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Notes to Accounts of Nitin Spinners Ltd.

Mar 31, 2015

1) CSR Expenditure

Amount spent on CSR activities during the year is charged to Statement of Profit & Loss, if the same is of revenue nature. If the expenditure is of such nature, which may give rise to a capital asset, the same is recognized in the Balance Sheet as "CSR Assets".

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 91.02 Lacs (Previous Year - Rs. 18038.70 Lacs).

b) The company has an outstanding export obligation of appox. Rs. 25812.42 lacs (Previous Year - 1136.64 lacs), in respect of capital goods imported at the concessional rate of duty under Export Promotion Capital Goods Scheme, which is required to be met at different dates on or before 31.03.2020.

2) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provisions for all known and determined liabilities are adequate and not in excess of the amount reasonably required.

3) Sundry Creditors include Rs. Nil (Previous Year Rs. Nil) amount due to Micro & Small Enterprises as at 31st March 2015. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

4) As per provisions of schedule II of the Companies Act 2013, depreciation amounting to Rs. 20.71 Lacs on fixed assets, whose remaining useful life is Nil as on 31st March 2014, has been included in depreciation for the year.

5) Provision for current tax is net of MAT Credit Entitlement Rs. 1126.56 Lacs (Previous Year - Rs. 834.29 Lacs)

6) The company has spent a sum of Rs. 23.64 lacs on CSR activities as against Rs. 49.33 lacs required as per provisions of the Companies Act, 2013.

7) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 185.15 lacs (Previous Year Rs 130.95 Lacs).

b) Defined Benefit Plan (i) Gratuity

The Company makes payment to vested employees as per provisions of Payment of Gratuity Act, 1972. The provision of Gratuity liability as on the balance sheet date is done on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost is measured using the Projected Unit Credit actuarial Method at the end of balance sheet date by Actuary.

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market.

The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

8) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

9) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in textiles. Hence there is no separate business segments

(ii) The company has its own power generation division mainly for captive use; therefore it is not treated as a separate business segment.

10) RELATED PARTY DISCLOSURES

List of Related Parties with whom transactions have taken place

(a) Key Management Personnel :-

Name of Person Relationship

Shri R.L. Nolkha, Chairman & Managing Director

Shri Dinesh Nolkha Managing Director

Shri Nitin Nolakha Executive Director

Shri P. Maheshwari Chief Financial Officer

Shri Sudhir Garg Company Secretary & GM (Legal)

(b) Relatives

Sushila Devi Nolkha Wife of Shri R. L. Nolkha,

Mother of Shri Dinesh Nolkha & Shri Nitin Nolakha

(c) Related Companies:-

Redial Trading & Investment Pvt. Ltd.

Singnature to Note 1 to 24

As per of our report of even date attached. For and on behalf of the Board


Mar 31, 2014

Explanations

1. Security

(a) Term Loans of Rs. 13385.49 Lacs crores are secured by way of first charge on all immovable and movable fixed assets (both present and future) and second charge on current assets . The term loan of Rs. 2831.25 Lacs are secured by way of third charge on all immovable and movable fixed assets and current assets of the company. The term loans are also secured by personal guarantee of three directors

(b) Vehicle Loan is secured by hypothecation of the specific vehicle

2. Terms of Repayment

(a) Term loans of Rs. 910.66 Lacs are repayable in 9 variable quarterly instalments upto 30th June 2016, Rs. 14813.23 Lacs in 19 variable quarterly instalments upto 31st December 2018 and Rs. 492.85 Lacs in 23 equal quarterly instalments upto 31st December 2019.

(b) Vehicle loan of Rs. 14.38 Lacs is repayable in 26 variable monthly instalments upto 7th May 2016, Rs. 22.28 Lacs in 27 variable monthly instalments upto 12th June 2016 and Rs. 11.71 Lacs in 36 variable monthly instalments upto 7th March 2017.

ADDITIONAL INFORMATION

1) Contingent Liabilities & Commitments

i) Contingent Liabilities not provided for

S.No. Particulars Current Year Previous Year (Rs. in lacs) (Rs. in lacs)

a. Disputed Liabilities not acknowledged as debts

- Cenvat, Service Tax and Custom Duty 804.91 814.99

b. Guarantees - Outstanding Bank Guarantees 315.59 129.59

c. Other money for which the company is contingently liable

- Bill Discounted with Bank 4667.93 4210.32

ii) Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 18038.70 Lacs (Previous Year – Rs. 15.93 Lacs).

b) The company has an outstanding export obligation of appox. Rs. 1136.64 lacs. (Previous Year – Rs. 2567.07 Lacs), in respect of capital goods imported at the concessional rate of duty under Export Promotion Capital Goods Scheme, which is required to be met at different dates on or before 31.03.2020.

2) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provisions for all known and determined liabilities are adequate and not in excess of the amount reasonably required.

3) Sundry Creditors include Rs. Nil (Previous Year Rs. Nil) amount due to Micro & Small Enterprises as at 31st March 2014. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

4) Provision for current tax is net of MAT Credit Entitlement Rs. 834.29 Lacs (Previous Year – Rs. 419.68 Lacs)

5) Exceptional item of Rs. 1473.83 lacs during previous year represent provision of liability for recompense interest pertaining to earlier years under CDR system.

8) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 130.95 lacs (Previous Year Rs 108.49 Lacs).

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Company makes provision of Gratuity liability as on the balance sheet date on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuation being carried out at each balance sheet date.

Reconciliation of the Present value of defined obligation and the fair value of the plan assets

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market.

The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

c) Other Long Term Employee Benefits

Leave Encashment obligation as on 31.03.2014 is Rs. 81.01 Lacs.

(Previous Year Rs. 68.73 lacs)

9) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

10) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in textiles. Hence there is no separate business segments

(ii) The company has its own power generation division mainly for captive use; therefore it is not treated as a separate business segment.

11) RELATED PARTY DISCLOSURES

Transactions with related party as identified by the management in accordance with Accountin Standard 18 " Related Party Disclosures" issued by The Institute of Chartered Accountants o India are as follows:- List of Related Parties with whom transactions have taken place :-

(a) Key Management Personnel :-

Name of Person Relationship

Shri R.L. Nolkha, Father of Shri Dinesh Nolkha &

Chairman & Managing Director Shri Nitin Nolkha

Shri Dinesh Nolkha, Managing Director Son of Shri R.L. Nolkha,

Brother of Shri Nitin Nolkha

Shri Nitin Nolkha, Executive Director Son of Shri R.L. Nolkha,

Brother of Shri Dinesh Nolkha

(b) Relatives :- Sushila Devi Nolkha

Wife of Shri R. L. Nolkha, Mother of Shri Dinesh Nolkha & Shri Nitin Nolakha

(b) Associates :- Redial Trading & Investment Pvt. Ltd


Mar 31, 2013

1) Contingent Liabilities not provided for

S. No. Particulars Current Period Previous Period (Rs. in lacs) (Rs. in lacs)

a. Bills discounted with Banks 4210.32 3669.94 b. Disputed Taxation matters for which no provision has been made :- Cenvat, Service Tax and Custom Duty 814.99 814.99

2) The estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 15.93 Lacs (Previous Year – Rs. 533.34 Lacs)

3) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

4) Sundry Creditors include Rs. Nil (Previous Year Rs. Nil) amount due to Micro & Small Enterprises as at 31st March 2013. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

5) The company has given proposal to exit from CDR system w.e.f. 31st July 2012. All the participating banks and CDR EG has accepted the company''s proposal and recommended the same to CDR Core Group. Pending CDR Core Group decision, a provision has been made for recompense amount of Rs. 1654.34 lacs as accepted and recommended by CDR EG. This amount includes Rs. 1473.83 lacs pertaining to period prior to 31.03.2012 and the same has been shown as exceptional item.

6) Financial Derivative Instruments

The Company uses forward contracts to hedge its risk associated with fluctuation in foreign currency relating to foreign currency assets and liabilities, firm commitments and highly probable forecast transactions. The use of the aforesaid financial instruments is governed by the company''s overall strategy. The company does not use forward contracts and options for speculative purposes. The details of the outstanding forward contracts as at 31st March, 2013 is as under :

7) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 108.49 lacs (Previous Year Rs 90.93 Lacs ) .

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Company makes provision of Gratuity liability as on the balance sheet date on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuation being carried out at each balance sheet date.

The Present value of the obligation as recognized in the Balance Sheet :-

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market. The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations. c) Other Long Term Employee Benefits

Leave Encashment obligation as on 31.03.2013 is Rs. 68.73 Lacs. (Previous Year Rs. 56.84 lacs)

8) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

9) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in textiles. Hence there is no separate business segments (ii) The company has its own power generation division mainly for captive use; therefore it is not treated as a separate business segment.

(b) Secondary Segment reporting on the basis of geographical segment is as below:

10) RELATED PARTY DISCLOSURES

Transactions with related party as identified by the management in accordance with Accounting Standard 18 " Related Party Disclosures" issued by The Institute of Chartered Accountants of India are as follows:- List of Related Parties with whom transactions have taken place :- (a) Key Management Personnel :- Name of Person Relationship Shri R.L. Nolkha, Father of Shri Dinesh Nolkha & Chairman & Managing Director Shri Nitin Nolkha Shri Dinesh Nolkha, Managing Director Son of Shri R.L. Nolkha,

Brother of Shri Nitin Nolkha Shri Nitin Nolkha, Executive Director Son of Shri R.L. Nolkha,

Brother of Shri Dinesh Nolkha (b) Relatives :- Sushila Devi Nolkha Wife of Shri R. L. Nolkha,

Mother of Shri Dinesh Nolkha & Shri Nitin Nolakha


Mar 31, 2012

Explanations

1. Term Loans of Rs.17448.36 Lacs crores are secured by way of first charge on all immovable and movable fixed assets (both present and future) and second charge on current assets . The term loan of Rs. 3405.00 Lacs are secured by way of IIIrd charge on all immovable and movable fixed assets and current assets of the company. The term loans are also secured by personal guarantee of three directors

2. Vehicle Loan is secured by hypothecation of the specific vehicle

3. Terms of Repayment

a) Term loans of Rs. 1705.80 Lacs are Repayable in 8 variable quartely Instalments up to 31st March 2014 (Applicable rate of interest 11% p.a.)

b) Term loans of Rs. 1345.16 Lacs are Repayable in 17 variable quarterly Instalments upto 30th June 2016 (Applicable rate of interest 11% p.a.)

c) Term loans of Rs. 14397.40 Lacs are Repayable in 27 variable quarterly Instalments upto 31st December 2018 (Applicable rate of interest 11% p.a.)

d) Term loans of Rs. 3405.00 Lacs are Repayable in 27 variable quarterly Instalments upto 31st December 2018 (Applicable rate of interest 8.36% p.a.)

e) Vehicle loans of Rs. 26.00 Lacs is Repayable in 50 variable monthly Instalments up to 7th May 2016 (Applicable rate of interest 10.40% p.a.)

1) Contingent Liabilities not provided for

(Rs. In Lacs)

S.No. Particulars Current Year Previous Year

a. Bills discounted with Banks 3669.94 4043.24

b. Dispute taxation matters for which no provision has been made

Cenvat, Service Tax and Custom Duty 814.99 794.63

2) The estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 533.34 Lacs (Previous Year - Rs. 163.79 Lacs)

3) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

4) Sundry Creditors include Rs. Nil (Previous Year Rs. Nil) amount due to Micro & Small Enterprises as at 31st March 2012. The figures have been disclosed on the basis of confirmations received from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

5) During the previous year ended on 31.03.2011 the company had recalculated depreciation for earlier years as per revised estimated useful life of these assets and therefore an amount of Rs. 2131.46 lacs had been provided as Depreciation for the earlier years and was shown as an exceptional item.

6) Financial Derivative Instruments

The Company uses forward contracts to hedge its risk associated with fluctuation in foreign currency relating to foreign currency assets and liabilities, firm commitments and highly probable forecast transactions. The use of the aforesaid financial instruments is governed by the company's overall strategy. The company does not use forward contracts and options for speculative purposes. The details of the outstanding forward contracts as at 31st March, 2012 is as under :

7) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs. 90.93 lacs (Previous Year Rs 78.92 Lacs ) .

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Company makes provision of Gratuity liability as on the balance sheet date on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the defined benefits obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuation being carried out at each balance sheet date.

The estimates of future salary increase; considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market. The discount rate is based on prevailing market yields of Indian Government Bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

c) Other Long Term Employee Benefits

Leave Encashment obligation as on 31.03.2012 is Rs. 56.84 Lacs.

(Previous Year Rs. 46.16 lacs)

8) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

9) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in textiles. Hence there is no separate business segments

(ii) The company has its own power generation division mainly for captive use; therefore it is not treated as a separate business segment.


Mar 31, 2010

1) Contingent Liabilities not provided for (Rs. In Lacs)

S.No. Particulars Current Year Previous Year

a. Bills discounted with Banks 3426.87 2906.36

b. Counter Guarantees given in respect of

Guarantees given by the Companys Banker 91.67 Nil

c. Disputed taxation matter for which no provision has been made.

VAT 0.44 0.44

Entry Tax 90.22 43.30

Cenvat and Custom Duty 71.81 36.31



2) The estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. Nil (Previous Year - Rs. Nil)

3) In the opinion of the Board the Current Assets. Loans and Advances are approximately of the value as stated in Financial Statements, if realised in the ordinary course of business. The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

4) Loans & Advances include due from officers of the Company Rs. Nil (Previous Year Rs. Nil). Maximum amount due at any time during the year from officers Rs. Nil (Previous Year Rs. Nil).

5) Sundry Creditors include Rs. 4.77 lacs (Previous Year Rs. 8.91 lacs) amount due to Micro & Small Enterprises as at 31sl March 2010. The figures have been disclosed on the basis of confirmations obtained from suppliers who have registered themselves under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) and /or based on the information available with the company. Further, no interest during the year has been paid or payable under the provisions of the MSMED Act, 2006.

6) During the year Company has allotted 50,00,000 Equity Shares of Rs. 10/- each, at par, aggregating to Rs. 5.00 Crores to the Promoters/ Promoters Group on preferential basis.

7) Exceptional items represent Rs Nil (Previous Year Rs 2926.47 lacs) being losses on Foreign Exchange Derivative Contracts.

8) Power and Fuel includes fuel consumed Rs. 693.62 lacs (Previous year Rs. 185.96 Lacs) for generation of power sold.

9) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is Rs 66.98 lacs (Previous Year Rs 65.30 Lacs ).

c) Other Long Term Employee Benefits

Present value of Leave Encashment obligation as on 31.03.2010 is Rs. 38.47 Lacs. (Previous Year Rs. 37.60 lacs). 13) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year. 14.

10. DISCLOSURES UNDER ACCOUNTING STANDARDS

B) RELATED PARTY DISCLOSURES

Transactions with related party as identified by the management in accordance with Accounting Standard 18 " Related Party Disclosures" issued by The Institute of Chartered Accountants of India are as follows.- List of Related Parties with whom transactions have taken place :-

(a) Key Management Personnel :-

Name of Person Relationship

Shri R.L. Nolkha, Father of Shri Dinesh Nolkha &

Chairman & Managing Director Shri Nitin Nolkha

Shri Dinesh Nolkha, Managing Director Son of Shri R.L. Nolkha

Shri Nitin Nolkha, Executive Director Son of Shri R.L. Nolkha ,

(b) Associates :-

Redial Trading & Investment Pvt. Ltd Prasham Corporate Services (India)

Pvt. Ltd. Greenfield Securities Pvt. Ltd Dolphin Carrier Pvt Ltd.

Ratan Lai Nolkha (HUF) Dinesh Nolkha (HUF)

 
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