Notes to Accounts of Oswal Yarns Ltd.

Mar 31, 2014

Rights, preferences and restrictions attaching to each class of shares

Equity Shares: The company has one class of equity shares having a par value of Rs.10 per share. Every member present in person at a general meeting shall have one vote if a resolution is put to vote by a show of hand and on a poll every member shall have one vote in respect of each share held by such member. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Nature of Security: i. Term loan facility is secured by hypothecation of Car.

Particulars of Repayment: Repayable in 47 monthly instalments of Rs.12490/- w.e.f. 15 Sept, 2010 Nature of Security: ii. Term loan facility is secured by hypothecation of Car.

Particulars of Repayment: Repayable in 60 monthly instalments of Rs.14900/- w.e.f. 01 Jan, 2014 Nature of Security: iii. Term loan facility is secured by hypothecation of Car.

Particulars of Repayment: Repayable in 60 monthly instalments of Rs.6019/- w.e.f. 28 Feb., 2013

Amount of default in repayment of loan: NIL (Previous year : NIL),Period of continuing default in repayment of loan: NIL(Previous Year: NIL)

Default in payment of Interest : NIL (Previous year: NIL), Period of continuing default in payment of interest : NIL (Previous Year: NIL)

The unsecured loans are repayable after 12 months from the date of squaring up of bank dues. However, the company reserve the right to prepay the same earlier. During previous year also, the terms of repayment were same. Rate of interest is 12%.

Amount of default in repayment of loan: NIL (Previous year : NIL),Period of continuing default in repayment of loan: NIL(Previous Year: NIL)

Default in payment of Interest : NIL (Previous year: NIL), Period of continuing default in payment of interest : NIL (Previous Year: NIL)

Mode of valuation:

Raw materials, work-in-progress, finished goods, consumables have been valued at cost and net realizable value. The cost in respect of various items of inventory is computed as under :

- Raw materials at actual cost plus direct expenses incurred to bring the stock at its present position and location excluding VAT.

- Work-in-progress at raw material cost plus conversion cost depending upon the stage of completion.

- Finished goods at raw material cost plus conversion cost incurred to bring the goods up to their present condition and location.

- Consumables at actual cost plus direct expenses incurred to bring the stock at its present position and location excluding VAT.

- Waste has been valued at net realizable value.

a. Contingent liabilities and commitments

(i) Contingent liabilities

i. Claims against the Company not acknowledged as debt:-

Punjab State Industrial Development Corporation Ltd. (PSIDC) had made investment in the equity shares of the Company under an agreement with the promoters, for buy-back of these shares at a later date under the direct subscription scheme. Such buy-back agreement was between PSIDC and the promoters. The option to buy back was exercised by the promoters, under the OTS scheme floated by PSIDC, and was accepted by PSIDC on 02.06.2003 in full and final. It returned the share certificates along with share transfer deeds and also share certificates held as security to the promoters. However, on the basis of a later notification dated 06.02.2009 of the Government of Punjab, the PSIDC is of the view that OTS scheme was not applicable and demanded a sum of Rs. 49,11,395/- with interest upto the date of payment. On an application filed by the company and its promoters, The Hon''ble Punjab & Haryana High Court has granted stay against the proceedings before the Hon''ble Debt Recovery Tribunal in the matter of suit filed by PSIDC in this regard.

As the company was never under any obligation for buy-back of the shares, it is strongly of the view that the stand of PSIDC is not tenable and it is in no way liable for this amount and thus has not acknowledged the same as debt. However, following a good practice, disclosure has been made without, in any way, accepting the liability/obligation on this count.

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Mar 31, 2013

Inventory is taken and valued as certified by the management. Mode of valuation:

Raw materials, work-in-progress, finished goods, consumables have been valued at lower of cost and net realizable value. The cost in respect of various items of inventory is computed as under :

Raw materials at actual cost plus direct expenses incurred to bring the stock at its present position and location excluding VAT.

Work-in-progress at raw material cost plus conversion cost depending upon the stage of completion.

Finished goods at raw material cost plus conversion cost incurred to bring the goods up to their present condition and location.

Consumables at actual cost plus direct expenses incurred to bring the stock at its present position and location excluding VAT.

Waste has been valued at net realizable value.

Note No. 1

Segment Reporting:

The company''s business predominantly comprises of only one segment i.e. manufacturing and trading of hosiery yarns/ cloth, therefore there is no separate reportable segment as required by AS-17 on segment reporting.

Note No. 2

Balances of various parties are subject to confirmation. However, in the opinion of the Board of Directors, all the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, except as expressly stated otherwise.

Note No. 3

Deferred Tax

As a matter of prudence, deferred tax assets amounting to Rs. 3.61 Lacs (Previous year Rs. 3.64 Lacs) onaccount of timing difference in depreciation has not been recognised in accounts.

Note No. 4

Previous year figures have been grouped or regrouped wherever necessary to make the figures comparable.

Note No. 5

RELATED PARTY DISCLOSURES

As per Accounting Standard 18, the disclosures of transactions with the related parties are given below:

1. List of Related Parties where controls exists and related parties with whom transactions have taken place:

Nature of Relation

KEY MANAGEMENT PERSONNAL

Sh. Tej Paul Oswal

Sh. Bharatt Oswall

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Mar 31, 2012

Inventory is taken and valued as certified by the management.

Mode of valuation:

Raw materials, work-in-progress, finished goods, consumables have been valued at lower of cost and net realizable value. The cost in respect of various items of inventory is computed as under :

- Raw materials at actual cost plus direct expenses incurred to bring the stock at its present position and location excluding VAT.

- Work-in-progress at raw material cost plus conversion cost depending upon the stage of completion. .

- Finished goods at raw material cost plus conversion cost incurred to bring the goods up to their present condition and location.

- Consumables at actual cost plus direct expenses incurred to bring the stock at its present position and location excluding VAT.

- Waste has been valued at net realizable value.

Note No. 1

Balances of various parties are subject to confirmation. However, in the opinion of the Board of Directors, all the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, except as expressly stated otherwise.

Note No. 2 Deferred Tax

As a matter of prudence, deferred tax assets amounting to Rs. 3.64 Lacs (Previous year Rs. 3.38 Lacs) on account of timing difference in depreciation has not been recognised in accounts.

Note No. 3

Previous year figures have been grouped or regrouped wherever necessary to make the figures comparable.

Note No. 4

RELATED PARTY DISCLOSURES

As per Accounting Standard 18, the disclosures of transactions with the related parties are given below:

1. List of Related Parties where controls exists and related parties with whom transactions have taken place: Nature of Relation KEY MANAGEMENT PERSONNAL

Sh. Tej Paul Oswal

Sh. Bharatt Oswall

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Mar 31, 2010

1. Contingent liabilities not provided for NIL (Previous year nil).

2. The balance in various parties are subject to confirmation and reconciliation.

3. Debtors include Rs. 896846.00 (Previous year Rs. 896846.00 which are disputed and are pending adjudication in court. No provisions has been made in respect of these debtors as the company is hopeful of recovery of these accounts.

Interest, if any, on these amounts will be treated on receipt basis.

4. Loans & Advances include Rs. 940162/- paid on account of excise duty which the Company has disputed and has filed appeals with appropriate authorities. No provision for this amount has been made as the Company is hopeful of favourable decisions.

5. The previous year figures have been recast/regrouped wherever considered necessary to facilitate comparison.

6. There was no Small scale industrial undertaking(s) to whom company owes a sum exceeding Rs. 1.00 lac.

7. No provision for income tax has been made as there was no taxable income.

8. The Company has requested its suppliers to intimate whether they are registered under ‘The Micro Small and Medium Enterprises Development Act, 2006. Pending receipt of intimation from suppliers, the amount due to the suppliers under the said Act could not be determined.

9. In the opinion of Board of Directors, the current assets, loans and advances are having the value at which they are stated in the balance sheet, if realised in the ordinary course of business.

10. Stocks are as taken and valued by the management.

11 . Deferred Tax

As a matter of prudence, Deferred Tax asset amounting to Rs. 3.62 Lacs (Previous year Rs. 3.50 Lacs) on account of timing difference in depreciation has not been recognised in accounts.

12. Related Party Disclosures in accordance with the Accounting Standard - 18. (i) Transactions with Related Parties : NIL

13. The Companys business predominantly comprises of only one segment i.e. Manufacturing and Trading of Hosiery yarns/Cloth, therefore there is no separate reportable segment as required by AS-17 on Segment Reporting.

14. Additional information pursuant to provisions of part II of the schedule VI to Companies Act, 1956 to the extent releven.

The installed capacity is certified by the management and has not been verified by auditors, being a technical matter :

d) Value of imported and indigeneous materials consumed and percentage thereof :