1.  Corporate Information
 
 Shekhawati Poly-Yarn Limited (the Company) is a public company
 domiciled in India and incorporated under the provisions of the
 Companies Act, 1956. Its shares are listed on two stock exchanges in
 India. The Company is engaged in the manufacturing and selling of
 Texturising Yarn, Twisting Yarn and knitted Fabrics. The Company caters
 to both domestic and international markets.
 
 a Term loan from banks amounting to Rs. 4,94,00,000 (P.Y. 6,62,00,000)
 was taken during the financial year 2007- 08 and carries Interest @
 Base Rate  5% p.a. The loan is repayable in 81 monthly installments
 starting from September 2008. The Loan is Secured By 1st equitable
 mortgage charge on Company''s Land admeasuring 3000 sq.mtrs. &
 Building,Plant & Machinery, Furniture & Fixtures, Office Equipments &
 all other Fixed assets situated at Plot No 44,Government Industrial
 Estate Masat Silvassa. 2nd charge on paripassu basis with other Bank on
 the Land,Building, Plant & Machinery, Office Equipments and all other
 Fixed Assets situated at plot, Suvery No 185/Padm 47900 sq mtrs village
 Naroli, Silvassa. 1st Charge on office No 1102 & 1103 (carpet area
 115.29 sq.mt each)Express Zone, A wing, Western Express Highway,
 Goregoan (East) and 2nd charge on parripassu basis with other lenders
 over the entire current assets of the company.
 
 b Term Loan from banks amounting to Rs.5,01,33,073 (P.Y. 6,02,13,067)
 was taken during the financial year 2009-
 
 10 and carries interest @ Base rate  5% p.a. The loan is repayable in
 78 monthly insttallments starting from October 2010. The Loan is
 Secured By 1st Equitable mortgage on pari-passu basis with other Bank
 on the Land & Building (Ground Floor),Plant & Machinery, Office
 Equipment (10 texturising machines) and all other Fixed Assets to be
 situated on ground floor plot, Survey no 185/P adm 47900 sq mtrs,
 village Naroli Silvassa.2nd charge on pari passu basis over entire
 fixed assets land & building at Plot No 44 adm 3000 sqmtrs, Govt
 Industrial Estate Masat, Silvassa and other location.1st Charge on
 office No 1102 & 1103 (carpet area 115.29 sq.mt each) Express Zone, A
 wing, Western ExpressHighway, Goregoan (East) and 2nd charge on
 parripassu basis with other lenders over the entire current assets of
 the company.
 
 c Term Loan from banks amounting to Rs.4,76,00,000 was taken during the
 current year and carries interest @ Base rate  5.65% p.a. The Loan is
 repayable in 80 monthly installments starting from April 2012. The Loan
 is secured by 1st equitable charge on Building (1st & 2nd Floor)
 constructed on Plot No 185/P adm 47900 sqmtrvillage Naroli, Silvassa
 owned by the company. 2nd charge on paripassu basis with other Bank on
 the Land,Building, Plant & Machinery, Office Equipments and all other
 Fixed Assets situated at plot, Suvery No 185/Padm 47900 sq mtrs village
 Naroli, Silvassa. 2nd parripassu charge with other Bank Ltd on entire
 fixed assets(other than 1st charge on assets to be created out of TL-IV
 from SBI) at Plot No 44, Govt Industrial Estate Masat,Silvassa and
 S.No. 185/P adm 47900 sqmtrs village Naroli Silvassa. 1st Charge on
 office No 1102 & 1103 (carpet area 115.29 sq.mt each) Express Zone, A
 wing, Western Express Highway, Goregoan (East) and 2nd charge on
 parripassu basis with other lenders over the entire current assets of
 the company.)
 
 d Term Loan from banks amounting to Rs. 28,18,89,545 was taken during
 the current year and carries interest @ Base rate  4.50% p.a. The loan
 is repayable in 76 monthly installments starting from October 2012.
 However, the Company has approached the bank in May 2012 for the
 revision of repayment schedule and requested to extend the Commencement
 of the repayment schedule from April 2013 instead of October 2012.The
 Loan is secured by 1st hyothecation charge on shed, plant & machinery
 to be installed on 1st & 2nd Floor, Plot No 185/P, adm 47900
 sqmtr,village Naroli, Silvassa owned by the company and extension of
 1st charge on Building (1st & 2nd Floor)constructed on Plot No 185/P,
 Naroli. 2nd charge on paripassu basis with other Bank on the
 Land,Building, Plant & Machinery, Office Equipments and all other Fixed
 Assets situated at plot, Suvery No 185/Padm 47900 sq mtrs village
 Naroli, Silvassa. 2nd parripassu charge with other Bank Ltd on entire
 fixed assets(other than 1st charge on assets to be created out of TL-IV
 from SBI) at Plot No 44, Govt Industrial Estate Masat,Silvassa and
 S.No. 185/P adm 47900 sqmtrs village Naroli Silvassa. 1st Charge on
 office No 1102 & 1103 (carpet area 115.29 sq.mt each) Express Zone, A
 wing, Western Express Highway, Goregoan (East) and 2nd charge on
 parripassu basis with other lenders over the entire current assets of
 the company.
 
 e Term Loan from banks amounting to Rs. 12,45,98,196 (P.Y.
 15,00,90,062) was taken during the financial year 2010-11 and carries
 interest @ Base rate  3.50% p.a The loan is repayable in 78 monthly
 installments starting from January 2011. The loan is secured by Secured
 By Equitable mortgage of land and building & hypothecation of Plant &
 Machinery(both acquired out of TL and installed at S No 185/1, Near
 Silavassa ,D&N Haveli (UT) on parripassu with SBI.Second parripassu
 charge on entire fixed assets of teh company with SBI (for land &
 building at plot No 44, Govt Industrial Estate Masat,Silvassa to the
 extent of Rs.10 Crore).Second parripassu charge on entire current
 assets of the company with SBI.
 
 f All the above term loans are guaranteed by both the Chairman &
 Managing Director of the Company.
 
 g Vehicle Loan amounting to Rs.22,02,618 (P.Y. Rs 29,87,838) was taken
 during the fiancial year 2009-10 and carries interest @ 8.67% p.a.The
 loan is repayable in 60 monthly instalments along with interest
 starting from Oct 2010.The loan is secured by 1st charge on the vehicle
 specifically finanaced out of loan
 
 h Loan from Companies includes
 
 I) Rs.25,00,000 (P.Y Rs.25,00,000 ) taken during the financial year
 2010-11 and carries interest @15% p.a..The loan is unsecured and is
 repayable on demand after a period of one year.
 
 ii) Rs.1,00,00,000 taken during the current year and carries interest @
 18% p.a..The loan is unsecured and is repayable on demand after a
 period of one year.
 
 a Cash credit and letter of credit from banks amounting to Rs.
 39,72,02,878 (P.Y. 26,93,50,315) is secured by 1st Hypothecation charge
 on entire current assets of the company on parripassu basis. 2nd charge
 on pari passubasis on Land & Building, Plant & Machinery, Office
 Equipments and all other Fixed Assets situated at plot, Survey No 185/P
 adm 47900 sq mtrs village Naroli Silvassa. 2nd charge on pari passu
 basis over entire fixed assets Land & Building at Plot No 44 adm 3000
 sqmtrs, Govt Industrial Estate, Masat, Silvassa and othe location(for
 land and building to the extent of Rs.10 Crores). 2nd charge on
 building Shed, Plant & Machinery of Proposed Project at Unit-3 situated
 at Naroli (under New project) 1st charge in office No 1102 & 1103,
 situated at Express Zone, A wing, Western Express Highway, Goregoan
 (East).The cash credit is repayable on demand and carries interest @
 Base Rate   4% p.a.
 
 b Cash credit from banks amounting to Rs.2,02,14,234 (P.Y. 1,80,00,800)
 is secured by 1st parripassu charge over entire current assets of the
 company, present & future. 2nd parripassu charge over the entire fixed
 assets of the company, present, future (for land & building at Plot No
 44, Govt Industrial Estate Masat, Silvassa to the extent of Rs 10
 crores. The cash credit is repayable on demand and carries interest
 @Base Rate   3.5% p.a.
 
 2 INTANGIBLE ASSETS UNDER DEVELOPMENT
 
 The Administration of Dadra and Nagar Haveli (U.T.), Electricity
 Department, Silvassa has granted permission of 66KV Power supply line
 with 66KV Multi Circuit Tower Line from 220/66/11 Kharadpada sub
 station to the factory premises of the Company. They have approved the
 same on the condition that entire cost in respect of the said
 arrangement will be incurred by the Company. Till March 2012, the
 Company has incurred a sum of Rs.  2,07,29,597 and the same has been
 reflected as Intangible Assets under Development.
 
 3. Provision for taxation for the accounting year has been computed on
 the basis of Minimum Alternate Tax (MAT) in accordance with Section 115
 JB of the Income Tax Act, 1961. Considering the future profitability
 and taxable positions in the subsequent years, the Company has
 recognized MAT credit entitlement of Rs.1,29,09,589(P.Y.  Rs.
 43,68,893) as an asset by crediting to the Profit and Loss Account an
 equivalent amount and included the same under Long term Loans and
 Advances in accordance with the Guidance Note on Accounting for
 credit available in respect of Minimum Alternate Tax under Income Tax
 Act, 1961” issued by the Institute of Chartered Accountants of India.
 
 4 The Company is consistently following the accounting of excise duty
 on closing stock of finished goods on clearance of finished goods from
 the factory and such treatment has no impact on Profit & Loss for the
 year.
 
 5 In the opinion of the Board the Current Assets (other than those
 doubtful & provided for) and Loans and Advances are approximately of
 the value stated and realizable in the ordinary course of business. The
 Provisions of all known liabilities is adequate and not in excess of
 the amount reasonably necessary.
 
 6. Few of the balances appearing under the head of Trade receivables,
 Trade Payables and Loans and Advances are subject to confirmation and
 reconciliation. Consequential adjustment thereof, if any, will be given
 effect into the books of accounts in the year of such adjustment. The
 management, however, does not expect any material adjustment.
 
 7. Contingent Liabilities not provided for:
 
 a) Outstanding Bank Guarantee Rs. 2,48,65,000 ( P. Y. Rs. 79,15,000)
 
 b) Estimated amount of Contracts remaining to be executed on Capital
 Account Rs.12,52,55,061 (Net of Advances) ( P. Y. Rs.2,24,05,593).
 
 c) The Company has purchased Machinery under the EPCG Scheme whereby it
 has obligation of exporting goods on FOB basis amounting to 8 times the
 Import duty saved within a period of 8 years. The amount of duty saved
 till 31st March, 2012 is Rs.12,45,82,059(P.Y. Rs.7,05,90,564 ).
 Accordingly, the Company has exported goods amounting to
 Rs.39,47,00,691(P.Y. Rs.18,99,55,383) on FOB Basis and export
 obligations as on 31st March 2012 is Rs.60,19,55,783 (P.Y.
 Rs.37,47,69,127).
 
 d) Excise Duty refund contested in appeal Rs. 1,59,02,117 (P.Y Nil)
 
 8. Related Party Disclosures
 
 As required under Accounting Standard 18 Related Party Disclosure”
 (AS-18), following are details of transactions during the year with the
 related parties of the Company as defined in AS 18:
 
 9.  Segmental Information:
 
 In accordance with the requirements of Accounting Standard 17
 ”Segmental Reporting”, the Company''s business consist of one reportable
 segment of textile business, hence no separate disclosure pertaining to
 attributable Revenues, Profits, Assets, Liabilities, Capital employed
 are given.
 
 10.  Till the year ended 31st March 2011, the Company was using
 Pre-revised Schedule VI to the Companies Act, 1956 for the preparation
 and presentation of its financial statements. During the year ended
 31st march, 2012 the Revised Schedule VI notified under the Companies
 Act, 1956 have become applicable to the Company. The Company has
 reclassified previous year figures to confirm to this year
 classification. Although the adoption of Revised Schedule VI does not
 impact recognition and measurement principles, it does significantly
 impacts the presentation of presentation and disclosures made in
 financial statements. The summary of effects that Revised Schedule VI
 had on presentation of Balance Sheet of the Company for the year ended
 31st March 2011 is given in Annexure 1.