As At       As At
 
 1. There are contingent liabilities in respect 
 of the following items : No outflow is          31.3.2011    31.3.2010
 expected in view of the past history relating 
 to these items :-                             (Rs. In Lac)  (Rs. In Lac)
 
 a) Claims not acknowledged as debts              1,034.07      739.06
 
 b) Bank Guarantees and Letters of Credit 
    outstanding                                  15,264.42    4,537.93
 
 c) Bills discounted with banks                   8,221.02      218.31
 
 2.  Estimated amount of contracts remaining to   
     be executed on Capital Account              44,710.72    1,296.57 
     (Net of advances)
 
 3.  The Company has contested the additional demand in respect of Sales
 Tax, Excise Duty etc., amounting to Rs. 572.85 Lac (Previous Year Rs.
 576.69 Lac). As against this a sum of Rs. 201.39 Lac (Previous Year Rs.
 217.22 Lac) has been deposited under protest and stands included under
 the head Advances and other recoverables in cash or in kind. The
 Company has filed an appeal with the Appellate Authorities and is
 advised that the demand is not in accordance with law. No provision,
 therefore, has been made in accounts in respect thereof.
 
 4.  The Company has executed bonds for an aggregate amount of Rs.
 20,654.66 Lac (Previous Year Rs. 35,095.04 Lac) in favour of the
 President of India under section 59 (2) and 67 of the Customs Act,1962
 and Central Excise Act, 1944 for fulfillment of the obligation under
 the said Acts.
 
 5.  The Company has contested the additional demand in respect of
 income tax amounting to Rs. 2,004.00 Lac (Previous Year Rs. 2,478.00
 Lac). Pending appeal with appellate authorities, no provision has been
 made in the books of account as the company is hopeful to get the
 desired relief in appeal.
 
 6.  The company had taken over the textile undertaking of Vardhman
 Holdings Limited by a scheme of Arrangement and De-merger. An
 injunction was obtained against the London Branch of the said textile
 undertaking for preventing disposal of assets upto the value of Pound
 Sterling 2.99 Lac as a result of a court case pending in London for
 alleged non-fulfillment of an agreement of cotton purchase. The said
 matter had been decided against the textile undertaking and
 accordingly, Pound Sterling 0.48 Lac lying in the bank account at
 London had been paid to the claimant pursuant to the Order of the
 Court. The said amount was written off in the books of the said
 undertaking by way of debit to the Profit and Loss Account.  No
 provision has been made for the balance decree amount in view of the
 fact that the said undertaking was prevented by force majure in
 fulfilling its part of contract. The Company as successor to the
 textile undertaking is contesting this matter in Indian Courts and is
 confident that there would not be any further liability in this regard.
 
 7.  Pursuant to the ‘Scheme of Arrangement and Demerger among Vardhman
 Textiles Limited (VTXL), Vardhman Special Steels Limited (VSSL), and
 their respective Shareholders and creditors, the entire steel business
 undertaking together with all its properties, assets, rights, benefits
 and interest therein of steel business undertaking has vested with VSSL
 w.e.f 1st January, 2011 as per the order of the Honble Punjab and
 Haryana High Court dated 12.01.2011. As a result of the above, the
 following assets, liabilities and reserves of the steel business
 undertaking stand vested with VSSL w.e.f 1st January, 2011:
 
 8.  The Company has provided depreciation on Computers @ 25% on
 straight line basis as the useful life of the computers has been
 estimated to be not more than four years.
 
 9.  Intangible assets which comprise of softwares have been amortized @
 25% on straight line basis as the useful life thereof has been
 estimated to be not more than four years.
 
 10.  The Company is holding 15,98,741 (Previous year 15,98,741) equity
 shares of Vardhman Textiles Limited through a trust, which were
 received by it in its capacity as a shareholder of Vardhman Holdings
 Limited, in accordance with the ‘Scheme of Arrangement and Demerger.
 The said trust has been exclusively formed for the benefit of the
 company. As per the provision of the trust deed, all the money received
 by the trust (including dividend and the proceeds of the sale of
 shares) shall be paid forthwith to the company by the trust.
 
 11.  The detail of the amount recoverable from Mahavir Share Trust as
 at the close of the year is as under:
 
 12.  The company has paid Rs. 33.75 Lacs (Previous Year Rs. 18.70 Lacs)
 to Madhya Pradesh Power Transmission Company Limited, Bhopal for
 expenditure on power lines. As future economic benefits associated with
 the installation of such power lines will flow to the company, the same
 has been reflected in the schedule of Fixed Assets. The company has
 amortized these lines @ 20% on straight line basis as the useful life
 is estimated to be five years.
 
 13.  The Company also hedges its foreign currency fluctuation exposure
 by way of foreign currency derivative options. The Company has taken
 various USD/INR options from banks. As at March 31, 2011, there are 15
 options (Previous Year 7) against exports and 5 options (Previous Year
 Nil) against Imports having a maturity period up to Jan 2016 (Previous
 Year June 2013). These derivative options are proprietary products of
 banks which do not have a ready market and are not tradeable in the
 open market. These options are marked to a model, which is bank
 specific instead of being marked to market. In view of the significant
 uncertainty associated with the above derivative options, the ultimate
 outcome of which depends on future events which are not under the
 direct control of the company, the resultant gain/loss if any, on such
 open derivative options cannot be determined at this stage and has
 accordingly not been accounted for in the books of account.
 
 14.  Segment Information as required by Accounting Standard (AS)-17 on
 Segment Reporting issued by Companies (Accounting Standards) Rules
 2006, has been compiled on the basis of the consolidated financial
 statements and is disclosed in the notes to accounts forming part of
 the consolidated financial statement in accordance with the above
 standard. Therefore segment information in respect of separate
 financial statements of the company is not being disclosed in the stand
 alone financial statements.
 
 15.  In accordance with the Accounting Standard (AS)-28 on Impairment
 of Assets the Company has assessed as on the balance sheet date,
 whether there are any indications (listed in paragraphs 8 to 10 of the
 Standard) with regard to the impairment of any of the assets. Based on
 such assessment it has been ascertained that no potential loss is
 present and therefore, formal estimate of recoverable amount has not
 been made. Accordingly no impairment loss has been provided in the
 books of account.
 
 19. (a) The company has identified Micro, Small and Medium Enterprises
 on the basis of information made available. There are no dues to Micro
 and Small Enterprises, that are reportable under the Micro, Small and
 Medium Enterprises Development Act, 2006 (MSMED Act).
 
 23. Related Party Disclosure
 
 (a) Disclosure of Related Parties and relationship between the parties.
 
 1.  Subsidiaries VMT Spinning Company Limited
 
 Vardhman Acrylics Limited
 
 VTL Investments Limited
 
 Vardhman Yarns & Threads Limited
 
 Vardhman Special Steels Limited
 
 Vardhman Nisshinbo Garments Company Limited (Formerly known as
 
 Vardhman Texgarments Limited)
 
 2.  Associates Vardhman Textile Components Limited
 
 Vardhman Spinning & General Mills Limited
 
 3.  Key Management Personnel
 
 Mr. S.P.Oswal Mr. Sachit Jain Mrs. Suchita Jain Mr. Neeraj Jain
 
 4.  Enterprises over which key Management Personnel and relative of
 such personnel is able to exercise significant influence or control
 
 Vardhman Holdings Limited
 
 Vardhman Apparels Limited
 
 Banarso Devi Oswal Public Charitable Trust
 
 Sri Aurobindo Socio Economic and Management Research Institute
 
 *Adinath Investment & Trading Co.
 
 *Devakar Investment & Trading Co. Pvt. Limited
 
 *Srestha Holdings Limited
 
 *Santon Finance & Investment Co. Limited
 
 *Flamingo Finance & Investment Co. Limited
 
 *Ramaniya Finance & Investment Co. Limited
 
 *Marshall Investment & Trading Co. (P) Limited
 
 *Pradeep Mercentile Co. (P) Limited
 
 *Plaza Trading Co. (P) Limited
 
 *Anklesh Investments (P) Limited
 
 *Syracuse Investment & Trading Co. (P) Limited
 
 **Mahavir Spinning Mills (P) Limited
 
 (Formerly known as Vardhman Textile Processors (P) Limited)
 
 **Northern Trading Co.
 
 Note: * Only Loan Transactions have taken place with these Companies.
 ** No transaction has taken place during the year.
 
 25.  Previous years figures have been recast / regrouped wherever
 necessary.
 
 26.  Disclosure required by Clause 32 of Listing Agreement:
 
 The Company has given inter corporate deposits aggregating to Rs.
 1,111.50 lacs (Previous Year Rs. Nil) to M/s Vardhman Acrylics Ltd.
 during the year. The maximum amount outstanding during the year was Rs.
 833.80 lacs (Previous Year Nil). The Balance outstanding as on 31.03.11
 is Rs. Nil (Previous Year Rs. Nil).
 
 The Company has given inter corporate deposits aggregating to Rs.
 4,914.80 lacs (Previous Year Rs. Nil ) to M/s VMT Spg. Company Limited
 during the year. The maximum amount outstanding during the year was Rs.
 2,195.30 lacs (Previous Year Rs. Nil). The Balance outstanding as on
 31.03.11 is Rs. 1,104.30 lacs (Previous Year Rs. Nil).
 
 The Company has given inter corporate deposits aggregating to Rs.
 8,121.83 lacs (Previous Year Rs. Nil) to M/s Vardhman Special Steels
 Limited during the year. The maximum amount outstanding during the year
 was Rs. 1,181.29 lacs (Previous Year Nil). The Balance outstanding as
 on 31.03.11 is Rs. Nil (Previous Year Rs. Nil).
 
 The Company has given inter corporate deposits aggregating to Rs.
 567.60 lacs (Previous Year Rs. Nil) to M/s Vardhman Nisshinbo Garments
 Company Limited during the year. The maximum amount outstanding during
 the year was Rs. 455.00 lacs (Previous Year Nil). The Balance
 outstanding as on 31.03.11 is Rs. Nil (Previous Year Rs. Nil).
 
 The Company has given inter corporate deposits aggregating to Rs.
 4,287.00 lacs (Previous Year Rs. Nil) to M/s VTL Investments Limited
 during the year. The maximum amount outstanding during the year was Rs.
 2,462.00 lacs (Previous Year Rs. Nil). The Balance outstanding as on
 31.03.11 is Rs. Nil (Previous Year Rs. Nil).
 
 27.  Excise Duty amounting to Rs. 3,015.07 Lacs (Previous Year Rs.
 2,426.80 Lacs) has been reduced from gross turnover as the same is
 included in the figure of gross turnover. Further the difference of
 excise duty between the closing stock and opening stock has been
 disclosed separately in the statement of profit and loss.
 
 28.  During the year, the Company raised Rs. 200 crores by issuing
 58,82,352 equity shares of Rs. 10/- each at a premium of Rs. 330/ - per
 share through a QIP issue to QIBs in accordance with ICDR Regulations,
 2009 pursuant to which the Equity Share Capital of the Company stand
 increased from Rs. 57.77 crores to Rs.63.65 crores. The amount so
 raised has been utilized for the purpose it was raised.
 
 29.  The company had issued Zero Coupon Foreign Currency Convertible
 Bonds (FCCB) aggregating to US $ 60 Million out of which FCCBs of US $
 1 Million were bought back by the company in the year 2008-09, thus
 leaving the outstanding FCCBs of US $ 59 Million. The bond holders had
 an option to convert bonds in to equity shares of the company at a
 price of Rs. 423.25 per share (subject to adjustment if any) with a
 fixed exchange rate of Rs. 44.1722 per US $ at any time on or after
 16th March 2006 but before 17th Jan 2011. These FCCBs were redeemable
 on 17th Feb 2011 at a premium of 34.39% of their principal amount
 unless previously converted, redeemed, paid or cancelled. In view of
 conversion of FCCBs not having been opted by the bond holders, the
 company has during the year redeemed such Bonds along with premium. The
 approximate amount of premium payable was allocated over period of 5
 years and had been provided in the books of account in the preceding
 years as well as in this year by debit to Securities Premium Account.
 No adjustment had been made in respect of tax effect on such a debit in
 the preceding years in view of uncertainty as to the convertibility of
 bonds into equity shares. The adjustment of tax effect for debit to
 Securities Premium Account for the year under reference as well as for
 the preceding years has been made during the year.
 
 30.  Figures in bracket indicate deductions.
 
 31.  The figures for the current year are not comparable with the
 preceding years figures on account of demerger of the steel business
 undertaking of the Company to Vardhman Special Steels Limited with
 effect from 1st January, 2011. (Refer Note No. 7).
 
 32.  The company uses forward contracts and options to hedge its risk
 associated with fluctuation in foreign currency relating to foreign
 currency assets and liabilities, firm commitment and highly probable
 forecast transactions. The use of the aforesaid financial instruments
 is governed by the companys overall strategy. The company does not use
 forward contracts and options for speculative purposes. The details of
 the outstanding forward contracts and options as at 31st March 2011 is
 as under: