Himatsingka America, Inc. Audited Financial Statements

Transcription

1 Himatsingka America, Inc. Audited Financial Statements

2 INDEPENDENT AUDITORS' REPORT To the Board of Directors, Himatsingka Seide Limited Bangalore, India Report on the Financial Statements We have audited the accompanying financial statements of Himatsingka America Inc. (the "Company") (a wholly owned subsidiary of Himatsingka Seide Limited), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements These financial statements are the responsibility of the management of the Company and the holding company, Himatsingka Seide Limited (the Holding Company ) and have been prepared under the generally accepted accounting principles in India. The Holding Company s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly we express no such opinion. An audit also includes evaluating the appropriateness of the accounting policies used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

3 Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its losses and its cash flows for the year ended on that date. Other Matters These financial statements have been extracted from the information prepared by the Holding Company s management for the purpose of its inclusion in the Consolidated Financial Statements of Himatsingka Seide Limited. This report is intended solely for the consideration of the Board of Directors of Himatsingka Seide Limited and should not be used for any other purpose. For Deloitte Haskins & Sells Chartered Accountants (Registration No S) BANGALORE, August 17, 2015 S. Sundaresan Partner (Membership No )

4 Himatsingka America, Inc. As at As at Balance Sheet Note No EQUITY AND LIABILITIES Shareholders' funds Share capital 2 2,913,573,750 2,792,790,000 Reserves and surplus 3 46,579, ,064,618 2,960,153,613 2,985,854,618 Non-current liabilities Long term borrowings 4 2,235,619,600 2,153,151,000 Long term provisions 5 249,065, ,191,361 2,484,684,666 2,323,342,361 Current liabilities Short term borrowings 6 1,174,771, ,865,818 Trade payables 7 294,136, ,505,601 Other current liabilities 8 1,568,999,023 1,248,127,097 Short term provisions 9-5,837,860 3,037,907,325 1,925,336,376 ASSETS Total 8,482,745,604 7,234,533,355 Non-current assets Non-current investments 10 6,368,949,346 6,104,921,162 Deferred tax asset ,159, ,090,393 6,954,108,876 6,468,011,555 Current assets Trade receivables 12 1,246,725, ,416,103 Cash and cash equivalents 13 40,369,300 19,960,089 Short term loans and advances ,541,717 67,145,608 1,528,636, ,521,800 Total 8,482,745,604 7,234,533,355 See accompanying notes (1 to 23) to the financial statements In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on on behalf of of the the Board of Directors of Shrikant Himatsingka D.K.Himatsingka Director Director S. Sundaresan DIN : DIN : Partner Place: Date: Pradeep K.P. Chief Financial Officer

5 Himatsingka America, Inc. For the year ended For the year ended Statement of Profit and Loss Note No Revenue from operations 15 2,484,326, ,984,065 Other income ,943 55,205,179 Total revenue 2,484,736, ,189,244 Expenses: Purchase of traded goods 17 2,484,326, ,984,065 Finance costs ,967, ,264,454 Depreciation - - Other expenses 19 73,287,470 62,587,997 Total expenses 2,829,581, ,836,516 Profit/(loss) before tax (344,845,332) (231,647,272) Tax expense: Current tax 14,089,910 3,962,083 Deferred tax (174,229,986) (61,279,143) Profit / (loss) after tax (184,705,256) (174,330,212) Basic and diluted earnings per equity share (Rs.) (39,722) (37,490) ($1 per share equivalent to Rs per share restated at closing rate) (Previous year is Rs per share restated at closing rate) See accompanying notes (1 to 23) to the financial statements In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on on behalf of of the the Board of Directors of Shrikant Himatsingka D.K.Himatsingka Executive Director Managing Director S. Sundaresan DIN : DIN : Partner Bangalore Date: Pradeep K.P. Chief Financial Officer

6 Himatsingka America, Inc. For the year ended For the year ended Cash flow statement A. CASH FLOW FROM OPERATING ACTIVITIES: Profit/(loss) before tax (344,845,332) (231,647,272) Interest income (409,943) (247,685) Dividend income - (54,957,494) Finance costs 271,967, ,264,454 Operating cash profit before working capital changes (73,287,470) (62,587,997) Decrease/(increase) in trade and other receivables (567,309,608) - Decrease/(increase) in short term, long term loan and advances and other current assets (267,359,724) (239,979,172) (Decrease)/increase in current and non current liabilities and provisions 686,899, ,642,185 Cash generated from operations (221,057,216) (144,924,984) Income tax paid (98,264) - Net cash from operations (221,155,480) (144,924,984) B. CASH FLOW FROM INVESTING ACTIVITIES: Investment in wholly owned subsidiary - (23,558,163) Dividend received - 54,957,494 Interest received 409, ,685 Net cash from investing activities 409,943 31,647,016 C. CASH FLOW FROM FINANCING ACTIVITIES: Finance costs paid (271,967,805) (227,865,111) Inter corporate loan received during the year 1,340,953,600 - Repayment of long term borrowings (1,482,881,400) (194,319,469) Proceeds /(repayments) of short term borrowings 655,905, ,341,880 Net cash from financing activities 242,010, ,157,300 Total increase in cash and cash equivalents 21,264, ,332 Effect of exchange differences on restatement of foreign currency cash and cash equivalents (855,270) 974,240 Cash and cash equivalents at the beginning of the period 19,960,089 18,106,517 Cash and cash equivalents at the end of the year 40,369,300 19,960,089 In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on behalf of the Board of Directors Shrikant Himatsingka D.K.Himatsingka Director Director S. Sundaresan DIN : DIN : Partner Bangalore Date: Pradeep K.P. Chief Financial Officer

7 Himatsingka America Inc. Notes to Financial Statements Note 1 : SIGNIFICANT ACCOUNTING POLICIES 1.1. Basis of accounting and preparation of financial statements The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ( the 2013 Act ) / Companies Act, 1956 ( the 1956 Act ), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year Use of estimates The preparation of the financial statements in conformity with GAAP requires, the Management to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statement and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision is recognised prospectively in current and future periods Investment Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value if any. Current investments, comprising investments in mutual funds, are stated at lower of cost and fair value determined on the portfolio basis. Cost of investment include acquisition charges such as brokerage, fees and duties Revenue recognition Revenue from sale of goods is recognised on the transfer of title in the goods which generally coincides with dispatch and is stated net of discounts and sales tax Foreign currency Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in foreign currencies as at the year-end are restated at the year-end rates. Exchange differences on settlement / restatement of foreign currency monetary assets and liabilities are charged to the Statement of Profit and Loss. Premium or discount on forward contract, that are not intended for trading or speculation purpose, are amortised over the life of such contract and is recognised as a expense or income. Any profit or loss arising on cancellation, renewal, or restatement of forward contract is recognised in the statement of profit and loss.

8 1.6 Derivative Contracts and Hedge Accounting The Company is exposed to currency fluctuations risk on foreign currency assets, liabilities, net investment in non-integral foreign operations and forecasted cash flows denominated in foreign currency, and is also exposed to interest rate fluctuations on floating interest rate borrowings. The Company follows a risk management policy of covering this risk through a combination of forward contracts, options, swaps and other derivative contracts. In accordance with the principles set out in AS 30, changes in fair value of designated derivative contracts being effective hedges, are recognised directly in Hedge reserve account under Reserves and surplus and reclassified into Statement of Profit and Loss upon the occurrence of the underlying hedged transaction. In case, the hedging instrument expires, sold, terminated or the underlying transaction is no longer expected to occur the net gain or loss recognised in the Hedge reserve account is transferred to the Statement of Profit and Loss. The changes in fair values of instruments designated at fair value through profit and loss are adjusted in the Statement of Profit and Loss. 1.7 Earnings per share Basic earnings per share are computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed as the Company has not issued any dilutive potential equity shares. 1.8 Income tax Income tax comprises the current tax provision, the net change in the deferred tax asset or liability in the year. Current income tax expenses are based on the local tax regulations. Deferred tax assets and liabilities are recognised for the estimated future tax consequences of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets in the nature of unabsorbed depreciation and losses are recognised only if there is virtual certainty of realisation. Other deferred tax assets are recognised if there is reasonable certainty of realisation. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the income statement in the period of enactment of the change. 1.9 Provisions and contingencies A provision is recognised when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes to the financial statement. A contingent asset is neither recognised nor disclosed.

9 1.10 Borrowings Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such assets are added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

10 Himatsingka America, Inc. As at As at Notes to Financial Statements Note 2 - Share capital Authorised 7,000 equity shares at no par value 3,000 preference shares at no par value - - Issued 4,650 equity shares of USD 10,000 each fully called up (Previous year: 4650 equity shares of USD 10,000 each) 2,913,573,750 2,792,790,000 Subscribed and fully paid-up 4,650 equity shares of USD 10,000 each fully paid up (Previous year: 4650 equity shares of USD 10,000 each) 2,913,573,750 2,792,790,000 2,913,573,750 2,792,790,000 (i) There has been no movement in the shares outstanding from the prior year to the current year. (ii) Details of the rights, preferences and restrictions attaching to each share : The Company has only one class of share, having a par value of USD 10,000/- per share. Each holder of equity share is entitled to one vote per share without restriction. (iii) Number of shares held by each shareholder holding more than 5% shares in the Company: Himatsingka Seide Ltd has 100% shareholding in Himatsingka America, Inc. Note 3 - Reserves and surplus Foreign currency translation reserve Opening balance 198,687, ,792,345 Movement during the year 32,382,641 11,895,130 Closing balance 231,070, ,687,475 Surplus/ (Deficit) in Statement of Profit and Loss Opening balance 215, ,545,215 Add: Transferred from surplus in statement of profit and loss (184,705,256) (174,330,212) Add: Deferred tax asset adjustment - - Closing balance (184,490,253) 215,003 Hedge reserve Opening balance (5,837,860) - Movement during the year 5,837,860 (5,837,860) Closing balance - (5,837,860) Note 4 - Long term borrowings 46,579, ,064,618 Secured Term loan from banks (Refer (i) below) - 1,108,107,000 Unsecured Loan from related parties 2,235,619,600 1,045,044,000 2,235,619,600 2,153,151,000 Notes: (i) Details of terms of repayment for the long-term borrowings: Term loans from bank: ICICI Bank Loan - 969,969,000 [Nature of security : First paripassu charge on certain movable fixed assets of the parent Company and pledge of shares of Himatsingka America, Inc., Divatex Home Fashion, Inc. and DWI Holdings, Inc. and DSRA account] [Repayment terms : Twenty Equal Installments-5% of the Loan amount on quarterly basis commencing 27th month from drawdown - December The outstanding term as of March 31, 2015 was Nil] [Interest rate : LIBOR(3M) plus 575 basis points p.a.] [The amount includes the current maturity of Rs. Nil (Previous year: Rs.204,204,000) included in Note 8]

11 Himatsingka America, Inc. As at As at Notes to Financial Statements Canara Bank Loan - 512,912,400 [Nature of security : Pledge of Shares of Himatsingka America, Inc., Divatex Home Fashion, Inc. and DWI Holdings, Inc.] [Repayment terms : Nine Half Yearly Installments commencing December 2012.The outstanding term as of March 31, 2015 was Nil] [Interest rate : LIBOR (6months) plus 495 basis points p.a.] [The amount includes the current maturity of Rs. Nil (Previous year: Rs.170,570,400) included in Note 8] - 1,482,881,400 Loan from related parties: Himatsingka Seide Limited 2,385,997,600 1,045,044,000 [Repayment terms : Quarterly Installments with step-up repayment after the initial moratorium period of 2 years] [Interest rate : 8.5% p.a.] [The amount includes the current maturity of Rs.150,378,000 (Previous year: Rs. Nil) as referred in Note 8] 2,385,997,600 1,045,044,000 Total long term borrowings including current maturities 2,385,997,600 2,527,925,400 (ii) For the current maturities of long-term borrowings, refer Note 8 - Other current liabilities.

12 Himatsingka America, Inc. As at As at Notes to Financial Statements Note 5 - Long term provisions Provision for taxes 249,065, ,191, ,065, ,191,361 Note 6 - Short term borrowings Working capital loan from banks (secured) EXIM (Buyers credit) 1,174,771, ,865,818 (Nature of Security: (a) Promissory Notes covering the value of consignments financed. (b) Trust Receipts relating to each shipment of goods financed by way of the relevant disbursement ('c) Escrow of Receivables (d) Corporate Guarantee of Himatsingka Seide Limited, being the Holding Company) 1,174,771, ,865,818 Note 7 - Trade payables Trade Payables, including dues to related parties (Refer Note 21) 294,136, ,505, ,136, ,505,601 Note 8 - Other current liabilities Current maturities of long term debt Term loan from banks (Secured) - 374,774,400 Loan from related parties (Unsecured) 150,378,000 - Interest accrued but not due on borrowings (include dues to related parties. Refer Note 21) 69,279,621 12,611,918 Other current liabilities (include dues to related parties. Refer Note 21) Divatex Home Fashions 1,294,240, ,871,826 DWI Holdings Inc., 52,909,058 99,868,953 Withholding Tax Payable 1,691,753 - Others 500,000-1,568,999,023 1,248,127,097

13 Himatsingka America, Inc. As at As at Notes to Financial Statements Note 9 - Short term provisions Provision for loss on derivatives - 5,837,860-5,837,860 Note 10 - Non current investments Investments, at cost Trade (Unlisted, unquoted) Investment in equity instruments DWI Holdings, Inc. 1,676,561,502 1,607,058,753 Equity shares of USD each fully paid up [No. of shares: 100 (Previous year: 100)] Divatex Fashions, Inc. 4,692,387,844 4,497,862,409 Equity shares of USD 1 each fully paid up [No. of shares: 50 (Previous year: 50)] 6,368,949,346 6,104,921,162 Note 11 - Deferred tax (asset) / liability Tax effect of items constituting deferred tax liability On difference between book balance and tax balance of fixed assets Tax effect of items constituting deferred tax assets Unabsorbed depreciation/ tax losses 556,322, ,426,012 Other Timing Differences 28,837, ,381 Deferred tax (asset)/liability net 585,159, ,090,393 The Company has recognized deferred tax asset on brought forward tax losses. Note 12 - Trade receivables (Unsecured, considered good) Outstanding for a period exceeding six months from the date they were due for payment 8,392,211 8,044,684 Others* 1,238,333, ,371,419 1,246,725, ,416,103 * includes dues from subsidiaries (Refer Note 21) Divatex Home Fashion, Inc. 1,238,333, ,371,419 Note 13 - Cash and cash equivalents Balances with banks - in current account 40,369,300 3,623,769 - in deposit account - 16,336,320 40,369,300 19,960,089 Note 14 - Short term loans and advances (unsecured, considered good) Prepaid expenses 3,194,848 26,404,737 Officer Loan 12,531,500 12,012,000 Interest Receivable - 989,065 Advance to subsidiaries Himatsingka Seide Limited 191,337,927 27,739,806 DWI Holdings, Inc. 34,477, ,541,717 67,145,608

14 Himatsingka America, Inc. For the year ended For the year ended Notes to Financial Statements Note 15 - Revenue from operations Sale of home textile products 2,484,326, ,984,065 2,484,326, ,984,065 Note 16- Other income Dividend income from subsidiaries - 54,957,494 Interest income Interest on fixed deposit with banks 43, ,685 Interest others 366, ,943 55,205,179 Note 17 - Cost of materials Purchase of Traded Goods 2,484,326, ,984,065 2,484,326, ,984,065 Note 18 - Finance costs Interest on loan 262,378, ,045,300 Finance charges 9,589,750 10,219, ,967, ,264,454

15 Himatsingka America, Inc. For the year ended For the year ended Notes to Financial Statements Note 19 - Other expenses Rent 3,328,232 3,256,645 Travelling and conveyance 3,206,595 3,396,492 Professional and consultancy charges 6,769,737 2,488,703 Other expenses 387,247 2,834 Corporate management fees paid to Parent Company 59,595,659 53,443,323 73,287,470 62,587,997 Note 19A - Professional and consultancy charges include payment to auditors Statutory audit Audit fees 500,000 50, ,000 50,671 The Company is mainly engaged in the business of home textiles. Considering the nature of business and financial reporting of the Company, it has only one business segment viz; home textiles as primary reportable segment. Note 21 - Related party disclosures Nature of relationship Holding company HC Himatsingka Seide Limited Subsidiary companies WOS Divatex Home Fashions, Inc. WOS DWI Holdings, Inc. Fellow Subsidiaries FS Himatsingka Wovens Private Limited FS Guiseppe Bellora S.p.A FS Himatsingka Singapore Pte Limited FS Twill and Oxford L.L.C Enterprises owned or significantly influenced by KMP, directors or their relatives (Referred as "enterprises") Bihar Mercantile Union Limited Satin Reed (America) Inc. BMU International Key management personnel KMP Shrikant Himatsingka KMP D.K.Himatsingka KMP Pradeep K.P.

16 Himatsingka America, Inc. For the year ended For the year ended Notes to Financial Statements Related party disclosure Relationship Purchase of goods Himatsingka Seide Limited HC 2,484,326, ,984,065 Sale of goods Divatex Home Fashions, Inc. WOS 2,484,326, ,984,065 Claims and Discounts Himatsingka Seide Limited HC 106,149,136 - Reimbursement of expenses paid Himatsingka Seide Limited HC 71,067,396 53,000,000 DWI Holdings, Inc. WOS 82,876,901 9,265,997 71,067,396 53,000,000 Interest expense on inter corporate loan Himatsingka Seide Limited HC 118,252,359 90,126, ,252,359 90,126,000 Inter corporate loans received during the year Himatsingka Seide Limited HC 1,337,070,000-1,337,070,000 - Inter corporate loans repaid during the year Himatsingka Seide Limited HC 20,050,400-20,050,400 - Dividend received Divatex Home Fashions, Inc. WOS - 41,213,054 DWI Holdings, Inc. WOS - 13,744,440-54,957,494

17 Himatsingka America, Inc. For the year ended For the year ended Notes to Financial Statements Outstanding as at year end Amounts payable Himatsingka Seide Limited HC 294,136, ,104,000 DWI Holdings, Inc. WOS 19,268,121 99,868,953 Divatex Home Fashions, Inc. WOS 1,294,727, ,871,826 Amounts receivable Divatex Home Fashions, Inc. WOS 1,238,333, ,371,419 Himatsingka Seide Limited HC 191,337,960 29,057,000 Inter corporate loan payable Himatsingka Seide Limited HC 2,385,998,000 1,045,044,000 Interest payable on inter corporate loan Himatsingka Seide Limited HC 64,763,732 2,320,000 Note 22 - Earning per share Net profit/(loss) for the year (being entirely attributable to the equity shareholders) (184,705,256) (174,330,212) Basic / diluted Weighted average number of equity shares 4,650 4,650 Par value per share - USD 10,000 each 10,000 10,000 Earnings per share - Basic / diluted (39,722) (37,490) Note 23 -Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

18 Divatex Home Fashions Inc Audited Financial Statements

19 INDEPENDENT AUDITORS' REPORT To the Board of Directors, Himatsingka Seide Limited Bangalore, India Report on the Financial Statements We have audited the accompanying financial statements of Divatex Home Fashions, Inc. (the "Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements These financial statements are the responsibility of the management of the ultimate holding company, Himatsingka Seide Limited (the Holding Company ) and have been prepared under the generally accepted accounting principles in India. The Holding Company s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly we express no such opinion. An audit also includes evaluating the appropriateness of the accounting policies used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

20 Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its losses and its cash flows for the year ended on that date. Other Matters These financial statements have been extracted from the information prepared by the Holding Company s management for the purpose of its inclusion in the Consolidated Financial Statements of Himatsingka Seide Limited. This report is intended solely for the consideration of the Board of Directors of Himatsingka Seide Limited and should not be used for any other purpose. For Deloitte Haskins & Sells Chartered Accountants (Registration No S) BANGALORE, August 17, 2015 S. Sundaresan Partner (Membership No )

21 Divatex Home Fashions Inc As at As at Balance Sheet Note No EQUITY AND LIABILITIES Shareholders' funds Share capital 2 3,133 3,003 Reserves and surplus 3 1,784,001,462 1,309,951,729 1,784,004,595 1,309,954,732 Non-current liabilities Long term Borrowings 4 19,580,477 33,783,753 Deferred tax liability (Net) 11 7,028,882 - Long term provisions 5 64,527,915 62,852,323 91,137,274 96,636,076 Current liabilities Short Term Borrowings 6 392,049, ,232,525 Trade payables 7 511,077, ,661,117 Other current liabilities 8 15,787,467 15,015, ,914,402 1,668,908,642 ASSETS Total 2,794,056,271 3,075,499,450 Non-current assets Fixed assets Tangible assets 9 162,533, ,147,379 Capital work in progress 35,175,909 - Long term loans and advances 10 15,792,750 15,536,396 Deferred tax asset (Net) 11-2,276, ,501, ,960,770 Current assets Inventories 12 2,357,077,781 2,691,115,485 Trade receivables 13 69,605,479 73,270,966 Cash and cash equivalents 14 20,318,755 24,939,925 Short term loans and advances ,552,365 94,212,304 2,580,554,380 2,883,538,680 Total 2,794,056,271 3,075,499,450 See accompanying notes (1 to 26) to the financial statements In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on behalf of of the the Board of of Directors Shrikant Himatsingka D.K.Himatsingka Director Director S. Sundaresan DIN : DIN : Partner Place: Date: Pradeep K.P. Chief Financial Officer

22 Divatex Home Fashions Inc For the year ended For the year ended Statement of Profit and Loss Note No Revenue from operations 16 11,723,501,460 12,253,487,957 Other income 17 15,084 8,053,468 Total revenue 11,723,516,544 12,261,541,425 Expenses: Cost of materials 18 10,365,050,280 11,038,363,168 Employee benefit expense ,878, ,642,288 Finance costs ,570, ,066,068 Depreciation and amortization expense 9 24,484,866 14,420,860 Other expenses ,862, ,318,775 Total expenses 11,312,846,206 11,913,811,159 Profit before tax 410,670, ,730,266 Tax expense: Current tax 55,413,020 1,460,484 Deferred tax 9,346,317 11,552,106 Profit after tax 345,911, ,717,676 Basic and diluted earnings per equity share (Rs.) (Refer note 25) 6,918,220 6,694,354 ($1 per share equivalent to Rs per share restated at closing rate) (Previous year is Rs per share restated at closing rate) See accompanying notes (1 to 26) to the financial statements In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on behalf of of the the Board of of Directors Shrikant Himatsingka D.K.Himatsingka Director Director S. Sundaresan DIN : DIN : Partner Place: Date: Pradeep K.P. Chief Financial Officer

23 Divatex Home Fashions Inc For the year ended For the year ended Cashflow Statement A. CASH FLOW FROM OPERATING ACTIVITIES: Profit/(loss) before tax 410,670, ,730,266 Depreciation and amortisation expense 24,484,866 14,420,860 Loss/(Profit) on sale of assets 558,910 (7,380,223) Finance costs 139,570, ,066,068 Interest Income (15,084) (3,901) Operating cash profit before working capital changes 575,269, ,833,070 Decrease in trade and other receivables 6,664,022 32,262,028 Decrease/(increase) in inventories 439,199,377 (1,478,319,323) Decrease/(increase) in short term, long term loan and advances and other current assets (1,257,231,454) 103,691,745 (Decrease)/increase in current and non current liabilities and provisions 772,355, ,245,707 Cash generated from operations 536,256,487 (427,286,773) Income tax paid - (1,502) Net cash from operations 536,256,487 (427,288,275) B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets (45,008,715) (179,531,788) Sale proceeds of fixed assets 4,371,017 13,797,829 Interest received 15,084 3,901 Net cash from investing activities (40,622,614) (165,730,058) C. CASH FLOW FROM FINANCING ACTIVITIES: Finance costs paid (139,570,039) (127,066,068) Proceeds/(Repayments) of short term borrowings (net) (343,256,517) 721,886,837 Proceeds of long term borrowings (15,274,008) 49,390,874 Dividend paid - (39,918,588) Net cash from financing activities (498,100,564) 604,293,055 Total decrease in cash and cash equivalents (2,466,691) 11,274,722 Effect of exchange rates changes (2,154,479) (101,646) Cash and cash equivalents at the beginning of the period 24,939,925 13,766,849 Cash and cash equivalents at the end of the year 20,318,755 24,939, In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on behalf of the Board of Directors Shrikant Himatsingka D.K.Himatsingka Director Director S. Sundaresan DIN : DIN : Partner Place: Date: Pradeep K.P. Chief Financial Officer

24 Divatex Home Fashions Inc. Notes to Financial Statements Note 1 : SIGNIFICANT ACCOUNTING POLICIES 1.1. Basis of accounting and preparation of financial statements The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ( the 2013 Act ) / Companies Act, 1956 ( the 1956 Act ), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year Use of estimates The preparation of the financial statements in conformity with GAAP requires, the Management to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statement and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision is recognised prospectively in current and future periods Fixed assets Fixed assets and intangibles are stated at cost less accumulated depreciation. Cost includes all costs relating to acquisition and installation of fixed assets including any incidental costs of bringing the assets to their working condition for their intended use. Borrowing costs directly attributable to acquisition or construction of qualifying assets, which necessarily take a substantial period of time to get ready for their intended use, are capitalised Depreciation Fixed assets are depreciated over the estimated useful lives as determined by the Management or over the lives determined based on rates of depreciation specified under various applicable statutes, whichever is shorter, on a straight line method. The estimated useful lives of assets are as follows: Leasehold improvements Shorter of lease term or useful life Other Assets - 5years 1.5. Impairment of assets At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss.

25 Reversal of impairment losses recognised in prior years, if any, is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years Investment Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value if any. Current investments, comprising investments in mutual funds, are stated at lower of cost and fair value determined on the portfolio basis. Cost of investment include acquisition charges such as brokerage, fees and duties Inventories Inventories of raw materials, stores and spares, work-in-process and finished goods are valued at lower of cost and estimated net realisable value. Cost is ascertained on weighted average basis. Cost of finished goods and work-in-process includes an appropriate proportion of conversion cost 1.8. Revenue recognition Revenue from sale of goods is recognised on the transfer of title in the goods which generally coincides with dispatch and is stated net of discounts and sales tax Retirement benefits Post employment benefit plans : Payments to defined contribution plans, such as provident fund are charged as an expense as they fall due. For defined benefit schemes, the cost of providing benefits is determined using Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur. Past Service Cost in recognised immediately. The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme. Short term employee benefits : The undiscounted portion of short-term employee benefits expected to be paid in exchange for the services rendered by the employees is recognized during the period when the employee renders service. These benefits include compensated absences such as paid annual leave.

26 1.10. Foreign currency Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in foreign currencies as at the year-end are restated at the year-end rates. Exchange differences on settlement / restatement of foreign currency monetary assets and liabilities are charged to the Statement of Profit and Loss. Premium or discount on forward contract, that are not intended for trading or speculation purpose, are amortised over the life of such contract and is recognised as a expense or income. Any profit or loss arising on cancellation, renewal, or restatement of forward contract is recognised in the statement of profit and loss Derivative Contracts and Hedge Accounting The Company is exposed to currency fluctuations risk on foreign currency assets, liabilities, net investment in non-integral foreign operations and forecasted cash flows denominated in foreign currency, and is also exposed to interest rate fluctuations on floating interest rate borrowings. The Company follows a risk management policy of covering this risk through a combination of forward contracts, options, swaps and other derivative contracts. In accordance with the principles set out in AS 30, changes in fair value of designated derivative contracts being effective hedges, are recognised directly in Hedge reserve account under Reserves and surplus and reclassified into Statement of Profit and Loss upon the occurrence of the underlying hedged transaction. In case, the hedging instrument expires, sold, terminated or the underlying transaction is no longer expected to occur the net gain or loss recognised in the Hedge reserve account is transferred to the Statement of Profit and Loss. The changes in fair values of instruments designated at fair value through profit and loss are adjusted in the Statement of Profit and Loss Earnings per share Basic earnings per share are computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed as the Company has not issued any dilutive potential equity shares Income tax Income tax comprises the current tax provision, the net change in the deferred tax asset or liability in the year. Current income tax expenses are based on the local tax regulations. Deferred tax assets and liabilities are recognised for the estimated future tax consequences of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets in the nature of unabsorbed depreciation and losses are recognised only if there is virtual certainty of realisation. Other deferred tax assets are recognised if there is reasonable certainty of realisation. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the income statement in the period of enactment of the change.

27 1.14 Provisions and contingencies A provision is recognised when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes to the financial statement. A contingent asset is neither recognised nor disclosed Borrowings Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such assets are added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

28 Divatex Home Fashions Inc As at As at Notes to Financial Statements Note 2 - Share capital Authorized 200 equity shares of no par value (Previous year: 200 equity shares of no par value) Issued 50 equity shares of USD 1 each (Previous year: 50 equity shares of USD 1 each) 3,133 3,003 Subscribed and paid-up 50 equity shares of USD 1 each (Previous year: 50 equity shares of USD 1 each) 3,133 3,003 Note 3 - Reserves and surplus 3,133 3,003 Foreign currency translation reserve Opening balance 321,288, ,807,759 Movement during the year 128,138,732 93,480,297 Closing balance 449,426, ,288,056 Surplus/ (deficit) in Statement of Profit and Loss Opening balance 988,663, ,159,051 Add: Transferred from surplus in statement of profit and loss 345,911, ,717,676 Less: Dividend - 41,213,054 Closing balance 1,334,574, ,663,673 Note 4 - Long term borrowings 1,784,001,462 1,309,951,729 Term Loans from Banks 19,580,477 33,783,753 19,580,477 33,783,753 [Nature of security : Secured by Lease hold improvements at warehouse in Spartanburg, South Carolina] [Repayment terms : 48 equal monthly installments.the outstanding term as of March 31, 2015 was 27 installments] [Interest rate : 3.75% p.a.] [The amount includes the current maturity of Rs.15,664,372 year: 15,015,000 ) included in Note 8] (Previous 35,244,849 48,798,753 Note 5 - Long term provisions Provision for taxes 64,527,915 62,852,323 64,527,915 62,852,323 Note 6 - Short Term Borrowings Working Capital Loan from Bank 392,049, ,232, ,049, ,232,525 Note 7 - Trade payables Trade payables 511,077, ,661, ,077, ,661,117 Note 8 - Other current liabilities Current maturities of long term debt Term loan from financial institution (Secured) 15,664,372 15,015,000 Others 123,095 15,787,467 15,015,000

29 Divatex Home Fashions Inc Notes to Financial Statements Note 9 Particulars Tangible Assets As at 01/04/2014 Additions Deletions Adjustments * Gross block Depreciation Net Block As at 31/03/2015 As at 01/04/2014 For the year On deletions On other adjustments* As at 31/03/2015 As at 31/03/2015 As at 31/03/2014 Furnitures & Fixtures 19,469,667-7,436, ,031 12,875,250 8,002,548 2,495,627 7,022, ,822 3,880,253 8,994,997 11,467,119 Leasehold Improvements 174,054,571 3,530,974 19,801,884 7,527, ,311,247 23,126,674 16,129,803 15,146,852 1,379,743 25,489, ,821, ,927,897 Office Equipments 161, ,987 7, , ,981 6, Other Property 25,546,924 7,453,034 5,480,974 1,104,865 28,623,849 13,794,561 5,859,436 5,480, ,470 14,907,493 13,716,356 11,752,363 Total 219,233,144 10,984,008 32,888,293 9,481, ,810,346 45,085,765 24,484,866 27,819,551 2,526,034 44,277, ,533, ,147,379 Previous Year 46,745, ,359,584 10,035,768 5,164, ,233,144 31,065,317 14,420,860 3,422,483 3,022,072 45,085, ,147,379 15,679,820 * Adjustments include exchange fluctuation arising on account of conversion of fixed assets from foreign currency to reporting currency.

30 Divatex Home Fashions Inc As at As at Notes to Financial Statements Note 10 - Long term loans and advances (unsecured, considered good) Security deposits 15,792,750 15,536,396 15,792,750 15,536,396 Note 11 - Deferred tax asset / (liability) Tax effect of items constituting deferred tax liability On difference between book balance and tax balance of fixed assets (26,115,513) (23,026,933) Tax effect of items constituting deferred tax assets Unabsorbed depreciation/losses - 8,464,676 Other timing differences 19,086,631 16,839,252 Deferred tax asset/ (liability) net (7,028,882) 2,276,995 Note 12 - Inventories Traded goods 2,357,077,781 2,691,115,485 2,357,077,781 2,691,115,485 Note 13 - Trade receivables Unsecured considered good 69,605,479 73,270,966 69,605,479 73,270,966 Note 14 - Cash and cash equivalents Cash in hand 375, ,169 Balances with banks - in current account 19,943,737 24,542,756 20,318,755 24,939,925 Note 15 - Short term loans and advances (unsecured, considered good) Advance to suppliers 2,625,729 1,838,912 Prepaid expenses 94,945,510 62,494,232 Other advances 35,981,126 29,879, ,552,365 94,212,304

31 Divatex Home Fashions Inc For the year ended For the year ended Notes to Financial Statements Note 16 - Revenue from operations Sale of products 11,676,456,129 12,195,706,388 Sale of services 47,045,331 57,781,569 11,723,501,460 12,253,487,957 Note 17- Other income Interest income 15,084 3,901 Profit on sale of assets - 7,380,223 Miscellaneous income - 669,344 15,084 8,053,468 Note 18 - Cost of materials Opening stock: Traded goods 2,691,115,485 1,113,429,098 2,691,115,485 1,113,429,098 Add: Purchases 10,031,012,576 12,616,049,555 Total 12,722,128,061 13,729,478,653 Less: Closing stock Traded goods 2,357,077,781 2,691,115,485 10,365,050,280 11,038,363,168 Note 19 - Employee benefit expense Salaries and wages 347,621, ,242,788 Contribution to provident and other funds 181, ,841 Workmen and staff welfare expenses 27,074,900 22,963, ,878, ,642,288 Note 20 - Finance costs Interest on working capital loan 108,979,135 89,806,071 Finance charges 30,590,904 37,259, ,570, ,066,068

32 Divatex Home Fashions Inc For the year ended For the year ended Notes to Financial Statements Note 21 - Other expenses Other manufacturing expenses 39,984,953 18,972,514 Rent 66,030,087 60,694,893 Travelling and conveyance 20,370,156 26,996,651 Communication expenses 3,121,251 3,894,008 Printing and stationery 4,310,250 6,185,161 Insurance 22,759,086 22,576,594 Repairs and maintenance 12,560,169 17,583,247 Rates and taxes 6,535,774 7,409,866 Professional and consultancy charges (Refer Note 21A) 86,140,303 47,570,609 Bank charges 5,152,371 4,244,982 Advertisement and publicity 1,595,505 2,242,204 Selling and distribution - Commission on sales 49,513,445 53,922,697 - Selling expenses 47,335,347 44,466,226 - Freight outward, net of reimbursement 7,718,017 7,749,499 Other expenses 9,235,427 5,162,814 Royalty 25,941,946 26,764,010 Loss on sale of assets 558,910 - Management fees - 1,882, ,862, ,318,775 Note 21A - Professional and consultancy charges include payment to auditors Statutory auditor Audit fees 3,146,080 2,921,360 3,146,080 2,921,360 Note 22 - Segment reporting a) Primary segment : Business segment The Company operates in the single segment of trading in fabrics. Accordingly there is no separate reportable business segment as per AS 17 - 'Segment Reporting'. b) Information about secondary segment Geographic segment Distribution of the Company's sales by geographic location North America 11,602,975,679 12,074,525,048 Europe continent 42,451,820 44,607,293 Others 31,028,630 76,574,047 11,676,456,129 12,195,706,388

33 Divatex Home Fashions Inc For the year ended For the year ended Notes to Financial Statements Note 23 - Related party disclosures Nature of relationship Names of the related parties Holding Company (HC) Ultimate holding Company (UHC) Fellow subsidiary (FS) Himatsingka America Inc Himatsingka Seide Limited DWI Holdings Inc Himatsingka Wovens Private Limited Guiseppe Bellora S.p.A Himatsingka Singapore Pte Limited Twill and Oxford L.L.C Related party disclosure Relationship Purchase of goods Himatsingka Seide Limited UHC 3,296,935,358 5,759,383,061 Himatsingka America Inc FS 2,484,326, ,984,065 Total 5,781,261,772 6,453,367,126 Dividend paid Himatsingka America Inc HC - 41,213,054 Claims and Discounts Himatsingka Seide Limited UHC 33,020,432 - Reimbursement of expenses incurred by Himatsingka Seide Limited UHC 2,958,000 - Reimbursement of expenses on behalf of DWI Holdings Inc FS 93,818,470 - Gieuseppe Bellora FS 25,659,518 Outstanding as at year end Amounts payable Himatsingka Seide Limited UHC 178,638, ,402,371 Himatsingka America Inc FS 1,238,333,500 29,057,000 Guarantees taken on bahalf of subsidiaries Himatsingka Seide Limited UHC 20,077, ,450,000 Amounts receivable DWI Holdings Inc FS 127,085,012 34,209,035 Himatsingka America Inc HC 1,294,727, ,871,826 Gieuseppe Bellora FS 12,788,521 27,655,708 Himatsingka Seide Limited UHC - 10,369,359

34 Divatex Home Fashions Inc For the year ended For the year ended Notes to Financial Statements Note 24 - Leases The Company has entered into operating lease agreements mainly in respect of the office premises, accommodation and vehicles provided to employees and guest houses. These leases have non - cancellable periods ranging from 1 to 5 years. i) Future minimum lease payments under non-cancellable operating leases due not later than one year 67,493, ,079,403 later than one year and not later than five years 370,246, ,274,624 later than five years 199,299, ,653,976 ii) lease payments recognized in the Statement of Profit and Loss for the year 66,030,087 60,694,893 Note 25 - Earning per share Net profit for the year (being entirely attributable to the equity shareholders) 345,911, ,717,676 Basic / diluted Weighted average number of equity shares Par value per share - USD 1 each Earnings per share - Basic / diluted 6,918,220 6,694,354 Note 26 - Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

35 DWI Holdings Inc., Audited Financial Statements

36 INDEPENDENT AUDITORS' REPORT To the Board of Directors, Himatsingka Seide Limited Bangalore, India Report on the Financial Statements We have audited the accompanying financial statements of DWI Holdings Inc., (the "Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements These financial statements are the responsibility of the management of the ultimate holding company, Himatsingka Seide Limited (the Holding Company ) and have been prepared under the generally accepted accounting principles in India. The Holding Company s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly we express no such opinion. An audit also includes evaluating the appropriateness of the accounting policies used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

37 Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its losses and its cash flows for the year ended on that date. Other Matters These financial statements have been extracted from the information prepared by the Holding Company s management for the purpose of its inclusion in the Consolidated Financial Statements of Himatsingka Seide Limited. This report is intended solely for the consideration of the Board of Directors of Himatsingka Seide Limited and should not be used for any other purpose. For Deloitte Haskins & Sells Chartered Accountants (Registration No S) BANGALORE, August 17, 2015 S. Sundaresan Partner (Membership No )

38 - - DWI Holdings Inc., As at As at Balance Sheet Note No EQUITY AND LIABILITIES Shareholders' funds Share capital Reserves and surplus 3 1,145,044,729 1,183,785,934 1,145,044,734 1,183,785,939 Non-current liabilities Long term borrowings 4 66,834,926 70,070,006 66,834,926 70,070,006 Current liabilities Short term borrowings 5 140,639, ,141,660 Trade payables 6 883,170, ,111,622 Other current liabilities 7 7,013,839 6,169,179 1,030,823, ,422,461 ASSETS Total 2,242,703,005 2,129,278,406 Non-current assets Fixed assets Tangible assets 8 231,800, ,011,842 Intangible assets 8 15,625,652 - Capital work-in-progress 63,445,744 7,917, ,871, ,929,445 Long term loans and advances 9 33,627,921 90,838,522 Deferred tax Assets (Net) 10 68,776, , ,276, ,898,477 Current assets Inventories 11 1,333,249,496 1,236,075,241 Trade receivables 12 34,848, ,332,829 Cash and cash equivalents 13 1,622,104 13,056,013 Short term loans and advances ,707, ,915,846 1,829,426,843 1,804,379,929 Total 2,242,703,005 2,129,278,406 See accompanying notes (1 to 26) to the financial statements In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on behalf of the Board of Directors Shrikant Himatsingka D.K.Himatsingka S.Sundaresan Director Director Partner DIN : DIN : Bangalore Date: Pradeep K.P. Chief Financial Officer

39 For the year ended For the year ended DWI Holdings Inc., Note No. Statement of Profit and Loss Revenue from operations 15 4,605,021,486 4,590,828,333 Other income ,347 - Total revenue 4,605,251,833 4,590,828,333 Expenses: Cost of materials 17 3,599,988,677 3,373,681,557 Employee benefit expense ,947, ,827,544 Finance costs 19 65,643,664 50,536,438 Depreciation and amortization expense 8 27,211,058 21,821,248 Other expenses ,258, ,071,937 Total expenses 4,738,049,683 4,386,938,724 Profit before exceptional items and tax (132,797,850) 203,889,609 Exceptional items - loss (Refer Note 25) - 49,742,143 Profit before tax (132,797,850) 154,147,466 Tax expense: Current tax 3,073,190 9,240,486 Deferred tax (68,217,009) 36,803,047 Profit / (loss) after tax (67,654,031) 108,103,933 Basic and diluted earnings per equity share (Rs.) (Refer note 24) (676,540) 1,081,039 ($1 per share equivalent to Rs per share restated at closing rate) (Previous year is Rs per share restated at closing rate) See accompanying notes (1 to 26) to the financial statements In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on behalf of the Board of Directors Shrikant Himatsingka D.K.Himatsingka S.Sundaresan Director Director Partner DIN : DIN : Bangalore Date: Pradeep K.P. Chief Financial Officer

40 DWI Holdings Inc., For the year ended For the year ended Cashflow Statement A. CASH FLOW FROM OPERATING ACTIVITIES: Profit/(loss) before tax (132,797,850) 154,147,466 (Profit)/ Loss on sale of assets (30,298) 983,943 Depreciation and amortisation expense 27,211,058 21,821,248 Interest income (200,049) Finance costs 65,643,664 50,536,438 Operating cash profit before working capital changes (40,173,475) 227,489,095 Decrease/(increase) in trade and other receivables 116,917,326 (119,915,741) Decrease/(increase) in inventories (42,628,530) (145,955,828) Decrease/(increase) in short term, long term loan and advances and other current assets (63,526,926) (299,386,806) (Decrease)/increase in current and non current liabilities and provisions 267,610, ,165,524 Cash generated from operations 238,198,800 23,396,244 Income tax paid 3,284,435 (11,066,071) Net cash from operations 241,483,235 12,330,173 B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets (92,323,882) (72,936,063) sale of fixed assets (net) 30,549 Interest received 196,274 - Net cash from investing activities (92,097,059) (72,936,063) C. CASH FLOW FROM FINANCING ACTIVITIES: Finance costs paid (65,643,664) (50,536,438) (Repayments) /Proceeds of Long term borrowings (net) (6,109,644) (6,086,276) (Repayments) / Proceeds of short term borrowings (net) (91,895,033) 116,183,419 Dividend paid - (13,328,949) Net cash from financing activities (163,648,341) 46,231,756 Total decrease in cash and cash equivalents (14,262,165) (14,374,134) Effect of exchange differences 2,828,256 4,442,067 Cash and cash equivalents at the beginning of the period 13,056,013 22,988,080 Cash and cash equivalents at the end of the year 1,622,104 13,056, In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on behalf of the Board of Directors Shrikant Himatsingka D.K.Himatsingka S.Sundaresan Director Director Partner DIN : DIN : Bangalore Date: Pradeep K.P. Chief Financial Officer

41 DWI Holdings Inc. Notes to Financial Statements Note 1 : SIGNIFICANT ACCOUNTING POLICIES 1.1. Basis of accounting and preparation of financial statements The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ( the 2013 Act ) / Companies Act, 1956 ( the 1956 Act ), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year Use of estimates The preparation of the financial statements in conformity with GAAP requires, the Management to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statement and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision is recognised prospectively in current and future periods Fixed assets Fixed assets and intangibles are stated at cost less accumulated depreciation. Cost includes all costs relating to acquisition and installation of fixed assets including any incidental costs of bringing the assets to their working condition for their intended use. Borrowing costs directly attributable to acquisition or construction of qualifying assets, which necessarily take a substantial period of time to get ready for their intended use, are capitalised Depreciation Fixed assets are depreciated over the estimated useful lives as determined by the Management or over the lives determined based on rates of depreciation specified under various applicable statutes, whichever is shorter, on a straight line method. The estimated useful lives are as follows: Buildings Leasehold improvements Machinery and equipment Computer and software Vehicles Furniture and fixtures Brands 40 years Shorter of lease term or useful life 7-1/2 years 3-5 years 4 years 8 years 7 years

42 1.5. Impairment of assets At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss. Reversal of impairment losses recognised in prior years, if any, is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years Investment Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value if any. Current investments, comprising investments in mutual funds, are stated at lower of cost and fair value determined on the portfolio basis. Cost of investment include acquisition charges such as brokerage, fees and duties Inventories Inventories of raw materials, stores and spares, work-in-process and finished goods are valued at lower of cost and estimated net realisable value. Cost is ascertained on weighted average basis. Cost of finished goods and work-in-process includes an appropriate proportion of conversion cost 1.8. Revenue recognition Revenue from sale of goods is recognised on the transfer of title in the goods which generally coincides with dispatch and is stated net of discounts and sales tax Retirement benefits Post employment benefit plans : Payments to defined contribution plans, such as provident fund are charged as an expense as they fall due. For defined benefit schemes, the cost of providing benefits is determined using Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur. Past Service Cost in recognised immediately.

43 The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme. Short term employee benefits : The undiscounted portion of short-term employee benefits expected to be paid in exchange for the services rendered by the employees is recognized during the period when the employee renders service. These benefits include compensated absences such as paid annual leave Foreign currency Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in foreign currencies as at the year-end are restated at the year-end rates. Exchange differences on settlement / restatement of foreign currency monetary assets and liabilities are charged to the Statement of Profit and Loss. Premium or discount on forward contract, that are not intended for trading or speculation purpose, are amortised over the life of such contract and is recognised as a expense or income. Any profit or loss arising on cancellation, renewal, or restatement of forward contract is recognised in the statement of profit and loss Derivative Contracts and Hedge Accounting The Company is exposed to currency fluctuations risk on foreign currency assets, liabilities, net investment in non-integral foreign operations and forecasted cash flows denominated in foreign currency, and is also exposed to interest rate fluctuations on floating interest rate borrowings. The Company follows a risk management policy of covering this risk through a combination of forward contracts, options, swaps and other derivative contracts. In accordance with the principles set out in AS 30, changes in fair value of designated derivative contracts being effective hedges, are recognised directly in Hedge reserve account under Reserves and surplus and reclassified into Statement of Profit and Loss upon the occurrence of the underlying hedged transaction. In case, the hedging instrument expires, sold, terminated or the underlying transaction is no longer expected to occur the net gain or loss recognised in the Hedge reserve account is transferred to the Statement of Profit and Loss. The changes in fair values of instruments designated at fair value through profit and loss are adjusted in the Statement of Profit and Loss Earnings per share Basic earnings per share are computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed as the Company has not issued any dilutive potential equity shares Income tax Income tax comprises the current tax provision, the net change in the deferred tax asset or liability in the year.

44 Current income tax expenses are based on the local tax regulations. Deferred tax assets and liabilities are recognised for the estimated future tax consequences of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets in the nature of unabsorbed depreciation and losses are recognised only if there is virtual certainty of realisation. Other deferred tax assets are recognised if there is reasonable certainty of realisation. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the income statement in the period of enactment of the change Provisions and contingencies A provision is recognised when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes to the financial statement. A contingent asset is neither recognised nor disclosed Borrowings Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such assets are added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

45 DWI Holdings Inc., As at As at Notes to Financial Statements Note 2 - Share capital Authorised 100 Equity Shares of USD.001 each (Previous year: '100 Equity Shares of USD.001 each ) 5 5 Issued 100 Equity Shares of USD.001 each (Previous year: '100 Equity Shares of USD.001 each ) 5 5 Subscribed and paid-up 100 Equity Shares of USD.001 each (Previous year: '100 Equity Shares of USD.001 each ) 5 5 Note 3 - Reserves and surplus 5 5 Foreign currency translation reserve Opening balance 361,025, ,309,223 Movement during the year 28,912, ,716,249 Closing balance 389,938, ,025,472 Surplus/ (Deficit) in Statement of Profit and Loss Opening balance 822,760, ,400,969 Add: Transferred from surplus in Statement of Profit and Loss (67,654,031) 108,103,933 Less: Dividend - 13,744,440 Closing balance 755,106, ,760,462 Note 4 - Long term borrowings 1,145,044,729 1,183,785,934 Secured Term loan from banks 66,834,926 70,070,006 66,834,926 70,070,006 [ Nature of Security - Real Estate in Timberlake, North Carolina ] [ Repayment Terms - Monthly instalments of $8333, with the final ballon instalment of $1,008,334.The outstanding term as of March 31, 2015 was 47 [Interest ] Rate - LIBOR (1months) plus 275 basis points p.a. ] [The amount includes the current maturity of Rs. 6,265,499 (Previous year: Rs. 6,006,000 ) included in Note 7] 73,100,425 76,076,006 Note 5 - Short term borrowings Secured From banks (Refer (i) below) 140,639, ,141, ,639, ,141,660 (i) Loans are secured against stock and book debts of the Company Note 6 - Trade payables Trade Payables 883,170, ,111, ,170, ,111,622 Note 7 - Other current liabilities Current maturities of long term debt Term loan from banks (Secured)(Refer note 4 ) 6,265,499 6,006,000 Interest accrued and due Other liabilities 748, ,179 7,013,839 6,169,179

46 DWI Holdings Inc., Notes to Financial Statements Note 8 Particulars As at Additions Gross block Depreciation Net block Other As at As at On other As at As at Deletions For the year On Deletions As at adjustments * adjustments * Tangible assets: Land 5,365, ,048 5,597, ,597,508 5,365,460 Buildings 123,828, ,355, ,184,226 36,116, ,561,992 37,678,736 91,505,490 87,712,102 Leasehold Buildings 39,862,504 14,243,698-1,723,956 55,830,158 4,431,779 6,063, ,857 10,830,208 44,999,950 35,430,725 Plant & Machinery 34,310,746 3,997,264 22,556,700 1,483,845 17,235,155 30,330, ,223 22,036, ,243 10,076,934 7,158,221 3,979,958 Furnitures & Fixtures 101,801,361 1,996,083-4,402, ,200,139 32,074,392 12,639,625-1,685,647 46,399,664 61,800,475 69,726,969 Office Equipments 106,742,334 3,630,592-4,616, ,989,352 82,945,706 7,539,638-3,765,313 94,250,657 20,738,695 23,796,628 Vehicles 3,855, ,731 4,021,922 3,855, ,731 4,021, Total 415,766,442 23,867,637 22,556,700 17,981, ,058, ,754,600 27,211,058 22,036,320 8,328, ,258, ,800, ,011,842 Intangible assets 15,625,652 15,625,652 15,625,652 Current year- Total 415,766,442 39,493,289 22,556,700 17,981, ,684, ,754,600 27,211,058 22,036,320 8,328, ,258, ,425, ,011,842 Previous Year 408,357,136 66,792, ,042,763 40,659, ,766, ,459,985 21,821,248 99,810,666 26,284, ,754, ,011, ,929,758 * Other adjustments include exchange fluctuation arising on account of conversion of fixed assets from foreign currency to reporting currency.

47 DWI Holdings Inc., As at As at Notes to Financial Statements Note 9 - Long term loans and advances (unsecured, considered good) Security deposits 14,267,419 13,323,763 Advance income tax(net of provision for tax) 19,360,502 77,514,759 33,627,921 90,838,522 Note 10 - Deferred tax asset / (liability) Tax effect of items constituting deferred tax liability On difference between book balance and tax balance of fixed assets (34,920,278) (17,680,018) Tax effect of items constituting deferred tax assets Other timing differences 103,696,784 17,810,528 Deferred tax asset/ (liability) net 68,776, ,510 Note 11 - Inventories Raw materials,stores and Spares 211,326, ,273,606 Work-in-progress 3,175,419 21,596,936 Finished goods 819,870, ,096,267 Traded goods 298,877, ,108,432 1,333,249,496 1,236,075,241 Note 12 - Trade receivables Unsecured considered good 34,848, ,332,829 34,848, ,332,829 Note 13 - Cash and cash equivalents Cash in hand 109,651 91,169 Balances with banks - in current account 1,512,453 12,964,844 1,622,104 13,056,013 Note 14 - Short term loans and advances (unsecured, considered good) Advance to suppliers 178,884, ,697,612 Prepaid expenses 277,335, ,415,225 Other advances 3,487,128 48,803, ,707, ,915,846

48 DWI Holdings Inc., For the year ended For the year ended Notes to Financial Statements Note 15 - Revenue from operations Sale of products 4,599,267,225 4,580,049,993 Sale of services 5,754,261 10,778,340 4,605,021,486 4,590,828,333 Note 16- Other income Interest income 200,049 - Profit on sale of assets 30, ,347 - Note 17 - Cost of materials Opening stock: Raw materials 234,273, ,788,314 Work in progress 21,596,936 4,018,758 Finished Goods 747,096, ,913,060 Traded Goods 233,108, ,411,106 1,236,075, ,131,238 Add: Purchases 3,697,162,932 3,621,625,560 Less: Closing stock Raw materials 211,326, ,273,606 Work in progress 3,175,419 21,596,936 Finished Goods 819,870, ,096,267 Traded Goods 298,877, ,108,432 1,333,249,496 1,236,075,241 3,599,988,677 3,373,681,557 Note 18 - Employee benefit expense Salaries and wages 346,566, ,571,587 Workmen and staff welfare expenses 27,381,737 32,255, ,947, ,827,544 Note 19 - Finance costs Interest on term loan 43,841,691 31,295,896 Finance charges 21,801,973 19,240,542 65,643,664 50,536,438 Note 20 - Other expenses Power and fuel 8,850,775 6,915,962 Rent 74,048,334 45,502,462 Travelling and conveyance 24,728,069 20,415,307 Communication expenses 11,254,534 10,842,606 Printing and stationery 1,043, ,515 Insurance 9,283,900 10,492,512 Repairs and maintenance 1,808,119 2,863,694 Rates and taxes 1,898, ,487 Professional and consultancy charges (Refer Note 20A) 94,276,014 75,177,916 Bank charges 1,410,652 1,260,016 Contribution and donation 1,528,838 1,223,632 Advertisement and publicity 94,544,483 88,117,594 Selling and distribution - Selling expenses 10,224,872 2,478,502 - Freight outward, net of reimbursement 452, ,649 Loss on sale of asset - 983,943 Other expenses 19,635,987 13,785,444 Royalty 316,269, ,162, ,258, ,071,937

49 DWI Holdings Inc., For the year ended For the year ended Notes to Financial Statements Note 20A - Professional and consultancy charges include payment to auditors Statutory auditor Audit fees 1,685,400 1,460,680 1,685,400 1,460,680 Note 21 - Segment reporting a) Primary segment : Business segment The Company operates in the single segment of trading in fabrics. Accordingly there is no separate reportable business segment as per AS 17 - 'Segment Reporting'. b) Information about secondary segment Geographic segment Distribution of the Group's consolidated sales by geographic location North America 4,474,958,796 4,468,306,055 Europe continent 5,974,765 1,020,208 Others 118,333, ,723,730 4,599,267,225 4,580,049,993 Note 22 - Related party disclosures Nature of relationship Holding Company (HC) Ultimate holding Company (UHC) Fellow subsidiary (FS) Names of the related parties Himatsingka America Inc Himatsingka Seide Limited Divatex Home Fashions Inc Giuseppe Bellora S.p.A. Himatsingka Wovens Pivate Limited Himatsingka Singapore Pte Limited Twill and Oxford LLC Related party disclosure Relationship Purchase of goods Himatsingka Seide Limited UHC 1,514,521,582 1,025,345,095 Himatsingka Wovens Pivate Limited FS 13,957,756 17,820,180 Giuseppe Bellora S.p.A. FS 93,543,123-1,622,022,461 1,043,165,275 Sale commission income Himatsingka Seide Limited UHC 5,739,000 10,660,734 Dividend paid Himatsingka America Inc HC - 13,744,440 Reimbursement of expenses incurred by Himatsingka Seide Limited UHC 1,373,000 -

50 DWI Holdings Inc., For the year ended For the year ended Notes to Financial Statements Reimbursement of expenses incurred on behalf of Himatsingka America Inc HC 82,876,901 9,265,997 Divatex Home Fashions Inc FS 93,818,470 11,721, ,695,371 20,987,547 Royalty paid Giuseppe Bellora S.p.A. FS 1,965,410 81,501 Outstanding as at year end Amounts payable Himatsingka Seide Limited UHC 451,015, ,573,479 Divatex Home Fashions Inc FS 127,085,012 34,209,035 Himatsingka Wovens Pivate Limited FS 1,183,735 10,813, ,284, ,596,208 Amounts receivable Himatsingka America Inc HC 19,268,121 99,868,953 Divatex Home Fashions Inc FS - 292,672 Himatsingka Seide Limited UHC 18,117,000 12,090,391 Giuseppe Bellora S.p.A. FS - 106,546,020 37,385, ,798,036 Note 23 - Leases The Company has entered into operating lease agreements mainly in respect of the office premises. These leases have non - cancellable period of 7 years. i) Future minimum lease payments under non-cancellable operating leases due not later than one year 36,127,552 35,214,458 later than one year and not later than five years 138,067, ,037,934 later than five years - 27,735,904 ii) lease payments recognised in the statement of profit and loss for the year 74,048,334 45,502,462 Note 24 - Earning per share Net profit for the year (being entirely attributable to the equity shareholders) (67,654,031) 108,103,933 Basic / diluted Weighted average number of equity shares Par value per share- USD Earnings per share - Basic / diluted (676,540) 1,081,039 Note 25 -Exceptional item of the previous year relates to severance pay. Note 26 -Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

51 Giuseppe Bellora SpA Audited Financial Statements

52 AUDITOR S REPORT To The Members, GUISEPPE BELLORA SPA We have audited the attached Balance Sheet of GUISEPPE BELLORA SPA ( the company ) as at 31 st March, 2015, the statement of Profit and Loss Account and the Cash Flow Statement for the year ended on that date. The above Balance sheet, Statement of profit and loss account and the Cash flow Statement have been prepared by the management of the holding company, Himatsingka Seide Ltd, based on the audited financial statement ( the financial statements ) of the company, audited by DELOITTE & TOUCHE S.p.A ( the other auditor ) in terms of their auditors report dated 7 th July 2015 (A copy of the financial statements and auditors report therein is enclosed herewith.) However we have not examined the books of accounts and other records of the company. Based on above examination and according to the additional information and explanations furnished to us, we report that the attached Balance sheet of the company as at 31 March 2015, the statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, prepared by the management of the holding company on the basis of the aforesaid financial statement with additional information and regrouping wherever necessary We have not audited the financial statements for the year ended 31 st March 2015 and the same has been audited by another firm. Subject to the limitations of our examination as indicated above, we further report that: 1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; 2. We are unable to state whether proper books of account have been kept as per the requirements of Companies Act, 2013 and whether Balance Sheet, Statement of Profit and Loss Account and Cash Flow Statement are in agreement with such books of account of the company as maintained and as stated above, we have not examined such books.

53 3. The other auditor have opined that the financial statements conforms to the requirements of the Generally Accepted Accounting Principles in the Singapore and in our opinion and to the best of our knowledge, the necessary adjustments have been made to ensure that the above balance sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting Standards referred to in Section 133 of the Companies Act, for GURU & JANA., Chartered Accountants Firm Reg No.:006826S Heena Kauser AP Partner Membership No Place: Bangalore Date:

54 Giuseppe Bellora SpA As at As at Balance Sheet Note No EQUITY AND LIABILITIES Shareholders' funds Share capital 2 726,061, ,711,017 Share application money 1,084,813,878 1,126,219,680 Reserves and surplus 3 (2,023,081,611) (2,445,175,389) (212,205,918) (432,244,692) Non-current liabilities Long term borrowings 4 541,008, ,236, ,008, ,236,712 Current liabilities Short term borrowings 5 95,215, ,315,581 Trade payables 6 227,532, ,384,751 Other current liabilities 7 119,408, ,064, ,156,384 1,046,764,729 ASSETS Total 770,958, ,756,749 Non-current assets Fixed assets Tangible assets 8 135,730, ,014,185 Intangible assets 8 27,887,028 16,335, ,617, ,349,670 Non current investments 9 1,692,500 2,066,983 Long term loans and advances 10 2,301,108 4,613, ,611, ,030,212 Current assets Inventories ,233, ,293,541 Trade receivables ,881,105 41,187,871 Cash and cash equivalents 13 60,349,780 37,549,999 Short term loans and advances 14 71,882, ,695, ,347, ,726,537 Total 770,958, ,756,749 See accompanying notes (1 to 25) to the financial statements In terms of our report attached for GURU & JANA, Chartered Accountants Firm Regn No S For and on behalf of the Board of Directors Heena Kauser A.P D.K.Himatsingka Shrikant Himatsingka Partner Director Director Membership No Bangalore Date: Bangalore Date: Bangalore Date:

55 Giuseppe Bellora SpA For the year ended For the year ended Statement of Profit and Loss Note No Revenue from operations ,284, ,535,352 Other income 16 2,902,324 2,786,382 Total revenue 866,186, ,321,734 Expenses: Cost of materials ,853, ,366,819 Employee benefit expense ,734, ,865,671 Finance costs 19 30,547,570 34,001,265 Depreciation and amortization expense 8 19,593,905 24,121,252 Other expenses ,477, ,954,989 Total expenses 890,206,876 1,151,309,996 Profit / (loss) before exceptional items and tax (24,020,146) (154,988,262) Exceptional items - expense - 115,241,779 Profit / (loss) before tax (24,020,146) (270,230,041) Tax expense: Current tax - - Profit / (loss) after tax (24,020,146) (270,230,041) Basic and diluted earnings per equity share (Rs.) (Refer note 24) (2.24) (25.17) (Par value of Euro 1 each) See accompanying notes (1 to 25) to the financial statements In terms of our report attached for GURU & JANA, Chartered Accountants Firm Regn No S For and on behalf of the Board of Directors Heena Kauser A.P D.K.Himatsingka Shrikant Himatsingka Partner Director Director Membership No Bangalore Bangalore Bangalore Date: Date: Date:

56 Giuseppe Bellora SpA For the year ended For the year ended Cash flow Statement A. CASH FLOW FROM OPERATING ACTIVITIES: Profit/(loss) before tax (24,020,146) (270,230,041) Profit / loss on sale of assets 583,463 (2,219,274) Depreciation and amortization expense 19,593,905 24,121,252 Exchange loss on non operating activities Provision for doubtful trade receivables - 18,032,963 Interest income (16,674) (21,672) Dimunition in the value of investments - 37,847,894 Finance costs 30,547,570 34,001,265 Operating cash profit before working capital changes 26,688,118 (158,467,613) Decrease/(increase) in trade and other receivables (188,833,232) 180,669,134 Decrease/(increase) in inventories 42,955,255 65,016,732 Decrease/(increase) in short term, long term loan and advances and other current assets 46,748,186 (63,967,810) (Decrease)/increase in current and non current liabilities and provisions (333,419,887) (92,839,130) Cash generated from operations (405,861,560) (69,588,687) Income tax paid - - Net cash from operations (405,861,560) (69,588,687) B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets (31,582,977) - Sale proceeds of fixed assets 2,339,358 3,969,014 Interest received 16,674 21,672 Net cash from investing activities (29,226,945) 3,990,686 C. CASH FLOW FROM FINANCING ACTIVITIES: Net proceeds from issue of share capital and share application money 186,267, ,527,274 Finance costs paid (30,547,570) (34,001,265) Proceeds of long term borrowings 622,338,831 - Repayment of long term borrowings (253,605,727) (97,752,105) (Repayments) / proceeds of short term borrowings (net) (48,697,581) (49,492,027) Net cash from financing activities 475,755,528 4,281,877 Total decrease in cash and cash equivalents 40,667,022 (61,316,124) Effect of exchange differences on restatement of foreign currency cash and cash equivalents (17,867,241) 23,468,102 Cash and cash equivalents at the beginning of the period 37,549,999 75,398,021 Cash and cash equivalents at the end of the year 60,349,780 37,549,999 In terms of our report attached for GURU & JANA, Chartered Accountants Firm Regn No S For and on behalf of the Board of Directors Heena Kauser A.P D.K.Himatsingka Shrikant Himatsingka Partner Director Director Membership No Bangalore Bangalore Bangalore Date: Date: Date:

57 Guiseppe Bellora SpA Note 1 SIGNIFICANT ACCOUNTING POLICIES 1. System of accounting The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles ( GAAP ) under the historical cost convention and on accrual basis. GAAP comprises mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, Use of estimates The preparation of the financials statements in conformity with the accounting standards generally accepted in India requires, the Management to make estimates that affect the reported amount of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision is recognised prospectively in current and future periods. 3. Fixed assets Fixed assets and intangibles are stated at cost less accumulated depreciation. Cost includes all costs relating to acquisition and installation of fixed assets including any incidental costs of bringing the assets to their working condition for their intended use. Borrowing costs directly attributable to acquisition or construction of qualifying assets, which necessarily take a substantial period of time to get ready for their intended use, are capitalised. 4. Depreciation 4.1 Fixed assets are depreciated over the estimated useful lives as determined by the management or over the lives determined based on rates of depreciation specified under various applicable statutes, whichever is shorter, on a straight line method. 4.2 In respect of improvements to leasehold premises, depreciation has been provided over the unexpired portion of the primary lease period. 4.3 Purchase goodwill is amortised over a period of ten years. 4.4 Depreciation rates used for various classes of assets are: Buildings 1.63% to 7.07% Plant and Machinery 4.75% to 25.00% Furniture and Fixtures 10.00% to 20.00% Office Equipment 12.00% to 15.00% EDP & Electronic Office Equipments 20.00% to 25.00% Software 20.00% to 25.00% Motor Vehicles 15.00% to 25.00%

58 5. Impairment of assets At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of profit and loss. Reversal of impairment losses recognised in prior years, if any, is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years. 6. Investments Long term investments are stated at cost less provision for other than temporary diminution in value, if any. Current investments are carried at lower of cost and fair value. 7. Inventories Inventories of raw materials, stores and spares, work-in-process and finished goods are valued at lower of cost and estimated net realisable value. Cost is ascertained on weighted average basis. Cost of finished goods and work-in-process includes an appropriate proportion of conversion cost based on normal operating capacity. 8. Government grants Government grants are accounted on accrual basis in accordance with the terms of the grant. 9. Revenue recognition Revenue from sale of goods is recognised on the transfer of title in the goods which generally coincides with dispatch and is stated net of discounts and sales tax but inclusive of excise duty. Dividend income is recognised when the right to receive the dividend is established. Interest on investments is booked on a time-proportion basis taking into account the amounts invested and the rate of interest. 10. Retirement benefits a. Post employment benefit plans : Payments to defined contribution plans, such as provident fund are charged as an expense as they fall due. For defined benefit schemes, the cost of providing benefits is determined using Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.

59 Actuarial gains and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur. Past Service Cost in recognised immediately. The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme. b. Short term employee benefits : The undiscounted portion of short-term employee benefits expected to be paid in exchange for the services rendered by the employees is recognized during the period when the employee renders service. These benefits include compensated absences such as paid annual leave. 11. Foreign currency Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in foreign currencies as at the year-end are restated at the year-end rates. Exchange differences on settlement / restatement of foreign currency monetary assets and liabilities are charged to the Statement of profit and loss. The financial statements of the Company is translated into Indian rupees as follows: Assets and liabilities, both monetary and non-monetary items, are translated at the exchange rate prevailing on the balance sheet date. Revenue and expenses are translated at average exchange rates prevailing during the year. All resulting exchange differences are accumulated in a foreign currency translation reserve which is reflected under Reserves and Surplus. 12. Earnings per share Basic earnings per share are computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed as the Group has not issued any dilutive potential equity shares. 13. Income tax Income tax comprises the current tax provision, the net change in the deferred tax asset or liability in the year. Current income tax expenses are based on the relevant tax regulations prevalent in the respective countries. Deferred tax assets and liabilities are recognised for the estimated future tax consequences of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets in the nature of unabsorbed depreciation and losses are recognised only if there is virtual certainty of realisation. Other deferred tax assets are recognised if there is reasonable certainty of realisation. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the income statement in the period of enactment of the change.

60 14. Provisions and contingencies A provision is recognised when the Group has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes to the financial statement. A contingent asset is neither recognised nor disclosed.

61 Giuseppe Bellora SpA As at As at Notes to Financial Statements Note 2 - Share capital Authorized 10,736,430 equity shares of Euro 1 each (Previous year: 10,736,430 equity shares of Euro 1 each ) 726,061, ,711,017 Issued 10,736,430 equity shares of Euro 1 each (Previous year: 10,736,430 equity shares of Euro 1 each ) 726,061, ,711,017 Subscribed and paid-up 10,736,430 equity shares of Euro 1 each (Previous year: 10,736,430 equity shares of Euro 1 each ) 726,061, ,711,017 Note 3 - Reserves and surplus 726,061, ,711,017 Securities premium account Opening balance 83,709,733 70,520,146 Movement during the year (15,166,048) 13,189,587 Closing balance 68,543,685 83,709,733 Legal reserve Opening balance 881, ,237 Movement during the year (159,625) 138,822 Closing balance 721, ,059 Foreign currency translation reserve Opening balance (503,359,904) (142,803,146) Movement during the year 461,439,597 (360,556,758) Closing balance (41,920,307) (503,359,904) Surplus/ (Deficit) in Statement of Profit and Loss Opening balance (2,026,406,277) (1,756,176,236) Add: Transferred from surplus in Statement of Profit and Loss (24,020,146) (270,230,041) (2,050,426,423) (2,026,406,277) (2,023,081,611) (2,445,175,389)

62 Giuseppe Bellora SpA As at As at Notes to Financial Statements Note 4 - Long term borrowings Secured Term loan from banks(refer note 4A) 541,008, ,236,712 Note 5 - Short term borrowings 541,008, ,236,712 Secured From banks 95,215, ,315,581 95,215, ,315,581 Note 6 - Trade payables Trade payables 227,532, ,384, ,532, ,384,751 Note 7 - Other current liabilities Current maturities of long term debt Term loan from banks (Secured) - 100,006,245 Interest accrued but not due 6,752,703 5,536,023 Other liabilities 112,656,276 77,522, ,408, ,064,397

63 Giuseppe Bellora SpA Notes to Financial Statements Note 4A - Long term borrowings Details of terms of repayment for the other long-term borrowings and security provided in respect of the secured other long-term borrowings Particulars As at As at Nature of security Repayment/ redemption terms Interest rate Term loan from financial institution Banca Intesa Mortgage Loan - 1, Mortgage on the Property Fagnano Olano, Italy 5 installments with step up repayment. The outstanding term EURIBOR (3 months) plus 150 Banca Naz.Del Lav. Loan Mortgage on the Property Biella, Italy Banca Pop. Milana Loan Unsecured ICICI bank 5, Banco Brescia Loan , , Exclusive charge over all Fixed assets of Bellora except for Plant & Machinery, Inventory, Shares of Bellora held by HSL and DSRA account Secured by SBLC by HSBC backed by certain immovable fixed assets of parent Company. as of March 31, 2015 was Nil 21 Installments of Eur 0.02 Mio commencing Apr 12. The outstanding term as of March 31, 2015 was Nil Thirteen Installments of Euro 0.11 Million commencing from June 2012.The outstanding term as of March 31, 2015 was Nil Eighteen Equal Installments commencing 33 months from drawdown.the outstanding term as of March 31, 2015 was 18 Thirteen Installments of Euro 0.11 Million commencing from June 2012.The outstanding term as of March 31, 2015 was Nil basis points p.a. EURIBOR (6 months) plus 165 basis points p.a. EURIBOR (3 months) plus 98 basis points p.a. 5.55% p.a.of the Loan amount on quarterly basis EURIBOR (6 months) plus 60 basis points p.a.

64 Giuseppe Bellora SpA Notes to Financial Statements Note 8 GROSS BLOCK DEPRECIATION NET BLOCK Particulars As at 01/04/2014 Additions Deletions Adjustments * As at 31/03/2015 As at 01/04/2014 For the year On Deletions On other adjustments* As at 31/03/2015 As at 31/03/2015 As at 31/03/2014 Tangible Assets Buildings 374,515,794 (67,852,617) 306,663, ,732,116 5,577,688 (39,179,696) 179,130, ,533, ,783,678 Plant & Machinery 90,784,077 37,194 (16,447,737) 74,373,534 89,028, ,500 (16,154,852) 73,085,101 1,288,433 1,755,624 Furnitures & Fixtures 104,384,367 (18,911,759) 85,472, ,901, ,997 (18,877,729) 85,472, ,027 Leasehold Improvements 31,798,347 (5,761,042) 26,037,305 31,798, (5,761,038) 26,037, Office Equipments 206,201,850 4,231,133 (36,690) (36,793,315) 173,602, ,066,854 6,977,310 (36,721) (37,078,020) 169,929,423 3,673,555 6,134,996 Vehicles 15,047,918 2,860,248 (6,629,970) (2,726,295) 8,551,901 11,191, ,366 (4,129,940) (2,065,695) 5,315,817 3,236,084 3,856,832 Intangible Assets 822,732,353 7,128,575 (6,666,660) (148,492,765) 674,701, ,718,168 13,535,885 (4,166,661) (119,117,030) 538,971, ,730, ,014,185 Goodwill and other intangibles 56,513,099 19,862,580 (15,013) (10,238,718) 66,121,948 40,177,614 6,058,020 (8,000,714) 38,234,920 27,887,028 16,335,485 56,513,099 19,862,580 (15,013) (10,238,718) 66,121,948 40,177,614 6,058,020 - (8,000,714) 38,234,920 27,887,028 16,335,485 Total: CY 879,245,452 26,991,155 (6,681,673) (158,731,483) 740,823, ,895,782 19,593,905 (4,166,661) (127,117,744) 577,205, ,617, ,349,670 Total- PY 739,333,903 2,202,737 (3,276,884) 140,985, ,245, ,916,281 24,121,252 (13,609) 107,871, ,895, ,349, ,417,622 * Adjustments include exchange fluctuation arising on account of conversion of fixed assets from foreign currency to reporting currency.

65 Giuseppe Bellora SpA As at As at Notes to Financial Statements Note 9 - Non current investments Investments, at cost Trade (Unlisted, unquoted) Investment in equity instruments Milano Confezioni S.r.l. 133, ,628 BP Venture S.r.l. 99,854, ,948,267 Industria e Universita S.r.l. 1,472,021 1,797,721 Consorzio Tutela Lino 87, , ,546, ,015,250 Provision for diminution in value of investments 99,854, ,948,267 1,692,500 2,066,983 Note 10 - Long term loans and advances (unsecured, considered good) Security deposits 1,911,805 2,567,976 Advance tax 389,303 2,045,583 2,301,108 4,613,559 Note 11 - Inventories Work-in-progress 79,153, ,786,134 Finished goods 168,315, ,400,984 Traded goods 25,764,435 30,106, ,233, ,293,541 Note 12 - Trade receivables Unsecured considered good 197,881,105 41,187,871 Unsecured considered doubtful 34,462,012 42,087, ,343,117 83,274,984 Less: Provision for doubtful trade receivables 34,462,012 42,087, ,881,105 41,187,871 Note 13 - Cash and cash equivalents Cash in hand 1,186,895 2,071,491 Balances with banks - in current account 59,162,885 35,478,508 60,349,780 37,549,999 Note 14 - Short term loans and advances (unsecured, considered good) Prepaid expenses 38,132,608 7,083,726 Other advances 33,750, ,611,400 71,882, ,695,126

66 Giuseppe Bellora SpA For the year ended For the year ended Notes to Financial Statements Note 15 - Revenue from operations Sale of products 827,884, ,827,029 Other operating income 35,399,532 33,708, ,284, ,535,352 Note 16 - Other income Interest income 16,674 21,672 Net gain on foreign currency transactions and translation - 545,436 Other non-operating income Profit on sale of assets - 2,219,274 Miscellaneous income 2,885,650-2,902,324 2,786,382 Note 17 - Cost of materials Opening stock: Work in progress 121,786,134 80,737,950 Finished goods 227,400,984 19,660, ,187, ,398,861 Add: Purchases 4,341, ,784,431 Total 353,529, ,183,292 Less: Closing stock Work in progress 79,153, ,786,134 Finished goods 168,315, ,400, ,059,836 (4,003,826) Purchase of traded goods 190,793, ,370, ,853, ,366,819 Note 18 - Employee benefit expense Salaries and wages 94,257, ,570,111 Contribution to provident and other funds 32,439,307 59,599,416 Workmen and staff welfare expenses 2,037,594 2,696, ,734, ,865,671 Note 19 - Finance costs Interest on term loan 5,615,210 6,452,031 Interest on working capital 19,651,219 21,931,070 Other borrowing costs - Finance charges 5,281,141 5,618,164 30,547,570 34,001,265

67 Giuseppe Bellora SpA For the year ended For the year ended Notes to Financial Statements Note 20 - Other expenses Power and fuel 2,526,322 7,928,167 Consumption of stores and spare parts 234,048 2,694,606 Other manufacturing expenses 211,175, ,523,186 Rent 27,393,359 62,809,890 Travelling and conveyance 14,181,033 21,062,710 Communication expenses 2,120,162 7,873,431 Printing and stationery 3,942,012 3,483,472 Insurance 1,698,707 3,674,976 Repairs and maintenance 2,313,914 4,294,963 Rates and taxes 16,183,905 6,988,293 Professional and consultancy charges (Refer Note 20A) 20,635,991 62,738,502 Bank charges 2,965,253 5,088,742 Contribution and donation 60,871 89,082 Selling and distribution - Commission on sales 2,964,896 6,235,022 - Selling expenses 47,572,218 64,702,200 - Freight outward, net of reimbursement 5,582,529 13,041,918 Net loss on foreign currency transactions and translation 46,368,078 - Other expenses 5,975,075 4,799,503 Loss on sale of assets 583,463 - Bad debts - 5,926, ,477, ,954,989 Note 20A - Professional and consultancy charges include payment to auditors Statutory auditor Audit fees 3,486,218 3,312,935 3,486,218 3,312,935 Note 21 - Segment reporting a) Primary segment : Business segment The Company is mainly engaged in trading of Home Textile products. Considering nature of business and financial reporting of the Company, the Company has only one business segment viz; Home Textiles as primary reportable segment. b) Information about secondary segment Geographic segment Distribution of Company's consolidated sales by geographic location Europe continent 733,559, ,566,671 North America 89,457, ,593,940 Others 4,867,596 20,666, ,884, ,827,029

68 Giuseppe Bellora SpA For the year ended For the year ended Notes to Financial Statements Carrying amount of segment assets based on their location Europe continent 770,958, ,756, ,958, ,756,749 Additions to fixed assets Europe continent 26,991,155 2,202,737 26,991,155 2,202,737 Note 22 - Related party disclosures Nature of relationship Holding company (HC) Key management personnel (KMP) Relatives of key management personnel (Relatives) Enterprises owned or significantly influenced by KMP, directors or their relatives (Referred as "enterprises") Fellow subsidiary (FS) Names of the related parties Himatsingka Seide Limited Giuseppe Bellora Lorenza Bellora Giovanni Bellora Tommaso Bellora Fintex Milano SrL Scirocco SrL GB Invest SrL Himatsingka Singapore Pte Limited Himatsingka America, Inc. DWI Holdings, Inc. Related party disclosure Relationship Purchase of goods Himatsingka Seide Limited HC 53,046,547 56,532,040 Commission income Himatsingka Seide Limited HC - 1,459,814 Reimbursement of expenses Himatsingka Seide Limited HC 1,790,000 - Claims Himatsingka Seide Limited HC 17,921,000 - Inter corporate loans received during the year Himatsingka Seide Limited HC 7,699,000 - Inter corporate loans paid during the year Himatsingka Seide Limited HC 6,763,000 - Investment Himatsingka Seide Limited HC 185,256,000 - Guarantees Himatsingka Seide Limited HC 635,686,000 - Royalty income DWI Holdings, Inc. FS 1,965,410 - Receipt towards share application money Himatsingka Seide Limited HC 186,268, ,527,274

69 Giuseppe Bellora SpA For the year ended For the year ended Notes to Financial Statements Outstanding as at year end Amounts payable HC 1,775, ,731,543 FS 12,788, ,198,128 Advances recoverable FS HC 20,774,000 3,223,788 Share application money HC 937,120, ,753,003 Interest payable on inter corporate loan HC 4,715,000 5,536,023 Note 23 - Leases The Company has entered into operating lease agreements mainly in respect of the office premises, accommodation and vehicles provided to employees and guest houses. i) Future minimum lease payments under non-cancellable operating leases due not later than one year - - later than one year and not later than five years - - later than five years - - ii) lease payments recognized in the statement of profit and loss for the year 27,393,359 62,809,890 Note 24 - Earning per share Net profit for the year (being entirely attributable to the equity shareholders) (24,020,146) (270,230,041) Basic / diluted Weighted average number of equity shares 10,736,430 10,736,430 Par value per share, Euro 1 1 Earnings per share - Basic / diluted (2.24) (25.17) Note 25 - Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

70 Himatsingka Wovens Private Limited Audited Financial Statements

71 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF HIMATSINGKA WOVENS PRIVATE LIMITED Report on the Financial Statements We have audited the accompanying financial statements of HIMATSINGKA WOVENS PRIVATE LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements The Company s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ( the Act ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

72 An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its losses and its cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor s Report) Order, 2015 ( the Order ) issued by the Central Government in terms of Section 143 (11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order. 2. As required by Section 143 (3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. (c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. (d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, (e) On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

73 (f) With respect to the other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i) The Company does not have any pending litigations which would impact is financial position. ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. For DELOITTE HASKINS & SELLS Chartered Accountants Firm s Registration No S BANGALORE, May, 2015 SS/JST/HMK/May 2015 S. Sundaresan Partner Membership No

74 ANNEXURE TO THE INDEPENDENT AUDITOR S REPORT (Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements section of our report of even date) (i) In respect of its fixed assets: (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Company has a programme of verification of fixed assets to cover all the items in a phased manner over a period of 2 years which, in our opinion, is reasonable having regard to size of the Company and nature of its assets. Pursuant to the programme, certain fixed assets are physically verified by the management. According to information and explanation given to us, no material discrepancies were noticed on such verification. (ii) In respect of its inventories: (a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals. (b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business. (c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification. (iii) According to the information and explanation given to us, the Company has granted loans, secured or unsecured, to companies, firms, or other parties covered in the Register maintained under Section 189 of the Companies Act 2013.In respect of such loans: (a) The receipt of principal amounts and interest have been as per the stipulation. (b) There are no overdue amounts remaining outstanding as at the year-end. (iv) (v) (vi) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system. According to the information and explanations given to us, the Company has not accepted any deposit during the year and there were no unclaimed deposits as at March 31, According to the information and explanations given to us in our opinion, the Company have, prima facie, made and maintained the prescribed cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under subsection (1) of Section 148 of the Companies Act, We have, however not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

75 (vii) According to the information and explanations given to us, in respect of statutory dues: (a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities. (b) There were no undisputed amounts payable in respect of Provident Fund,, Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at March 31, 2015 for a period of more than six months from the date they became payable. (c) According to information and explanation given to us, there are no dues to sales tax, income tax, customs duty, wealth tax, service tax, excise duty, value added tax and Cess which have not been deposited on account of any dispute. (d) There are no amounts that are due to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder. (viii) The Company does not have accumulated losses at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. (ix) (x) (xi) (xii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions and banks. The Company has not issued any debentures. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company. In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year. For DELOITTE HASKINS & SELLS Chartered Accountants (Firm s Registration No S) BANGALORE, May, 2015 SS/JST/HMK/May 2015 S. Sundaresan Partner Membership No

76 - - Himatsingka Wovens Private Limited As at As at BALANCE SHEET Note No EQUITY AND LIABILITIES Shareholders' funds Share capital 2 125,000, ,000,000 Reserves and surplus 3 82,893,881 92,178, ,893, ,178,327 Non-current liabilities Long-term borrowings 4 100,000,000 40,000,000 Deferred tax liabilities (net) 5 10,020,000 17,930,000 Long-term provisions 6 3,104,084 14, ,124,084 57,944,713 Current liabilities Short-term borrowings 7 105,980, ,373,135 Trade payables 8 152,698,296 98,285,500 Other current liabilities 9 19,579,869 84,127,617 Short-term provisions ,061 11,230, ,731, ,016,942 ASSETS Total 599,749, ,139,982 Non-current assets Fixed assets Tangible assets 11(i) 151,315, ,111,342 Intangible assets 11(ii) 10,831,268 14,338,830 Capital work-in-progress - 6,084,169 Non-current investments 12 19,878,130 19,878,130 Long-term loans and advances 13 96,638,890 44,066, ,664, ,478,874 Current assets Inventories ,004, ,137,937 Trade receivables 15 79,430, ,081,937 Cash and cash equivalents 16 19,622,382 2,519,567 Short-term loans and advances 17 12,615,038 19,897,380 Other current assets 18 11,413,221 10,024, ,085, ,661,108 Total 599,749, ,139,982 See accompanying notes (1 to 35) to the financials statements In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on behalf of the Board of Directors Shrikant Himatsingka Dinesh Kumar Himatsingka Managing Director Director DIN: DIN: S. Sundaresan Murali Devaraj K. P. Pradeep Partner Company Secretary Chief Financial Officer Place: Bangalore Date: Place: Bangalore Date:

77 Himatsingka Wovens Private Limited Note No. For the year ended For the year ended STATEMENT OF PROFIT AND LOSS Revenue from operations ,641, ,437,204 Other income 20 14,283,811 21,991,004 Total Revenue 422,925, ,428,208 Expenses: Cost of materials consumed 21(i) 9,822,123 12,494,089 Purchase of stock-in-trade 21(ii) 188,478, ,519,965 Changes in inventories of finished goods, work-in-progress and stock-in-trade 22 9,463,398 13,434,185 Employee benefit expense 23 48,911,909 50,834,194 Finance costs 24 23,293,476 19,550,496 Depreciation and amortization expense 11 20,662,103 18,169,312 Other expenses ,184, ,224,988 Total Expenses 439,815, ,227,229 Profit/ (Loss) before tax (16,890,309) 8,200,979 Tax expense: Current tax - 3,072,608 Deferred tax (7,806,000) 1,153,000 Reversal of provision of previous years (1,825) - Profit/ (Loss) for the year (9,082,484) 3,975,371 Basic and diluted earnings per equity share (Rs.) (Refer Note 28) (7.27) 3.18 See accompanying notes (1 to 35) to the financials statements In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on behalf of the Board of Directors Shrikant Himatsingka Dinesh Kumar Himatsingka Managing Director Director DIN: DIN: S. Sundaresan Murali Devaraj K. P. Pradeep Partner Company Secretary Chief Financial Officer Place: Bangalore Date: Place: Bangalore Date:

78 Himatsingka Wovens Private Limited For the year ended For the year ended STATEMENT OF CASH FLOWS A. CASH FLOW FROM OPERATING ACTIVITIES: Profit before tax (16,890,309) 8,200,979 Adjustments for: Depreciation 20,662,103 18,169,312 Loss on sale of fixed assets 17,356 - Interest income (2,376,325) (368,472) Finance costs 23,293,476 19,550,496 Exchange gain on non-operating activities 2,601,201 (884,817) Operating cash profit before working capital changes 27,307,502 44,667,498 Adjustments for (increase) / decrease in operating assets: Trade receivables 29,651,206 (35,443,817) Inventories 8,133,853 15,086,167 Short term and long term loan and advances 16,731,507 (1,518,516) Adjustments for increase / (decrease) in operating liabilities: Current and non current liabilities and provisions 45,734,188 19,398,474 Cash generated from operations 127,558,256 42,189,806 Income tax paid (15,474,031) (2,475,678) Net cash from operations A 112,084,225 39,714,128 B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets (20,381,146) (45,833,883) Loans to subsidiary (net) (59,875,738) - Interest received 45,540 - Net cash used in investing activities B (80,211,344) (45,833,883) C. CASH FLOW FROM FINANCING ACTIVITIES: Inter corporate loan repaid during the year (52,600,000) - Inter corporate loan received during the year 60,000,000 40,000,000 Repayment of long term borrowings (9,999,993) (12,121,218) Repayment of short term borrowings 3,607,167 (1,470,651) Finance costs paid (15,777,240) (21,499,338) Net cash from financing activities C (14,770,066) 4,908,793 Net increase/(decrease) in cash and cash equivalents (A+B+C) 17,102,815 (1,210,962) Cash and cash equivalents at the beginning of the year 2,519,567 3,730,529 Cash and cash equivalents at the end of the year (Refer Note 34) 19,622,382 2,519, In terms of our report attached for Deloitte Haskins & Sells Chartered Accountants For and on behalf of the Board of Directors Shrikant Himatsingka Dinesh Kumar Himatsingka Managing Director Director DIN: DIN: S. Sundaresan Murali Devaraj K. P. Pradeep Partner Company Secretary Chief Financial Officer Place : Bangalore Date: Place : Bangalore Date:

79 Himatsingka Wovens Private Limited Note 1 SIGNIFICANT ACCOUNTING POLICIES 1. Basis of accounting and preparation of financial statements The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year. 2. Use of estimates The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. 3. Inventories Inventories of raw materials, work-in-process and finished goods are valued at lower of cost and estimated net realisable value. Cost is ascertained on weighted average basis. Cost of finished goods and work-in-process includes an appropriate proportion of conversion cost based on normal operating capacity. Products held for the purpose of display to customers are treated as part of inventories and are charged to the Statement of Profit and Loss during the useful life of the products. 4. Cash and cash equivalents (for purposes of Cash Flow Statement) Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. 5. Cash flow statement Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

80 Himatsingka Wovens Private Limited Note 1 6. Depreciation and amortisation Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.: Plant & machineries - 25 years on single shift basis. Leasehold land is amortised over the primary period of the lease. Intangible assets are amortised over their estimated useful life on straight line method as follows: SAP (ERP implementation cost) is amortised over a period of 10 years. The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation period is revised to reflect the changed pattern, if any. 7. Revenue recognition Sales of goods: Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax. Service income: Income from job-work service is recognised on completion of service. 8. Other income Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established. 9. Fixed assets Tangible assets: Tangible assets are stated at cost less accumulated depreciation. Cost includes all costs relating to acquisition and installation of tangible assets including any incidental costs of bringing the assets to their working condition for their intended use. Intangible assets: Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any duties and taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

81 Himatsingka Wovens Private Limited Note 1 Capital work in progress: Capital work-in-progress comprises of fixed assets that are not yet ready for their intended use at the year end. 10. Foreign currency Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currency are restated at the rate prevailing on the date of balance sheet. The exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities are recognised as income or expense in the statement of profit and loss. Premium or discount on forward contract is amortised over the life of such contract and is recognised as income or expense. Any profit or loss arising on cancellation, renewal or restatement of forward contract is recognised in the statement of profit and loss. 11. Government grants Government grants related to revenue is recognized on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with the related costs which they are intended to compensate. Government grants related to depreciable fixed assets is treated as deferred income which is recognized in the Statement of Profit and Loss on a systematic basis over the useful life of the asset. 12. Investments Long term investments are stated at cost less provision for other than temporary diminution in value, if any. Current investments are stated at the lower of cost and fair value, determined on a portfolio basis. 13. Employee benefits Employee benefits include provident fund, superannuation fund, gratuity fund, employee state insurance and compensated absences. Defined contribution plans: The Company's contribution to provident fund, superannuation fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees. Defined benefit plans: For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes. Short-term employee benefits: The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the

82 Himatsingka Wovens Private Limited Note 1 year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of short-term compensated absences is accounted as under: (a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and (b) in case of non-accumulating compensated absences, when the absences occur. Long-term employee benefits: Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the balance sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. 14. Borrowing costs Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset are added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. 15. Segment reporting The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance. The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under unallocated revenue / expenses / assets / liabilities. 16. Leases Where the Company as a lessor leases assets under finance leases, such amounts are recognised as receivables at an amount equal to the net investment in the lease and the finance income is recognised based on a constant rate of return on the outstanding net investment. Assets leased by the Company in its capacity as a lessee, where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are

83 Himatsingka Wovens Private Limited Note 1 capitalised at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year. Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis over the lease term. 17. Earnings per share Basic earnings per share is computed by dividing net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding for the period. The weighted average numbers of shares outstanding during the period are adjusted for events of bonus issue and share split. 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. 18. Taxes on income Income tax comprises the current tax, net change in the deferred tax asset or liability in the year and fringe benefit tax. Current tax and fringe benefit tax are determined in accordance with the provisions of the Income Tax Act, 1961 after considering tax allowances and exemptions. Minimum alternate tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that future economic benefit associated with it will flow to the Company and the asset can be measured reliably. Deferred tax assets and liabilities are recognised for the estimated future tax consequences of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using substantively enacted tax rates applicable on the balance sheet date. Deferred tax assets are recognised and carried forward to the extent that there is reasonable / virtual certainty (as applicable) that sufficient future taxable income will be available against which such deferred tax asset can be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the statement of profit and loss in the period of enactment of the change. Current and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the Statement of Profit and Loss. 19. Impairment of assets At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. If such recoverable amount of the asset is less than its

84 Himatsingka Wovens Private Limited Note 1 carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss. 20. Provisions and contingencies A provision is recognised when the Company has a present obligation as a result of past events and 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognised in the financial statements. 21. Operating Cycle Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

85 Himatsingka Wovens Private Limited As at As at Notes to Financial Statements Note 2 - Share capital Authorised 1,250,000 equity shares of Rs. 100/- each (Previous year: 1,250,000 equity shares of Rs. 100/- each) 125,000, ,000,000 Issued, subscribed and paid-up 1,250,000 equity shares of Rs. 100/- each (Previous year:1,250,000 equity shares of Rs. 100/- each) 125,000, ,000, ,000, ,000,000 (i) There has been no movement in the shares outstanding from the prior year to the current year (ii) Details of the rights, preferences and restrictions attached to each class of shares: The Company has only one class of equity share, having a par value of Rs. 100/-. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amount. However, as on date no such preferential amounts exist. The distribution will be in proportion to number of equity shares held by the shareholders. (iii) Details of shares held by each shareholder holding more than 5% shares Name of the shareholder Himatsingka Seide Ltd Himatsingka Seide Ltd No of shares Held 1,250,000 1,250,000 % holding 100% 100% As per the records of the Company, including its registers of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of equity shares. (iv) Details of shares held by the holding company Particulars Equity shares with voting rights (no. of shares) Himatsingka Seide Ltd, the holding company 12,50,000 12,50,000 (v) There have been no instances of shares allotted other than for consideration received in cash and there have been no instances of any buy-backs or bonus issues in the preceding five years. (vi) There were no instances of shares issued, on which there were any calls remaining unpaid or instances of any forfeitures during the years ended March 31, 2015 and Note 3 - Reserves and surplus Surplus / (Deficit) in Statement of Profit and Loss: Opening balance 92,178,327 88,202,956 Add: Profit/ (loss) for the year (9,082,484) 3,975,371 Add: Transition provision towards depreciation (Refer Note 33) (201,962) - Closing balance 82,893,881 92,178,327

86 Himatsingka Wovens Private Limited As at As at Notes to Financial Statements Note 4 - Long term borrowings Secured: Term Loan from Financial Institution (Refer (ii) below) - - Unsecured: Loan from Holding Company (Refer (ii) below) 100,000,000 40,000, ,000,000 40,000,000 Notes: (i) The Company has not issued any bonds and debentures. (ii) Details of terms of repayment for the other long-term borrowings and security provided in respect of the secured other long-term borrowings: Term Loan from Financial Institution: Exim Bank - 9,999,993 [Nature of Security: Secured by hypothecation of movable & immovable fixed assets, both present & future and guarantee by the Holding Company.] [Repayment Terms: 33 Quarterly installments commencing 2 years from the date of 1st disbursement with step up repayment in the ratio of 1:2:3. The outstanding term as of March 31, 2015 was Nil.] [Interest rate: Long term minimum lending rate plus 250 bps] [The amount includes the current maturity of Rs.Nil (Previous year Rs.9,999,993) as referred in Note 9.] Loans and advances from related parties: Himatsingka Seide Limited 100,000,000 92,600,000 [Repayment Terms: 3 annual installments commencing 4 years from the date of 1st disbursement with step up repayment in the ratio of 3:3:4. The outstanding term as of March 31, 2015 was 3 installments.] [Interest rate: 8.5%] [The amount includes the current maturity of Rs.Nil (Previous year Rs.52,600,000) as referred in Note 9.] (iii) The Company has not taken any term loans which are guaranteed by directors or others (iv) The Company has not defaulted in the payment of interest or principal on the loans (v) For the current maturities of long-term borrowings, refer Note 9 Other current liabilities. Note 5 - Deferred tax liabilities Deferred tax liabilities Provision for depreciation 14,793,839 18,028,000 Deferred tax asset Provision for leave encashment (900,258) (33,400) Provision for gratuity (512,215) (64,600) Unabsorbed Depreciation loss (3,361,366) - Deferred tax liabilities (net) 10,020,000 17,930,000 The Company has recognized a deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax. Note 6 - Long term provisions Provision for Taxes (Net of advance tax Rs.7,365,301 (Previous year Rs.304,135)) 928,547 14,713 Provision for accumulated leave credits 2,175,537-3,104,084 14,713 Note 7 - Short term borrowings Working capital loan from banks 105,980, ,373,135 (Secured by hypothecation of stocks and book debts and guarantee by the Holding Company) 105,980, ,373,135

87 Himatsingka Wovens Private Limited As at As at Notes to Financial Statements Note 8 - Trade payables Trade payables Dues to Micro, Small and Medium Enterprises (Refer Note 8A) 13,243 21,346 Dues to others* 152,685,053 98,264, ,698,296 98,285,500 * Trade payables includes due to Himatsingka Seide Limited - Holding Company 140,088,954 86,668,585 Note 8A The following information related to Micro, Small and Medium Enterprises are disclosed: (i) Principal amount remaining unpaid to any supplier as at the end of the accounting year 2,794 12,499 (ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year - - (iii) The amount of interest paid along with the amounts of the payment made to the supplier beyond the appointed 10,712 - day (iv) The amount of interest due and payable for the year 473 3,200 (v) The amount of interest accrued and remaining unpaid at the end of the accounting year (vi) The amount of further interest due and payable even in the succeeding year, until such date when the interest dues as above are actually paid Note 9 - Other current liabilities 10,449 5,647 1, Current maturities of long term debt Term loan from financial institution (Secured) - 9,999,993 Loan from Holding company (Unsecured) - 52,600,000 [Refer Notes (ii),(iii) and (iv) in Note 4 - Long-term borrowings for details of security and guarantee] Interest accrued but not due # 7,292,319 41,753 Other liabilities Towards taxes and duties 1,643,457 1,703,243 Towards employees 190, ,339 Advances received from customers 4,466,298 13,924,603 Security deposit received 4,480,000 4,934,469 Towards gratuity (Refer Note 9A.a) 1,506, ,217 19,579,869 84,127,617 #Includes interest payable to Himatsingka Seide Ltd - Holding Company 7,292,319 -

88 Himatsingka Wovens Private Limited As at As at Notes to Financial Statements Note 9A - Employee benefits (a) Defined benefit plans In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity plan). The Gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn eligible salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to a fund managed by the Insurer (Canara HSBC Oriental Bank Of Commerce Life Insurance Company Limited) included as part of 'Contribution to provident and other funds' in Note 23 Employee benefit expense. Under this plan, the settlement obligation remains with the Company, although the Employees Gratuity Trust administers the plan and determines the contribution premium required to be paid by the Company Change in the benefit obligation Defined Benefit Obligation at the beginning of the year 3,068,817 2,919,926 Current service cost 443, ,989 Interest cost 284, ,702 Benefits paid (677,836) (402,641) Actuarial gain 244,782 (74,748) Liabilities assumed on acquisition - (41,411) DBO at the end of the year 3,364,417 3,068,817 Change in plan assets Fair value of plan assets at the beginning of the year 2,354,600 2,398,803 Expected return on plan assets 284, ,718 Employer contributions - - Benefits paid (677,836) (402,641) Actuarial gain (103,998) 72,720 Fair value of plan assets at the end of the year 1,857,458 2,354,600 Composition of plan assets is as follows Insurer managed funds - invested in 100% debt funds 1,857,458 2,354,600 Funded status [Surplus / (deficit)] Present value of defined benefit obligation 3,364,417 3,068,817 Fair value of plan assets 1,857,458 2,354,600 Funded status [Surplus / (deficit)] (1,506,959) (714,217) Unrecognized past service costs - - Net liability (unfunded obligations) (1,506,959) (714,217) Less: Current portion of liability (1,506,959) (714,217) Non-current liability - - Estimate of amount of contribution in the immediate next year 1,506, ,217 Net gratuity cost for the year ended is as follows Service cost 443, ,989 Interest cost 284, ,702 Expected return on plan assets (284,692) (285,718) Actuarial gain 348,780 (147,468) Net gratuity cost 792, ,505 Actual return on plan assets 180, ,438

89 Himatsingka Wovens Private Limited As at As at Notes to Financial Statements Actuarial assumptions for gratuity Expected rate of return 8.0% 8.0% Discount rate 8.0% 8.9% Salary escalation* 6.0% 6.0% Mortality LIC Mortality ( ) Table Withdrawal rates Staff 15.0% 15.0% *Salary escalation considered takes into account the inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market Five year data Defined benefit obligation 3,364,417 3,068,817 Plan assets 1,857,458 2,354,600 Surplus/(Deficit) (1,506,959) (714,217) Expected adjustment on plan liabilities 113,880 (409,154) Expected adjustment on plan assets (103,998) 72, Defined benefit obligation 2,919,888 2,774,933 2,540,929 Plan assets 2,398,803 - Surplus/(Deficit) (521,085) (2,774,933) (2,540,929) Expected adjustment on plan liabilities (290,585) (439,672) (619,796) Expected adjustment on plan assets (b) Defined contribution plans: The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised the following contributions in the Statement of profit and loss Provident fund 1,949,171 1,626,178 Superannuation fund 199, ,951 Employee state insurance scheme * 34,895 57,762 *Note : Included as part of 'Workmen and staff welfare expenses' in Note 23 Employee benefit expense Note 10 - Short term provisions Provision for accumulated leave credits 473,061 2,128,885 Provision for taxes (Net of advance tax Rs.Nil (Previous year Rs.45,081,844) - 9,101, ,061 11,230,690

90 Himatsingka Wovens Private Limited NOTES TO BALANCE SHEET Note 11 - Fixed Assets () Gross block Depreciation Net block Other Particulars As at Additions Deletions As at Upto For the On As at As at As at adjustments * year deletions Tangible assets - owned (i) Freehold land 27,566, ,566, ,566,806 27,566,806 (27,566,806) - - (27,566,806) (27,566,806) (27,566,806) Buildings 44,623, ,623,116 12,960, ,677-13,714,739 30,908,377 31,663,054 (44,623,116) - - (44,623,116) (12,296,174) (663,888) - (12,960,062) (31,663,054) (32,326,942) Leasehold improvements 54,479,533 26,152,438 8,945,498 71,686,473 29,010,688 8,965,538 8,945,498 29,030,728 42,655,745 25,468,845 (40,412,549) (26,025,336) (11,958,352) (54,479,533) (37,171,094) (3,797,946) (11,958,352) (29,010,688) (25,468,845) (3,241,455) Plant and machinery 32,268, ,530-32,826,878 16,751,244 1,866, ,142 18,875,404 13,951,474 15,517,104 (32,268,348) - - (32,268,348) (14,111,129) (2,640,115) - (16,751,244) (15,517,104) (18,157,219) Plant and machinery- given on operating lease 48,244, ,244,967 22,916,171 2,281,599 25,197,770 23,047,197 25,328,796 (48,244,967) - - (48,244,967) (19,336,649) (3,579,522) - (22,916,171) (25,328,796) (28,908,318) Furniture and fixtures 27,036,751 1,720,791 1,454,843 27,302,699 17,953,006 1,576,227 1,437,487 18,091,746 9,210,953 9,083,745 (25,948,915) (1,087,836) - (27,036,751) (14,841,531) (3,111,475) - (17,953,006) (9,083,745) (11,107,384) Vehicles 1,595, ,595, , ,207-1,325, , ,110 (1,595,159) - - (1,595,159) (759,775) (239,274) - (999,049) (596,110) (835,384) Office equipment 21,865,579 1,250,507-23,116,086 17,978,697 1,384,275-47,820 19,410,792 3,705,294 3,886,882 (19,898,240) (1,967,339) - (21,865,579) (17,301,784) (676,913) - (17,978,697) (3,886,882) (2,596,456) Tangible assets 257,680,259 29,682,266 10,400, ,962, ,568,917 17,154,541 10,382, , ,646, ,315, ,111,342 Tangible assets (240,558,100) (29,080,511) (11,958,352) (257,680,259) (115,818,136) (14,709,133) (11,958,352) - (118,568,917) (139,111,342) (124,739,964) Intangible assets (ii) Software and other related costs 19,594, ,594,128 5,255,298 3,507, ,762,860 10,831,268 14,338,830 (11,333,617) (8,260,511) - (19,594,128) (1,795,119) (3,460,179) - - (5,255,298) (14,338,830) (9,538,498) Intangible assets 19,594, ,594,128 5,255,298 3,507, ,762,860 10,831,268 14,338,830 Intangible assets (11,333,617) (8,260,511) - (19,594,128) (1,795,119) (3,460,179) - - (5,255,298) (14,338,830) (9,538,498) Grand total 277,274,387 29,682,266 10,400, ,556, ,824,215 20,662,103 10,382, , ,409, ,147, ,450,172 Grand total (251,891,717) (37,341,022) (11,958,352) (277,274,387) (117,613,255) (18,169,312) (11,958,352) - (123,824,215) (153,450,172) (134,278,462) *Note: Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014, and has adjusted an amount of Rs. 305,962/-. Also refer Note 33.

91 Himatsingka Wovens Private Limited As at As at Notes to Financial Statements Note 12 - Non current investments Investments, at cost Trade (Unlisted, Unquoted) Investment in equity instruments of Subsidiary Company Himatsingka Singapore Pte Limited Equity shares of SGD 1 each fully paid up 88,425,360 88,425,360 [No. of shares: 2,565,000 (Previous year: 2,565,000)] Less: Provision for other than temporary diminution in the value of equity instruments (88,398,670) (88,398,670) Net Investment in equity instruments of Subsidiary Company 26,690 26,690 Investment in preference instruments of Subsidiary Company Himatsingka Singapore Pte Limited Preference shares of SGD 1 each fully paid up 19,851,440 19,851,440 [No. of shares: 600,000 (Previous year: 600,000] 19,878,130 19,878,130 Note 13 - Long-term loans and advances (unsecured, considered good) Security deposits 26,494,254 30,774,309 Advance income tax (net of income tax provision of Rs.46,864,650 (Previous year Rs.4,856,000)) 9,063,784 6,564,494 Loans to subsidiary - Himatsingka Singapore Pte Limited *(Refer Note 27) [Maximum amount outstanding during the year Rs.63,209,278 (Previous year: Rs.3,333,540 61,053,080 3,333,540 lakhs)] Loans and advances to employees 27, ,109 Capital advances to vendors - 3,216,951 96,638,890 44,066,403 *The Company has given loan to its subsidiary towards growing business needs. Note 14 - Inventories Raw materials 2,516,684 1,187,139 Finished goods 15,962,466 11,951,095 Stock in trade 179,524, ,999, ,004, ,137,937 Note 15 - Trade receivables (Unsecured, considered good) Outstanding for a period exceeding six months from the date they were due for payment (Note i) 9,689,285 28,878,755 Others (Note ii) 69,741,446 80,203,182 79,430, ,081,937 Note: (i) include dues from Body Corporates in which any director is a director or member Himatsingka Singapore Pte Limited 103,314 25,996,961 Twill & Oxford L.L.C 7,790,901 - (ii)include dues from Body Corporates in which any director is a director or member Twill & Oxford L.L.C 46,612,699 31,277,250 Himatsingka Singapore Pte Limited 10,063,268 28,676,717 DWI Holdings, Inc. 1,183,735 10,813,694

92 Himatsingka Wovens Private Limited As at As at Notes to Financial Statements Note 16 - Cash and cash equivalents Cash in hand 364, ,235 Balances with banks - in Current accounts 18,720,702 1,427,186 - in Earmarked accounts Balances held as margin money 536, ,146 19,622,382 2,519,567 Note 17 - Short-term loans and advances (unsecured, considered good) Security deposits 4,003,181 12,213,718 Interest subsidy receivable 151, ,745 Prepaid expenses 2,512,632 2,877,441 Loans and advances to employees 169, ,299 Income tax refund receivable 4,853,785 65,190 Advances to vendors 925,033 4,170,987 12,615,038 19,897,380 Note 18 - Other current assets Advances recoverable in cash or in kind or for value to be received 63, ,891 Interest receivable* 11,350,178 9,464,396 11,413,221 10,024,287 * - Includes due from Himatsingka Singapore Pte Limited 11,350,178 9,464,396

93 Himatsingka Wovens Private Limited For the year ended For the year ended Notes to Financial Statements Note 19 - Revenue from operations Sale of products (Refer Note (i) below) 391,704, ,691,375 Sale of services (Refer Note (ii) below) 16,937,470 12,745, ,641, ,437,204 Notes: (i) Sale of products comprises of: Fabric 379,862, ,498,045 Madeups 11,841,747 11,193, ,704, ,691,375 (ii) Sale of services comprises of: Job work services 16,937,470 12,745,829 16,937,470 12,745,829 Note 19A - Foreign currency earnings Revenue from operations Exports of goods on F.O.B. basis 122,366, ,521, ,366, ,521,382 Other Income Interest income from ICD 2,330, ,472 2,330, ,472 Note 20- Other income Interest Income Interest on inter corporate loan 2,330, ,472 Interest others 45,540 - Net gain on foreign currency transactions and translation 359,877 6,337,625 Other non-operating income (net of expenses directly attributable to such income) Rent income from operating leases 11,343,876 14,731,244 (Tax deducted at source Rs.964,504, Previous year Rs.719,846) Miscellaneous income 203, ,663 14,283,811 21,991,004

94 Himatsingka Wovens Private Limited For the year ended For the year ended Notes to Financial Statements Note 21 -Cost of materials consumed and purchases of stock in trade (i) Raw material consumed Opening stock 1,187,139 2,839,121 Add: Purchases 2,354,333 3,038,732 Add: Transfer from traded goods 8,797,335 7,803,375 12,338,807 13,681,228 Less: Closing stock 2,516,684 1,187,139 Raw material consumed 9,822,123 12,494,089 Material consumed comprises: Fabrics 8,359,641 9,585,058 Others 1,462,482 2,909,031 9,822,123 12,494,089 Value of imported and indigenous raw materials consumed Imported - - Percentage of each to the total consumption - - Indigenous 9,822,123 12,494,089 Percentage of each to the total consumption 100% 100% 9,822,123 12,494,089 (ii) Traded goods Purchases 197,275, ,323,340 Less: Transferred to manufacturing (8,797,335) (7,803,375) 188,478, ,519,965 Traded goods purchased comprise of: Fabric 183,008, ,163,507 Other items 5,469,691 4,356, ,478, ,519,965 CIF value of imports Traded goods 7,664,512 7,745,456 Capital goods 431,762-8,096,274 7,745,456 Note 22 - Changes in inventories of finished goods, work-in-progress and stock-in-trade Opening Stock Finished goods 11,951,095 10,603,101 Stock in trade 192,999, ,781,882 Closing Stock: Finished goods 15,962,466 11,951,095 Stock in trade 179,524, ,999,703 Net (increase) / decrease 9,463,398 13,434,185 Note 23 - Employee benefit expense Salaries and wages 45,055,780 47,313,045 Contribution to provident and other funds (Refer Note 9A.b) 2,941,905 2,060,634 Workmen and staff welfare expenses 1,427,071 2,224,737 Less: Expenses capitalised (Refer Note 32) (512,847) (764,222) 48,911,909 50,834,194

95 Himatsingka Wovens Private Limited For the year ended For the year ended Notes to Financial Statements Note 24 - Finance costs Interest on term loan (net of subsidy under TUFS Rs.131,548 (Previous year Rs.714,320)) 194,951 1,113,027 Interest on inter corporate loan 8,102,576 4,593,262 Interest on bank overdraft 14,995,949 13,844,207 23,293,476 19,550,496 Note 25 - Other expenses Rent 67,140,624 75,668,827 Power and fuel 5,130,117 7,206,881 Travelling and conveyance 8,482,245 6,458,760 Communication expenses 2,239,995 1,996,235 Printing and stationery 610,595 2,202,530 Insurance 1,335,457 1,353,970 Repairs and maintenance - Plant and machinery - 300,770 - Building 7,803,774 6,880,620 - Others 1,662,344 1,615,513 Rates and taxes 3,234,546 3,849,226 Professional and consultancy charges (Refer Note 25A below) 6,420,753 11,356,052 Bank charges 2,236,933 1,778,857 Advertisement and publicity 3,895,286 1,692,035 Selling and distribution - Commission on sales 8,382,882 23,364,485 - Selling expenses 1,484, ,299 - Packing and forwarding 13,271,636 12,341,906 Security and house keeping charges 6,819,147 8,507,624 Loss on sale of assets 17,356 - Other expenses 1,729,232 1,416,800 Less: Expenses capitalised (Refer Note 32) (2,713,371) (1,698,402) 139,184, ,224,988 Note 25A - Payment to auditors Audit fees 700, ,000 Tax audit fees 200, ,000 Taxation matters 100, ,000 Other services 220,000 - Service tax 142, ,077 Out of pocket expenses 34,406 63,404 1,397,091 1,082,481 Note 25B - Expenditure in foreign currency Professional services and other service charges 688, ,301 Recruitment Expenses - 42,957 Advertisement - 63,744 Foreign travel 144, ,621 Purchase of Hangers for Showroom Display 120, , ,623

96 Himatsingka Wovens Private Limited For the year ended For the year ended Notes to Financial Statements Note 26 - Segment reporting a) Primary segment information The Company is mainly engaged in the business of home textiles. Considering the nature of business and financial reporting of the Company, it has only one business segment viz; home textiles as primary reportable segment. b) Secondary segment information Geographic segment Distribution of the Company's turnover by geographic location of customers India 286,274, ,825,747 UAE 80,944,775 88,903,005 Singapore 21,449,063 30,838,543 Others 19,972,823 22,869, ,641, ,437,204 Segment assets by location of customers (receivables classified based on location of customer) India 432,349, ,010,728 Singapore 102,447,970 87,349,744 UAE 54,403,600 31,277,250 Others 1,484,700 10,937, ,685, ,575,488 Cost incurred during the year to acquire segment assets (tangible and intangible fixed assets) India 29,682,266 37,341,022 Singapore - - UAE - - Others ,682,266 37,341,022 Note 27 - Related party disclosures Nature of relationship Holding Company (HC) Fellow subsidiary (FS) Wholly owned subsidiary (Sub) Enterprises owned or significantly influenced by key management personnel/directors or their relatives (Enterprises) Key management personnel (KMP) Names of the related parties Himatsingka Seide Limited Himatsingka America, Inc. Twill & Oxford LLC. Divatex Home Fashions, Inc. DWI Holdings, Inc. Himatsingka Singapore Pte Limited Bihar Mercantile Union Limited Shrikant Himatsingka - Managing Director Dinesh Himatsingka - Director Rajiv Khaitan - Director Dr. KRS. Murthy - Director Amitabh Himatsingka - Director Akanksha Himatsingka - Director K.P. Pradeep - Chief Financial officer Ravi Kumar Reddy - Company Secretary

97 Himatsingka Wovens Private Limited For the year ended For the year ended Notes to Financial Statements Related party disclosure Relationship Purchase of fabrics (inclusive of duties and taxes) Himatsingka Seide Limited HC 183,509, ,742,389 Bihar Mercantile Union Limited Enterprise 2,267,682 1,058,448 Sale of fabrics Himatsingka Seide Limited HC 128,404 87,390 Himatsingka Singapore Pte Ltd Sub 21,449,063 30,838,543 Twill & Oxford LLC FS 80,944,775 88,903,005 DWI Holdings, Inc. FS 13,957,756 17,820,180 Rent expense Himatsingka Seide Limited HC 4,948,334 3,242,448 Rental income Himatsingka Seide Limited HC 2,275,680 4,510,104 Services provided (net of taxes) Himatsingka Seide Limited HC 16,807,791 12,945,792 Expenses incurred by Himatsingka Seide Limited HC 5,453,703 20,290,401 Expenses incurred on behalf of Twill & Oxford LLC FS 1,426, ,245 Remuneration Akanksha Himatsingka KMP 1,191,990 1,140,442 Inter corporate loans repaid to Himatsingka Seide Limited HC 52,600,000 - Inter corporate loans received from Himatsingka Seide Limited HC 60,000,000 40,000,000 Inter corporate loans given Himatsingka Singapore Pte Ltd Sub 59,875,738 - Interest income on ICD Himatsingka Singapore Pte Ltd Sub 2,330, ,472 Interest expense on ICD Himatsingka Seide Limited HC 8,102,576 4,593,262

98 Himatsingka Wovens Private Limited For the year ended For the year ended Notes to Financial Statements Outstanding as at year end Amounts payable Himatsingka Seide Limited HC 140,088,954 86,668,585 Amounts receivable Himatsingka Singapore Pte Ltd Sub 10,166,582 54,673,678 Twill & Oxford LLC FS 54,403,600 31,277,250 DWI Holdings, Inc. FS 1,183,735 10,813,694 Inter corporate loan payable Himatsingka Seide Limited HC 100,000,000 92,600,000 Interest receivable on ICD Himatsingka Singapore Pte Ltd Sub 11,350,178 9,464,396 Interest payable on ICD Himatsingka Seide Limited HC 7,292,319 - Inter corporate loan receivable Himatsingka Singapore Pte Ltd Sub 61,053,080 3,333,540 Guarantee given on behalf of Himatsingka Seide Limited HC 832,091, ,816,000 Guarantee given by Himatsingka Seide Limited HC - 9,999,993 Note 28 - Earning per share Particulars Net profit/ (loss) for the year (being entirely attributable to the equity shareholders) (9,082,484) 3,975,371 Basic/Diluted Weighted average number of equity shares 1,250,000 1,250,000 Par value per share Earnings per share - Basic/Diluted (7.27) 3.18 Note 29 - Contingent liability Outstanding guarantees to various banks in respect of the guarantees given by those banks in favour of Government authorities and others 491, ,146 Outstanding guarantees to various banks in respect of the loans given by those banks in favour of Holding Company 832,091, ,816, ,582, ,307,146

99 Himatsingka Wovens Private Limited For the year ended For the year ended Notes to Financial Statements Note 30 - Details on derivatives instruments and unhedged foreign currency exposures: The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below: (a) Foreign currency receivable: Particulars Currency USD 834,554 1,165,021 52,291,093 69,971,153 SGD 208, ,233 9,505,776 26,917,541 Export of goods AED 236,588-4,036,421 - GBP 1, ,163 - Interest on Inter corporate loan Inter corporate loan SGD SGD 249,115 1,340, ,740 70,000 11,350,178 61,053,080 9,464,396 3,333,540 USD 33 - Advance paid to suppliers 2,071 - Euro ,863 - (b) Foreign currency payable Particulars Currency Import of goods Advance received from customers EURO USD 1,083-12,150 19,437 73,227-1,003,479 1,167,356 Note 31- Leases The Company's significant leasing agreements are mainly in respect of the office premises, accommodation and vehicles provided to employees and guest houses. A. Lease expenses i) Future minimum lease payments under non-cancellable operating leases due not later than one year 13,298,964 1,164,084 later than one year and not later than five years 49,695,278 3,668,162 later than five years 10,235,996 - ii) Lease payments recognised in the statement of profit and loss for the year 65,501,793 74,587,362 B. Lease income i) The Company has entered into operating lease arrangements with Himatsingka Seide Limited, the holding company for leasing certain plant and machinery, details as follows: Gross carrying amount 48,244,967 48,244,967 Accumulated depreciation 25,197,770 22,916,171 Depreciation recognized in the statement of profit and loss 2,281,599 3,579,522 Note 32- The company on meeting the necessary criteria commenced capitalising cost associated with opening/relocation of showrooms. The below mentioned costs have been identified to be relating to the said activities and have accordingly been capitalised as part of the asset/capital work in progress. Employee benefit expenses 512, ,222 Other expenses 2,713,371 1,698,402 Total expenses capitalised 3,226,218 2,462,624

100 Himatsingka Singapore Pte Limited Audited Financial Statements

101 INDEPENDENT AUDITOR S REPORT To The Members of HIMATSINGKA SINGAPORE PTE. LTD. We have audited the attached Balance Sheet of Himatsingka Singapore Pte. Ltd ( the company ) as at 31 st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date. The above Balance sheet, Statement of Profit and loss and the Cash flow Statement have been prepared by the Management of the Holding Company, Himatsingka Seide Ltd, based on the audited financial statement ( the financial statements ) of the company, audited by Baker Tilly TFW LLP, Singapore ( the other auditor ) in terms of their auditors report dated 4 th May 2015 (A copy of the financial statements and auditors report therein is enclosed herewith.) However we have not examined the books of accounts and other records of the company. Based on above examination and according to the additional information and explanations furnished to us, we report that the attached Balance sheet of the company as at 31 March 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, prepared by the Management of the Holding Company on the basis of the aforesaid financial statement with additional information and regrouping wherever necessary. We have not audited the financial statements for the year ended 31 st March 2015 and the same has been audited by another firm. Subject to the limitations of our examination as indicated above, we further report that: 1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; 2. We are unable to state whether proper books of account have been kept as per the requirements of Companies Act, 2013 and whether Balance Sheet, Statement Profit and Loss and Cash Flow Statement are in agreement with such books of account of the company as maintained and as stated above, we have not examined such books.

102 3. The other auditor have opined that the financial statements conforms to the requirements of the Generally Accepted Accounting Principles in the Singapore and in our opinion and to the best of our knowledge, the necessary adjustments have been made to ensure that the above balance sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting Standards referred to in Section 133 of the Companies Act, for Guru & Jana, Chartered Accountants Firm Reg No.:006826S Ananth Prasad B R Partner Membership No Place: Bangalore Date:

103 Himatsingka Singapore Pte Limited As at As at Balance Sheet Note No EQUITY AND LIABILITIES Shareholders' funds Share capital 2 108,276, ,276,800 Reserves and surplus 3 (178,535,208) (157,453,236) (70,258,408) (49,176,436) Non-current liabilities Long term borrowings 4 61,053,080 3,333,540 61,053,080 3,333,540 Current liabilities Trade payables 5 10,765,748 55,649,346 Other current liabilities 6 12,476,710 9,345,379 Short term provisions 7 30,572 31,954 23,273,030 65,026,679 ASSETS Total 14,067,702 19,183,783 Non-current assets Fixed assets Tangible assets 8 12,083 18,641 Long term loans and advances 9 3,403,935 3,557,837 3,416,018 3,576,478 Current assets Inventories 10 5,886,117 5,896,860 Trade receivables ,494 1,216,142 Cash and cash equivalents 12 4,424,129 8,055,169 Short term loans and advances , ,134 10,651,684 15,607,305 Total 14,067,702 19,183,783 See accompanying notes (1 to 25) to the financial statements In terms of our report attached for GURU & JANA, Chartered Accountants Firm Registration No:006826S Ananth Prasad B R Partner Membership No For and on behalf of the Board of Directors D.K.Himatsingka Shrikant Himatsingka Managing Director Executive Director DIN : DIN : Bangalore Bangalore Bangalore Date: Date: Date:

104 Himatsingka Singapore Pte Limited For the year ended For the year ended Statement of Profit and Loss Note No Revenue from operations 14 31,481,471 42,542,683 Other income 15 1,906, ,615 Total revenue 33,387,663 43,470,298 Expenses: Cost of materials 16 21,296,853 31,080,606 Employee benefit expense 17 13,070,313 12,676,750 Finance costs 18 2,357, ,471 Depreciation and amortization expense 8 6, ,540 Other expenses 19 17,738,182 19,564,429 Total expenses 54,469,635 64,036,796 Profit / (loss) before tax (21,081,972) (20,566,498) Tax expense: Current tax - - Profit / (loss) after tax (21,081,972) (20,566,498) Basic and diluted earnings per equity share (Rs.) (Refer note 24) (8.22) (8.02) (Par value of SGD 1 each) See accompanying notes (1 to 25) to the financial statements In terms of our report attached for GURU & JANA, Chartered Accountants Firm Registration No:006826S For and on behalf of the Board of Directors D.K.Himatsingka Shrikant Himatsingka Managing Director Executive Director Ananth Prasad B R DIN : DIN : Partner Membership No Bangalore Bangalore Bangalore Date: Date: Date:

105 Himatsingka Singapore Pte Limited For the year ended For the year ended Cashflow Statement A. CASH FLOW FROM OPERATING ACTIVITIES: Profit/(loss) before tax (21,081,972) (20,566,498) Depreciation and amortization expense 6, ,540 Finance costs 2,357, ,471 Operating cash profit before working capital changes (18,717,685) (19,851,487) (Increase)/decrease in trade and other receivables 3,534,801 3,534,620 Decrease/(increase) in inventories (258,310) (329,358) Decrease/(increase) in short term, long term loan and advances and other current assets (4,351) 270,988 (Decrease)/increase in current and non-current liabilities and provisions (45,447,056) 18,928,035 Cash generated from operations (60,892,601) 2,552,798 Income tax paid - - Net cash from operations (60,892,601) 2,552,798 B. CASH FLOW FROM INVESTING ACTIVITIES: Loans received from Holding Company (Net) 60,254,581 - Net cash from investing activities 60,254,581 - C. CASH FLOW FROM FINANCING ACTIVITIES: Finance costs paid (2,676,769) - Net cash from financing activities (2,676,769) - Total decrease in cash and cash equivalents (3,314,789) 2,552,798 Effect of exchange differences on restatement of foreign currency cash and cash equivalents (316,251) 1,957,815 Cash and cash equivalents at the beginning of the period 8,055,169 3,544,556 Cash and cash equivalents at the end of the year 4,424,129 8,055,169 In terms of our report attached for GURU & JANA, Chartered Accountants Firm Registration No:006826S For and on behalf of the Board of Directors D.K.Himatsingka Shrikant Himatsingka Managing Director Executive Director Ananth Prasad B R DIN : DIN : Partner Membership No Bangalore Bangalore Bangalore Date: Date: Date:

106 Himatsingka Singapore Pte Limited Note 1 SIGNIFICANT ACCOUNTING POLICIES 1. System of accounting The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles ( GAAP ) under the historical cost convention and on accrual basis. GAAP comprises mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, Use of estimates The preparation of the financial statements in conformity with the accounting standards generally accepted in India requires, the Management to make estimates that affect the reported amount of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision is recognised prospectively in current and future periods. 3. Fixed assets Fixed assets and intangibles are stated at cost of acquisition or construction less accumulated depreciation. Cost includes all costs relating to acquisition and installation of fixed assets including incidental expenses incurred, interest on borrowings up to the date of capitalisation/commissioning of the projects/fixed asset. Expenditure during construction period in respect of new projects is included under capital workin-progress and the same is allocated to the fixed assets on the commissioning of the respective projects. 4. Depreciation Fixed assets are depreciated over the estimated useful lives as determined by the Management or over the lives determined based on rates of depreciation specified under various applicable statutes, whichever is shorter, on a straight line method. In respect of leasehold building and improvements to leasehold premises, depreciation has been provided over the unexpired portion of the primary lease period. Depreciation rates used for various classes of assets are: Furniture and Fixtures 20.00% Office Equipment 15.00% to 25.00% In respect of assets for which impairment loss has been recognised, the depreciation charge has been adjusted to allocate the revised carrying amount, on a systematic basis over its remaining useful life.

107 5. Impairment of assets At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of impairment losses recognized in prior years, if any, is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years. 6. Inventories Inventories of raw materials, stores and spares, work-in-process and finished goods are valued at lower of cost and estimated net realisable value. Cost is ascertained on weighted average basis. Cost of finished goods and work-in-process includes an appropriate proportion of conversion cost. 7. Government grants Government grants are accounted on accrual basis in accordance with the terms of the grant. 8. Revenue recognition Revenue from sale of goods is recognised on the transfer of title in the goods which generally coincides with dispatch and is stated net of discounts and sales tax but inclusive of excise duty. 9. Retirement benefits a. Post employment benefit plans : Payments to defined contribution plans, such as provident fund are charged as an expense as they fall due. For defined benefit schemes, the cost of providing benefits is determined using Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur. Past Service Cost in recognised immediately. The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is

108 limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme. b. Short term employee benefits : The undiscounted portion of short-term employee benefits expected to be paid in exchange for the services rendered by the employees is recognized during the period when the employee renders service. These benefits include compensated absences such as paid annual leave. 10. Foreign currency Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in foreign currencies as at the year-end are restated at the year-end rates. Exchange differences on settlement / restatement of foreign currency monetary assets and liabilities are charged to the Statement of profit and loss. The financial statements of the Company are translated into Indian rupees as follows: Assets and liabilities (other than non-monetary items), are translated at the exchange rate prevailing on the balance sheet date. Non-monetary items are carried at historical cost. Revenue and expenses are translated at average exchange rates prevailing during the year. 11. Earnings per share Basic earnings per share are computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed as the Company has not issued any dilutive potential equity shares. 12. Income tax Income tax comprises the current tax provision, the net change in the deferred tax asset or liability in the year. Current income tax expenses are based on the local tax regulations. Deferred tax assets and liabilities are recognised for the estimated future tax consequences of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets in the nature of unabsorbed depreciation and losses are recognised only if there is virtual certainty of realisation. Other deferred tax assets are recognised if there is reasonable certainty of realisation. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the income statement in the period of enactment of the change.

109 13. Provisions and contingencies A provision is recognised when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes to the financial statement. A contingent asset is neither recognised nor disclosed.

110 Himatsingka Singapore Pte Limited As at As at Notes to Financial Statements Note 2 - Share capital Authorised 2,565,000 equity shares of Singapore Dollar 1 each (Previous year: 2,565,000 shares of Singapore Dollar 1 each) 600,000 preference shares of Singapore Dollar 1 each (Previous year: 600,000 shares of Singapore Dollar 1 each) 88,425,360 88,425,360 19,851,440 19,851,440 Issued 2,565,000 equity shares of Singapore Dollar 1 each (Previous year: 2,565,000 shares of Singapore Dollar 1 each) 600,000 preference shares of Singapore Dollar 1 each (Previous year: 600,000 shares of Singapore Dollar 1 each) Subscribed and paid-up 2,565,000 equity shares of Singapore Dollar 1 each (Previous year: 2,565,000 shares of Singapore Dollar 1 each) 600,000 preference shares of Singapore Dollar 1 each (Previous year: 600,000 shares of Singapore Dollar 1 each) 88,425,360 88,425,360 19,851,440 19,851,440 88,425,360 88,425,360 19,851,440 19,851, ,276, ,276,800 (i) There is no movement in the shares outstanding from the prior year to the current year. (ii) Details of the rights, preferences and restrictions attaching to each share: All ordinary shares carry one vote per share without restriction and have no par value.the holder of ordinary shares is entitled to receive dividends as and when declared by the company. (iii) Number of shares held by each shareholder holding more than 5% shares in the Company: Himatsingka Wovens Pvt. Ltd has 100% shareholding in Himatsingka Singapore Pte Limited Note 3 - Reserves and surplus Surplus/ (Deficit) in Statement of Profit and Loss Opening balance (157,453,236) (136,886,738) Add: Transferred from surplus in statement of profit and loss (21,081,972) (20,566,498) (178,535,208) (157,453,236)

111 Himatsingka Singapore Pte Limited As at As at Notes to Financial Statements Note 4 - Long term borrowings Unsecured Loan from related parties 61,053,080 3,333,540 61,053,080 3,333,540 Note 5 - Trade payables Trade payables 10,765,748 55,649,346 10,765,748 55,649,346 Note 6 - Other current liabilities Interest accrued but not due 9,647,617 8,044,689 Other liabilities 357, ,037 Advances received from customers 2,431, ,813 Advances given to employees 40, ,922 Advances to Suppliers - 113,918 12,476,710 9,345,379 Note 7 - Short term provisions Provision for accumulated leave credits 30,572 31,954 30,572 31,954

112 Himatsingka Singapore Pte Limited Notes to Financial Statements Note 8 Particulars As at 01/04/2014 Gross Block Depreciation Net Block Additions (Deletions) As at 31/03/2015 As at 01/04/2014 For the year On Deletions As at 31/03/2015 As at 31/03/2015 As at 31/03/2014 Tangible Assets Furnitures & Fixtures 911, , , , Leasehold Improvements 24,753,497-24,753,497 24,753, ,753, Office Equipments 1,550,043-1,550,043 1,531,402 6,558-1,537,960 12,083 18,641 Total 27,214,879-27,214,879 27,196,238 6,558-27,202,796 12,083 18,641 Previous Year 27,214,879-27,214,879 26,850, ,540-27,196,238 18, ,181

113 Himatsingka Singapore Pte Limited As at As at Notes to Financial Statements Note 9 - Long term loans and advances (unsecured, considered good) Security deposits 3,403,935 3,557,837 3,403,935 3,557,837 Note 10 - Inventories Traded goods 5,886,117 5,896,860 5,886,117 5,896,860 Note 11 - Trade receivables Unsecured considered good 108,494 1,216, ,494 1,216,142 Note 12 - Cash and cash equivalents Cash in hand 45, ,245 Balances with banks - in current account 4,378,567 7,914,924 4,424,129 8,055,169 Note 13 - Short term loans and advances (unsecured, considered good) Prepaid expenses 232,944 56,698 Other advances - 382, , ,134

114 Himatsingka Singapore Pte Limited For the year ended For the year ended Notes to Financial Statements Note 14 - Revenue from operations Sale of products 31,481,471 42,542,683 31,481,471 42,542,683 Note 15- Other income Miscellaneous income 385, ,615 Net gain on foreign currency transactions and translation 1,520,540-1,906, ,615 Note 16 - Cost of materials Opening stock: Traded goods 5,896,860 5,119,942 5,896,860 5,119,942 Add: Purchases 21,286,110 31,857,524 Total 27,182,970 36,977,466 Less: Closing stock Traded goods 5,886,117 5,896,860 21,296,853 31,080,606 Note 17 - Employee benefit expense Salaries and wages 11,377,168 11,153,583 Contribution to provident and other funds 1,418,315 1,317,984 Workmen and staff welfare expenses 274, ,183 13,070,313 12,676,750 Note 18 - Finance costs Interest on term loan 2,357, ,471 2,357, ,471

115 Himatsingka Singapore Pte Limited For the year ended For the year ended Notes to Financial Statements Note 19 - Other expenses Rent 12,860,068 12,908,177 Travelling and conveyance 174, ,074 Communication expenses 609, ,133 Printing and stationery 84,471 38,170 Insurance - 27,466 Repairs and maintenance 282, ,190 Rates and taxes 3,988 22,784 Professional and consultancy charges (Refer Note 19A) 1,259,813 1,150,159 Bank charges 215, ,247 Selling and distribution - Selling expenses 952,649 31,922 Net loss on foreign currency transactions and translation - 2,055,423 Other expenses 1,295,292 1,875,684 Note 19A - Professional and consultancy charges include payment to auditors 17,738,182 19,564,429 Statutory auditor Audit fees 559, , , ,276 Note 20 - Segment reporting a) Primary segment : Business segment The Company is mainly engaged in the business of trading in fabric. Considering the nature of business and financial reporting of the Company, the Company has only one business segment viz; Home textile as primary reportable segment. Note 21 - Related party disclosures Nature of relationship Holding Company (HC) Ultimate holding Company (UHC) Fellow subsidiary (FS) Names of the related parties Himatsingka Wovens Private Ltd Himatsingka Seide Ltd Giuseppe Bellora SpA Related party disclosure Relationship Purchase of goods Himatsingka Wovens Private Ltd HC 21,449,063 30,838,543 Himatsingka Seide Ltd UHC - - Total 21,449,063 30,838,543

116 Himatsingka Singapore Pte Limited For the year ended For the year ended Notes to Financial Statements Interest expense on inter corporate loan Himatsingka Wovens Private Ltd HC 2,357, ,471 Outstanding as at year end Accounts Payable Himatsingka Wovens Private Ltd HC 10,166,582 54,673,678 Vendor Advances Himatsingka Seide Ltd UHC 79,108 79,108 Inter corporate loan payable Himatsingka Wovens Private Ltd HC 61,053,080 3,333,540 Interest payable on inter corporate loan Himatsingka Wovens Private Ltd HC 9,647,617 8,044,689 Note 22 - Leases The Company has entered into operating lease agreements mainly in respect of the office premises, accommodation and vehicles provided to employees and guest houses. i) Future minimum lease payments under non-cancellable operating leases due not later than one year - - later than one year and not later than five years - - later than five years - - ii) lease payments recognised in the statement of profit and loss for the year 12,860,068 12,908,177 Note 24 - Earning per share Net profit for the year (being entirely attributable to the equity shareholders) (21,081,972) (20,566,498) Basic / diluted Weighted average number of equity shares 2,565,000 2,565,000 Par value per share, SGD 1 1 Earnings per share - Basic / diluted (8.22) (8.02) Note 25 - Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

117 Twill & Oxford L.L.C Audited Financial Statements

118 INDEPENDENT AUDITOR S REPORT To The Members of TWILL & OXFORD LLC. We have reviewed the attached Balance Sheet of Twill & Oxford LLC. ( the company ) as at 31 st March 2015, Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date. The above Balance sheet, Statement of profit and loss and the Cash flow Statement have been prepared by the Management of the Holding company, Himatsingka Seide Ltd, based on the audited financial statement ( the financial statements ) of the company, audited by HORWATH MAK, UAE ( the other auditor ) in terms of their auditors report dated 1 st April 2015 (A copy of the financial statements and auditors report therein is enclosed herewith). However we have not examined the books of accounts and other records of the company and we do not express any opinion on the financial statement. Based on above examination and according to the additional information and explanations furnished to us, we report that the attached Balance sheet of the company as at 31 March 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, prepared by the management of the holding company on the basis of the aforesaid financial statement with additional information and regrouping wherever necessary. We have not audited the financial statements for the year ended 31 st March 2015 and the same has been audited by another firm. Subject to the limitations of our examination as indicated above, we further report that: 1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; 2. We are unable to state whether proper books of account have been kept as per the requirements of Companies Act, 2013 and whether Balance Sheet, Statement of Profit and Loss Account and Cash Flow Statement are in agreement with such books of account of the company as maintained and as stated above, we have not examined such books.

119 3. The other auditor have opined that the financial statements conforms to the requirements of the Generally Accepted Accounting Principles in the United Arab Emirates and in our opinion and to the best of our knowledge, the necessary adjustments have been made to ensure that the above balance sheet, Statement of Profit and Loss Account and Cash Flow Statement comply with the accounting Standards referred to in Section 133 of the Companies Act, for Guru & Jana, Chartered Accountants Firm Reg No.:006826S Heena Kauser A P Partner Membership No Place: Bangalore Date:

120 Twill & Oxford L.L.C As at As at Balance Sheet Note No EQUITY AND LIABILITIES Shareholders' funds Share capital 2 3,735,000 3,735,000 Reserves and surplus 3 (29,808,408) (17,339,457) (26,073,408) (13,604,457) Non-current liabilities Long term provisions 4 5,499,863 5,326,198 5,499,863 5,326,198 Current liabilities Trade payables 5 55,613,856 36,301,658 Other current liabilities 6 3,384,390 1,722,861 Short term provisions 7 458, ,775 59,456,453 38,673,294 ASSETS Total 38,882,908 30,395,035 Non-current assets Fixed assets Tangible assets 8 111, ,778 Long term loans and advances 9 1,215,767 1,118,233 1,327,190 1,322,011 Current assets Inventories 10 4,551,834 3,718,165 Trade receivables 11 25,472,984 12,820,801 Cash and cash equivalents 12 6,263,273 7,101,402 Short term loans and advances 13 1,267,627 5,432,656 37,555,718 29,073,024 Total 38,882,908 30,395,035 See accompanying notes (1 to 22) to the financial statements In terms of our report attached for GURU & JANA, Chartered Accountants Firm Registration No:006826S For and on behalf of the Board of Directors D.K.Himatsingka Shrikant Himatsingka Managing Director Executive Director Ananth Prasad B R DIN : DIN : Partner Membership No Bangalore Bangalore Bangalore Date: Date: Date:

121 Twill & Oxford L.L.C For the year ended For the year ended Statement of Profit and Loss Note No Revenue from operations ,013, ,793,009 Other income ,000 Total revenue 119,013, ,719,009 Expenses: Cost of materials 16 84,055,497 92,285,433 Employee benefit expense 17 13,732,777 14,423,119 Depreciation and amortization expense 8 92, ,362 Other expenses 18 33,601,905 40,771,337 Total expenses 131,482, ,582,251 Profit / (loss) before tax (12,468,951) 3,136,758 Tax expense: Current tax - - Profit / (loss) after tax (12,468,951) 3,136,758 Basic and diluted earnings per equity share (Rs.) (Refer note 21) (41,563.17) 10, (Par value of AED 1000 each) See accompanying notes (1 to 22) to the financial statements In terms of our report attached for GURU & JANA, Chartered Accountants Firm Registration No:006826S For and on behalf of the Board of Directors D.K.Himatsingka Shrikant Himatsingka Managing Director Executive Director Ananth Prasad B R DIN : DIN : Partner Membership No Bangalore Bangalore Bangalore Date: Date: Date:

122 Twill & Oxford L.L.C For the year ended For the year ended Cashflow Statement A. CASH FLOW FROM OPERATING ACTIVITIES: Profit/(loss) before tax (12,468,951) 3,136,758 Depreciation and amortization expense 92, ,362 Operating cash profit /(loss) before working capital changes (12,376,596) 3,239,120 (Increase)/decrease in trade and other receivables (11,957,337) (7,049,750) Decrease/(increase) in inventories (665,822) (331,904) (Increase)/decrease in short term, long term loan and advances and other current assets 4,297,036 (4,426,725) (Decrease)/increase in current and non-current liabilities and provisions 18,837,986 7,683,497 Cash generated from operations (1,864,733) (885,762) Income tax paid - - Net cash from operations (1,864,733) (885,762) B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets - - Net cash from investing activities - - C. CASH FLOW FROM FINANCING ACTIVITIES: Finance costs paid - - (Repayments) / proceeds of inter corporate borrowings (net) - - Net cash from financing activities - - Total decrease in cash and cash equivalents (1,864,733) (885,762) Effect of exchange differences on restatement of foreign currency cash and cash equivalents 1,026,604 2,440,183 Cash and cash equivalents at the beginning of the period 7,101,402 5,546,981 Cash and cash equivalents at the end of the year 6,263,273 7,101,402 In terms of our report attached for GURU & JANA, Chartered Accountants Firm Registration No:006826S For and on behalf of the Board of Directors D.K.Himatsingka Shrikant Himatsingka Managing Director Executive Director Ananth Prasad B R DIN : DIN : Partner Membership No Bangalore Bangalore Bangalore Date: Date: Date:

123 Twill & Oxford L.L.C. Note 1 SIGNIFICANT ACCOUNTING POLICIES 1. System of accounting The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles ( GAAP ) under the historical cost convention and on accrual basis. GAAP comprises mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, Use of estimates The preparation of the financial statements in conformity with GAAP requires, the Management to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statement and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision is recognised prospectively in current and future periods. 3. Fixed assets Fixed assets and intangibles are stated at cost less accumulated depreciation. Cost includes all costs relating to acquisition and installation of fixed assets including any incidental costs of bringing the assets to their working condition for their intended use. Borrowing costs directly attributable to acquisition or construction of qualifying assets, which necessarily take a substantial period of time to get ready for their intended use, are capitalised. Expenditure during construction period in respect of new projects is included under capital workin-progress and the same is allocated to the fixed assets on the commissioning of the respective projects. 4. Depreciation Fixed assets are depreciated over the estimated useful lives as determined by the Management or over the lives determined based on rates of depreciation specified under various applicable statutes, whichever is shorter, on a straight line method. In respect of improvements to leasehold premises, depreciation has been provided over the unexpired portion of the primary lease period.

124 5. Impairment of assets At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of profit and loss. Reversal of impairment losses recognised in prior years, if any, is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years. 6. Inventories Inventories of finished goods are valued at lower of cost and estimated net realisable value. Cost is ascertained on weighted average basis. 7. Revenue recognition Revenue from sale of goods is recognised on the transfer of title in the goods which generally coincides with dispatch and is stated net of discounts and sales tax but inclusive of excise duty. 8. Retirement benefits a. Post employment benefit plans : Payments to defined contribution plans, such as provident fund are charged as an expense as they fall due. For defined benefit schemes, the cost of providing benefits is determined using Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur. Past Service Cost in recognised immediately. The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme. b. Short term employee benefits : The undiscounted portion of short-term employee benefits expected to be paid in exchange for the services rendered by the employees is recognized during the period when the employee renders service. These benefits include compensated absences such as paid annual leave.

125 9. Foreign currency Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in foreign currencies as at the year-end are restated at the year-end rates. Exchange differences on settlement / restatement of foreign currency monetary assets and liabilities are charged to the Statement of profit and loss. The financial statements of the Company are translated into Indian rupees as follows: Assets and liabilities (other than non-monetary items), are translated at the exchange rate prevailing on the balance sheet date. Non-monetary items are carried at historical cost. Revenue and expenses are translated at average exchange rates prevailing during the year. 10. Earnings per share Basic earnings per share are computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed as the Company has not issued any dilutive potential equity shares. 11. Provisions and contingencies A provision is recognised when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes to the financial statement. A contingent asset is neither recognised nor disclosed.

126 Twill & Oxford L.L.C As at As at Notes to Financial Statements Note 2 - Share capital Authorised 300 equity Shares of AED 1000 each (Previous year: 300 equity shares of AED 1000 each) 3,735,000 3,735,000 Issued 300 equity Shares of AED 1000 each (Previous year: 300 equity shares of AED 1000 each) 3,735,000 3,735,000 Subscribed and paid-up 300 equity Shares of AED 1000 each (Previous year: 300 equity shares of AED 1000 each) 3,735,000 3,735,000 3,735,000 3,735,000 (i) There is no movement in the shares outstanding from the prior year to the current year. (ii) Details of the rights, preferences and restrictions attaching to each share : The Company has only one class of share, having a par value of AED 1000/- per share. Each holder of equity share is entitled to one vote per share without restriction. (iii) Number of shares held by each shareholder holding more than 5% shares in the Company: Shareholder No. of shares No. of shares Mr.Obaid Mohamed Alaslai Himatsingka Seide Limited Note 3 - Reserves and surplus Surplus/ (Deficit) in Statement of Profit and Loss Opening balance (17,339,457) (20,476,215) Add: Transferred from surplus / (Deficit) in Statement of Profit and Loss (12,468,951) 3,136,758 (29,808,408) (17,339,457) Note 4 - Long term provisions Provision for gratuity, unfunded 5,499,863 5,326,198 5,499,863 5,326,198 Note 5 - Trade payables Trade payables 55,613,856 36,301,658 55,613,856 36,301,658 Note 6 - Other current liabilities Advances received from customers 3,384,390 1,722,861 3,384,390 1,722,861 Note 7 - Short term provisions Provision for accumulated leave credits 458, , , ,775

127 Twill & Oxford L.L.C Notes to Financial Statements Note 8 Particulars As at 01/04/2014 Gross block Depreciation Net block Additions As at 31/03/2015 As at 01/04/2014 For the year On Deletions As at 31/03/2015 As at 31/03/2015 As at 31/03/2014 (Deletions) Tangible assets: Furnitures and fixtures 1,043,933-1,043, ,974 72, , , ,959 Leasehold improvements 26,741,538-26,741,538 26,741, ,741, Office equipments 633, , ,191 19, ,952 11,058 30,819 Total 28,418,481-28,418,481 28,214,703 92,355-28,307, , ,778 Previous Year 28,418,481 28,418,481 28,112, ,362-28,214, , ,150

128 Twill & Oxford L.L.C As at As at Notes to Financial Statements Note 9 - Long term loans and advances (unsecured, considered good) Security deposits 1,215,767 1,118,233 1,215,767 1,118,233 Note 10 - Inventories Traded goods 4,551,834 3,718,165 4,551,834 3,718,165 Note 11 - Trade receivables Unsecured considered good 25,472,984 12,820,801 25,472,984 12,820,801 Note 12 - Cash and cash equivalents Cash in hand 129, ,633 Balances with banks - in current account 6,134,103 6,985,769 6,263,273 7,101,402 Note 13 - Short term loans and advances (unsecured, considered good) Prepaid expenses 1,136, ,896 Advance to Suppliers 131,622 4,434,760 1,267,627 5,432,656

129 Twill & Oxford L.L.C For the year ended For the year ended Notes to Financial Statements Note 14 - Revenue from operations Sale of products 119,013, ,793, ,013, ,793,009 Note 15- Other income Miscellaneous income - 926, ,000 Note 16 - Cost of materials Opening stock: Traded goods 3,718,165 3,060,975 3,718,165 3,060,975 Add: Purchases 84,889,166 92,942,623 Total 88,607,331 96,003,598 Less: Closing stock Traded goods 4,551,834 3,718,165 84,055,497 92,285,433 Note 17 - Employee benefit expense Salaries and wages 13,413,153 12,692,479 Workmen and staff welfare expenses 379, ,933 Contribution to Provident and other funds (60,343) 1,061,707 13,732,777 14,423,119 Note 18 - Other expenses Rent 13,366,714 13,167,035 Travelling and conveyance 1,061,611 1,305,309 Communication expenses 1,209,509 1,592,700 Printing and stationery 154, ,336 Insurance 364,699 69,697 Repairs and maintenance 676, ,136 Rates and taxes 1,017, ,616 Professional and consultancy charges (Refer Note 18A) 1,108,031 1,167,621 Bank charges 497, ,018 Selling and distribution - Commission on sales 10,010,196 3,349,255 - Selling expenses 1,779,895 15,819,488 Net loss on foreign currency transactions and translation 1,327,436 1,583,068 Other expenses 1,028, ,058 33,601,905 40,771,337

130 Twill & Oxford L.L.C For the year ended For the year ended Notes to Financial Statements Note 18A - Professional and consultancy charges include payment to auditors Statutory auditor Audit fees 150, , , ,043 Note 19 - Segment reporting a) Primary segment : Business segment The Company is mainly engaged in the business of trading in fabrics. Considering the nature of business and financial reporting of the Company, the Company has only one business segment viz; Home textile as primary reportable segment. Note 20 - Related party disclosures Nature of relationship Holding Company (HC) Fellow subsidiary (FS) Names of the related parties Himatsingka Seide Ltd Himatsingka Wovens Private Ltd Related party disclosure Relationship Purchase of goods Himatsingka Wovens Private Ltd FS 80,944,775 88,903,005 Outstanding as at year end Amounts payable Himatsingka Wovens Private Ltd FS 54,403,600 31,277,250 Note 21 - Earning per share Net profit for the year (being entirely attributable to the equity shareholders) (12,468,951) 3,136,758 Basic / diluted Weighted average number of equity shares Par value per share, AED 1,000 1,000 Earnings per share - Basic / diluted (41,563.17) 10, Note 22 - Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.