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Notes to Accounts of Nahar Spinning Mills Ltd.

Mar 31, 2015

1. Commitments

I. Estimated amount of Contracts remaining to be executed , net of advances

Particular Current year Previous Year

On Capital Accounts 3212.89 Lacs 8206.29 Lacs

On Others 7.37 Lacs 170.07 Lacs

II. The Company has executed legal agreement/bonds/undertakings for the sum of Rs.6653.16 Lacs (Previous Year Rs. 6653.16 Lacs) with the Central Government, undertaking to export Hosiery Knitwear, yarn and other goods of F.O.B. value of Rs.76647.73 Lacs (Previous Year Rs. 76647.73 Lacs) against the issuance by the Government of Advance Licenses/E.P.C.G. Licenses with Duty Exemption entitlement Certificates/Pass books for the Import of Raw Materials, Machinery and Components etc. for the aggregate C.I.F./duty saved value of Rs.8530.07Lacs (Previous Year Rs. 8530.07 Lacs)

2. Other Notes

i. Inter unit job work and inter unit sales are billed at market price. The closing stock of units is partly comprised of such material lying in finished or semi-finished stage. The mode of valuation referred to 'At Weighted Average Cost' represents costs worked out by taking into account the price charged by such units.

ii. Salaries & wages incurred during the year on repairs and maintenance of Building and Plant & Machinery etc. have been charged to former accounts and not shown separately.

iii. In the opinion of the board, the value of Current Assets, Loans and Advances have a value in the ordinary course of business at least equal to that stated in the balance sheet

iv. Some balances of Trade Payables , Advances and Trade Receivables are subject to their Confirmation.

v. Borrowing cost amounting Rs. 95.59 Lacs (Previous Year Rs.226.73 Lacs) has been capitalized during the year.

vi. Material events occurring after the balance sheet date are taken into cognizance.

vii. Prior period and extraordinary changes in accounting policies, having material effect on the financial affairs of the Company (if any) are disclosed.

viii. The accounts of the Company have been prepared on going concern basis.

ix. Previous year figures have been regrouped/recasted/rearranged/reclassified wherever necessary to make them comparable.

x. All figures have been rounded off to the nearest Rs. Lacs

xi. Income in respect of Carbon Credits is accounted for only on sale as it does not have any cost to the company.

xii. In accordance with Accounting Standard (AS)-28 on impairment of Assets, which is mandatory for the accounting periods commencing on or after 1st April, 2004, the company has assessed as on Balance Sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the standards) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

xiii. There are no Micro & Small enterprises covered under Micro, Small and Medium Scale Development Act 2006, to whom the company owes dues, which are outstanding for more than 45 days, hence no disclosure has been given. This information has been determined on the basis of intimation received from such parties

xiv. The company is eligible for Sales Tax incentives /Interest subsidies from government of Madhya Pradesh. the same is being accounted for on receipt basis as the availability of the above incentives/Interest subsidies is only on the basis of completion of certain formalities

xv. The Company had floated a wholly owned subsidiary in U.A.E on 09/12/2013. The same has been wound up during the current year .No activity has been carried out during the period ended 31.03.2015.

xvi. Impact of prior period items on Profits/(Loss) is as under: Rs. In Lacs

xvii. (a) In one of the units of the company , depreciation on Other equipments, furniture and fixtures and vehicles, was being charged on W.D.V basis . From 01.04.2014 the depreciation on these assets has been changed to SLM basis on the useful life specified in the Schedule-II of the Companies Act 2013, Consequent to this change the lower depreciation of Rs.33.03 Lacs has been credited to the statement of Profit & Loss.

(b) In case of assets whose useful life have exhausted, the carrying values as at 1st April,2014 amounting to Rs. 1903.77 Lacs (net of deferred tax Rs.980.30 Lacs) have been adjusted against the opening reserves as on 1st April,2014 pursuant to the provision of Schedule II to the Companies Act,2013.

xviii. In accordance with the section 135 of the Companies Act 2013, the company is covered by the provision of the said section

a) The amount required to be spent Rs. 110.51 Lacs

b) The amount Spent Nil

However the company and other group companies have joined hands to undertake the future CSR activities under one umbrella organization i.e Oswal Foundation.

xix. The company is operating in single segment i.e Textiles., Hence segment reporting as required under Accounting Standard 17 (Segment Reporting), is not applicable Ltd., Bermuda Insurance Brokers Pvt. Ltd., Kovalam Investment & Trading Co. Ltd., Monica Growth Fund (P) Ltd., Nagdevi Trading & Investment Co. Ltd., Nahar Growth Fund (P) Ltd., Ruchika Growth Fund (P) Ltd., Sankeshwar Holding Co. Ltd., Vanaik Investors Ltd., Vardhman Investment Ltd., J.L. Growth Fund Ltd.Neha Credit and Investment Pvt. Ltd.,Ginar Investment Limited, Crown Star Ltd., Monte Carlo Fashions Ltd.,Cotton County Retail Ltd.,Nahar industrial Infrastructure Corp. Ltd.,Sidhant & Mannat Co.Ltd,Simran & Shanaya Co. Ltd, Palam Motels Ltd,Hug Foods pvt Ltd.

Key Management Personnel

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

Relatives of Key management Personnel

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

*Associates includes the Companies in which the Key Management Personnel or their relatives have significant influence, Group Companies and also includes enterprises with whom no transaction has taken place during the period.

xxi. The employee's gratuity fund scheme is managed by LIC. The following tables set out the funded status of the gratuity plan recognized as per the company's financial statement as at 31.03.2015. (Rs.in Lacs)


Mar 31, 2014

1. CONTINGENT LIABILITIES NOT PROVIDED FOR:

a. Bank guarantees outstanding Rs.1790.89 Lacs ( Previous Yr. 1665.89Lacs )

b. The Company has bound itself unto the President of India for Rs.138.00 Lacs (Previous Year Rs.138.00 Lacs) under Central Excise Act, 1944 for clearance of goods without payment of excise duty, in respect of export of various types of yarn and for storage of various commodities manufactured within factory premises.

c. Excise/Sales Tax/Income Tax/ Other Government Authorities have raised demands of Rs.414.36 Lacs (Previous Year Rs.148.06 Lacs) out of which a sum of Rs.10.31Lacs(Previous Year Rs. 9.90 Lacs) has been deposited as security deposit, the same are being contested in appeal and no provision has been made.

d. Electricity demand raised by Madhya Pradesh Electricity board There is an electricity demand of Rs 3212.54 Lacs (Previous year Rs.3212.54 Lacs) raised by MPMK VV Co Ltd. in spite of surrender of electricity connection by the company and the same was being contested in the Hon''ble High court of Jabalpur. Against this company has deposited Rs. 561.92 Lacs with the MPMK VV CO. Limited. and has also furnished a bank guarantee for Rs. 1662.54 Lacs.

The matter was decided by the Hon''ble High Court , Jabalpur vide order dated 16th December 2009 . The order is as follow:

i) "As a consequence the company is granted permission to set up captive power plant of 4.1 MW capacity in its Unit No.1 and 2"

ii) "As a further consequence, we direct the Board to redetermine the tariff/minimum charges on the basis of reduced contract demand of 1000 KVA in case of Unit No. 1 and 0 KVA in case of Unit No.2 w.e.f. 01/08/1999 and raise bills, If any, with a further direction that in case if the company found to be owing certain arrears to the Board pursuant to redetermination as directed hereinabove, the same be adjusted from SD of Rs. 110.85 Lacs"

" We further direct the Board to issue correct electricity bills of the period after 01.08.1999 on the basis of reduced contract demand as aforesaid and settle the accounts with the Company keeping in view the aforesaid directions within 6 months"

The above order has been contested by MPMKVV Co. Ltd.by way of SLP in the Hon''ble Supreme Court and the following interim order has been passed by Hon''ble Supreme Court on dated 29.03.2010 "responded No. 1 (M/s Nahar Spinning Mills Ltd.) restrained from taking steps for recovering amount of Rs. 561.92 Lacs or from return the Bank Guarantee given for Rs. 1662.54 Lacs There will be a further direction upon the respondent No.1 to keep the Bank Guarantee renewed during the pendency of the matter in this court."

"The matter is pending for final decision with the Hon''ble Supreme Court." No provision for the same has been made.

e) The Madhya Pardesh Government''s ordinance to collect cess on Captive Power generation was declared ultravires by the Hon''ble Supreme court vide order dated 09/12/2003. But the State Government subsequently enacted an act namely M.P.Upkar (Sanshodhan tatha vidhimanyatakaran) Adhiniyam 2004 on 15th April 2004 which deemed to have come in to force from 29.06.2001.After the above act, the M.P.High Court passed an order dated 31/08/2007 to collect the dues of Cess from Captive Power plant users along with interest. According to this order, on the disputed amount,Rs. 159.03 Lacs (Previous year Rs.147.40 lacs) is payable as interest .The above refered order has been agitated by some actual users in Hon''ble Supreme Court and matter being sub-judice,hence liability has not been provided for.

f) The Company has given the following Guarantees in respect of loans granted by the banks Rs.2500 Lacs (previous year Rs.2500 Lacs) to Oriental Bank of Commerce and Rs. 1500 Lacs (previous year 1500Lacs) to Bank of Maharashtra in respect of financial assistance granted by the said banks to M/s Nahar Poly Films Limited, Ludhiana.

g) Levy of Entry Tax on certain items including yarn by the Punjab Government is subjudice before the Hon''ble Punjab & Haryana High Court.The Punjab Government has deferred the same subject to undertaking by the company that if the same is hold valid by the Hon''ble High Court , then company will deposit the same w.e.f the date of undertaking . The amount of such entry tax is Rs. 153.50 Lacs (previous year Rs.102.20 Lacsl) .It has no effect on the profitability of the company since the same will be claimed as Input Tax Credit

h) In the last year company has paid tax under MAT Rs. 990 Lacs for which the company is entitled to have MAT credit . The current year tax is net of MAT credit entitlement of Rs. 575 lacs , the balance MAT credit entitlement will be adjusted in the coming years.

2. Other Notes

i. Interunit job work and interunit sales are billed at market price. The closing stock of units is partly comprised of such material lying in finished or semi-finished stage. The mode of valuation referred to ''At Weighted Average Cost'' represents costs worked out by taking into account the price charged by such units.

ii. Salaries & wages incurred during the year on repairs and maintenance of Building and Plant & Machinery etc. have been charged to former accounts and not shown separately.

iii. In the opinion of the board, the value of Current Assets, Loans and Advances have a value in the ordinary course of business at least equal to that stated in the balance sheet

iv. Some balances of Trade Payables , Advances and Trade Receivables are subject to their Confirmation.

v. Borrowing cost amounting Rs. 226.73 Lacs (Previous Year Rs.41. 19 Lacs) has been capitalized during the year.

vi. Material events occurring after the balance sheet date are taken into cognizance.

vii. Prior period and extraordinary changes in accounting policies, having material effect on the financial affairs of the Company (if any) are disclosed.

viii. The accounts of the Company have been prepared on going concern basis.

ix. Previous year figures have been regrouped/recasted/rearranged/reclassified wherever necessary to make them comparable.

x. All figures have been rounded off to the nearest Rs.Lacs

xi. Income in respect of Carbon Credits is accounted for only on sale as it does not have any cost to the company.

xii. In accordance with Accounting Standard (AS)-28 on impairment of Assets, which is mandatory for the accounting periods commencing on or after 1st April, 2004, the company has assessed as on Balance Sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the standards) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

xiii. There are no Micro & Small enterprises covered under Micro, Small and Medium Scale Development Act 2006, to whom the company owes dues, which are outstanding for more than 45 days, hence no disclosure has been given. This information has been determined on the basis of intimation received from such parties

xiv. The company is eligible for Sales Tax incentives /Interest subsidies from government of Madhya Pradesh. the same is being accounted for on receipt basis as the availability of the above incentives/Interest subsidies is only on the basis of completion of certain formalities

xv. The Company has floated a wholly owned subsidiary in U.A.E on 09/12/2013 to explore the possibilities of trading in commodities etc. During the year, the company has incurred Rs.4.54 Lacs by way of annual charges. No activity has been carried out during the period ended 31.03.2014

3.SEGMENT ACCOUNTING POLICIES:

a) Segment revenue includes Sales and other income directly identifiable with/allocable to the segment including inter-segment revenue.

b) Expenses that are directly identifiable with/allocable to segments are considered for determining the Segment Result. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "other unallocable expenditure."

c) No geographical segment is reported as none of the conditions laid down for Geographical segment are satisfied.

d) Segment assets include all operating assets i.e. fixed assets and current assets used by segment.

e) Segment liabilities consist of Trade payables and other liabilities directly attributable to segment but does not include tax and financial liabilities.

f) Inter segment transfers are valued at prevailing market prices.

Note:

*Associates

Nahar Capital & Financial services Ltd., Nahar Poly Films Ltd., Nahar Industrial Enterprises Ltd., Oswal Woollen Mills Ltd.,Vanaik Spinning Mills Ltd.,Nahar Spinning Mills (FZE)., Abhilash Growth Fund(P)Ltd.,Atam Vallabh Financers Ltd., Bermuda Insurance Brokers Pvt. Ltd., Kovalam Investment & Trading Co. Ltd., Monica Growth Fund (P) Ltd., Nagdevi Trading & Investment Co. Ltd., Nahar Growth Fund (P) Ltd., Ruchika Growth Fund (P) Ltd., Sankeshwar Holding Co. Ltd., Vanaik Investors Ltd., Vardhman Investment Ltd., J.L. Growth Fund Ltd.Neha Credit and Investment Pvt. Ltd.,Ginar Investment Limited, Crown Star Ltd., Monte Carlo Fashions Ltd.,Cotton County Retail Ltd.,Nahar industrial Infrastructure Corp. Ltd.,Sidhant & Mannat Co.Ltd,Simran & Shanaya Co. Ltd, Palam Motels Ltd,Hug Foods pvt Ltd.

Key Management Personnel

Sh. Jawahar Lal Oswal, Sh. Dinesh Oswal & Sh. Kamal Oswal Relatives of Key management Personnel

Mrs. Abhilash Oswal, Mrs. Ruchika Oswal, Mrs. Manisha Oswal, Mrs. Ritu Oswal and Mrs. Monika Oswal

*Associates includes the Companies in which the Key Management Personnel or their relatives have significant influence, also includes enterprises with whom no transaction has taken place during the period.


Mar 31, 2013

A. Bank guarantees outstanding Rs.1665.89 Lacs (Previous Yr. 1665.89 Lacs)

b. The Company has bound itself unto the President of India for Rs.138.00 Lacs (Previous Year Rs.138.00 Lacs) under Central Excise Act, 1944 for clearance of goods without payment of excise duty, in respect of export of various types of yarn and for storage of various commodities manufactured within factory premises.

c. Excise/Sales Tax/ Other Government Authorities have raised demands of Rs.148.06 Lacs (Previous Year Rs.185.07 Lacs) out of which a sum of Rs.9.90 Lacs(Previous Year Rs. 9.90 Lacs) has been deposited as security deposit, the same are being contested in appeal and no provision has been made.

d. Electricity demand raised by Madhya Pradesh Electricity board

There is an electricity demand of Rs 3212.54 Lacs (Previous year Rs.3212.54 Lacs) raised by MPMK VV Co Ltd. in spite of surrender of electricity connection by the company and the same was being contested in the Hon''ble High court of Jabalpur. Against this company has deposited Rs. 561.92 Lacs with the MPMKVV CO. Limited. and has also furnished a bank guarantee for Rs. 1662.54 Lacs.

The matter was decided by the Hon''ble High Court, Jabalpur vide order dated 16th December 2009 . The order is as follow:

i) "As a consequence the company is granted permission to set up captive power plant of 4.1 MW capacity in its Unit No.1 and 2"

ii) "As a further consequence, we direct the Board to redetermine the tariff/minimum charges on the basis of reduced contract demand of 1000 KVA in case of Unit No. 1 and 0 KVA in case of Unit No.2 w.e.f. 01/08/1999 and raise bills, If any, with a further direction that in case if the company found to be owing certain arrears to the Board pursuant to redetermination as directed hereinabove, the same be adjusted from SD of Rs. 110.85 Lacs"

iii) " We further direct the Board to issue correct electricity bills of the period after 01.08.1999 on the basis of reduced contract demand as aforesaid and settle the accounts with the Company keeping in view the aforesaid directions within 6 months"

The above order has been contested by MPMKVV Co. Ltd.by way of SLP in the Hon''ble Supreme Court and the following interim order has been passed by Hon''ble Supreme Court on dated 29.03.2010 "responded No. 1 (M/s Nahar Spinning Mills Ltd.) restrained from taking steps for recovering amount of Rs. 561.92 Lacs or from return the Bank Guarantee given for Rs. 1662.54 Lacs There will be a further direction upon the respondent No.1 to keep the Bank Guarantee renewed during the pendency of the matter in this court."

"The matter is pending for final decision with the Hon''ble Supreme Court." No provision for the same has been made.

e) The Madhya Pardesh Government''s ordinance to collect cess on Captive Power generation was declared ultravires by the Hon''ble Supreme court vide order dated 09/12/2003. But the State Government subsequently enacted an act namely M.P.Upkar (Sanshodhan tathavidhimanyatakaran) Adhiniyam 2004 on 15th April 2004 which deemed to have come in to force from 29.06.2001.After the above act, the M.P.High Court passed an order dated 31/08/2007 to collect the dues of Cess from Captive Power plant users along with interest. According to this order, on the disputed amount, Rs. 147.40 Lacs (Previous year Rs.124.56 lac) is payable as interest .The above refered order has been agitated by some actual users in Hon''ble Supreme Court and matter being sub-judice,hence liability has not been provided for.

f) The Company has given the following Guarantees in respect of loans granted by the banks.

Rs.2500 Lacs (previous year Rs.2500 Lacs) to Oriental Bank of Commerce and Rs. 1500 Lacs (previous year 1500Lacs) to Bank of Maharashtra in respect of financial assistance granted by the said banks to M/s Nahar Poly Films Limited, Ludhiana.

g) Levy of Entry Tax on certain items including yarn by the Punjab Government is subjudice before the Hon''ble Punjab & Haryana High Court .The Punjab Government has deferred the same subject to undertaking by the company that if the same is hold valid by the Hon''ble High Court, then company will deposit the same w.e.f the date of undertaking . The amount of such entry tax is Rs. 102.20 Lacs (previous year Rs.57.68 Lacsl) .It has no effect on the profitability of the company since the same will be claimed as Input Tax Credit

28. Other Notes

i) Interunit job work and interunit sales are billed at market price. The closing stock of units is partly comprised of such material lying in finished or semi-finished stage. The mode of valuation referred to ''At Weighted Average Cost'' represents costs worked out by taking into account the price charged by such units.

ii) Salaries & wages incurred during the year on repairs and maintenance of Building and Plant & Machinery etc. have been charged to former accounts and not shown separately.

iii) In the opinion of the board, the value of Current Assets, Loans and Advances have a value in the ordinary course of business at least equal to that stated in the balance sheet except in case of those shown as doubtful. No provision have been made for doubtful debts

iv) Some balances of Trade Payables, Advances and Trade Receivables are subject to their Confirmation.

v) Borrowing cost amounting Rs. 41.19 Lacs (Previous Year Rs.285.40 Lacs) has been capitalized during the year.

vi) Material events occurring after the balance sheet date are taken into cognizance.

vii) Prior period and extraordinary changes in accounting policies, having material effect on the financial affairs of the Company (if any) are disclosed.

viii) The accounts of the Company have been prepared on going concern basis.

ix) Previous year figures have been regrouped/recasted/rearranged/reclassified wherever necessary to make them comparable.

x) All figures have been rounded off to the nearest Rs.Lacs

xi) Income in respect of Carbon Credits is accounted for only on sale as it does not have any cost to the company.

xii) In accordance with Accounting Standard (AS)-28 on impairment of Assets, which is mandatory for the accounting periods commencing on or after 1st April, 2004, the company has assessed as on Balance Sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the standards) with regard to the impairment of any of the assets. Based on such assessment, it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

xiii)There are no Micro & Small enterprises covered under Micro, Small and Medium Scale Development Act 2006, to whom the company owes dues, which are outstanding for more than 45 days, hence no disclosure has been given. This information has been determined on the basis of intimation received from such parties.

xiv)The company is eligible for Sales Tax incentives /subsidies from government of Madhaya Pradesh . the same is being accounted for on receipt basis as the availability of the above incentives/subsidies is only on the basis of completion of certain formalities.


Mar 31, 2012

1. CONTINGENT LIABILITIES NOT PROVIDEDFOR:

a. Bank guarantees outstanding Rs.1665.89 Lacs (Previous Yr. 1665.89Lacs)

b. The Company has bound itself unto the President of India for Rs.138.00 Lacs (Previous Year Rs.138.00 Lacs) under Central Excise Act, 1944 for clearance of goods without payment of excise duty, in respect of export of various types of yarn and for storage of various commodities manufactured within factory premises.

c. Excise/Sales Tax/ Other Government Authorities have raised demands of Rs.185.07 Lacs (Previous Year Rs.153.35 Lacs) out of which a sum of Rs.9.90 Lacs(Previous Year Rs. 18.49 Lacs) has been deposited as security deposit, the same are being contested in appeal and no provision has been made.

d. Electricity demand raised by Madhya Pradesh Electricity board.

There is an electricity demand of Rs 3212.54 Lacs (Previous year Rs.3041.90 Lacs) raised by MPMK VV Co Ltd. in spite of surrender of electricity connection by the company and the same was being contested in the Hon'ble High court of Jabalpur. Against this company has deposited Rs. 561.92 Lacs with the MPMK VV CO. Limited. and has also furnished a bank guarantee for Rs. 1662.54 Lacs.

The matter was decided by the Hon'ble High Court, Jabalpur vide order dated 16th December 2009 . The order is as follow:

i) "As a consequence the company is granted permission to set up captive power plant of 4.1 MW capacity in its Unit No.1 and2"

ii) "As a further consequence, we direct the Board to predetermine the tariff/minimum charges on the basis of reduced contract demand of 1000 KVA in case of Unit No. 1 and 0 KVA in case of Unit No.2 w.e.f. 01/08/1999 and raise bills, If any, with a further direction that in case if the company found to be owing certain arrears to the Board pursuant to redetermination as directed hereinabove, the same be adjusted from SD of Rs. 110.85 Lacs"

iii) " We further direct the Board to issue correct electricity bills of the period after 01.08.1999 on the basis of reduced contract demand as aforesaid and settle the accounts with the Company keeping in view the aforesaid directions within 6 months"

The above order has been contested by MPMKVV Co. Ltd.by way of SLP in the Hon'ble Supreme Court and the following interim order has been passed by Hon'ble Supreme Court on dated 29.03.2010 "responded No. 1 (M/s Nahar Spinning Mills Ltd.) restrained from taking steps for recovering amount of Rs. 561.92 Lacs or from return the Bank Guarantee given for Rs. 1662.54 Lacs There will be a further direction upon the respondent No.1 to keep the Bank Guarantee renewed during the pendency of the matter in this court."

"The matter is pending for final decision with the Hon'ble Supreme Court." No provision for the same has been made.

e. The Madhya Pardesh Government's ordinance to collect cess on Captive Power generation was declared ultravires by the Hon'ble Supreme court vide order dated 09/12/2003. But the State Government subsequently enacted an act namely M.P.Upkar (Sanshodhan tatha vidhimanyatakaran) Adhiniyam 2004 on 15th April 2004 which deemed to have come in to force from 29.06.2001.After the above act, the M.P.High Court passed an order dated 31/08/2007 to collect the dues of Cess from Captive Power plant users along with interest. According to this order on the disputed amount, Rs. 124.56 Lacs (Previous year Rs.103.61 Lacs) is payable as interest .The above referred order has been agitated by some actual users in Hon'ble Supreme Court and matter being sub-judice,hence liability has not been provided for.

f. The Company has given the following Guarantees in respect of loans granted by the banks Rs.2500 Lacs (previous year Rs.2500 Lacs) to Oriental Bank of Commerce and Rs. 1500 Lacs (previous year 1500Lacs) to Bank of Maharashtra in respect of financial assistance granted by the said banks to M/s Nahar Poly Films Limited, Ludhiana.

g. Levy of Entry Tax on certain items including yarn by the Punjab Government is subjudice before the Hon'ble Punjab & Haryana High Court .The Punjab Government has deferred the same subject to undertaking by the company that if the same is hold valid by the Hon'ble High Court, then company will deposit the same w.e.f the date of undertaking . The amount of such entry tax for the Current Year is Rs. 57.68 Lacs (previous year Rs. Nil) .It has no effect on the profitability of the company since the same will be claimed as Input Tax Credit.

III. The Company has executed legal agreement/bonds/undertakings for the sum of Rs.8124.93 Lacs (Previous Year Rs. 4663.32 Lacs) with the Central Government, undertaking to export Hosiery Knitwear, yarn and other goods of F.O.B. value of Rs.120029.51 Lacs (Previous Year Rs. 60326.36Lacs) against the issuance by the Government of Advance Licenses/E.P.C.G. Licenses with Duty Exemption entitlement Certificates/Pass books forthe Import of Raw Materials, Machinery and Components etc. forthe aggregate C.I.F./duty saved value of Rs.7273.19 Lacs Previous Year Rs. 6685.43 Lacs)

i. Inter unit job work and inter unit sales are billed at market price. The closing stock of units is partly comprised of such material lying in finished or semi-finished stage. The mode of valuation referred to 'At Weighted Average Cost' represents costs worked out by taking into account the price charged by such units

ii. Salaries & wages incurred during the year on repairs and maintenance of Building and Plant & Machinery etc. have been charged to former accounts and not shown separately.

iii. In the opinion of the board, the value of Current Assets, Loans and Advances have a value in the ordinary course of business at least equal to that stated in the balance sheet except in case of those shown as doubtful. No provision have been made for doubtful debts

iv. Some balances of Trade Payables, Advances and Trade Receivables are subject to their Confirmation.

v. Borrowing cost amounting Rs. 285.40 Lacs (Previous Year Rs.222.79 Lacs) has been capitalized during the year.

vi. Material events occurring after the balance sheet date are taken into cognizance.

vii. Prior period and extraordinary changes in accounting policies, having material effect on the financial affairs of the Company (if any) are disclosed.

viii. The accounts of the Company have been prepared on going concern basis.

ix. Previous year figures have been regrouped/recanted/rearranged/reclassified to make them comparable.

x. All figures have been rounded off to the nearest Rs.Lacs

xi. Income in respect of Carbon Credits is accounted for only on sale as it does not have any cost to the company.

xii. In accordance with Accounting Standard (AS)-28 on impairment of Assets, which is mandatory for the accounting periods commencing on or after 1st April, 2004, the company has assessed as on Balance Sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the standards) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

xiii. There are no Micro & Small enterprises covered under Micro, Small and Medium Scale Development Act 2006, to whom the company owes dues, which are outstanding for more than 45 days, hence no disclosure has been given. This information has been determined on the basis of intimation received from such parties.

xiv. The company is eligible for Sales tax incentives/subsidies from government of Madhya Pradesh. The same is being accounted for on receipt basis as the availability of the above incentives/ subsidies is only on the basis of completion of certain formalities.

SEGMENT ACCOUNTING POLICIES:

a) Segment revenue includes Sales and other income directly identifiable with/allocable to the segment including intersegment revenue.

b) Expenses that are directly identifiable with/allocable to segments are considered for determining the Segment Result. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "other unallowable expenditure."

c) No geographical segment is reported as none of the conditions laid down for Geographical segment are satisfied.

d) Segment assets include all operating assets i.e. fixed assets and current assets used by segment.

e) Segment liabilities consist of Trade payables and other liabilities directly attributable to segment but does not include tax and financial liabilities.

f) Inter segment transfers are valued at prevailing market prices.

Note:

*Associates

Nahar Capital & Financial services Ltd., Nahar Poly Films Ltd., Nahar Industrial Enterprises Ltd., Oswal Woollen Mills Ltd.,Vanaik Spinning Mills Ltd., Abhilash Growth Fund(P)Ltd.,Atam Vallabh Financers Ltd., Bermuda Insurance Brokers Pvt. Ltd., Kovalam Investment & Trading Co. Ltd.,Ludhiana Holdings Ltd., Monica Growth Fund (P) Ltd., Nagdevi Trading & Investment Co. Ltd., Nahar Growth Fund (P) Ltd., Ruchika Growth Fund (P) Ltd., Sankeshwar Holding Co. Ltd., Vanaik Investors Ltd., Vardhman Investment Ltd., J.L. Growth Fund Ltd.Neha Credit and Investment Pvt. Ltd.,Ginar Investment Limited, Crown Star Ltd., Monte Carlo Fashion Ltd.

Key Management Personnel

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

Relatives of Key management Personnel

Mrs. Abhilash Oswal, Mrs. Ruchika Oswal, Mrs. Manisha Oswal, Mrs. Ritu Oswal and Mrs. Monika Oswal

* Associates includes the Companies in which the Key Management Personnel or their relatives have significant influence, also includes enterprises with whom no transaction has taken place during the period.

xxiii. The financial statements for the year ended 31st March,2012 have been prepared as per the requirements of the Revised Schedule VI to the Companies Act,1956 as per notification issued by the Central Government. The previous period's figures have been accordingly regrouped/reclassified to conform to the current year's classification.


Mar 31, 2011

A. CONTINGENT LIABILITIES NOT PROVIDED FOR:

1. Estimated amount of Contracts remaining to be executed on capital account, net of advances Rs.16034.73 Lacs (Previous Yr. Rs7258.19 Lacs )

2. Bank guarantees outstanding Rs.1665.89 Lacs ( Previous Yr. 1665.89Lacs )

3. The Company has executed legal agreement/bonds for the sum of Rs.4663.32 Lacs (Previous Year Rs. 3514.32 Lacs) with the Central Government, undertaking to export Hosiery Knitwear, yarn and other goods of F.O.B. value of Rs.60326.36 Lacs (Previous Year Rs. 6699.88 Lacs) against the issuance by the Government of Advance Licenses/E.P.C.G. Licenses with Duty Exemption entitlement Certificates/Pass books for the Import of Raw Materials, Machinery and Components etc. for the aggregate C.I.F./duty saved value of Rs.6685.43Lacs Previous Year Rs. 5537.41 Lacs)

4. The Company has bound itself unto the President of India for Rs.138.00 Lacs (Previous Year Rs.138.00 Lacs) under Central Excise Act, 1944 for clearance of goods without payment of excise duty, in respect of export of various types of yarn and for storage of various commodities manufactured within factory premises.

5. Letter of Credits outstanding in favour of Suppliers Rs.17.53 Lacs (PreviousYear Rs.22.91 Lacs )

6. Excise/Sales Tax/ Other Government Authorities have raised demands of Rs.153.35 Lacs (Previous Year Rs.52.43 Lacs) out of which a sum of Rs.18.49 Lacs(Previous Year Rs. 13.92 Lacs) has been deposited as security deposit, the same are being contested in appeal and no provision has been made

7. Foreign exchange hedging contracts which were under dispute with ICICI Bank Ltd. have been settled during the year . Accordingly hedging loss of Rs.1058.46 Lacs have been paid during the year. As reserve created to meet out such liability is no more required, hence the same has been written back.

8. Electricity demand raised by Madhya Pradesh Electricity board

There is an electricity demand of Rs 3041.90 Lacs (Previous year Rs.2673.13Lacs) raised by MPMK VV Co Ltd. in spite of surrender of electricity connection by the company and the same was being contested in the Hon'ble High court of Jabalpur. Against this company has deposited Rs. 561.92 Lacs with the MPMK VV CO. Limited. and has also furnished a bank guarantee for Rs. 1662.54 Lacs.

The matter was decided by the Hon'ble High Court , Jabalpur vide order dated 16th December 2009 . The order is as follow:

i) "As a consequence the company is granted permission to set up captive power plant of 4.1 MW capacity in its Unit No.1 and 2"

ii) "As a further consequence, we direct the Board to redetermine the tariff/minimum charges on the basis of reduced contract demand of 1000 KVA in case of Unit No. 1 and 0 KVA in case of Unit No.2 w.e.f. 01/08/1999 and raise bills, If any, with a further direction that in case if the company found to be owing certain arrears to the Board pursuant to redetermination as directed hereinabove, the same be adjusted from SD of Rs. 110.85 Lacs"

iii) " We further direct the Board to issue correct electricity bills of the period after 01.08.1999 on the basis of reduced contract demand as aforesaid and settle the accounts with the Company keeping in view the aforesaid directions within 6 months"

The above order has been contested by MPMKVV Co. Ltd.by way of SLP in the Hon'ble Supreme Court and the following interim order has been passed by Hon'ble Supreme Court on dated 29.03.2010

"responded No. 1 (M/s Nahar Spinning Mills Ltd.) restrained from taking steps for recovering amount of Rs. 561.92 Lacs or from return the Bank Guarantee given for Rs. 1662.54 Lacs There will be a further direction upon the respondent No.1 to keep the Bank Guarantee renewed during the pendency of the matter in this court."

"The matter is pending for final decision with the Hon'ble Supreme Court." No provision for the same has been made.

9. The Company has given the following Guarantees in respect of loans granted by the banks

(a) Rs.2500 Lacs (previous year Rs. Nil) to Oriental Bank of Commerce and Rs. 1500 Lacs (previous year Nil) to Bank of Maharashtra in respect of financial assistance granted by the said banks to M/s. Nahar Poly Films Limited, Ludhiana.

1. Interunit job work and interunit sales are billed at market price. The closing stock of units is partly comprised of such material lying in finished or semi-finished stage. The mode of valuation referred to 'At Weighted Average Cost' represents costs worked out by taking into account the price charged by such units

2. Salaries & wages incurred during the year on repairs and maintenance of Building and Plant & Machinery etc. have been charged to former accounts and not shown separately.

3. In the opinion of the board, the value of Current Assets, Loans and Advances have a value in the ordinary course of business at least equal to that stated in the balance sheet except in case of those shown as doubtful. No provision have been made for doubtful debts

4. Some balances of Sundry Creditors, Advances and Sundry Debtors are subject to their Confirmation.

5. Borrowing cost amounting Rs. 222.79 Lacs (Previous Year Rs.2.75 Lacs) has been capitalized during the year.

6. Material events occurring after the balance sheet date are taken into cognizance.

7. Prior period and extraordinary changes in accounting policies, having material effect on the financial affairs of the Company (if any) are disclosed.

8. The accounts of the Company have been prepared on going concern basis.

9. Previous year figures have been regrouped/recasted/rearranged to make them comparable.

10. All figures have been rounded off to the nearest Rs.Lacs

11. Income in respect of Carbon Credits is accounted for only on sale as it does not have any cost to the company.

12. In earlier years the company made payments of Rs. 23.45 Crore to M/s. Nahar Industrial Infrastructure Corporation Limited for allocation of 200.79 acres of land at village lalru(Punjab). During the year M/s. Nahar Industrial Infrastructure Corporation Limited has made final allocation of 148.410 acres land to Nahar Spinning Mills Limited and hence company is entitled for refund of the excess payment of Rs. 6.78 Crore and accordingly necessary entries/adjustments have been made in the books of accounts.

13. As per Accounting Standard 17, issued by the Institute of Chartered Accountants of India regarding Segment Reporting, the detail is as under:

SEGMENT ACCOUNTING POLICIES:

a) Segment revenue includes Sales and other income directly identifiable with/allocable to the segment including inter- segment revenue.

b) Expenses that are directly identifiable with/allocable to segments are considered for determining the Segment Result. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "other unallocable expenditure."

c) No geographical segment is reported as none of the conditions laid down for Geographical segment are satisfied.

d) Segment assets include all operating assets i.e. fixed assets and current assets used by segment.

e) Segment liabilities consist of creditors and other liabilities directly attributable to segment but does not include tax and financial liabilities.

f) Inter segment transfers are valued at prevailing market prices.

14. There are no Micro & Small enterprises covered under Micro, Small and Medium Scale Development Act 2006, to whom the company owes dues, which are outstanding for more than 45 days, hence no disclosure has been given . This information has been determined on the basis of intimation received from such parties

15. Detail of transactions entered into with related parties during the year as required by Accounting Standard 18 on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are as under:

Note: *Associates

Nahar Capital & Financial services Ltd., Nahar Poly Films Ltd., Nahar Industrial Enterprises Ltd., Oswal Woollen Mills Ltd.,Vanaik Spinning Mills Ltd., Abhilash Growth Fund(P)Ltd.,Atam Vallabh Financers Ltd., Bermuda Insurance Brokers Pvt. Ltd., Kovalam Investment & Trading Co. Ltd.,Ludhiana Holdings Ltd., Monica Growth Fund (P) Ltd., Nagdevi Trading & Investment Co. Ltd., Nahar Growth Fund (P) Ltd., Ogden Trading & Investment Co. (P) Ltd., Ruchika Growth Fund (P) Ltd., Sankeshwar Holding Co. Ltd., Vanaik Investors Ltd., Vardhman Investment Ltd., J.L. Growth Fund Ltd., Jawahar Lal & Sons, Crown Star Ltd., Monte Carlo Retail (India) Ltd.

Key Management Personnel

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

Relatives of Key management Personnel

Mrs. Abhilash Oswal, Mrs. Ruchika Oswal, Mrs. Manisha Oswal, Mrs. Ritu Oswal and Mrs. Monika Oswal

* Associates includes the Companies in which the Key Management Personnel or their relatives have significant influence, also includes enterprises with whom no transaction has taken place during the period.

16. Computation of Net Profit under Section 198 read with Section 349 of the Companies Act, 1956, for the purpose of remuneration payable to Managing Director, Chairman and Executive Director are given below :-

Notes:

1. Apart from remuneration drawn from the company, Sh. Dinesh Oswal, Managing Director of the company, also draws remuneration from Nahar Capital and Financial Services Ltd. The total remuneration drawn from both the companies does not exceed the higher maximum limit admissible u/s iii of part II of Schedule XIII of the Companies Act,1956.

2. Remuneration includes salary, cash allowances and commission on profit paid or payable to the Managing Director.

17. In accordance with Accounting Standard (AS)-28 on impairment of Assets, which is mandatory for the accounting periods commencing on or after 1st April, 2004, the company has assessed as on Balance Sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the standards) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account

18. Schedule 1 to 24 form an integral part of the Balance Sheet and Profit and Loss Account and have been authenticated as such.


Mar 31, 2010

1. Interunit job work and interunit sales are billed at market price. The closing stock of units is partly comprised of such material lying in finished or semi-finished stage. The mode of valuation referred to At Weighted Average Cost represents costs worked out by taking into account the price charged by such units.

2. Salaries & wages incurred during the year on repairs and maintenance of Building and Plant & Machinery etc. have been charged to former accounts and not shown separately.

3. In the opinion of the board, the value of Current Assets, Loans and Advances have a value in the ordinary course of business at least equal to that stated in the balance sheet except in case of those shown as doubtful.

4. Some balances of Sundry Creditors, Advances and Sundry Debtors are subject to their Confirmation.

5. Borrowing cost amounting Rs. 2.75 Lacs (Previous Year Rs.21.53 Lacs) has been capitalized during the year.

6. Material events occurring after the balance sheet date are taken into cognizance.

7. Prior period and extraordinary changes in accounting policies, having material effect on the financial affairs of the Company (if any) are disclosed.

8. The accounts of the Company have been prepared on going concern basis.

9. Previous year figures have been regrouped/recasted/rearranged to make them comparable.

10. All figures have been rounded off to the nearest Rs.Lac

12. Income in respect of Carbon Credits is accounted for only on sale as it does not have any cost to the company.

SEGMENT ACCOUNTING POLICIES:

a) Segment revenue includes Sales and other income directly identifiable with/allocable to the segment including inter- segment revenue.

b) Expenses that are directly identifiable with/allocable to segments are considered for determining the Segment Result. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "other unallocable expenditure."

c) No Geographical segment is reported as none of the conditions laid down for Geographical segment are satisfied.

d) Segment assets include all operating assets i.e. fixed assets and current assets used by segment.

e) Segment liabilities consist of creditors and other liabilities directly attributable to segment but does not include tax and financial liabilities.

f) Inter segment transfers are valued at prevailing market prices.

16. There are no Micro & Small enterprises covered under Micro, Smal and Medium Scale Development Act 2006, to whom the company owes dues, which are outstanding for more than 45 days, hence no disclosure has been given. This information has been determined to the extent such parties, which have been identified by the company.

Note: *Associates

Nahar Capital & Financial services Ltd., Nahar Poly Film Ltd., Nahar Industrial Enterprises Ltd., Oswal Woollen Mills Ltd.,Vanaik Spinning Mills Ltd., Abhilash Growth Fund(P)Ltd.,Atam Vallabh Financers Ltd., Bermuda Insurance Brokers Pvt. Ltd., Kovalam Investment & Trading Co. Ltd.,Ludhiana Holdings Ltd., Monica Growth Fund (P) Ltd., Nagdevi Trading & Investment Co. Ltd., Nahar Growth Fund (P) Ltd., Ogden Trading & Investment Co. (P) Ltd., Ruchika Growth Fund (P) Ltd., Sankeshwar Holding Co. Ltd., Vanaik Investors Ltd., Vardhman Investment Ltd., J.L. Growth Fund Ltd., Jawahar Lal & Sons, Crown Star Ltd., Monte Carlo Retail (India) Ltd.

Key Management Personnel

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

Relatives of Key management Personnel

Mrs. Abhilash Oswal, Mrs. Ruchika Oswal, Mrs. Manisha Oswal, Mrs. Ritu Oswal and Mrs. Monika Oswal

* Associates includes the Companies in which the Key Management Personnel or their relatives have significant influence, also includes enterprises with whom no transaction has taken place during the period.

Notes:

1. Apart from remuneration drawn from the company , Sh. Dinesh Oswal, Managing Director of the company, also draws remuneration from Nahar Capital and Financial Services Ltd. The total remuneration drawn from both the companies does not exceed the higher maximum limit admissible u/s iii of part II of Schedule XIII of the Companies Act,1956.

2. The Companys application for approval of is pending before the Government of India, Ministry of CorporateAffairs,New Delhi as on date. Accordingly the company has paid remuneration to Managing Director during the year within the limit prescribed under the Companies Act, 1956 read with schedule XIII of the Act and as per the net profits calculated under section 198 read with section 349 of the Companies Act,1956 as per detail hereinabove

3. Remuneration includes salary, cash allowances and commission on profit paid or payable to the Managing Director.

13. In accordance with Accounting Standard (AS)-28 on impairment of Assets, which is mandatory for the accounting periods commencing on or after 1st April, 2004, the company has assessed as on Balance Sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the standards) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

 
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