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Notes to Accounts of Nahar Industrial Enterprises Ltd.

Mar 31, 2015

1) CONTINGENT LIABILITIES NOT PROVIDED FOR :

a) Estimated amount of contracts remaining to be executed on capital account (net of advances/ Letter of credit issued) Rs.5,398.67 Lacs (Previous year Rs.1,010.03 Lacs).

b) Letter of Credits in favour of suppliers and others Rs. 694.98 Lacs (Previous year Rs. 868.81 Lacs).

c) Bank Guarantees in favour of suppliers and others Rs. 1,159.11 Lacs (Previous year Rs. 916.08 Lacs).

d) Sales tax demands against which the company has preferred appeals Rs. 67.17 Lacs (Previous year Rs. 67.17 Lacs).

e) Income tax demands against which the company has preferred appeals Rs. 646.83 Lacs (Previous year Rs. Nil Lacs).

f) The Central Excise Authorities have issued show cause notices to the Company for Rs. 819.44 Lacs on various matters under the Central Excise Rules (Previous year Rs. 809.52 Lacs). The Company has filed suitable replies with the concerned authorities.

g) The Company has executed bonds / legal undertakings for an aggregate amount of Rs. 8,681.30 Lacs (Previous year Rs. 8,161.57 Lacs) in favour of the President of India for fulfillment of its obligations under the rules made under Central Excise Act, 1944 and Customs Act, 1962.

h) Claims of Rs. 3,525.40 Lacs (Previous year Rs. 486.49 Lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities.

2) The Company has undertaken export obligations of Rs. 67,461.51 Lacs (Previous year Rs. 52,048.08 Lacs) to export goods against the issuance of Import Licenses / Advance Licenses for the Import of Capital Goods and Raw Materials. Out of this, export obligations of Rs. 65,881.82 Lacs (Previous year Rs. 50,468.39 Lacs) have been fulfilled up to 31st March, 2015.

3) Advances include Rs. 27.76 Lacs (Previous year Rs. 27.76 Lacs) paid to the machinery supplier that are under dispute. The matter is pending in the Delhi High Court.

4) In the opinion of the Board of Directors, the Current Assets and Loans and Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

5) Export/domestic bills discounted during the year under Letter of Credit outstanding as on 31.03.2015 for Rs. 5,723.35 Lacs (Previous year Rs. 6,597.01 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

6) In accordance with the section 135 of the Companies Act, 2013 the company is covered by the provision of the said section-"Corporate Social Responsibility (CSR)"

a) The amount required to be spent- Rs.40.56 Lacs

b) The amount Spent - Nil However the company jointly with other group companies have joined hands under one umbrella, namely Oswal Foundation to carry out CSR activities in future.

7) Consequent to the enactment of the Companies Act, 2013 and its applicability for accounting periods commencing from 1st April, 2014, the Company has recalculated the remaining useful life of fixed assets in accordance with the provisions of Schedule-II of the Act. In case of Fixed Assets which have already completed their useful life in terms of Schedule-II of the Act, the carrying value (net of residual value) of such assets as at 1st April, 2014 amounting to Rs. 3,348.44 Lacs (net of deferred tax ) has been adjusted to the Retained Earnings and in case of other fixed assets the carrying value (net of residual value) is being depreciated over the re-calculated remaining useful life.

8) The Company is setting up a distillery unit with a capacity of 200 KLPD and 5 MW co-generation power plant at Village Salana Jeon Singh Wala , Tehsil Amloh , District Fatehgarh Sahib in the State of Punjab. After obtaining all necessary approvals for setting up the unit, orders for purchase of plant and machinery was placed and civil construction has also started. Unfortunately, farmers of the nearby area have filed an appeal in the National Green Tribunal (NGT), Delhi challenging Environmental Clearance and the central ground water approval regarding extraction of water through bore wells. The Tribunal heard the arguments from both the sides and the order was reserved on 19.3.2015 and the same is pending till date. In the meantime Company has incurred Rs. 16.61 crore as capital expenditure in the project.

9) Related Party Disclosures as required by Accounting Standard 18 issued by the ICAI are as under: - (a) Disclosure of Related Parties and relationship between the parties.

1 Associates J.L.Growth Fund Limited

Vardhman Investment Limited

Atam Vallabh Financers Limited

Cotton County Retail Limited

2 Key Management Personnel Sh. Kamal Oswal Vice Chairman-cum-Managing Director

Sh. Bharat Bhushan Gupta Chief Financial Officer

Sh. Mukesh Sood Company Secretary

3 Relatives of Key Management Personnel Sh. Jawahar Lal Oswal

Sh. Dinesh Oswal

Mrs. Abhilash Oswal

Mrs. Manisha Oswal

Mrs. Ritu Oswal

Mrs. Ruchika Oswal

Mrs. Monika Oswal

Mr. Rishab Oswal

Mr. Abhinav Oswal

4 Enterprises in which Key Management Personnel and relative of such personnel is able to exercise significant influence or control

Oswal Woollen Mills Ltd.

Nahar Spinning Mills Ltd.

Nahar Capital and Financial Services Ltd.

Nahar Industrial Infrastructure Corporation Ltd.

Monte Carlo Fashions Ltd.

Nahar Poly Films Ltd.

Kovlam Investment & Trading Co. Ltd.

Nagdevi Trading & Investment Co. Ltd.

Sankheshwar Holding Co. Ltd.

Vanaik Investors Ltd.

Vinayak Spinning Mills Ltd.

Crown Star Ltd.

Hug Foods Pvt. Ltd.

Abhilash Growth Fund Pvt. Ltd.

Nahar Growth Fund Pvt. Ltd.

Neha Credit & Investment Pvt. Ltd.

Nahar Financial and Investment Ltd.*

Retailerkart E-Venture Pvt. Ltd.*

Simran & Shanaya Co. Ltd.*

Sidhanth & Mannat Co. Ltd.*

Palam Motels Ltd.*

Monika Growth Fund Pvt. Ltd.*

Ruchika Growth Fund Pvt. Ltd.*

Girnar Investment Ltd.*

10) The previous year figures have been reclassified to confirm to this year's classification.


Mar 31, 2013

1) CONTINGENT LIABILITIES NOT PROVIDED FOR :

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs.3,498.34 Lacs (Previous year Rs.3,645.75 Lacs).

b) Letter of Credits in favour of suppliers and others Rs.4,852.15 Lacs (Previous year Rs.3,505.94 Lacs).

c) Bank Guarantees in favour of suppliers and others Rs.335.57 Lacs (Previous Year Rs.128.98 Lacs)

d) Corporate guarantee given on behalf of others Rs. Nil Lacs (Previous year Rs.1,195 Lacs)

e) Sales tax demands against which the company has preferred appeals Rs.120.46 Lacs (Previous year Rs.120.46 Lacs).

f) Income tax demands against which the company has preferred appeals Rs.552.00 Lacs (Previous year Rs.Nil Lacs).

g) The Central Excise Authorities have issued show cause notices to the Company for Rs.749.29 Lacs on various matters under the Central Excise Rules (Previous Year Rs.850.68 Lacs). The Company has filed suitable replies with the concerned authorities.

h) Punjab State Power Corporation Ltd. has raised a net demand of Rs.121.78 Lacs (Previous Year Rs.121.78 Lacs) on account of paralleling operation charges for the captive power generation by the Company. The Company has protested the demand in the Hon''ble Courts. i) The Company has executed bonds / legal undertakings for an aggregate amount of Rs.6,900.39 Lacs (Previous year Rs.6,041.87 Lacs) in favour of The President of India for fulfillment of its obligations under the rules made under Central Excise Act, 1944 and Customs Act, 1962. j) Claims of Rs.437.35 lacs (Previous Year Rs.368.06 lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities. k) On the basis of liability under disputed derivative contracts the banks have created interest demand of Rs.135.03 lacs so far on account of non payment. Since the derivative contracts are subjudice and disputed, thus the interest liability is contingent and has not been provided for.

2) The Company has undertaken export obligations of Rs.38,251.63 Lacs (Previous year Rs.26,130.59 Lacs) to export goods against the issuance of Import Licenses / Advance Licenses for the Import of Capital Goods and Raw Materials. Out of this, export obligations of Rs.36,671.95 Lacs (Previous year Rs.23,046.27 Lacs) have been fulfilled up to 31st March, 2013.

3) Advances include Rs.27.76 Lacs (Previous Year Rs.27.76 Lacs) paid to the machinery suppliers that are under dispute. The matter is pending in the Delhi High Court.

4) In the opinion of the Board of Directors, the Current Assets and Loans and Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

5) Export/domestic bills discounted during the year under Letter of Credit outstanding as on 31.03.2013 for Rs.6,896.92 Lacs (Previous year Rs.2,952.57 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

6) The previous year figures have been reclassified to confirm to this year''s classification.


Mar 31, 2012

A. Terms/rights attached to equity shares:

The company has only one class of Equity Shares having Face value of Rs. 10/-each. Each holder of equity share is entitled to only one vote per share.

1.1 Term loan from ICICI Bank Limited, IDBI Bank Limited, Canara Bank, State Bank of Patiala, Indian Overseas Bank, Allahabad Bank, Punjab National Bank, Axis Bank , State Bank Of Mysore, Punjab & Sind Bank , Corporation Bank and Government of India, Ministry of Consumer Affairs are secured by hypothecation as pari-passu first charge on whole of the immovable properties of the Company situated at Village Jalalpur, Chandigarh Ambala Road, Lalru, Distt. Mohali, Industrial Focal Point, Phase VIII, Village Mundian, Distt. Ludhiana, Village Jalaldiwal, Near Raikot, Distt. Ludhiana (Punjab), Village Udaipur/ Khijuriwas, Bhiwadi, Distt. Alwar (Rajasthan), Focal Point Phase IV Ludhiana (Punjab) and Village Salana Jeon Singh Wala, Tehsil Amloh, Distt. Fatehgarh Sahib (Punab) including the Company's movable Plant and Machinery, Machinery Spares and other moveables both present and future and subject to the charge or charges created or to be created by the Company in favour of its Bankers on its movables and also personally guaranteed by some of the Directors of the Company.

2.1 Working Capital Borrowings are secured by hypothecation of stock of Raw Materials, Work-in-Progress, Finished Goods, Stores and Book Debts and further secured by 2nd charge on Fixed Assets of the Company and also personally guaranteed by some of the Directors of the Company.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market. Discount rate is based on market yields prevailing on government bond as at 31 March 2012 for the estimated term of defined benefit obligation.

3) CONTINGENT LIABILITIES NOT PROVIDED FOR :

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 3,645.75 Lacs (Previous year Rs. 14,036.28 Lacs).

b) Letter of Credits in favour of suppliers and others Rs. 3,505.94 Lacs (Previous year Rs. 8,032.67 Lacs).

c) Bank Guarantees in favour of suppliers and others Rs. 128.98 Lacs (Previous Year Rs. 113.34 Lacs).

d) Corporate guarantee given on behalf of others Rs. 1,195 lacs (Previous year Rs. 8,500lacs).

e) Sales tax demands against which the company has preferred appeals Rs. 120.46 Lacs (Previous year Rs. 120.46 Lacs).

f) The Central Excise Authorities have issued show cause notices to the Company forRs. 850.68 Lacs on various matters under the Central Excise Rules (Previous Year Rs. 618.81 Lacs). The Company has filed suitable replies with the concerned authorities.

g) Punjab State Power Corporation Ltd. has raised a net demand of Rs. 121.78 Lacs (Previous Year Rs. 158.66 Lacs) on account of paralleling operation charges for the captive power generation by the Company. The Company has protested the demand in the Hon'ble Courts.

h) The Company has executed bonds / legal undertakings for an aggregate amount of Rs. 6,041.87 Lacs (Previous yearRs. 6,293.03 Lacs) in favour of The President of India for fulfillment of its obligations under the rules made under Central Excise Act, 1944 and Customs Act, 1962.

i) Claims of Rs. 368.06 lacs (Previous YearRs. 349.67 lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities.

j) Contingent liablities were provided in respect of Foreign Exchange Contracts which were under dispute in the courts, The net contingent liability at the end of year 2011-12 come to Rs. 1,609.04 lacs.

Since the liability arising out of the derivative contracts are sub judice before the Civil Courts and has been considered by the company as Contingent liability, thus the interest of Rs. 135.03 lacs computed by the banks on the disputed amount is not acknowledged and accordingly not provided for as status quo order is already in force.

4) The Company has undertaken export obligations of Rs. 26,130.59 Lacs (Previous year Rs. 19,929.98 Lacs) to export goods against the issuance of Import Licenses / Advance Licenses for the Import of Capital Goods and Raw Materials. Out of this, export obligations of Rs. 23,046.27 Lacs (Previous year Rs. 18,798.44 Lacs) have been fulfilled up to 31st March, 2012.

5) Advances include Rs. 27.76 Lacs (Previous YearRs. 27.76 Lacs) paid to the machinery suppliers that are under dispute. The matter is pending in the Delhi High Court.

6) In the opinion of the Board of Directors, the Current Assets and Loans and Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

7) Export/domestic bills discounted during the year under Letter of Credit outstanding as on 31.03.2012 forRs. 2,952.57 Lacs (Previous yearRs. 2,211.88 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

Associates*

Nahar Spinning Mills Limited , Nahar Poly Films Limited, Nahar Capital and Financial Services Limited, Oswal Woolen Mills Limited, Atam Vallabh Financers Limited, J.L.Growth Fund Limited, Vardhman Investments Limited, Abhilash Growth Fund Pvt. Limited, Kovlam Investment Trading Co. Limited, Ludhiana Holding Limited, Nagdevi Trading Investment Co. Limited, Nahar Growth Fund Pvt. Limited, Neha Credit Investment Pvt. Limited, Sankheshwar Holding Co. Limited, Vanaik Investor Limited, Vinayak Spinning Mills Limited, Nahar Industrial Infrastructure Corporation Limited, Cotton County Retail Limited, Crown Star Limited, Nahar Financial and Investment Limited, Monte Carlo Fashions Limited.

Key Management Personnel

Sh. Jawahar Lal Oswal, Sh. Kamal Oswal and Sh. Dinesh Oswal

Relatives of Key management Personnel

Mrs. Abhilash Oswal, Mrs. Manisha Oswal, Mrs. Ritu Oswal and Mr. Rishab Oswal

* Associates include enterprises in which Key Management Personnel or their relatives have significant Influence, it also includes enterprises with which no transaction has taken place during the peroid.

8) The financial statements for the year ended 31st March, 2012 have been prepared as per Revised Schedule-VI to the Companies Act, 1956. Accordingly the previous year figures have been reclassified to confirm to this year's classification.


Mar 31, 2011

1) CONTINGENT LIABILITIES NOT PROVIDED FOR:

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 14,036.28 Lacs (Previous year Rs. 1,570.14 Lacs).

b) Letter of Credits in favour of suppliers and others Rs. 8,032.67 Lacs (Previous year Rs. 2,074.50 Lacs).

c) Bank Guarantees in favour of suppliers and others Rs. 113.34 Lacs (Previous Year Rs. 267.69 Lacs).

d) Corporate guarantee given on behalf of others Rs. 8,500 lacs (Previous year Rs. 8,500 lacs).

e) Sales tax demands against which the company has preferred appeals Rs. 120.46 Lacs (Previous year Rs. 120.46 Lacs).

f) The Central Excise Authorities have issued show cause notices to the Company for Rs. 618.81 Lacs on various matters under the Central Excise Rules (Previous Year Rs. 2,129.06 Lacs). The Company has filed suitable replies with the concerned authorities.

g) Punjab State Electricity Board has raised a net demand of Rs. 158.66 Lacs (Previous Year Rs. 158.66 Lacs) on account of paralleling operation charges for the captive power generation by the Company. The Company has protested the demand in the Hon'ble Courts.

h) The Company has executed bonds / legal undertakings for an aggregate amount of Rs. 6,293.03 Lacs (Previous year Rs. 3,166.52 Lacs) in favour of the President of India for fulfillment of its obligations under the rules made under Central Excise Act, 1944 and Customs Act, 1962.

i) Claims of Rs. 349.67 lacs (Previous Year Rs. 372.56 lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities.

j) Foreign Exchange contracts which were under dispute in the Courts, for which contingent liablities were provided, have been partly settled during the year. The net contingent liability at the end of year 2010-11 come to Rs. 1,609.04 lacs.

Since the liability arising out of the derivative contracts are sub judice before the Civil Courts and has been considered by the company as Contingent liability, thus the interest of Rs. 135.03 lacs computed by the banks on the disputed amount is not acknowledged and accordingly not provided for as status quo order is already in force.

2) The Company has undertaken export obligations of Rs. 19,929.98 Lacs (Previous year Rs. 17,793.98 Lacs) to export goods against the issuance of Import Licenses for the Import of Capital Goods. Out of this, export obligations of Rs.18,798.44 Lacs (Previous year Rs. 17,397.65 Lacs) have been fulfilled up to 31st March, 2011.

3) The outstanding liability towards Zero Coupon Foreign Currency Convertible Bonds (FCCBs), which were due for redemption on its maturity date i.e. 16th February, 2011 have been redemed in full alongwith redemption premium for the entire peroid.

FCCB's peroidic cost reserve of Rs. 1,272.91 Lacs Created upto 31st March, 2010 has been transferred to the Profit/ Loss Account in the year ended results.

4) Market value of quoted investments is Rs. 3,742.92 Lacs (Previous Year Rs. 3,242.39 Lacs). Aggregate value of quoted investments is Rs. 5,057.66 Lacs (Previous Year Rs. 5,091.24 Lacs) and unquoted investment is Rs. 9,028.34 Lacs (Previous Year Rs. 9,025.53 Lacs).

5) Advances include Rs. 27.76 Lacs (Previous Year Rs. 27.76 Lacs) paid to the machinery suppliers that are under dispute. The matter is pending in the Delhi High Court.

6) The balances of Sundry debtors and Sundry creditors are subject to confirmation.

7) In the opinion of the Board of Directors, the Current Assets and Loans and Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

During the financial year 2007-08 the company had paid managerial remuneration of Rs. 464.78 lacs as approved by the shareholders in their meeting held on 29.09.2007. The company moved an application with the Central Government for approval which was denied. Accordingly, the amount of excess remuneration of Rs.358.75 lacs was considered as advance salary in the year of payment and was adjusted in the subsequent years remuneration. Out of this, Rs.145.49 lacs was adjusted in 2009-10 and Rs. 213.26 lacs was adjusted in 2010-11. After adjustment, the remuneration of Rs. 14.13 lacs is paid/payable to the Vice Chairman Cum-Managing Director.

Associates*

Nahar Spinning Mills Limited , Nahar Poly Films Limited, Nahar Capital and Financial Services Limited, Oswal Woolen Mills Limited, Atam Vallabh Financers Limited, J.L.Growth Fund Limited, Vardhman Investments Limited, Abhilash Growth Fund Pvt. Limited, Kovlam Investment Trading Co. Limited, Ludhiana Holding Limited, Nagdevi Trading Investment Co. Limited, Nahar Growth Fund Pvt. Limited, Neha Credit Investment Pvt. Limited, Sankheshwar Holding Co. Limited, Vanaik Investor Limited, Vinayak Spinning Mills Limited, Nahar Industrial Infrastructure Corporation Limited, Cotton County Retail Limited, Crown Star Limited, Nahar Financial and Investment Ltd.

Key Management Personnel

Sh. Jawahar Lal Oswal, Sh. Kamal Oswal and Sh. Dinesh Oswal

Relatives of Key management Personnel

Mrs. Abhilash Oswal, Mrs. Manisha Oswal, Mrs. Ritu Oswal and Ms Neha Oswal

* Associates include enterprises in which Key Management Personnel or their relatives have significant Influence, it also includes enterprises with which no transaction has taken place during the peroid.

8) Export/domestic bills discounted during the year under Letter of Credit outstanding as on 31.03.2011 for Rs. 2,211.88 Lacs (Previous year Rs. 1,639.16 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

9) Previous year's figures have been regrouped / rearranged wherever considered necessary in order to make them comparable with the current year's figures.

10) Annexure I to XX form integral part of the Balance Sheet and Profit and Loss Account and have been duly authenticated as such.

11 Additional informations as required under paragraph 3 and 4 of Part-II of Schedule VI of the Companies Act, 1956 are as follows :

1 Production excludes 517 MTs. material reprocessed (Previous year 115 MTs.) and excludes 3,368 MTs. for captive consumption (Previous year 3,288 MTs.). Sales Includes interunit transfer of 20,761 MTs. amounting to Rs. 4,016,618 thousands (Previous Year 19,820 MTs. amounting to Rs. 2,592,957 thousands).

2 Production excludes 633,385 Mtrs. reprocessed (Previous year 361,806 Mtrs.) It also excludes 27,161,755 Mtrs. for captive consumption (Previous Year 21,554,951 Mtrs.). Sales includes interunit transfer of 16,513,629 Mtrs amounting to Rs. 1,204,728 thousands (Previous Year 16,485,423 Mtrs. amounting to Rs. 960,693 thousands).

3 Production excludes 1,632,437 Mtrs. material reprocessed (Previous year 1,403,659 Mtrs.) and include 159,935 Mtrs. on Job work basis (Previous year 940,559). Sales Includes interunit transfer of 871,110 Mtrs. amounting to Rs. 76,541 thousands (Previous year 2,177,726 Mtrs. amounting to Rs. 183,216 thousands).

4 Sale Includes interunit transfer of 1,625 MTs. amounting to Rs.124,551 thousands (Previous year 76 MTs. amounting to Rs. 4,507 thousands).

5 Production excludes 4,720 Qtls. of Brown sugar reprocessed (Previous Year 3,950 Qtls.).

6 Production includes 815,387 Qtls. for captive consumption (Previous Year 467,755 Qtls.). Sale include interunit transfer of 65,995 Qtls. amounting to Rs. 13,199 thousands (Previous year 13,870 Qtls. amounting to Rs. 3,814 thousand).

7 Other sales includes interunit transfer of Rs. 923,046 thousands (Previous year Rs. 804,440 thousands).

(1) Excludes interunit transfer of 4,288 MTs. (Previous Year 3,394 MTs.) amounting to Rs. 270,512 thousands (Previous Year Rs. 143,499 thousands).

(2) Excludes interunit transfer of 18,836 MTs. (Previous Year 17,908 MTs.) amounting to Rs. 3,703,192 thousands (Previous Year Rs. 2,339,650 thousands).

(3) Excludes interunit transfer of 17,050,430 Mtrs. amounting to Rs. 1,260,377 thousands (Previous Year excludes interunit transfer of 18,356,313 Mtrs. amounting to Rs. 1,127,748 thousands).

(4) Includes 4,478.30 Qtls. amounting to Rs. 930 thousands of Sugar Cane Cultivated at Company's own R & D Farms (Previous Year 3,514.90 Qtls. amounting to Rs. 752 thousands).

(5) Excludes interunit transfer of 154 MTs. amounting to Rs. 2,315 thousands (Previous Year nil MTs. amounting to Rs. nil thousands).

 
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