Notes to Accounts of Hisar Spinning Mills Ltd.

Mar 31, 2024

(t) Provisions and contingent liabilities

A provision is recognised if, as a result of a past event, the Company has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation. Provisions are determined by discounting the expected
future obligation at pre-tax rate that reflects current market assessments of the time value of money
risks specific to liability. They are not discounted where they are assessed as current in nature.
Provisions are not made for future operating losses.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly with in the control of the Company or a present obligation that arises from past
events where it is either not probable that an outflow of resources will be required to settle or reliable
estimate of the amount cannot be made. Contingent assets are not recognised in the financial
statements but disclosed, where an inflow of economic benefit is probable.

Commitments are items that are not reported as liabilities as on reporting date. Capital commitments
are disclosed when there is a projected capital expenditure to spend on long-term assets over a period
of time. Other commitments are disclosed when there is an undertaking to fulfil quantified exports in
future years.

Provisions, contingent liabilities and contingent assets and commitments are reviewed at the end of
each reporting date.

(u) Taxation

Income tax expense represents the sum of tax currently payable and deferred tax. Current and deferred
tax are recognised in the Statement of Profit and Loss, except when they relate to items that are
recognised in Other Comprehensive Income or directly in equity, in which case, the current and
deferred tax are also recognised in Other Comprehensive Income or directly in equity respectively.

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the
year and any adjustment to the tax payable or receivable in respect of previous years. The amount
of current tax reflects the best estimates of the tax amount expected to be paid or received after
considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax
laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to
set off the recognised amounts, and it is intended to realise the asset and settle the liability on a
net basis or simultaneously.

ii. Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent
that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilised. Such deferred tax assets and liabilities are not recognised if the
temporary difference arises from the initial recognition of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the
extent that it has become probable that future taxable profits will be available against which they
can be used.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that
have been enacted or substantively enacted by the reporting date. The measurement of deferred
tax assets and liabilities reflects the tax consequences that would follow from the manner in which
the Company expects, at the reporting date, to recover or settle the carrying amount of its assets
and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off
current tax assets against current tax liabilities and when they relate to income taxes levied by the
same taxation authority and the Company intends to settle its current tax assets and liabilities on a
net basis.

(v) Segment reporting

The Company is primarily in the business of manufacturing and sale of cotton yarn blended (textile
product). The Board of Directors of the Company, which has been identified as being the Chief
Operating Decision Maker (CODM), evaluates the Company’s performance, allocate resources based
on the analysis of the various performance indicator of the Company as a single unit. Therefore, there
is only one reportable segment for the Company.

(w) Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended
March 31, 2024, MCA has not notified any new standards or amendments to the existing standards
applicable to the Company.

Nature and purpose of reserves/ other equity:

(a) Equity component of redeemable preference shares: Under previous GAAP, 5% redeemable non¬
cumulative preference shares of 7 65.00 Lakhs were classified as part of total equity. However, under Ind AS the
non-cumulative redeemable preference shares are compound financial instruments, where the liability component
outstanding at the date of transition is bifurcated by first valuing the debt component with the residual being equity.
The liability component is determined as the present value of the eventual redemption amount of 7 65.00 Lakhs of
preference shares, discounted at the rate at which the Company could issue a similar instrument with a similar
credit standing but without the feature of discretionary dividends during its life. At the transition date i.e.,
01.04.2016, 5% redeemable non-cumulative preference shares of 7 65.00 Lakhs were bifurcated into liability
component amounting to 7 21.95 Lakhs and the residual 7 43.05 Lakhs being equity. The preference shares of 7
65.00 Lakhs were redeemed at a pre-mature date during the financial year 2018-19. At the time of pre-mature
redemption of 5% redeemable non-cumulative preference shares of 7 65.00 Lakhs during the financial year 2018¬
19, an amount of 7 25.50 Lakhs were allocated from equity component of compound financial instrument and
residual 7 39.50 Lakhs from the liability component by taking the fair value of compound financial instrument at the
time of its redemption. After allocation of 7 25.50 Lakhs from equity component of compound financial instrument
at the time of its redemption, balance amount of 7 17.55 Lakhs is outstanding as on the Balance Sheet date.

(b) Capital redemption reserve: Capital redemption reserve has been created pursuant to the provisions of
Section 55 of the Companies Act, 2013 on account of redemption of preference shares out of the profits of the
Company.

(c) Retained earnings: Retained earnings are the profit that the Company has earned till date, less any transfers
to general reserve, dividends or other distributions paid to investors.

Remeasurements of the defined benefit plans which are the part of retained earnings represents the
following as per Ind AS 19, Employee Benefits:

(i) actuarial gains and losses;

(ii) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset);
and

(ii) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined
benefit liability (asset).

(a) Nature of security and guarantee by directors or others:

Term loan from bank:

Term loan from Punjab National Bank is secured by:

A. Primary Security:

(i) Hypothecation of machinery, other assets and equipments purchased with the bank loan.

B. Collateral Security:

(i) First charge on all the existing (except assets financed by SIDBI) and future block assets of the Company.

(ii) Extension of first pari passu charge with SIDBI by way of equitable mortgage of factory land measuring 34
kanals and 14 marlas and building constructed thereon (20993.5 sq. yards) located at 9th KM Stone, Hisar Bhiwani
Road, VPO Dabra, Hisar, Haryana.

Term loan from Punjab National Bank is further covered by irrevocable and unconditional personal guarantee of
the directors of the Company namely Sh. Anurag Gupta, Smt. Sapna Kansal and Sh. Nikhil Goel.

Term loans from financial institution:

Term loans from financial institution i.e., Small Industries Development Bank of India (SIDBI) are secured by:

A. Primary Security:

(i) First charge by way of hypothecation in favour of SIDBI on all the movables of the borrower including plant and
machinery, equipment, miscellaneous fixed assets, machinery spares, tools and accessories etc. acquired/ to be
acquired under the project.

B. Collateral Security:

(i) First charge by way of hypothecation in favour of SIDBI of the entire movables of the borrower including plant,
equipment, machinery, machinery spares, miscellaneous fixed assets, tools, accessories, furniture, fixtures,
computers etc. which have already been charged to SIDBI for earlier assistances.

(ii) Extension of first pari passu charge with Punjab National Bank by way of equitable mortgage of factory land
measuring 34 kanals and 14 marlas and building constructed thereon (20993.5 sq. yards) located at 9th KM Stone,
Hisar Bhiwani Road, VPO Dabra, Hisar, Haryana.

(iii) Term loan from financial institution with sanctioned amount of ? 445.00 Lakhs is further guaranteed under
Partial Risk Sharing Facility for Energy Efficiency for not less than 75% of term loan.

(iv) Term loan from financial institution with sanctioned amount of? 300.00 Lakhs is further secured by pledge of
fixed deposit of ? 75.00 lakhs held with SIDBI.

Term loans from financial institution are further covered by irrevocable and unconditional personal guarantee of the
director of the Company namely Sh. Anurag Gupta (Managing Director of the Company), Smt. Sapna Kansal, Sh.
Nikhil Goel and Chief Executive Officer of the Company namely Sh. Naveen Kansal.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- credit risk

- liquidity risk

- market risk

i. Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk
management framework. The Board of Directors has established the processes to ensure that executive management
controls risks through the mechanism of properly defined risk management framework.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems
are reviewed by the board regularly to reflect changes in market conditions and the Company’s activities. The Company,
through its policies and procedures, aims to maintain a disciplined and constructive control environment in which all
employees understand their roles and responsibilities.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company''s receivables from customers.

The carrying amounts of financial assets represent the maximum credit risk exposure. The Company monitor credit risk
very closely both in domestic and export market. The Management impact analysis shows credit risk and impact
assessment as low.

Trade receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the factors that may influence the credit risk of its customer base, including the default risk
associated with the industry and country in which customers operate.

The Company Management has established a credit policy under which each new customer is analysed individually for
creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The
Company''s review includes market check, industry feedback, past financials and external ratings, if they are available,
and in some cases bank references. Sale limits are established for each customer and reviewed monthly basis. Any
sales exceeding those limits require approval from the Company''s management.

Most of the Company''s customers have been transacting with the Company from past few years, and most of these
customers'' balances are not credit-impaired at the reporting date except in few cases reported. Identifying
concentrations of credit risk requires judgement in the light of specific circumstances. The Company monitors ageing of
its trade receivables regularly and based on the same takes corrective action. Trade receivables having ageing more
than 180 days is monitored individually and loss allowance is created based on such assessment.

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Company’s approach to manage liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when liabilities are fallen due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s
reputation.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of
fund through an adequate amount of committed credit facilities to meet obligations when due and to close out market
positions. Due to the dynamic nature of the underlying businesses, the Company maintains flexibility in funding by
maintaining availability under committed credit line.

Liquidity risk is managed by adequate reserves, banking facilities and reserve borrowing facilities, by continuously
monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities

C. Capital Management

The Company manages its capital to ensure the Company''s abaility to continue as going concern and to create value for
shareholders by facilitating the meeting of long term and short term goals of the Company. The Company manages
capital risk in order to maximize shareholders’ profit by maintaining sound/optimal capital structure through monitoring of
financial ratios, such as net debt-to-equity ratio. The funding needs are met through equity, cash generated from
operations, long term and short term bank borrowings. Net debt includes interest bearing borrowings less cash and cash
equivalents and other bank balances.

B. Defined Benefit Plans
Gratuity

The Company provides for gratuity for its employees in India as per the Payment of Gratuity Act, 1972 (as
amended). Employees in continuous service for a period of 5 years are eligible for gratuity. The amount of
gratuity payable on retirement/termination is the employee''s last drawn basic salary per month computed
proportionately for 15 days salary multiplied for the number of completed years of service. Gratuity liability
is being contributed to Group Gratuity cum Life Assurance Schemes administered by the Life Insurance
Corporation of India. The present value of the defined benefit obligations and the related current service
cost and past service cost, were measured using the Projected Unit Credit Method. The measurement
date used for determining retirement benefits for gratuity is 31st March.

These plans typically expose the Company to actuarial risks such as investment risk, interest rate risk,
longevity risk and salary risk.

Investment risk:

The probability or likelihood of occurrence of losses relative to the expected return on any particular
investment.

Interest rate risk:

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an
increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value
of the liability.

Longevity risk:

The present value of defined benefit plan liability is calculated by reference to the best estimate of the
mortality of plan participants both during and after employment. An increase in the life expectancy of the
plan participants will increase the plan''s liability.

Salary risk:

The present value of the defined benefit plan is calculated with reference to the future salaries of
participants under the plan. Increase in salary due to adverse inflationary pressures might lead to higher
liabilities.

‘‘Shortfall in CSR Spent:

Amount remaining unspent as at 31st March, 2023 pertains to "other than ongoing projects"
which is required to be transferred to a Fund specified in Schedule VII to the Companies
Act, 2013 before the expiry of time limit as permitted under the second proviso to sub¬
section (5) of section 135 of the Act i.e. six months of the expiry of the financial year.
Accordingly, the Company has transferred the amount of ? 6.87 lakhs remaining unspent as
at 31st March, 2023 to PM CARES Fund during the current financial year before 30th
September, 2023.

43. Additional Regulatory Information as applicable to the Company:

(a) The Company has not granted any loans or advances in the nature of loans to promoters,
Directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally
or jointly with any other person.

(b) There are no proceedings initiated or are pending against the Company for holding any benami
property under the Prohibition of Benami Property Transactions Act, 1988 and rules made
thereunder.

(c) The Company has borrowings from banks on the basis of security of current assets; and the
quarterly returns or statements of current assets filed by the Company with banks are in
agreement with the books of account of the Company and there are no material discrepancies.

(d) The Company has not been declared as willful defaulter by any bank or financial institution or other
lender.

(e) The Company has not used the borrowings from banks and financial institutions at the balance
sheet date other than the specific purpose for which it was taken.

(f) The Company does not have any transactions with companies struck off under Section 248 of the
Companies Act, 2013 or Section 560 of the Companies Act, 1956.

(g) The Company does not have any charges or satisfaction which are yet to be registered with the
Registrar of Companies beyond the statutory period.

(h) The Company is not a subsidiary or holding company of any other company.

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (“Intermediaries”) with the understanding that the Intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(j) The Company has not received any fund from any person(s) or entity(ies), including foreign entities
("Funding Party") with the understanding (whether recorded in writing or otherwise) that the
Company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(k) There are no transactions which are not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax
Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act,
1961).

(l) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial
year.

In terms of our report of even date attached

for JAIN & ANIL SOOD For and on behalf of the Board of Directors

Chartered Accountants
Firm''s Registration No. 010505N

(RAJESH KUMAR JAIN) (ANURAG GUPTA) (NIKHIL GOEL)

Partner Managing Director Director

Membership No. 088447 DIN-00192888 DIN-01741446

Place: Chandigarh
Date: 30th May, 2024

(SHARAD GOEL) (NIKITA SINGLA)

Chief Financial Officer Company Secretary

(NAVEEN KANSAL)

Chief Executive Officer

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Mar 31, 2014

1.Corporate identification number and nature of operations

Corporate identification number of the company is L17112HR1992PLC031621 and the company is engaged in the business of manufacturing and sale of cotton blended yarn.

(*) Nature of security and guarantee by directors or others:

Term loan from bank:

Term loans from bank i.e., Punjab National Bank are secured by (a) hypothecation of building constructed/ to be constructed, plant and machinery installed up to 31.03.2011, other assets and equipments purchased with the bank loan along with furniture & fixture (b) first charge ranking paripassu with Small Industries Development Bank of India (SIDBI) by way of equitable mortgage of all the immovable. properties i.e., land & building thereon of the company situated at VPO Dabra, Distt, Hissar, admeasuring about 34 kanal 14 marlas owned by the company. The above securities are also held as security for loan repayable on demand (cash credit) from Punjab National Bank (refer note no. 7 ''Short-term borrowings'').

Term loans from bank i.e., Punjab National Bank are further covered by personal guarantee of the promoter directors of the company namely Sh. Gopal Krishan Gupta, Sh. Anurag Gupta and Sh. T.N. Goel and former director of the company namely Sh. M.L. Kansal.

Term loans from financial institution:

Term loans from financial institution i.e., Small Industries Development Bank of India (SIDBI) together with interest, costs, expenses, penal interest and all other monies dues and payable by the company are secured by (a) first charge by way of hypothecation in favour of SIDBI in a form satisfactory to SIDBI in respect of all the movable fixed assets i.e., plant and machinery, equipment, tools and accessories, moulds, miscellaneous fixed assets etc., save & except stocks and book debts acquired/ to be acquired under the project (new machinery installed specifically from loan financed by SIDBI on or after 01.04.2011). (b) first charge ranking paripassu with Punjab National Bank by way of equitable mortgage in a form satisfactory to SIDBI of all the immovable properties i.e., land & building thereon of the borrower situated at VPO Dabra, Distt, Hissar, admeasuring about 34 kanal 14 marlas owned by the company.

Term loans from financial institution i.e., Small Industries Development Bank of India (SIDBI) are further covered by irrevocable and unconditional personal guarantee of the promoter directors of the company namely Sh. Gopal Krishan Gupta. Sh. Anurag Gupta and Sh. T.N. Goel and former director of the company namely Sh. M.L. Kansal.

Other long-term borrowings from banks:

Other long-term borrowings from banks are secured by hypothecation (marked with Registering Authority, Motor Vehicles) of vehicles acquired out of proceeds of the said borrowings from banks.

Term loans from financial institution:

(i) Term loan of Rs. 29300000/- is repayable in 66 monthly instalments commencing 18 months after the date of first disbursement i.e., 02.08.2011. The first 18 instalments of Rs. 300000/- each, next 18 instalments of Rs. 400000/- each, next 18 instalments of Rs. 510000/- each, next 11 instalments of Rs. 625000/- each and the last final instalment of Rs. 645000/-.

(ii) Term loan of Rs. 1700000/- is repayable in 66 monthly instalments commencing 18 months after the date of first disbursement i.e., 02.08.2011. The first 18 instalments of Rs. 15000/- each, next 18 instalments of Rs. 25000/- each, next 18 instalments of Rs. 30000/- each, next 11 instalments of Rs. 35000/- each and the last final instalment of Rs.55000/-.

Other long-term borrowings from banks:

(i) Other long-term borrowing from ICICI Bank Limited amounting to Rs. 1500000/- is repayable in 36 equated monthly installments (EMIs) of Rs. 48585/- (including interest).

(ii) Other long-term borrowing from HDFC Bank Limited amounting to Rs. 800000/- is repayable in 36 equated monthly installments (EMIs) of Rs. 25600/- (including interest).

(**) Nature of security and guarantee by directors or others:

Loan repayable on demand from bank (cash credit) is secured by hypothecation of stocks of raw material, work-in-progress, finished goods, stores and spares and hypothecation of entire receivables/ book debts.

The said facilities from Punjab National Bank are further secured by hypothecation of block assets of the company and first charge ranking paripassu with Small Industries Development Bank of India (SIDBI) by way of equitable mortgage of all the immovable properties i.e., land & building thereon of the company situated at VPO Dabra, Distt, Hissar, admeasuring about 34 kanal 14 marlas owned by the company. These securities are also held as security for long-term borrowings (refer note no. 5 ''Long-term borrowings'').

Loan repayable on demand from bank (cash credit) is also covered by personal guarantee of the promoter directors of the company namely Sh. Gopal Krishan Gupta, Sh. Anurag Gupta and Sh. T.N. Goel and former director of the company namely Sh. M.L. Kansal.

2. Earnings per equity share (EPS)

The calculation of EPS as disclosed in the statement of profit and loss has been made in accordance with Accounting Standard (AS)-20 ''Earning Per Share'' notified under the Companies (Accounting Standards) Rules, 2006

3. Contingent liabilities and commitments

(to the extent not provided for)

(i) Contingent liabilities. Counter guarantees issued to 1857500 1857500 Punjab National Bank in respect of the guarantees issued by the said bank in favour of various government authorities.

(ii) Commitments:

Performance bonds executed in favour of The President of 27673306 27673306 India against exports obligations for purchase of capital goods under Export Promotion Capital Goods (EPCG) scheme

4. Employee benefits

Disclosures as required by the Accounting Standard (AS) * 15 ''Employee benefits'' are as under:

(a) General description of plan: Defined gratuity benefit obligation (funded)

(b) Method of valuation of gratuity: Projected Unit Credit (PUC) Actuarial Method.

5. Related parties disclosures

(a) The name of the transacting related party and description of the relationship between the parties:

Key management personnel:

Mr. Gopal Krishan Gupta

Mr Anurag Gupta

Enterprises over which key management personnel or relative of such personnel is able to exercise significant influence:

Usha Yarns Limited

6. No amount of dividend has been proposed to be distributed to equity and preference shareholders for the period.

7. There is no impairment of assets during the year.

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Mar 31, 2013

1. Nature of operations

The company is engaged in the business of manufacturing and sale of cotton and cotton blended yam.

2. Employee benefits

Disclosures as required bythe Accounting Standard (AS)-15 ''Employee benefits''are as under:

(a) General description of plan: Defined gratuity benefit obligation (funded)

(b) Method of valuation of gratuity: Projected Unit Credit (PUC) Actuarial Method.

3 Related parties disclosures

(a) Trie name of the transacting related party and description of the relationship between the parties:

Key management personnel:

Mr. Gopal Krishan Gupta Mr. Anurag Gupta

Enterprises over which key management personnel or relative of such personnel is able to exercise significant influence:

Usha Yarns Limited

4 No amount of dividend has been proposed to be distributed to equity and preference shareholders for the period.

5 There is no impairment of assets during the year.

6 The previous period figures have been regrouped/ reclassified, wherever necessary to conform to the current period presentation.

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Mar 31, 2012

1. Nature of operations

The company is engaged in the business of manufacturing and sale of cotton yam.

Rights, preferences and restrictions attaching to each class of shares:

Equity shares: The company has one class of equity share having par value of rupees 10/- per share. Every member holding equity shares and entitled to vote and present in person or by proxy shall have voting rights which shall be in the same proportion as the capital paid on the equity share or shares (whether fully paid up or partly paid up) held by him bears to tie total paid up equity capital of the company.

Preference shares: The company has issued 5% redeemable non cumulative preference shares having par value of rupees 10/- per share. The preference shareholders enjoy preferential rights in respect of payment of dividend and repayment of capital over the equity shareholders. The preference shares shall not entitle the holders thereof to any voting rights, except in respect of resolutions which directly affect the rights attached to the preferences shares, and in the event the company does not pay any dividend on the said preference shares no voting rights shall accrue to such holders on account of non-payment of dividend. The said preference shares will be redeemable at par at the discretion of the board either in lump sum or in four quarterly instalments commencing from 01.01.2024 and ending on 31.122024 but before the expiry of 20 years from the date of allotment (27.07.2005) subject to the provisions of tie Companies Act, 1956 and other applicable legislations as may be in force from time to time and the provisions of the articles of association of the company.

( ) Nature of security and guarantee by o lrectors or ettiwrs;

; Term loansfrom bank: ;

Term loaris.frorn bank i.e.,Punjab National Bank are secured by (a) hypothecation of building construcWd^tb beconstructed, plant and machinery installed up to 3,1.Q3-2011, other assets and equipments purchased with the bank tearfcalorjg/.with furniture & figure, (b) ffrsf charge ranWnc| paripassu with Small Industries Development Bank of India i(Sip|l)J?y way of equitable rrtorfgage of atl the immovable properties i.e., Iand& building thereon of the company situated at VPO Dabra, Distt, Hissar, admeasuring about 34 kanal 14marlas owned by the company. The above securities are also heltf as sVcUrity for loan repayable on demand (cash credit) from Punjab National Bank (refer note no. 7 Short-term borrowings ).

Term loans from bank i.e., Punjab National Bank are further covered by personal guarantee of the promoter- directors of the company namely Sh. Gopal Krishan Gupta, Sh. Anurag Gupta, Sh. M.L Kansal and Sh. T.N. Goel.

Term loans from financial institution:

Term loans from financial institution i.e., Small Industries Development Bank of India (SIDBI) together with interest, costs, expenses, penal interest and all other monies dues and payable by the company are secured by (a) first charge by way of hypothecation in favour of SIDBI in a form satisfactory to SIDBI in respect of all the movable fixed assets i.e., plant and machinery, equipment, tools and accessories, moulds, miscellaneous fixed assets etc., save & except stocks and book debts acquired/ to be acquired under the project (new machinery installed specifically from loan financed by SIDBI on or after 01.042011). (b) first charge ranking paripassu with Punjab National Bank by way of equitable mortgage in a form satisfactory to SIDBI of all tie immovable properties i.e., land & building thereon of the borrower situated at VPO Dabra, Distt Hissar, admeasuring about 34 kanal 14marlas owned by the company.

Term loans from financial institution i.e., Small Industries Development Bank of India (SIDBI) are farther covered by irrevocable and unconditional personal guarantee of the promoter directors of Ihe company namely Sh. Gopal Krishan Gupta, Sh. Anurag Gupta, Sh. Ml. Kansal and Sh. T.N. Goel.

Term loans from financial institution:

(i) Term loan of rupees 29300000/- is repayable in 66 monthly instalments commencing 18 months after tie date of first disbursement i.e., 02.08.2011. The first 18 instalments of rupees 300000/- each, next 18 instalments of rupees 400000A each, nert 18 instalments of rupees 510000/- each, next 1 instalment of rupees 625000/- each and the last final instalment of rupees 645000/-.

(i) Term loan of rupees 1700000/- is repayable in 66 monthly instalments commencing 18 months after the date of first disbursement i.e„ 02.08.2011. The first 18 instilments of rupees 15000/- each, next 18 instalments of rupees 25000/- each, next 18 instalments of rupees 30000/- each, next 11 instalments of rupees 35000A each and the last final instalment of rupees 55000A.

Terms of repayment of unsecured long-term borrowings: Inter-corporate deposits:

Unsecured inter-corporate deposits are repayable at the lime of squaring up of term loan facilities availed by the company from bank.

Loans and advances from related parties and from other promoters:

Unsecured loans and advances from related parties and from other promoters are repayable at the time of squaring up of term loans availed by the company from financial institution.

( ) Nature of security and guarantee by directors or others:

Loan repayable on demand from bank (cash credit) is secured by hypothecation of stocks of raw material, work-in-progress, finished goods, stores and spares and hypothecation of entire receivables/book debts.

The said facilities from Punjab National Bank are further secured by hypothecation of block assets of the company and first charge ranking paripassu with Small Industries Development Bank of India (SIDBI) by way of equitable mortgage of all the immovable properties i.e., land & building thereon of the company situated at VPO Dabra, Distt, Hissar, admeasuring about 34 kanal 14 marlas owned by the company. These securities are also held as security for term loan from bank
Loan repayable on demand from bank (cash credit) is also covered by personal guarantee of the promoter directors of the company namely Sh. Gopal Krishan Gupta, Sh. Anurag Gupta, Sh. M.L Kansal and Sh. T.N. Goel.

2. Related parties disclosures

(a) The name of the transacting related party and description of the relationship between the parties:

Key management personnel:

Mr. Gopal Krishan Gupta Mr. Anurag Gupta

3. No amount of dividend has been proposed to be distributed to equity and preference shareholders for the period.

4. There is no impairment of assets during the year.

5. The company has reclassified previous year s figures to conform to current year s classification as per revised Schedule VI notified under the Companies Act, 1956. The adoption of revised Schedule VI has significantly impacted the disclosure and presentation made in the financial statements. However, it does not impact recognition and measurement principles followed for preparation of financial statements.

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Mar 31, 2011

1 Contingent Liabilities not provided for:

Counter guarantees issued to Punjab National Bank against guarantees issued by the said bank in favour of The President of India for Rs. 502000/- covered by 100% margin in the shape of fixed deposits (previous year - Rs. 502000/-).

Performance bond of Rs. 8343306/- (previous year - Rs. 8343306/-) issued in favour of The President of India under an export obligation against purchase of capital goods under export performance credit guarantee scheme.

2. The Company has not received any communication from any of its suppliers/ service providers in response to letters issued by the Company, confirming whether or not they are registered under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of any positive confirmation from the suppliers/ service providers, the information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 could not be determined.

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Mar 31, 2010

1. Contingent Liabilities not provided for:

Counter guarantees issued to Punjab National Bank against guarantees issued by the said bank in favour of The President of India for Rs. 502000/- covered by 100% margin in the shape of fixed deposits (previous year - Rs. 1455614/-).

Performance bond of Rs. 8343306/- (previous year - Rs. 8343306/-) issued in favour of The President of India under an export obligation against purchase of capital goods under export performance credit guarantee scheme.

2. The Company has not received any communication from any of its suppliers/ service providers in response to letters issued by the Company, confirming whether or not they are registered under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of any positive confirmation from the suppliers/ service providers, the information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 could not be determined.

3. Previous years figures have been re-grouped / re-arranged wherever considered necessary to make them comparable with figures of the current year.

4. Figures have been rounded off to the nearest rupee.