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Notes to Accounts of Hisar Spinning Mills Ltd.

Mar 31, 2014

1.Corporate identification number and nature of operations

Corporate identification number of the company is L17112HR1992PLC031621 and the company is engaged in the business of manufacturing and sale of cotton blended yarn.

(*) Nature of security and guarantee by directors or others:

Term loan from bank:

Term loans from bank i.e., Punjab National Bank are secured by (a) hypothecation of building constructed/ to be constructed, plant and machinery installed up to 31.03.2011, other assets and equipments purchased with the bank loan along with furniture & fixture (b) first charge ranking paripassu with Small Industries Development Bank of India (SIDBI) by way of equitable mortgage of all the immovable. properties i.e., land & building thereon of the company situated at VPO Dabra, Distt, Hissar, admeasuring about 34 kanal 14 marlas owned by the company. The above securities are also held as security for loan repayable on demand (cash credit) from Punjab National Bank (refer note no. 7 ''Short-term borrowings'').

Term loans from bank i.e., Punjab National Bank are further covered by personal guarantee of the promoter directors of the company namely Sh. Gopal Krishan Gupta, Sh. Anurag Gupta and Sh. T.N. Goel and former director of the company namely Sh. M.L. Kansal.

Term loans from financial institution:

Term loans from financial institution i.e., Small Industries Development Bank of India (SIDBI) together with interest, costs, expenses, penal interest and all other monies dues and payable by the company are secured by (a) first charge by way of hypothecation in favour of SIDBI in a form satisfactory to SIDBI in respect of all the movable fixed assets i.e., plant and machinery, equipment, tools and accessories, moulds, miscellaneous fixed assets etc., save & except stocks and book debts acquired/ to be acquired under the project (new machinery installed specifically from loan financed by SIDBI on or after 01.04.2011). (b) first charge ranking paripassu with Punjab National Bank by way of equitable mortgage in a form satisfactory to SIDBI of all the immovable properties i.e., land & building thereon of the borrower situated at VPO Dabra, Distt, Hissar, admeasuring about 34 kanal 14 marlas owned by the company.

Term loans from financial institution i.e., Small Industries Development Bank of India (SIDBI) are further covered by irrevocable and unconditional personal guarantee of the promoter directors of the company namely Sh. Gopal Krishan Gupta. Sh. Anurag Gupta and Sh. T.N. Goel and former director of the company namely Sh. M.L. Kansal.

Other long-term borrowings from banks:

Other long-term borrowings from banks are secured by hypothecation (marked with Registering Authority, Motor Vehicles) of vehicles acquired out of proceeds of the said borrowings from banks.

Term loans from financial institution:

(i) Term loan of Rs. 29300000/- is repayable in 66 monthly instalments commencing 18 months after the date of first disbursement i.e., 02.08.2011. The first 18 instalments of Rs. 300000/- each, next 18 instalments of Rs. 400000/- each, next 18 instalments of Rs. 510000/- each, next 11 instalments of Rs. 625000/- each and the last final instalment of Rs. 645000/-.

(ii) Term loan of Rs. 1700000/- is repayable in 66 monthly instalments commencing 18 months after the date of first disbursement i.e., 02.08.2011. The first 18 instalments of Rs. 15000/- each, next 18 instalments of Rs. 25000/- each, next 18 instalments of Rs. 30000/- each, next 11 instalments of Rs. 35000/- each and the last final instalment of Rs.55000/-.

Other long-term borrowings from banks:

(i) Other long-term borrowing from ICICI Bank Limited amounting to Rs. 1500000/- is repayable in 36 equated monthly installments (EMIs) of Rs. 48585/- (including interest).

(ii) Other long-term borrowing from HDFC Bank Limited amounting to Rs. 800000/- is repayable in 36 equated monthly installments (EMIs) of Rs. 25600/- (including interest).

(**) Nature of security and guarantee by directors or others:

Loan repayable on demand from bank (cash credit) is secured by hypothecation of stocks of raw material, work-in-progress, finished goods, stores and spares and hypothecation of entire receivables/ book debts.

The said facilities from Punjab National Bank are further secured by hypothecation of block assets of the company and first charge ranking paripassu with Small Industries Development Bank of India (SIDBI) by way of equitable mortgage of all the immovable properties i.e., land & building thereon of the company situated at VPO Dabra, Distt, Hissar, admeasuring about 34 kanal 14 marlas owned by the company. These securities are also held as security for long-term borrowings (refer note no. 5 ''Long-term borrowings'').

Loan repayable on demand from bank (cash credit) is also covered by personal guarantee of the promoter directors of the company namely Sh. Gopal Krishan Gupta, Sh. Anurag Gupta and Sh. T.N. Goel and former director of the company namely Sh. M.L. Kansal.

2. Earnings per equity share (EPS)

The calculation of EPS as disclosed in the statement of profit and loss has been made in accordance with Accounting Standard (AS)-20 ''Earning Per Share'' notified under the Companies (Accounting Standards) Rules, 2006

3. Contingent liabilities and commitments

(to the extent not provided for)

(i) Contingent liabilities. Counter guarantees issued to 1857500 1857500 Punjab National Bank in respect of the guarantees issued by the said bank in favour of various government authorities.

(ii) Commitments:

Performance bonds executed in favour of The President of 27673306 27673306 India against exports obligations for purchase of capital goods under Export Promotion Capital Goods (EPCG) scheme

4. Employee benefits

Disclosures as required by the Accounting Standard (AS) * 15 ''Employee benefits'' are as under:

(a) General description of plan: Defined gratuity benefit obligation (funded)

(b) Method of valuation of gratuity: Projected Unit Credit (PUC) Actuarial Method.

5. Related parties disclosures

(a) The name of the transacting related party and description of the relationship between the parties:

Key management personnel:

Mr. Gopal Krishan Gupta

Mr Anurag Gupta

Enterprises over which key management personnel or relative of such personnel is able to exercise significant influence:

Usha Yarns Limited

6. No amount of dividend has been proposed to be distributed to equity and preference shareholders for the period.

7. There is no impairment of assets during the year.


Mar 31, 2013

1. Nature of operations

The company is engaged in the business of manufacturing and sale of cotton and cotton blended yam.

2. Employee benefits

Disclosures as required bythe Accounting Standard (AS)-15 ''Employee benefits''are as under:

(a) General description of plan: Defined gratuity benefit obligation (funded)

(b) Method of valuation of gratuity: Projected Unit Credit (PUC) Actuarial Method.

3 Related parties disclosures

(a) Trie name of the transacting related party and description of the relationship between the parties:

Key management personnel:

Mr. Gopal Krishan Gupta Mr. Anurag Gupta

Enterprises over which key management personnel or relative of such personnel is able to exercise significant influence:

Usha Yarns Limited

4 No amount of dividend has been proposed to be distributed to equity and preference shareholders for the period.

5 There is no impairment of assets during the year.

6 The previous period figures have been regrouped/ reclassified, wherever necessary to conform to the current period presentation.


Mar 31, 2012

1. Nature of operations

The company is engaged in the business of manufacturing and sale of cotton yam.

Rights, preferences and restrictions attaching to each class of shares:

Equity shares: The company has one class of equity share having par value of rupees 10/- per share. Every member holding equity shares and entitled to vote and present in person or by proxy shall have voting rights which shall be in the same proportion as the capital paid on the equity share or shares (whether fully paid up or partly paid up) held by him bears to tie total paid up equity capital of the company.

Preference shares: The company has issued 5% redeemable non cumulative preference shares having par value of rupees 10/- per share. The preference shareholders enjoy preferential rights in respect of payment of dividend and repayment of capital over the equity shareholders. The preference shares shall not entitle the holders thereof to any voting rights, except in respect of resolutions which directly affect the rights attached to the preferences shares, and in the event the company does not pay any dividend on the said preference shares no voting rights shall accrue to such holders on account of non-payment of dividend. The said preference shares will be redeemable at par at the discretion of the board either in lump sum or in four quarterly instalments commencing from 01.01.2024 and ending on 31.122024 but before the expiry of 20 years from the date of allotment (27.07.2005) subject to the provisions of tie Companies Act, 1956 and other applicable legislations as may be in force from time to time and the provisions of the articles of association of the company.

( ) Nature of security and guarantee by o lrectors or ettiwrs;

; Term loansfrom bank: ;

Term loaris.frorn bank i.e.,Punjab National Bank are secured by (a) hypothecation of building construcWd^tb beconstructed, plant and machinery installed up to 3,1.Q3-2011, other assets and equipments purchased with the bank tearfcalorjg/.with furniture & figure, (b) ffrsf charge ranWnc| paripassu with Small Industries Development Bank of India i(Sip|l)J?y way of equitable rrtorfgage of atl the immovable properties i.e., Iand& building thereon of the company situated at VPO Dabra, Distt, Hissar, admeasuring about 34 kanal 14marlas owned by the company. The above securities are also heltf as sVcUrity for loan repayable on demand (cash credit) from Punjab National Bank (refer note no. 7 Short-term borrowings ).

Term loans from bank i.e., Punjab National Bank are further covered by personal guarantee of the promoter- directors of the company namely Sh. Gopal Krishan Gupta, Sh. Anurag Gupta, Sh. M.L Kansal and Sh. T.N. Goel.

Term loans from financial institution:

Term loans from financial institution i.e., Small Industries Development Bank of India (SIDBI) together with interest, costs, expenses, penal interest and all other monies dues and payable by the company are secured by (a) first charge by way of hypothecation in favour of SIDBI in a form satisfactory to SIDBI in respect of all the movable fixed assets i.e., plant and machinery, equipment, tools and accessories, moulds, miscellaneous fixed assets etc., save & except stocks and book debts acquired/ to be acquired under the project (new machinery installed specifically from loan financed by SIDBI on or after 01.042011). (b) first charge ranking paripassu with Punjab National Bank by way of equitable mortgage in a form satisfactory to SIDBI of all tie immovable properties i.e., land & building thereon of the borrower situated at VPO Dabra, Distt Hissar, admeasuring about 34 kanal 14marlas owned by the company.

Term loans from financial institution i.e., Small Industries Development Bank of India (SIDBI) are farther covered by irrevocable and unconditional personal guarantee of the promoter directors of Ihe company namely Sh. Gopal Krishan Gupta, Sh. Anurag Gupta, Sh. Ml. Kansal and Sh. T.N. Goel.

Term loans from financial institution:

(i) Term loan of rupees 29300000/- is repayable in 66 monthly instalments commencing 18 months after tie date of first disbursement i.e., 02.08.2011. The first 18 instalments of rupees 300000/- each, next 18 instalments of rupees 400000A each, nert 18 instalments of rupees 510000/- each, next 1 instalment of rupees 625000/- each and the last final instalment of rupees 645000/-.

(i) Term loan of rupees 1700000/- is repayable in 66 monthly instalments commencing 18 months after the date of first disbursement i.e„ 02.08.2011. The first 18 instilments of rupees 15000/- each, next 18 instalments of rupees 25000/- each, next 18 instalments of rupees 30000/- each, next 11 instalments of rupees 35000A each and the last final instalment of rupees 55000A.

Terms of repayment of unsecured long-term borrowings: Inter-corporate deposits:

Unsecured inter-corporate deposits are repayable at the lime of squaring up of term loan facilities availed by the company from bank.

Loans and advances from related parties and from other promoters:

Unsecured loans and advances from related parties and from other promoters are repayable at the time of squaring up of term loans availed by the company from financial institution.

( ) Nature of security and guarantee by directors or others:

Loan repayable on demand from bank (cash credit) is secured by hypothecation of stocks of raw material, work-in-progress, finished goods, stores and spares and hypothecation of entire receivables/book debts.

The said facilities from Punjab National Bank are further secured by hypothecation of block assets of the company and first charge ranking paripassu with Small Industries Development Bank of India (SIDBI) by way of equitable mortgage of all the immovable properties i.e., land & building thereon of the company situated at VPO Dabra, Distt, Hissar, admeasuring about 34 kanal 14 marlas owned by the company. These securities are also held as security for term loan from bank
Loan repayable on demand from bank (cash credit) is also covered by personal guarantee of the promoter directors of the company namely Sh. Gopal Krishan Gupta, Sh. Anurag Gupta, Sh. M.L Kansal and Sh. T.N. Goel.

2. Related parties disclosures

(a) The name of the transacting related party and description of the relationship between the parties:

Key management personnel:

Mr. Gopal Krishan Gupta Mr. Anurag Gupta

3. No amount of dividend has been proposed to be distributed to equity and preference shareholders for the period.

4. There is no impairment of assets during the year.

5. The company has reclassified previous year s figures to conform to current year s classification as per revised Schedule VI notified under the Companies Act, 1956. The adoption of revised Schedule VI has significantly impacted the disclosure and presentation made in the financial statements. However, it does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

1 Contingent Liabilities not provided for:

Counter guarantees issued to Punjab National Bank against guarantees issued by the said bank in favour of The President of India for Rs. 502000/- covered by 100% margin in the shape of fixed deposits (previous year - Rs. 502000/-).

Performance bond of Rs. 8343306/- (previous year - Rs. 8343306/-) issued in favour of The President of India under an export obligation against purchase of capital goods under export performance credit guarantee scheme.

2. The Company has not received any communication from any of its suppliers/ service providers in response to letters issued by the Company, confirming whether or not they are registered under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of any positive confirmation from the suppliers/ service providers, the information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 could not be determined.


Mar 31, 2010

1. Contingent Liabilities not provided for:

Counter guarantees issued to Punjab National Bank against guarantees issued by the said bank in favour of The President of India for Rs. 502000/- covered by 100% margin in the shape of fixed deposits (previous year - Rs. 1455614/-).

Performance bond of Rs. 8343306/- (previous year - Rs. 8343306/-) issued in favour of The President of India under an export obligation against purchase of capital goods under export performance credit guarantee scheme.

2. The Company has not received any communication from any of its suppliers/ service providers in response to letters issued by the Company, confirming whether or not they are registered under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of any positive confirmation from the suppliers/ service providers, the information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 could not be determined.

3. Previous years figures have been re-grouped / re-arranged wherever considered necessary to make them comparable with figures of the current year.

4. Figures have been rounded off to the nearest rupee.

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