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You Are Here   :  Equity   |   Company Profile  |   Reports
Koutons Retail India Ltd(Industry :   Textiles - Products)
 
BSE Code:532901NSE Symbol: KOUTONSP/E  (TTM): 0
ISIN Demat:INE406I01014Div & Yield %:0EPS   (TTM) ( Cr.) :0
Book Value ( Cr.):18.42Market Cap ( Cr.):18.0856Face Value ( Cr.) :10
  Change Company 
KOUTONS RETAIL INDIA LIMITED

ANNUAL REPORT 2009-2010

NOTES ON ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES:

(a) BASIS OF PREPARATION:

The  Financial  statements  have been prepared under  the  historical  cost 
convention and in accordance with applicable Accounting Standards issued by 
the  Institute  of Chartered Accountants of India and  relevant  disclosure 
requirements of Companies Act, 1956 as adopted consistently by the Company. 
The accounting policies have been consistently applied by the company & are 
consistent with those used in the previous year.

(b) Uses of estimates

The  preparation  of financial statements requires the  management  of  the 
company to make estimates and assumptions that affect the reported balances 
of  assets  and  liabilities and disclosures  relating  to  the  contingent 
liabilities as at the date of the financial statements and reported amounts 
of  income and expenses during the year. Example of such estimates  include 
provisions  for  employee  benefits, provision for income  taxes,  and  the 
expected useful life of fixed assets.

(c) FIXED ASSETS & DEPRECIATION:

FIXED ASSETS:

Fixed  Assets  are  stated at the  cost  of  acquisition/installation  less 
accumulated  depreciation and include directly attributable cost  including 
installation  and  freight charges for bringing the assets to  its  working 
conditions for its intended use.

DEPRECIATION:

Depreciation  on  fixed  assets  is provided on  WDV  method  at  the  rate 
prescribed  under  schedule XIV of the Companies Act,  1956.  Proportionate 
depreciation is charged for additions/deletions during the year. Individual 
asset costing less than Rs. 5,000/- are depreciated in full in the year  of 
purchase.

(d) IMPAIRMENT OF ASSETS:

The management reviews the carrying amounts of assets at each Balance Sheet 
date for any indication of impairment based on internal/external factors in 
accordance with Accounting Standard 28 'Impairment of Assets'. An asset  is 
treated  as  impaired  when  the carrying cost of  the  assets  exceed  its 
recoverable value. An impairment loss, if any, is charged to the Profit and 
Loss Account in the year, in which an asset is identified as impaired.

(e) INVESTMENTS:

Investments  that  are readily realizable and intended to be held  for  not 
more  than  a  year  are  classified  as  current  investments.  All  other 
investments  are classified as long term investments.  Current  investments 

are  carried  at lower of cost and fair value on an  individual  investment 
basis. Long term investments are carried at cost. Provision for  diminution 
in  the  value of long term investment is made only if such  a  decline  is 
other than temporary in the opinion of the management.

(f) INVENTORIES:

Raw  materials, consumables, stores and spares are valued at lower of  cost 
and net realisable value as certified by the management.

Work-in-Progress is valued at direct raw material cost and appropriate cost 
of completed process.

Finished  goods  are valued at lower of cost and net  realisable  value  as 
certified by the management. Finished goods include cost of conversion  and 
other costs incurred in bringing the inventories to their present  location 
and condition.

Cost of inventories is computed on FIFO basis. Net realisable value is  the 
estimated selling price in the ordinary course of business, less  estimated 
costs of completion and to make the sale.

(g) REVENUE RECOGNITION:

Revenue  is recognised to the extent that it is probable that the  economic 
benefits will flow to the Company and the revenue can be reliably measured.

i. SALE OF GOODS:

(a) Consignment Sales: Revenue is recognised when consignee agents make the 
sales. Sales are recorded at net realisable value i.e. net of all discounts 
& sales tax.

(b)  Direct  Sales: Revenue is recognised when goods  are  delivered  which 
coincide  with risk and rewards of ownership of goods have been  passed  to 
buyer.

ii. INTEREST:

Revenue  is recognised on a time proportion basis taking into  account  the 
amount outstanding and the rate applicable.

(h) FOREIGN CURRENCY TRANSACTIONS:

a) Initial Recognition:

Foreign  currency transactions are recorded in the reporting  currency,  by 
applying  to  the  foreign currency amount the exchange  rate  between  the 
reporting currency and the foreign currency at the date of the transaction.

b) Conversion:

Foreign  currency  monetary items are reported using the  closing  rate  of 
exchange at the end of the year. Non monetary items, like fixed assets  are 
carried in terms of historical cost using the exchange rate at the date  of 
the transaction.

c) Exchange Differences

i)  Any  gain  or  losses  on account  of  exchange  difference  either  on 
settlement  or on translation is recognized in the Profit and Loss  Account 
except  in  cases where they relate to the acquisition of fixed  assets  in 
which case they are adjusted to the carrying cost of such assets.

ii)  Foreign currency assets & liabilities are translated at the  year  end 
rates  and resultants gains / losses on foreign exchange transaction  other 
than  those relating to fixed assets are recognized in the profit and  loss 
account.

iii) Non-monetary foreign currency items are carried at cost.

(i) TAXATION:

Income  tax  expense comprises of current tax and deferred  tax  charge  or 
credit.

Provision for current tax is made on the basis of estimated taxable  income 
for the current accounting year in accordance with the provisions of Income 
Tax Act, 1961 as applicable to the relevant assessment year.

The deferred tax asset and deferred tax liability is calculated by applying 
tax  rate and tax laws that have been enacted or substantively  enacted  by 
the Balance Sheet Date. Deferred tax assets arising from timing differences 
are  recognised, subject to consideration of prudence, to the extent  there 
is  reasonable  certainty that these would be realised in future.  At  each 
Balance Sheet date, the carrying amount of deferred tax assets is  reviewed 
to reassure realisation.

(j) EMPLOYEE RETIREMENT BENEFITS:

i. DEFINED CONTRIBUTION PLAN:

The  Company  makes  defined  contribution to  Provident  Fund,  which  are 
recognised in the Profit and Loss Account on accrual basis.

ii. DEFINED BENEFIT PLAN

i)  The Company's liability under Payment of Gratuity Act is determined  on 
the  basis  of actuarial valuation made at the end of  financial  year  and 
accounted for on accrual basis.

ii) Provision for leave entitlement is accrued and provided for at the  end 
of  the  financial year but the same is not being determined  on  actuarial 
valuation basis.

(k) BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of 
qualified  assets are, capitalised as a part of the cost of such assets  up 
to  the date when such assets are ready for its intended use. A  qualifying 
asset is one that necessarily takes substantial period of time to get ready 
for intended use. All other borrowing costs are charged to revenue. However 
during the current financial year no borrowing cost has been capitalized.

(l) OPERATING LEASES:

The  Company takes premises for it's showroom/godown for  various  duration 
Lease/License period with Lock-in-period of One to Three Years.  Escalation 
Clause is variable between 5% to 15% after every three years and 30-45 days 
rent free time is taken from the date of possession given by the landlord.

(m) CASH FLOW STATEMENT:

The  cash  flow  statement is prepared by the indirect method  set  out  in 
Accounting  Standard 3 on cash flow statements and presents the cash  flows 
By  Operating, Investing and Financing activities of the company. Cash  and 
cash equivalents presented in cash flow statement consists of cash in hand, 
cheques in hand, bank balances & demand deposits with Banks.

(n) MISCELLANEOUS EXPENSES:

i. PRELIMINARY EXPENSES

The  expenses incurred on formation of Company are amortised over a  period 
of 10 years.

ii. DEFERRED REVENUE EXPENDITURE:

Expenditure  incurred  on factory license fees, Trade mark fee  and  rental 
paid  for  pre  commencement of retail stores,  factories  are  treated  as 
Deferred  revenue  Expenditure and are amortised over the  life  period  of 
concerned  item in accordance with the AS 26(Intangible Assets)  issued  by 
the ICAI.

(o) PROVISIONS:

A  provision is recognised when the Company has a present obligation  as  a 
result  of past event; it is probable that an outflow of resources will  be 
required to settle the obligation, in respect of which a reliable  estimate 
can  be  made. Provisions are not discounted to its present value  and  are 
determined based on best estimate required to settle the obligation at each 
balance  sheet  date.  These are reviewed at each balance  sheet  date  and 
adjusted to reflect the current best estimate.

B. NOTES ON ACCOUNTS:

1. In the opinion of the Board of Directors of the company and to the  best 
of their knowledge and belief the realisable value of current assets, loans 
& advances if realised in the ordinary course of business will not be  less 
than  the amount at which they are stated in the Balance Sheet as  at  31st 
March, 2010.

2.  Balance from some of the sundry debtors, sundry creditors and  loans  & 
advances are subject to confirmation and reconciliation.

3.  The name of the Micro, Small and Medium Enterprises  suppliers  defined 
under  the 'The Micro Small and Medium Enterprises Development  Act,  2006' 
could  not  be  identified,  as the necessary information  is  not  in  the 
possession of the Company.

4.  The Company had made investment of Rs. 1.95 crore in the share  capital 
of DBG Retail Holdings Ltd., a wholly owned subsidiary company in F.Y.2007-
08. In view of the long term investment of the company in the said company, 
a provision equal to the accumulated losses in the wholly owned  subsidiary 
company has been made in the books of accounts.

5.  The  Company had raised Rs. 10,822.77 Lacs through a  public  issue  of 
equity  shares  during the financial year 2007-08 and whole amount  of  the 
proceeds are utilized as per object of the issue.

6.  Term  loan secured against hypothecation of  machinery  and  collateral 
security  of  immovable properties registered in the name  of  company  and 
directors  &  their wives and personal guarantees of  directors  and  their 
wives are Rs.240.44 Lacs & Rs.602.59 Lacs for the year ended on 31.03.10  & 
31.03.09 respectively.

Term loan secured against hypothecation of car are Rs.45.91 Lacs & Rs.57.40 
Lacs for the year ended on 31.03.10 & 31.03.09 respectively.

Term  loan secured against hypothecation of Retail Commercial  Outlets  are 
Rs.178.91  Lacs & Rs.186.64 Lacs for the year ended on 31.03.10 &  31.03.09 
respectively.

Working  Capital  Loans  from Banks are secured  against  hypothecation  of 
inventories  and collateral security of immovable properties registered  in 
the name of company and directors & their wives and personal guarantees  of 
directors and their wives.

The  company has NCD which, with 10.15% redeemable at Par on 6/04/2009  for 
Rs  5000  lacs  (Balances as on 31-03-2010 Rs 3356.45  lacs  )  and  13.00% 
redeemable at Par on 16/07/2009 for Rs 5000 lacs (Balance as on  31-03-2010 
Rs  4800  lacs  ),  are secured by post dated  cheques  for  Principal  and 
Interest and further secured by charge on land in Gujrat.

7.  The  Company has taken certain office premises,  showrooms  and  retail 
commercial  outlets on non-cancellable operating lease. The future  minimum 
lease  rentals  payable at the Balance Sheet date, in respect of  the  non-
cancellable operating lease, are as follows:

7.  The  Company has taken certain office premises,  showrooms  and  retail 
commercial  outlets on non-cancellable operating lease. The future  minimum 
lease  rentals  payable  at  the Balance Sheet  date,  in  respect  of  the 
noncancellable operating lease, are as follows:

                                                                Rs. in Lacs
                                            As at 31.03.10   As at 31.03.09

For a period not later than one year              3,672.25         4,691.09

For a period later than one year and 
not later than five years                         2,332.33         2,782.83

For a period later than five years                       -                -

8.  The company could not fully redeem the debentures on due dates and  has 
asked  the Debenture holder for reschedulement of repayment dates which  is 
pending their consideration. Meanwhile the interest rate on 10.15% NCD  has 
been revised to 13.50%.

9. SEGMENT REPORTING

i. Primary- Business Segment:

In  accordance  with the requirements of Accounting  Standard  17  'Segment 
Reporting' issued by the ICAI, the Company's business consists of  multiple 
segments  like  Manufacturing,  Trading and Selling  of  Textile  products, 
Accessories  and  Shoes. But the separate disclosure under  the  Accounting 
Standard 17 is not applicable.

ii. Secondary- Geographical Segment:

Secondary  Segment  Reporting  is performed on the  basis  of  geographical 
location  of  the customers. The operation of the Company  comprises  local 
sales only in the current year. Hence no separate disclosure pertaining  to 
attributable  Revenues, profits, assets, Liabilities and  Capital  employed 
are  given.  10.  During  the year the company  has  settled  some  of  its 
creditors assignment of its receivables with mutual consent.

11. Detail of Deferred Tax Liabilities/Assets is as below:

                                                                Rs. in Lacs
Deferred Tax Liabilities on account of:                    As at      As at 
                                                        31.03.10   31.03.09
Depreciation                                                   -      43.75
Preliminary & Deferred Exp.                                 0.11       0.11
Expenses allowed u/s 40(a)(ia)                                 -       5.95
Total                                                       0.11      49.81

Deferred Tax Assets on account of:                         As at      As at 
                                                        31.03.10   31.03.09
Depreciation                                               34.50          -
Retirements Benefits                                        8.55       2.85
Total                                                      43.05       2.85
Deferred Tax Liabilities/(Assets) (Net)                  (42.94)      46.96

12. EARNINGS PER SHARE:

Basic earnings per share are calculated by dividing the net profit or  loss 
for  the  period attributable to equity shareholders  by  weighted  average 
number of equity shares outstanding during the period. The weighted average 
numbers of equity shares outstanding during the period are adjusted for the 
events  of  bonus  issue, if any. For the purpose  of  calculating  diluted 
earnings  per share, the net profit or loss for the period attributable  to 
equity  shareholders and the weighted average number of shares  outstanding 
during  the period are adjusted for the effects of all  dilutive  potential 
equity shares.

                                                        As at         As at 
                                                     31.03.10      31.03.09
i) Net Profit available for Equity
Shareholders (In Lacs)                               8,179.97      7,955.71

Opening No. of Shares (In Lacs)                        305.51        305.51

Closing No. of Shares (In Lacs)                        305.51        305.51

ii) Weighted average number of equity
Shares Outstanding for calculation of

Basic EPS (In Lacs)                                    305.51        305.51

Basic EPS (Rs.) (i)/ (ii)                               26.77         26.04

Effect of Dilutive Securities:

Conversion of Share application
Money (In Lacs)                                             -             -

iii) Weighted average number of Equity
Shares Outstanding for calculation of

Diluted EPS(In Lacs)                                   305.51        305.51

Diluted EPS (Rs.) (i)/ (iii)                            26.77         26.04

13.  Disclosure  pursuant  to  Accounting  Standard-15(Revised)   'Employee 
Benefits'

(i) DETAILS OF DEFINED CONTRIBUTION PLAN:

The  Company has recognized Rs.31.64 lacs (Previous year Rs.32.02 lacs)  as 
provident  fund in the Profit & Loss Account for the year ended 31st  March 
2010 under Defined Contribution Plans.

(ii) DETAILS OF DEFINED BENEFIT PLAN:

(a) GRATUITY:

The  company  makes annual contribution to the  employees'  group-cum  life 
assurance  scheme  of  the Life Insurance Corporation of  India,  a  funded 
defined  benefit  plan for qualifying employees. The  scheme  provides  for 
lumsum payment to vested employees at retirement, death while in employment 
or  on termination of employment of an amount equivalent to 15 days  salary 
for  service more than 5 years, payable for each completed year of  service 
or part thereof in excess of 6 months. Vesting occurs upon completion of  5 
years of service.

The present value of the defined benefit obligation and the related current 
service  cost  were measured using the Projected unit credit  method,  with 
actuarial valuations being carried out at each balance sheet date.

                                                                Rs. in lacs
                                                         As at        As at 
                                                      31.03.10     31.03.09
1. Components of Employer Expense

Current Service Cost                                     20.91        29.00

Interest Cost                                             4.08         3.50

Expected Return on Plan Assets                          (6.88)       (4.59)

Actuarial (Gain)/Loss                                  (23.78)      (25.20)

Total expense/(gain)recognized In the
Profit & Loss Account                                   (5.66)         2.71

2. Net Asset/(Liability) recognized in 
Balance Sheet

Present Value of Obligation as at                        52.27        51.05

Fair Value of Plan Assets as at                          83.42        54.72

Asset/(Liability) recognized in the 
Balance Sheet                                            31.15         3.67

3. Change in Defined Benefit Obligation 
During the year ended as on 31.03.10

Present Value of Obligation as at                        51.05        43.75

Current Service Cost                                     20.91        29.00

Interest Cost                                             4.08         3.50

Actuarial (Gain)/Loss                                  (23.78)      (25.20)

Benefits paid                                                -            -

Present Value of Obligation as at                        52.27        51.05

4. Change in the Fair value of Plan Assets

Fair Value of Plan Assets as at                          54.72        50.13

Expected Return on Plan assets                            6.88         4.59

Actuarial Gain/(Loss)                                        0            -

Actual Company Contribution                              21.82            -

Benefits Paid                                                0            -

Fair Value of Plan assets as at                          83.42        54.72

5. Actuarial Assumptions

Discount Rate (per  annum)                                  8%           8%

Expected Rate of Return on Assets (per annum)            9.15%        9.15%

Salary Escalation Rate*                                     6%           6%

*takes into account the inflation, seniority, promotions and other relevant 
factors 

(b) LEAVE ENCASHMENT:

Provision  for leave entitlement is accrued and provided for at the end  of 
the  financial  year  but the same is not  being  determined  on  actuarial 
valuation basis.

14. Capital work-in-progress include a sum of Rs. 156.84 lacs being advance 
paid  to  a real estate developer against purchase  of  immovable  property 
which  the  Developer  has  given notice  for  forfeiture  and  company  is 
contesting.  In view of the fact that the Developer had failed  to  acquire 
land  and\or  achieve  desired milestones  justifying  the  withholding  of 
further  payments  by  Company  as  also  further  negotiations  with   the 
Developer, the amount is considered good for recovery.

15. Details of Statutory Auditors' Remuneration

                                                                Rs. in lacs
                                            As at 31.03.10   As at 31.03.09

Audit Fees                                           13.24            10.00
For Taxation Matters                                  4.41             7.00
For Certification Work                                2.21             3.19
Total                                                19.86            20.19

16. Contingent liabilities not provided for:

                                                                Rs. in lacs
Particulars                                 As at 31.03.10   As at 31.03.09

i) Bank Guarantee O/S                                12.58            91.60

ii) Claims against the company not
acknowledged as debts in respect of
past disputed liabilities of sales tax               93.80           93.80

iii)  Landlords  Mr Jai Kishan Chikara & others has filed  civil  suit  for 
recovery amounting to Rs 20.00 lacs* against the company.

iv)  Various workmen have filed 4 labour cases against the Company and  the 
same are pending before different authorities as on 31.03.10

v)  State government of U.P. has filed a case against the company and  same 
are pending before Commissioner (Stamp) Meerut as on 31.03.2010.

*  Based  on the discussions with the solicitor/ legal opinion  taken,  the 
management believes that company has strong chance of success in the  above 
mentioned cases and hence no provision against is considered necessary.

17. Related Party Disclosure

As  per  Accounting  Standard  18, issued by  The  Institute  of  Chartered 
Accountants of India, the disclosures of transactions with related  parties 
for  the year ended 31st march, 2010 as defined in Accounting Standard  are 
given as below:

List of Related Parties:

a) Key Management Personnel

MR. D.P.S. KOHLI                   Chairman
MR. BHUPINDER SINGH SAWHNEY        Managing Director
MR. GURMEET SINGH SAWHNEY          Whole-time Director
MR. KAILASH CHAND SHARMA           Whole-time Director

b) Relatives of Key Management Personnel:

NAME OF RELATIVES             RELATION WITH KEY MANAGEMENT PERSONNEL

MR. BASANT SINGH SAWHNEY      Father of Mr. BHUPINDER SINGH SAWHNEY &
                              Mr. GURMEET SINGH SAWHNEY

MR. BANPREET SINGH KOHLI      Son of Mr. D.P.S. KOHLI

MR. PRABHJOT SINGH SAWHNEY    Son of Mr. BHUPINDER SINGH SAWHNEY

MRS. SATINDER KAUR            Wife of Mr. BHUPINDER SINGH SAWHNEY

MRS. AMARJIT KAUR             Wife of Mr. D.P.S. KOHLI

MRS. PARVINDER KAUR           Wife of Mr. GURMEET SINGH SAWHNEY

MR. JASKARAN SINGH SAWHNEY    Son of Mr. BHUPINDER SINGH SAWHNEY

MRS. GURBANI KAUR             Daughter in Law of Mr. BHUPINDER SINGH 
                              SAWHNEY

c) Wholly Owned Subsidiary Company:

i) DBG Retail Holdings Ltd.

d) Companies under the same Management:

i) Klone Infrastructure Private Ltd.
ii) K & S Knitwears Private Ltd.
iii) PBP Marketing private Ltd.
iv) Klone Avinash Infrastructure Private Ltd.
v) Gartex Concept Clothings Ltd.
vi) Venezia Leathers Pvt. Ltd.
vii) S.R. Resorts Pvt. Ltd.
viii) JEG Hospitality Holdings Ltd.
ix) Vian Hospitality Pvt. Ltd.

Related Party Transactions 

                                                                Rs. in Lacs
Particulars               KMP  Relatives  Subsidiary  Associates      Total
                                  of KMP     Company  Enterprise

Sales                       -          -           -       10.24      10.24
                          (-)        (-)         (-)         (-)        (-)

Purchases                   -          -           -      110.22     110.22
                          (-)        (-)         (-)    (331.20)   (331.20)

Rent Paid                   -     223.00           -        4.50     227.50
                          (-)   (225.63)         (-)         (-)   (225.63)

Job Work                    -          -           -     1897.49    1897.49
                          (-)        (-)         (-)   (3280.04)  (3280.04)

Advertisement               -          -           -       24.75      24.75
                          (-)        (-)         (-)         (-)        (-)

Sales Promotion             -          -           -        1.55       1.55
                          (-)        (-)         (-)         (-)        (-)

Asset Sold                  -          -           -           -          -
                          (-)        (-)         (-)      (0.46)     (0.46)

Remuneration           723.60      37.23           -           -     760.83
                     (543.60)    (30.20)           -           -   (573.80)

Loans & Advances            -          -           -           -          -
granted                   (-)        (-)     (25.00)         (-)    (25.00)

Loans & Advances            -    6018.63           -           -    6018.63
taken                     (-)  (4302.00)         (-)         (-)  (4302.00)

Loans & Advances            -    6252.62           -           -    6252.62
repaid                    (-)  (5998.10)         (-)         (-)  (5998.10)

Security deposit            -          -      100.00           -     100.00
Received                  (-)        (-)         (-)         (-)        (-)

Investment in 
shares outstanding          -          -      195.00           -     195.00
as on 31.03.10            (-)        (-)    (195.00)         (-)   (195.00)

Loans & Advances 
granted outstanding         -          -       40.00           -      40.00
as on 31.03.10            (-)        (-)     (40.00)         (-)    (40.00)

Loans & Advances 
taken Outstanding           -      15.39           -           -      15.39
as on 31.03.10            (-)   (249.38)         (-)         (-)   (249.38)

Security deposit 
paid outstanding            -     138.96           -           -     138.96
as on 31.03.10            (-)   (138.96)         (-)         (-)   (138.96)

Security deposit 
Received 
outstanding as              -          -      100.00           -     100.00
on 31.03.10               (-)        (-)         (-)         (-)        (-)

Sundry Creditors
outstanding as 
on 31.03.10                 -      37.58           -     1106.74    1144.32
                          (-)        (-)         (-)    (847.25)   (847.25)

*Figures in brackets relate to the previous year 2008-09.

**Related parties are as disclosed by the management and relied upon by the 
Auditors. 

18. Managerial remuneration:

(i)  PARTICULARS OF REMUNERATION AND OTHER BENEFITS PROVIDED  TO  DIRECTORS 
FOR THE YEAR ENDED 31ST MARCH, 2010 AND 2009 ARE SET OUT BELOW:

                                                                Rs. in lacs
                                             As at 31.03.10  As at 31.03.09
Salary & Bonus                                       404.80          303.41
Allowances                                           313.49          215.94
Perquisites                                            2.72           21.66
Contribution to Provident Fund                         2.59            2.59
Total                                                723.60          543.60
Sitting Fees to non executive directors                1.95            2.15
Total                                                725.55          545.75

*The figures do not include gratuity payable to the directors, as the  same 
was actuarially determined for the Company as a whole.

(ii)  COMPUTATION OF MANAGERIAL REMUNERATION U/S 198 OF THE COMPANIES  ACT, 
1956.
                              
                                                                Rs. in lacs
                                            As at 31.03.10   As at 31.03.09
Profit before tax before extraordinary
Items as per P&L A/c                             12,451.83        12,082.85

Add:

(a) Directors Remuneration                          723.60           543.60

(b) Loss on sale of Investments                       5.20             6.75

(c) Depreciation charged to accounts              1,643.38         1,530.03

                                                 14,824.01        14,163.24

Less:

(a) Profit on sale of Investments                        -            45.32

(b) Depreciation as per Section 350 
of the Companies Act,1956                         1,643.38         1,530.03

Net Profit as per section 198 of 
the Companies Act, 1956                          13,180.63        12,587.89

Maximum permissible remuneration 
to whole-time directors u/s 198 
of the Companies Act, 1956 @10% of 
the Profits as computed above                     1,318.06         1,258.79

Restricted as per shareholders' 
approval                                            720.00           540.00

Maximum permissible managerial 
remuneration to non-executive 
directors u/s 309 of the 
Companies Act, 1956 @1% of the 
Profits as computed above                           131.81           125.88

Restricted as per service 
agreement                                             3.60             3.60

19. The Break-up of the expenditures on Employee getting remuneration:

Particular                     As at 31.03.10            As at 31.03.09
                             No. of   Salary paid      No. of   Salary paid
                          Employees      in lacs.   Employees      in lacs.
Not less than 
Rs. 24.00 lacs p.a.               2         54.00           2         54.00

Not less than 
Rs. 2.00 lacs p.m.                -             -           -             -

20.  INFORMATION PURSUANT TO PARAS 3 & 4 AND OF PART II OF SCHEDULE  VI  OF 
THE COMPANIS ACT 1956 AS CERTIFIED BY MANAGEMENT:

(a) Particulars of capacity and production 

                                                            Figures in lacs
Particulars                 Installed Capacity         Actual Production
                               (per annum)                   (Pcs.)
                                  As at                    Year ending
                         31.03.2010   31.03.2009   31.03.2010   31.03.2009

Garments                     350.00       350.00       220.28       219.26

*  Installed  Capacity of the company is only indicative as it  depends  on 
product mix and level of outsourcing. Installed capacity is as certified by 
the  management  and have not been verified by the auditor as  a  technical 
matter. 

(b) Particulars of stocks, Purchase and sales

I) Ready Made Garments

Particulars                   Quantity (Pcs in lacs)   Value (Rs in lacs)

Opening stock                                 212.67             49645.09

Closing stock                                 181.03             47539.64

Purchases                                      50.94             18930.77
                                            (115.50)           (28418.89)

Sale                                          302.84            120151.65
                                            (267.53)          (104600.18)

II) Leather Goods

Particulars                   Quantity (Pcs in lacs)   Value (Rs in lacs)

Opening stock                                   0.34               196.13

Closing stock                                   0.32                92.46

Purchases                                       0.34               106.90
                                              (0.43)             (213.00)

Sale                                            0.38               224.66
                                              (0.09)              (68.23)

*  (The company is manufacturing a range of men's wear / ladies wear  hence 
not  possible  to  give details of each and  every  items  in  quantitative 
terms.)

** Figures in bracket are of previous year 2008-09

(c) Particulars of raw materials consumed:

                         As at 31.03.10                   As at 31.03.09
                     Quantity          Value        Quantity          Value
               (Mtrs in Lacs)  (Rs. in Lacs)  (Mtrs in Lacs)  (Rs. in Lacs)

Fabric                 267.60       21855.44          289.10       22204.61

(d) Value of Imported and indigenous Raw Material and packing Material: 

                                                                Rs. in lacs
                                     Indigenous     Imported          Total
1. Raw Materials                       21182.32            -       21182.32
                                     (22757.23)            -     (22757.23)

2. Finished Goods                      19037.67            -       19037.67
                                     (28412.56)     (219.33)     (28631.89)

3. Consumable Stores                    2732.50        36.83        2769.33
                                      (2834.23)      (18.62)      (2852.85)

4. Packing Materials                    3007.18            -        3007.18
                                      (3406.37)       (4.99)      (3411.36)

5. Spare Parts                           104.98            -         104.98
                                        (68.02)          (-)        (68.02)

Percentage                                99.92         0.08         100.00
                                        (99.58)       (0.42)       (100.00)

**Figures in bracket are of previous year 2008-09

(e) Foreign Exchange Earning and Outgoing

                                                                Rs. in lacs
                                                     2009-10        2008-09
                                               (Rs. in lacs)  (Rs. in lacs)
A) Imports on CIF basis

i) Finished Goods                                          -         219.33
ii) Consumable                                         36.83          18.62
iii) Capital Goods                                         -         840.08
iv) Packing Material                                       -           4.99

B) Expenditure in foreign
Currency (foreign traveling
director & others)                                     36.08          48.39

C) Dividend paid to Non- resident 
Share Holders                                          54.79              -

No. Of Non-Resident Share Holders                        214              -

D) Earning in Foreign Currency                             -              -

21.  The figures of the previous year are regrouped /reclassified  wherever 
necessary to make them comparable with that of the current year.

As per our attached report of even date

For R.CHADHA & ASSOCIATES          On Behalf of the Board of Directors
Chartered Accountants

RAKESH CHADHA                 DPS KOHLI           BHUPINDER SINGH SAWHNEY
Partner                       Chairman            Managing Director
No. 83135

Place: New Delhi              POONAM CHAHAL       AJAY MAHAJAN
Date: 04/09/2010              Company Secretary   Chief Financial Officer


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