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Notes to Accounts of Nahar Spinning Mills Ltd.

Mar 31, 2018

1. Contingent Liabilities not Provided for:

a) Bank guarantees outstanding Rs. Nil Lacs (31 March 2017: Rs. 8.94 Lacs)

b) The Company has bound itself unto the President of India for Rs.Nil Lacs (31 March 2017: 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/Service Tax/Sales Tax/Income Tax/ Other Government Authorities have raised demands of Rs. 499.23 Lacs (31 March 2017: Rs.367.47 Lacs) out of which a sum of Rs. 13.90 Lacs (31 March 2017: Rs. 7.47 Lacs) has been deposited against said demand. Further these demands have been contested in appeal and no provision has been made in the financial statement.

d) 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. 205.53 Lacs (31 March 2017: Rs.193.91 lacs) is payable as interest .The above referred order has been challenged by some actual users in Hon’ble Supreme Court and matter being sub-judice,hence liability has not been provided for in the books.

e) The Company has given Corporate Guarantees for Rs. 4,000 Lacs (31 March 2017: Rs. 4,000 Lacs) to the term lenders in respect of financial assistance granted to M/s Nahar Poly Films Limited, Ludhiana.

f) 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 (31 March 2017: Rs.153.50 Lacs) .It has no material effect on the profitability of the company as either company will get refund or get ITC of the same.

2. Other Notes

I. 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.

II. 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

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

IV. Borrowing cost amounting Rs. 0.17 Lacs (31st March 2017 : Rs. Nil Lacs) has been capitalized during the year.

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

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

The Company for its CSR obligation joined hands with other group companies and agreed to do CSR obligation through a SPV, a recognized charitable organization , M/s. Oswal Foundation.

The said organization had done various activities under CSR. Last year the project of Eye care which was under consideration could not be taken up and discarded. Now the said society is considering a new health care project. The company would contribute its CSR obligation as and when it is finalized. In the meantime amount of CSR obligation Rs. 107.22 lacs has been set apart towards CSR activity reserve.

VIII. The Company had entered into a contract with Trident International Holdings FZCO, Dubai to purchase property for official use for a consideration of Thirteen Million Three hundred nineteen thousand eight hundred ninety eight Dirhams. The company has paid Seven Million Nine hundred ninety one thousand nine hundred forty Dirhams. (INR 939.51 Lacs) As per the contract, the above said party was supposed to handover the contracted property at the end of 1st Quarter of 2011. The said party breached the contract, thus company is entitled to recover full payment of the amount paid and reasonable interest and damages etc. and for this purpose the company has initiated legal proceedings against the party to recover the amount. Till company recovers the amount by a legal process, the amount paid by the company has been shown as advances recoverable in Cash or Kind.

IX. The Company has purchased Guest House at Shimla from Bemloi devlopment and Infrastructure Co. P Ltd. (DLF Group) New Delhi for value of Rs. 389 Lacs plus applicable Taxes, as per agreed payment terms based on construction work. Till date company has paid 95% demanded amount as a part consideration of the said property. Since the builder M/s Bemloi Devlopment and Infrastructure Company (p) Ltd. (DLF Group), New Delhi failed to fulfil the commitment, complete the construction and deliver the possession within stipulated time , therefore company has filed a case before National Consumer Disputes redressal Commission for addressal of our claim of the advance paid of Rs. 382 Lacs alongwith compensation and interest. Thus amount has been shown as advances recoverable in Cash or Kind.

X. The company is operating in single segment i.e Textiles. Hence segment reporting as required under IND AS 108 (Operating Segments) is not applicable.

Major Customer

Sales of the company is evenly distributed, disclosure of major customer is not being made There is no single customer having sale more than 10% of the turnover of the company.

XI. Ministry of Corporate Affairs vide letter dated 26.12.2017 has approved M.D.Remuneration of Rs. 799.73 Lacs for the period 01/01/2017 to 31/12/2017 jointly from M/s Nahar Spinning Mills Ltd. and M/s Nahar Capital & Financial Services Ltd. During the period 01/01/2017 to 31/03/2017 M.D.remuneration amounting to Rs. 33.60 Lacs only was paid by the company, accordingly balance payment of Rs. 106.33 Lacs has been paid during the year.

Government grants have been received for the purchase of certain items of property, plant & equipment and MP state sales tax incentives. There are no unfulfilled conditions or contingencies attached to these grants.

3. Significant accounting judgments, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgments

In the process of applying the Company’s accounting policies, management has made the following judgments’, which have the most significant effect on the amounts recognized in the financial statements:

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimating uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables end to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Further details about gratuity obligations are given in Note36.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using other valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgments is required in establishing fair values. Judgments’ include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculations based on a DCF model.

4. Financial risk management objective and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations and to support its operations. The Company’s financial assets include loans, trade and other receivables, and cash & cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management is supported by a financial risk committee that advises on financial risks and the appropriate financial risk governance framework for the Company. This financial risk committee provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedure and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each risk, which are summarized as below:

(A) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: ’interest rate risk, currency risk and other price risks. Financial instruments affected by market risk include loans and borrowings, deposits and payables/receivables in foreign currencies. a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to ’the risk of changes in market interest rates relates primarily to the Company’s long term debt obligations with floating interest rates. The company is carrying its borrowings primarily at variable rates. For floating rates borrowings the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding ’for the whole year . A 50 basis point Increase or decrease is used when reporting interest rate risk internally to Key management personnel and represents management’s assessment of the reasonably possible change in interest rates

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variable held ’constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

iii) Price risk

The Company’s exposure price risk arises from investments held and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

B) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables)

Credit risk management

The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment.

Recoveries made are recognized in statement of profit and loss.

Cash & cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Trade receivables

Credit risk related to trade receivables are mitigated by taking bank guarantees/letter of credit, from customers where credit risk is high. The Company closely monitors the credit-worthiness of the debtors through internal systems that are configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts. The Company assesses increase in credit risk on an ongoing basis for amounts receivable that become past due and default is considered to have occurred when amounts receivable become one year past due.

Other financial assets measured at amortized cost

Other financial assets measured at amortized cost includes loans and advances to employees, security deposits and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously.

i) Trade Receivables

Customer credit risk is managed by each business location subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with the assessment both in terms of number of days and amount.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 5.2. Trade receivables are unsecured but considered goods subject to provision made thereon.

(C) Liquidity risk

The Company monitors its risk of a shortage of funds by estimating the future cash flows. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and bank loans. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturity within 12 months can be rolled over with existing lenders. The Company has access to the following undrawn borrowing facilities at the end of the reporting periods -

5. Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade payables, less cash and cash equivalents.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March 2018 and 31st March 2017.


Mar 31, 2016

25. CONTINGENT LIABILITIES NOT PROVIDED FOR:

a) Bank guarantees outstanding Rs.1662.54 Lacs (Previous Yr. 1662.54 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/Income Tax/ Other Government Authorities have raised demands of Rs.462.15 Lacs (Previous Year Rs.404.52 Lacs) out of which a sum of Rs.7.20 Lacs(Previous Year Rs. 7.20 Lacs) has been deposited against said demand. Further these demands have been contested in appeal and no provision has been made in the financial statement.

d) The electricity demand of Rs. 3212.54 lac (Previous year 3212.54 Lac) was raised by MPMKVV Co. Ltd and was contested by the company before Hon''ble High court of Jabalpur. The company deposited Rs. 561.92 Lacs under protest and also furnished bank guarantee for Rs.1662.54 Lac. The Hon''ble High court decided the issue but the matter is contested by MPMKVV Co.Ltd before Hon''ble Supreme Court which is pending. No provision for any liability has been made in the books.

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. 182.28 Lacs (Previous year Rs.170.65 lac) is payable as interest .The above referred order has been challenged by some actual users in Hon''ble Supreme Court and matter being sub-judice, hence liability has not been provided for in the books .

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.153.50 Lacsl) .It has no material effect on the profitability of the company since the same will be claimed as Input Tax Credit

II. The Company has executed legal agreement/bonds/undertakings for the sum of Rs. Nil (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.Nil (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. Nil (Previous Year Rs.8530.07 Lacs)

(Face Value of Rs. 5/- Share

28. Other Notes

i. 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.

ii. 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

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

iv. Borrowing cost amounting Rs. 18.42 Lacs (Previous Year Rs.95.59 Lacs) has been capitalized during the year.

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

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

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

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

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

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

xi. 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.

xii. 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

xiii. 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

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

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

- The company , during the year contributed Rs. 120.40 Lacs to M/s. Oswal Foundation, a special purpose Vehicle, which has undertaken projects in the fields of environmental sustainability, promoting education and special education for differently abled persons, for the purpose of doing CSR activities on behalf of the company and other group companies.

xvi. The Company had entered into a contract with Trident International Holdings FZCO, Dubai to purchase property for a consideration of Thirteen Million Three hundred nineteen thousand eight hundred ninety eight Dirhams. The company has paid Seven Million Nine hundred ninety one thousand nine hundred forty Dirhams. (INR 939.51 Lacs) As per the contract, the above said party was supposed to handover the contracted property at the end of 1st Quarter of 2011. The said party breached the contract, thus company is entitled to seek full payment of the amount paid and reasonable interest and damages etc. and for this purpose, and claim before Dubai International Arbitration Center, Dubai has been filed seeking relief through Arbitration. The matter is pending before them. Amount paid by the company has been shown as capital advance.

xvii (a) Current year Nil (previous year 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) Current year Nil (Previous year 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 The company is operating in single segment i.e Textiles., Hence segment reporting as required under Accounting Standard 17 (Segment Reporting), is not applicable.

xix. Ministry of Corporate Affairs vide letter dated 17.02.2016 has approved M.D.Remuneration of Rs. 696 Lacs p.a for the period 01/04/2014 to 31/12/2016 jointly from M/s Nahar Spinning mills Ltd. and Nahar Capital & Financial Services Ltd. During the year 2014-15, M.D. remuneration amounting to Rs. 59.97 Lacs only was paid by the company accordingly balance Rs. 516 lacs has been paid during the year 2015-16

xx. 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 is as under:

- The Company has paid consolidated electricity charges .There are Sub-Meters and the charges are divided according to the respective consumption without any addition thereon.

Note:

Associates - Nil

Other Related Parties/ group Companies.*

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., 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.,Oswal Leasing Ltd.,Nahar Financial and Investment Ltd.,White Tiger Breweries and Distilleries Ltd.,Vigil Investment P Ltd.,Shri Atam Fabrics Ltd.,Cabot Trading and Investment Co. P Ltd.,Retailerkart E Venture Pvt. Ltd.,Marble Retail P Ltd., Suvrat Trading Co. Ltd.,Amloh Industries Ltd.,Oswal Foundation.

Key Management Personnel & their relative.

Sh. Dinesh Oswal, Sh. Jawahar Lal Oswal, Sh. Kamal Oswal, Mrs. Abhilash Oswal, Mrs. Ruchika Oswal, Mrs. Manisha Oswal, Mrs. Ritu Oswal, Mrs. Monika Oswal, Mr. Sambhav Oswal and Mr. Rishab Oswal.

- Other related parties 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.

xxi. The employee''s gratuity fund scheme is managed by LIC. The following tables set out the funded status of the

xxii. Foreign Currency Exposure

The foreign Currency exposure of the company as on March 31, 2016 is an under. The Company does not use forward contracts for speculative purpose


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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