period

(1) Buildings include cost of Ownership Premises Rs.71,37,356/- ( Previous period Rs.71,37,356/- ) and cost of Shares in Co-operative Society Rs.2,000/- (Previous period Rs.2,000/-)

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 10 Deferred Tax Assets Particulars Deferred Tax Assets on Account of Following Depreciation (Including unabsorbed) Provision for Bonus Provision for Gratuity Provision for Leave Encashment Provision for Super Annuation Fund Interest on Term Loan Deferred Tax (Assets) / Liabilities (Net) As at September 30, 2011 Charge/ Credit During the year

(5,149,845) 1,569,295 1,482,511 683,041 1,414,998 -

(15,648,720) 334,780 (396,823) 19,483 (1,355,740) 17,047,019 -

(i) At present Companys net worth is fully eroded and further considering the present scenario prevailing in Textile Industry Management is of the view that there is no virtual certainty of future profitability which can absorb unabsorbed depreciation in near future. In view of this Management has decided to recognized the Deferred tax Assets only to the extent of Deferred tax Liabilities. 11 Long Term Loans and Advances Particulars Capital Advances Prepaid Expenses As at September 30, 2012 4,050,700 14,707 4,065,407

12 Current Investments Particulars Current Investment (1) Investments in Mutual Funds - SBI Infrastructure Fund Less: Provision for decrease in value on account of revaluation As at September 30, 2012

500,000 92,000 408,000

(1) Valued at lower of cost or fair value

Profit and Loss for the

Amount in Rupees As at September 30, 2012

(20,798,565) 1,904,075 1,085,688 702,524 59,258 17,047,019 -

enario prevailing in Textile hich can absorb unabsorbed ferred tax Assets only to the

Amount in Rupees ` As at September 30, 2011 4,050,700 4,050,700

Amount in Rupees As at September 30, 2011

500,000 89,500 410,500

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 13 Inventories Amount in Rupees As at September 30, 2012 September 30, 2011 78,908,944 27,282,853 32,642,408 10,992,478 4,186,972 154,013,655 (1) Valued at cost or net realizable value whichever is lower (2) At Net realisable value Details of inventory i) Goods manufactured Yarn/Knitted Fabrics ii) Work-in-progress Yarn/Knitted Fabrics 14 Trade Receivables As at September 30, 2012 September 30, 2011 32,642,408 40,681,889 34,810,636 31,350,156 40,681,889 11,634,920 2,983,474 121,461,075

Inventories a. Raw Materials and components(1) b. Work-in-progress(1) c. Finished goods(1) d. Stores and spares(1) e. Waste(2)

27,282,853

31,350,156 Amount in Rupees

Particulars Unsecured, considered good Outstanding for a period exceeding six months from the date they become due for Payment Other receivables

As at September 30, 2012 September 30, 2011

8,899,224 8,899,224

61,854 44,675,628 44,737,482 Amount in Rupees

15 Cash and Bank Balances

Particulars Cash and Cash Equivalents Cash on hand Balances with banks In Current Accounts In Fixed Deposit Accounts

As at September 30, 2012 September 30, 2011

404,061

375,430

3,795,017 219,947 4,419,025

5,355,027 5,730,457

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 16 Short term loans and advances Amount in Rupees As at September 30, 2012 September 30, 2011

Particulars Others - Unsecured, considered good Prepaid Expenses Deposits Amount with Government Authorities Advances to suppliers Advances to staff Advance Income Tax Others

385,094 19,904,522 43,934,480 1,506,491 704,119 638,978 12,628,978 79,702,662

767,873 17,875,947 35,821,555 3,615,676 996,505 717,242 28,965,620 88,760,418

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012.

17 Revenue from Operation

Year ended on September 30, 2012

Amount in Rupees
Six Months period ended on September 30, 2011

Particulars

Sale of Products Sale of Services Other operating revenues Export Benefits received Scrap Sales

1,227,163,117 939,461 3,886,225 739,028 4,625,253 1,232,727,831

462,004,697 24,179,087 307,426 24,486,513 486,491,210

Details of Goods Sold

Yarn/Knitted Fabrics Others

1,092,618,234 134,544,883 1,227,163,117

412,998,864 49,005,833 462,004,697 Amount in Rupees

18 Other Income
Year ended on September 30, 2012

Particulars

Six Months period ended on September 30, 2011

Interest Income Exchange Rate Difference Liabilities / Provision no longer required Surplus on sale of fixed assets (net) Other non-operating income Service tax Refund

1,131,280 3,705,819 549,338 29,571 647 7,733 5,424,388

862,416 3,153,118 1,983 4,017,517

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 19 Cost of materials consumed Year ended on September 30, 2012 Amount in Rupees Six Months period ended on September 30, 2011

Particulars

Raw Material Consumption Opening Stock Add: Purchases Less: Closing Stock Total Cost of Material Consumed Details of Raw Material Consumed Cotton

34,810,636 914,735,181 78,908,944 870,636,873

101,102,198 325,045,491 34,810,636 391,337,053

870,636,873 870,636,873

391,337,053 391,337,053 Amount in Rupees Six Months period ended on September 30, 2011

20 Changes in inventories of finished goods and work-in-progress Year ended on September 30, 2012

Particulars

Changes in Inventory Work-in-progress Opening Closing Finished goods Opening Closing (Increase) / Decrease in Inventory 21 Employee Benefit Expenses

31,350,156 27,282,853

45,927,858 31,350,156

43,665,363 36,829,380 10,903,286

132,302,362 43,665,363 103,214,701 Amount in Rupees

Particulars

Year ended on September 30, 2012

Six Months period ended on September 30, 2011 27,630,028 4,388,146 1,477,994 33,496,168

Salaries and incentives Contributions to Provident and other funds Staff welfare expenses

70,934,602 6,383,766 3,896,154 81,214,522

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 22 Finance Costs Year ended on September 30, 2012 Amount in Rupees Six Months period ended on September 30, 2011 31,887,158 2,181,582 34,068,740 Amount in Rupees Year ended on September 30, 2012 Six Months period ended on September 30, 2011

Particulars

Interest expense Other borrowing costs

89,361,807 1,749,562 91,111,369

23 Other expenses

Particulars

Other Expenses Consumption of Store materials Power and Fuel Repairs to buildings Repairs to machinery Repairs to others Insurance Rates and Taxes Commission and discount Freight and despatch charges Travelling and conveyance Vehicle Expenses Director's Sitting Fees Sundry Balances Written Off Payment to Auditors (Refer note 24(2)(d)) Provision for Diminutions in the value of Investment Miscellaneous Expenses

20,433,960 157,671,156 578,785 26,113,156 1,204,304 621,845 262,156 13,501,065 6,224,627 4,123,623 2,487,441 230,000 63,445 212,197 2,500 12,074,096 245,804,356

6,543,373 50,216,052 385,283 8,714,856 306,409 335,905 132,790 7,440,078 11,079,062 367,145 1,099,666 80,000 127,949 89,500 6,254,447 93,172,515

ABC LIMITED ABC LIMITED

Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 24 1 a Significant accounting policies and other notes to account Significant Accounting Policies Basis of Accounting The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out in the schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current non current classification of assets and liabilities. b Fixed Assets and Depreciation Fixed Assets : Fixed Assets are stated at cost / book value less depreciation and net of cenvat and subsidy except on freehold land. Depreciation : (i) Depreciation is being provided on Straight Line Method in terms of Section 205(2) (b) of the Companies Act, 1956 at the rates and in the manner specified in Schedule XIV to the said Act. (ii) In respect of assets acquired/sold during the year, depreciation has been provided on pro-rata basis. c Investments : All long term investments and are stated at cost unless there is a permanent fall in the value of Investments. All current investment are stated at cost or realisable value which ever is lower.

Inventories : (i) Stores and spares are valued at cost. Cost is arrived at on F.I.F.O. basis. (ii) Raw materials are valued at cost or net realisable value whichever is lower. Cost is arrived at on the basis of cost of respective lots remaining in stock and related expenses. (iii) Materials in Process is valued at cost (*) or net realisable value whichever is lower. (iv) Yarn and Knitted Fabrics are valued at cost(*) or net realisable value whichever is lower. *(v) Cost of Valuation of materials in process and yarn has been arrived at 'by adding direct cost & relevant overhead cost' in accordance with the revised Accounting Standard(AS-2) "Valuation of Inventories". (vi) Waste is valued at estimated realisable value. (vii) Materials in transit are valued at cost to date of the Balance Sheet. Exchange Fluctuations Monetary Current Assets and Liabilities in foreign currency outstanding at the close of the financial year are valued at the appropriate exchange rates at the close of the year. The loss or gain due to fluctuation of exchange rates is charged to Statement Profit & Loss. Revenue Recognition (i) Sale of goods is recognised at the point of transfer of significant risk and rewards to the customers. (ii) Benefit on account of entitlement to import goods free of duty under the "Duty Entitlement Pass Book under the Duty Exemption Scheme" and "Duty Draw Back Scheme" are accounted in the year of export.

Government Grants and Subsidy Revenue Grants and Subsidy received during the year have been shown by way of deduction from related expenses.

ABC LIMITED ABC LIMITED

Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. h Employee Benefits (i) Defined Contribution Plan: The Company has defined contribution plans in the form of Provident Fund, Pension Scheme, EDLI, Super Annuation Fund and Labour Welfare Fund and the contributions are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due. There are no other contributions other than the contributions payable to the respective funds. (ii) Defined Benefit Plan: Fund Plan: The Company has defined benefit plans in the form of Gratuity, the liability for which is determined on the basis of acturial valuation at the end of the year. Gains and losses arising out of acturial valuation are recognised immediately to the Statement of Profit and Loss as income or expense. Unfunded Plan: The Company has unfunded Defined Benefit Plans in the form of Compensated Absences, as per Company Policy. (iii) Other Defined Benefits Provision for other defined benefit for long term leave encashment is made based on an independent actuarial valuation on projetced unit credit method at the end of each financial year. Acturial gain and losses are recognised immediately in the Statement of Profit and Loss Account as income or expenses. Company recognised the undiscounted amount of short term employee benefits during the accounting period based on service rendered by an employee. i Borrowing Cost Borrowing costs in relation to acquisition and construction of assets are capitalised as part of the cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which these are incurred. Taxes on Income Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred Tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences,being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Impairment of Assets: The carrying amounts of assets are reveiwed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An Impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital.

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. 2 Other Notes to Accounts (a) Contingent liabilities and commitments (to the extent not provided for) Particulars (i) Contingent Liabilities (a) Claims against the company not acknowledged as debt - Labour Matters (b) Bills Discounted (Since Realised) As at September 30, 2012 September 30, 2011

335,231 335,231

228,950 80,300,066 80,529,016

(ii) Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for

42,345,734 42,345,734 42,680,965

41,495,104 41,495,104 122,024,120

(b) As of the Balance Sheet date, the Company's net foreign currency exposures that are not hedged by a derivative instrument or otherwise is as follows As at September 30, 2012 September 30, 2011 $622,847 30,625,986

Trade Receivable

USD INR

(c) Segment Reporting In accordance with the requirements of Accounting Standard 17 - " Segment Reporting' the Company has determined its business segment as Textile Products. Since 100% of the Companys' business is from Textile Products, there are no other primary reportable segments. Thus the segment revenue, segment results, total carrying amount of segment liabilitites, total cost incurred to acquired segment assets, the total amount of charge for depreciation and amortisation during the year are all as reflected in the financial statements for the year ended September 30, 2012 and as on that date. Amount in Rupees As at September 30, 2012 September 30, 2011

Secondary Segment- Geographical by location of customers Sales & Operating Income In India Outside India Carrying cost of Assets by Location In India Outside India Capital Expenditure In India Outside India

1,138,586,069 94,141,762 1,232,727,831 559,645,120 559,645,120 2,766,162 2,766,162

163,245,202 323,246,008 486,491,210 581,736,026 30,625,986 612,362,012 1,629,261 1,629,261

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. (d) Payment to Auditors Particulars Auditor a. for audit services b. for taxation matters c. for other services d. expenses Cost Auditor a. Cost audit fees b. for reimbursement of expenses September 30, 2012 Amount in Rupees September 30, 2011

100,000 15,000 63,500 178,500 32,318 1,379 33,697 212,197

75,000 24,000 1,980 100,980 25,590 1,379 26,969 127,949 Amount in Rupees

(e) Earning Per Share Particulars Loss for the year attributable to the Equity Shareholders Basic/weighted average number of Equity Shares outstanding during the year Nominal Value of Equity Share Basic and diluted earning per Share

As at September 30, 2012 September 30, 2011 (103,050,530) (317,361,392) 17,930,374 Rs. 10/(Rs.5.75) 17,930,374 Rs. 10/(Rs.17.70)

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. (f) Other Details (i) Value of Raw Materials Consumed September 30, 2012 Amount % Indigenous 870,636,873 870,636,873 (ii) Value of Spares Consumed September 30, 2012 Amount % Imported Indigenous 3,118,519 21,157,806 24,276,325 (iii) Value of Imports on C.I.F. Basis 12.85 87.15 100.00 Amount in Rupees 100.00 100.00 Amount in Rupees September 30, 2011 Amount % 391,337,053 391,337,053 100.00 100.00 Amount in Rupees September 30, 2011 Amount % 1,467,929 6,626,652 8,094,581 18.13 81.87 100.00

September 30, 2012 September 30, 2011 Spare Parts 2,861,415 2,861,415 (iv) Expenditure in Foreign Currency 1,528,062 1,528,062 Amount in Rupees

September 30, 2012 September 30, 2011 Travelling Bank Charges Commission 1,436,093 374,886 459,947 2,270,926 (v) Earnings in Foreign Currency 374,990 2,302,661 2,677,651 Amount in Rupees

September 30, 2012 September 30, 2011 F.O.B. Value of Exports 92,680,013 92,680,013 (vi) Export sales 318,464,639 318,464,639 Amount in Rupees September 30, 2012 September 30, 2011 Direct Exports Through Export House 94,141,762 735,451,958 829,593,720 323,246,008 25,332,652 348,578,660

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended March 31, 2012. (g) Disclosure pursuant to Accounting Standard - 15 (Revised) "Employee Benefits": a. Defined Contribution Plans: Amount of Rs. 54,35,295/- (Previous period 28,77,557/-) is recognised as expense and included in "Employee benefits expenses" in Note - 21 to the Statement of Profit & Loss. b. Defined Benefit Plans: i. Reconciliation of opening and closing balances of the Present Value of the Defined Benefit Obligation: Amount in Rupees

a. b. c. d. e. f.

Particulars Present value of Defined Benefit obligation at the beginning of the year Interest cost Current service cost Actuarial Losses/(Gains) Benefits paid Present value of Defined Benefit Obligation at the close of the year

Gratuity as at September 30, 2012 September 30, 2011 10,083,368 9,148,508 806,669 365,940 999,646 566,792 (78,148) 818,742 (2,892,967) 816,614 8,918,568 10,083,368

ii. Changes in the fair value of Plan Assets and the reconciliation thereof: a. Fair value of Plan Assets at the beginning of the year b. Add: Expected return on Plan Assets c. Add/Less: Actuarial Losses/(Gains) d. Add: Contributions e. Less: Benefits Paid f. Fair value of Plan Assets at the close of the year

5,285,597 466,118 313,578 2,400,000 (2,892,967) 5,572,326

5,661,326 240,886 200,000 816,615 5,285,597

iii. Amount Recognised in the Balance sheet including a reconciliation of the present value of the defined obligation in (i) and the fair value of the plan assets in (ii) to assets and liabilities recognised in the Balance Sheet. a. Present value of Defined Benefit obligation 8,918,568 10,083,368 b. Less: Fair value of plan Assets 5,572,326 5,285,597 c. Present value of unfunded obligation 3,346,242 4,797,771 d. Net Liability/(Asset) recognised in the Balance sheet 3,346,242 4,797,771

iv. Amount recognised in the Statement of Profit and Loss are as follows: a. Current Service Cost b. Interest Cost c. Expected return on Plan Assets d. Actuarial Losses/(Gains) e. Past services costs f. Effect of Curtailment/settlement g. Adjustments for earlier years h. Recognised in the Statement of Profit and Loss

999,646 806,669 (466,118) (391,726) 948,471

566,792 365,940 240,886 818,742 1,510,588

v. Actuarial Assumptions at the Balance sheet date: a. Discount Rate b. Expected rate of return on Plan Assets c. Salary Escalation rate- Management Staff d. Salary Escalation rate- Non Management Staff vi. Experience Adjustments a. Defined Benefit Obligation b. Plant Assets c. (Surplus) / Deficit d. Experience adjustments on plan liabilities (gain) / loss e. Experience adjustments on plan assets (gain) / loss

8.25% 9.25% 3% 3%

8% 9% 3% 3%

8,918,568 5,572,326 3,346,242 120,833 (313,578)

10,083,368 5,285,597 4,797,771 818,742 -

Experience adjustment is on account of attrition in number of employees as compared to the previous year and changes in actuarial assumptions. The Estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors. vii. Amount recognised as an expense in respect of Compensated Leave Absences is Rs 11,34,601/- (Previous period Rs. 4,62,009/-)

ABC LIMITED
Notes '1' to '24' annexed to and forming part of the Balance Sheet as at and Statement of Profit and Loss for the year ended September 30, 2012. (h) Related Party Disclosures Related party disclosures, as required by AS-18 are given below: 1.Relationships: (i) Key Management Personnel and their relatives : significant influence : 2.The following transactions were carried out with the related parties in the ordinary course of business: Details relating to parties referred to in item 1(i) and 1(ii) above: Amount in Rupees September 30, 2011 In Relation to In Relation to Item 1(i) Item 1(ii)

Particulars Intercorporate Loan Repaid Intercorporate Loan Received Remuneration Interest Paid Outstanding Balances at the end

September 30, 2012 In Relation to In Relation to Item 1(i) Item 1(ii)

(i) The Company has decided to file an appeal u/s 25(1) the Sick Industrial Companies (Special Provisions) Act,1985 against the order passed by the Board of Industrial and Financial Reconstruction (BIFR) for reference bearing no.3/2012 filed u/s 15(1) of the SICA,1985 on 13/01/2012. (j) The Company has incurred accumulated loss of Rs.65,34,55,528/- as on September 30, 2012, which has resulted in erosion of its net worth by more than 100%. The Company will make a fresh reference u/s 15(1) of the SICA,1985 along with a rehabilitation scheme to the BIFR.The Company has no specific plan for windup operations in the near future. The Management, on the basis of Techno Economic Viability study conducted by an approved consultant, looking into the stability in the cotton price and overall turnaround in the Textile Industry, believes that it will have sufficient funds to meet its liability for the next twelve months and hence continue to present its financial statements on going concern basis. (k.) The previous period figures have been regrouped/reclassified, wherever necessary to conform to the current year presentation. The figures for the previous period are for the period of six months and are thus not comparable with current year figures. As per our report of even date Chartered Accountants
For and on behalf of the Board of Directors of

Director Partner Company Secretary Place: Date: