Notes to Accounts of Nahar Industrial Enterprises Ltd.

Mar 31, 2025

(l) Provisions, Contingent liabilities and Contingent Assets

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. A present obligation that arises from past events where it is neither
probable that an outflow of resources will be required to settle nor a reliable estimate of the amount cannot be made, is
disclosed as a contingent liability. Contingent liabilities are also 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 within the control of the Company. Contingent assets are not recognised in financial statements
since this may result in the recognition of income that may never be realised. However, when the realisation of income is
virtually certain, then the related asset is not a contingent asset and is recognised.

(m) Foreign currency transaction
Initial Recognition:

On initial recognition, transactions in foreign currencies entered into by the Company are recorded in the functional currency
(i.e. Indian Rupees), by applying to the foreign currency amount, the spot exchange rate between the functional currency
and the foreign currency at the date of the transaction. Exchange differences arising on foreign exchange transactions
settled during the year are recognized in the Statement of Profit and Loss.

Measurement of foreign currency items at reporting date:

Foreign currency monetary items of the Company are translated at the closing exchange rates. Non-monetary items that are
measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Non¬
monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date
when the fair value is measured.

Exchange differences arising out of these transaction are recognized in the Statement of Profit and Loss.

(n) Revenue recognition

(i) Revenue arises mainly from the sale of manufactured and traded goods.

To determine whether to recognise revenue, the Company follows a 5-step process:

1. Identifying the contract with a customer

2. Identifying the performance obligations

3. Determining the transaction price

4. Allocating the transaction price to the performance obligations

5. Recognising revenue as & when performance obligation(s) are satisfied.

Revenue is measured at fair value of consideration received or receivable, after deduction of any trade discounts, volume
rebates and any taxes or duties collected on behalf of the government which are levied on sales such as goods and service
tax, etc.

Revenue is recognized either at a point in time or over time, when (or as) the Company satisfies performance obligations by
transferring the promised goods or services to its customers.

Sale of goods

Revenue from sale of goods is recognized when the control of goods is transferred to the buyer as per the terms of the
contract, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.
Control of goods refers to the ability to direct the use of and obtain substantially all of the remaining benefits from goods.

Rendering of services

Revenue from services is recognized as and when the services are rendered and on the basis of contractual terms with the
parties.

(ii) Export Incentives- Export incentives are recognized on post export basis.

(iii) Interest income - Interest income from debt instruments is recognized using the effective interest rate method.

(iv) Dividend income - Dividends are recognized in profit or loss only when the right to receive payment is established.

(v) Rental Income- Rental income is accounted for on accrual basis.

(vi) Scrap (i.e empties, wastage etc. Other than production ) is accounted for on sale basis.

(vii) Income and other Claims -Revenue in respect of claims is recognized when no Significant uncertainty exists with
regard to the amount to be realised and ultimate Collection thereof .

(o) Short-term leases and leases of low-value assets

The Company has elected not to recognize ROU assets and lease liabilities for short term leases as well as low value assets
and recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(p) Income Tax

Income tax expense comprises current income tax and deferred tax.

Current tax expense for the year is ascertained on the basis of assessable profits computed in accordance with the
provisions of the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or

substantively enacted, at the reporting date.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets are reviewed
at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on a net basis or to realise the asset and settle
the liability simultaneously.

Current and deferred tax is recognised in the Statement of profit and loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In that case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.

(q) Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash in hand and
balances with banks.

(r) Trade receivables

Trade receivables are recognized initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment if any. The EIR is the rate that discounts estimated future cash income through
the expected life of financial instrument.

(s) Financial instruments

Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of
the instruments.

Initial Recognition:

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in
Statement of Profit and Loss.

Classification and Subsequent Measurement: Financial Assets

The Company classifies financial assets as subsequently measured at amortised cost, fair value through other
comprehensive income (“FVOCI”) or fair value through profit or loss (“FVTPL”) on the basis of following:

• The entity''s business model for managing the financial assets and

• The contractual cash flow characteristics of the financial asset.

Amortised Cost:

A financial asset shall be classified and measured at amortised cost if both of the following conditions are met:

• The financial asset is held within a business model whose objective is to hold financial assets in order to collect
contractual cash flows and

• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

Fair Value through OCI:

A financial asset shall be classified and measured at fair value through OCI if both of the following conditions are met:

• The financial asset is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets and

• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

Fair Value through Profit or Loss:

A financial asset shall be classified and measured at fair value through profit or loss unless it is measured at amortised cost
or at fair value through OCI.

All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending
on the classification of the financial assets.

Impairment of financial assets:

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period.
The Company assesses on a forward looking basis the expected credit losses associated with its assets.

The impairment methodology applied depends on whether there has been a significant increase in credit risk. In case of
trade receivables, the Company follows the simplified approach permitted by Ind AS 109 -- Financial Instruments for
recognition of impairment loss allowance. The application of simplified approach does not require the Company to track
changes in credit risk. The Company calculates the expected credit losses on trade receivables using a provision matrix on
the basis of its historical credit loss experience.

Derecognition of financial assets:

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the
Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may
have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the
Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds
received.

Classification and Subsequent Measurement: Financial liabilities:

Financial liabilities are classified as either financial liabilities at FVTPL or ''other financial liabilities''.

Financial Liabilities at FVTPL:

Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial
recognition as FVTPL:

Gains or Losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

Other Financial Liabilities

Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost
using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction
costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter
period, to the net carrying amount on initial recognition.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another financial liability from the same lender on substantially different terms, or the
terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in
the statement of profit and loss.

(t) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and
settle the liability simultaneously.

(u) Derivative financial instruments

The Company enters into derivative financial instruments viz. foreign exchange forward contracts to manage its exposure to
foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss
immediately.

(v) Employee benefits

(i) Short term obligations

Liabilities for wages and salaries, short term compensated absence and ex-gratia including non-monetary benefits that are
expected to be settled wholly within 12 months after the end of the period in which the employees render the related service
are recognised in respect of employees services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefits obligations in
the balance sheet.

(ii) Post-employment obligations

The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plans is the present value of the
defined benefit obligations at the end of the reporting period less the fair value of plan assets. The defined benefit obligation
is calculated annually by actuaries using the projected unit credit method.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the
fair value of plan assets.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings
in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are
recognised immediately in profit or loss as past service cost.

(iii) Defined contribution plans

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and
Miscellaneous Provisions Act, 1952 and is charged to the Statement of Profit and Loss.

(w) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker [CODM]. The Operating Segment is the level at which discrete financial information is available. The CODM allocates
resources and assess performance at this level. The Company has Operating segments comprising of Textile, Sugar and
Others.

(x) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within the credit period allowed. Trade and other payables are
presented as current liabilities when payment is due within 12 months after the reporting period. Long term trade payables
are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

(y) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using effective interest method.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long term loan
arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the
reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before
the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

(z) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

The profit attributable to owners of the Company

By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus
elements in equity shares issued during the year and excluding treasury shares

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account:

The after income tax effect of interest and other financing costs associated with dilutive potential equity shares,
and

The weighted average number of additional equity shares that would been outstanding assuming the conversion
of all dilutive potential equity shares.

Note: 2.1 Critical estimates and judgements

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual
results. Management also needs to exercise judgement in applying the Company''s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are
more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.
Detailed information about each of these estimates and judgements is included in relevant notes together with information about
the basis of calculation for each affected line item in the financial statements.

Critical estimates and judgements

The areas involving critical estimates or judgements are:

• Estimation of current tax expense and payable -

• Estimation of defined benefit obligation -

• Recognition of deferred tax assets for carried forward tax losses -

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including
expectations of future events that may have a financial impact on Company and that are believed to be reasonable under the
circumstances.

• Term Loan from Indian Bank and State Bank of India of '' 4,964.08 lacs are secured by hypothecation as pari-passu first charge on
whole of the immovable properties of the Company situated at Village Jalalpur, Chandigarh Ambala Road, Lalru, Distt. Mohali,
Village Jaladiwal, Near Raikot, Distt. Ludhiana (Punjab), Village Udaipur / Khljuriwas, Bhiwadi, Distt. Alwar (Rajasthan), Village
Salana Jeon Singh Wala, Tehsil Amloh, Distt. Fatehgarh Sahib (Punjab) Including the Company''s movable Plant and Machinery,
Machinery Spares and other moveables both present and future and subject to the charge or charges created or to be created by
the Company in favour of its Bankers on its movables and also personally guaranteed by some of the Directors of the Company.

• Term loan (secured) includes '' 7,211.25 Lacs as LRD facility taken from HDFC Bank Ltd. against exclusive charge on the title
deeds situated at Focal Point, Phase-IV, Ludhiana (Previous year '' 5,581.06).

• Term loan (secured) includes '' 7,961.07 Lacs as term loan facility taken from Axis Bank against exclusive charge on the title deeds
situated at Ward No. 28, Mouza Garji, Garje Road, MC Road, Chandan Nagar, Hooghly, West Bengal (Previous year ''3,149.98).

ii) NCNCRPS shall be redeemable at par within a period not exceeding 20 years from date of their issue or an earlier date only at the
discretion of the company.

• Term Loan from Indian Bank of '' 1,041.98 lacs are secured by hypothecation as pari-passu first charge on whole of the immovable
properties of the Company situated at Village Jalalpur, Chandigarh Ambala Road, Lalru, Distt. Mohali, Village Jaladiwal, Near
Raikot, Distt. Ludhiana (Punjab), Village Udaipur / Khljuriwas, Bhiwadi, Distt. Alwar (Rajasthan), Village Salana Jeon Singh Wala,
Tehsil Amloh, Distt. Fatehgarh Sahib (Punjab) and Negative Lien of immovable assets (property) Land measuring 15 acres (out of
total land of 100 acres) at Industrial Focal Point, Phase-VIII, Village Mundian, Distt. Ludhiana, Including the Company''s movable
Plant and Machinery, Machinery Spares and other moveables both present and future and subject to the charge or charges created
or to be created by the Company in favour of its Bankers on its movables and also personally guaranteed by some of the Directors
of the Company.

• Term Loan (secured) includes '' 10.43 Lacs as vehicle loan taken from ICICI Bank against hypothecation of the respective Vehicles
only.

• Term loan (secured) includes '' 5,581.06 Lacs as LRD facility taken from HDFC Bank Ltd. against exclusive charge on the title
deeds situated at Focal Point, Phase-IV, Ludhiana.

The carrying amounts of trade receivables, other financial assets & liabilities, trade payables, other bank balances and
cash and cash equivalents are considered to be the same as their fair values, due to short term nature. The fair values for
loans, security deposits and investments in preference shares were calculated based on cash flows discounted using a
current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of
unobservable inputs, including counter party credit risk. The fair values of non-current borrowings are based on
discounted cash flows using a current borrowings rate . They are classified as level 3 fair values in the fair value hierarchy
due to the use of unobservable inputs, including own credit risk. For financial assets and liabilities that are measured at fair
value, the carrying amounts are equal to the fair values.

43. Financial risk management objectives and policies

The Company''s principle 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 investments, loans, trade and other receivables, cash & cash equivalents and other bank balances 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 summarised 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 rate. The Company expects the variable rate to decline, accordingly the Company is
currently carrying its loans at variable interest rates.

(B) Credit risk

Credit risk is the risk that counter party 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)
and from its financing activities, deposits with banks and financial institutions, foreign exchange transactions and other
financial instruments.

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.

(i) Low credit risk on reporting date

(ii) Moderate credit risk

(iii) High credit risk

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 Credit insurance for domestic sales/letter of credit for export
sales, which results in low credit risk. 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 amount receivable that become past due
and default is consider to have occurred when amount''s receivable become 365 days past due.

Gross carrying amount of trade receivables (for ageing Refer note no. 9b)

Other financial assets measured at amortised 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.

(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.

44. 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 maximise 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 , interest
bearing loans and borrowings, trade payables, less cash and cash equivalents.

(c) The company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

(d) The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful
defaulter at any time during the financial year or after the end of reporting period but before the date when the financial
statements are approved.

(e) The company has not enter into any transactions during the year with companies struck off under section 248 of the
Companies Act, 2013 or Section 560 of the Companies Act, 1956.

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

(g) The company has complied with the number of layers as prescribed under Companies (Restriction on Number of Layers)
Rules, 2017.

(h) The company has not advanced or loaned or invested funds to any other person(s) or entities, 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.

(i) The Company has not received any funds 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 to or on behalf of the Ultimate Beneficiaries.

(j) The Company has borrowings from banks and financial institutions on the basis of the security of current assets and
movable assets. The Company has complied with the requirement of filing of monthly/ quarterly returns/statements of
current assets with the banks or financial institutions, as applicable, and these returns were in agreement with the books of
accounts for the year ended March 31,2025.

(k) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was
obtained.

(l) The Company has not any such transaction which is 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).

(m) The company has not revalued any of its Property, Plant, and Equipment, or Intangible assets during the year.

(n) 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 the Companies Act, 2013), either severally or jointly with any other person, that are
repayable on demand or without specifying any terms or period of repayment.

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

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

49. The Company has used accounting software for maintaining its books of account, which has a feature of recording audit
trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.

Further no instance of audit trail feature being tampered with was noted in respect of accounting software, and the audit
trail has been preserved by the company as per the statuary requirements for record retention.

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

---

Mar 31, 2024

(l) Provisions, Contingent liabilities and Contingent Assets

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. A present obligation that arises from past events where it is neither probable that an outflow of resources will be required to settle nor a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also 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 within the control of the Company. Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognised.

(m) Foreign currency transaction Initial Recognition:

On initial recognition, transactions in foreign currencies entered into by the Company are recorded in the functional currency (i.e. Indian Rupees), by applying to the foreign currency amount, the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.

Measurement of foreign currency items at reporting date:

Foreign currency monetary items of the Company are translated at the closing exchange rates. Non-monetary items that are measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Nonmonetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured.

Exchange differences arising out of these transaction are recognized in the Statement of Profit and Loss.

(n) Revenue recognition

(i) Revenue arises mainly from the sale of manufactured and traded goods.

To determine whether to recognise revenue, the Company follows a 5-step process:

1. Identifying the contract with a customer

2. Identifying the performance obligations

3. Determining the transaction price

4. Allocating the transaction price to the performance obligations

5. Recognising revenue as & when performance obligation(s) are satisfied.

Revenue is measured at fair value of consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government which are levied on sales such as goods and service tax, etc.

Revenue is recognized either at a point in time or over time, when (or as) the Company satisfies performance obligations by transferring the promised goods or services to its customers.

Sale of goods

Revenue from sale of goods is recognized when the control of goods is transferred to the buyer as per the terms of the contract, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Control of goods refers to the ability to direct the use of and obtain substantially all of the remaining benefits from goods.

Rendering of services

Revenue from services is recognized as and when the services are rendered and on the basis of contractual terms with the parties.

(ii) Export Incentives- Export incentives are recognized on post export basis.

(iii) Interest income - Interest income from debt instruments is recognized using the effective interest rate method.

(iv) Dividend income - Dividends are recognized in profit or loss only when the right to receive payment is established.

(v) Rental Income- Rental income is accounted for on accrual basis.

(vi) Scrap (i.e empties, wastage etc. Other than production ) is accounted for on sale basis.

(vii) Income and other Claims -Revenue in respect of claims is recognized when no Significant uncertainty exists with regard to the amount to be realised and ultimate Collection thereof .

(o) Short-term leases and leases of low-value assets

The Company has elected not to recognize ROU assets and lease liabilities for short term leases as well as low value assets and recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(p) Income Tax

Income tax expense comprises current income tax and deferred tax.

Current tax expense for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or

substantively enacted, at the reporting date.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in the Statement of profit and loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In that case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

(q) Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash in hand and balances with banks.

(r) Trade receivables

Trade receivables are recognized initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment if any. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.

(s) Financial instruments

Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of the instruments.

Initial Recognition:

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in Statement of Profit and Loss.

Classification and Subsequent Measurement: Financial Assets

The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income (“FVOCI”) or fair value through profit or loss (“FVTPL”) on the basis of following:

• The entity''s business model for managing the financial assets and

• The contractual cash flow characteristics of the financial asset.

Amortised Cost:

A financial asset shall be classified and measured at amortised cost if both of the following conditions are met:

• The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair Value through OCI:

A financial asset shall be classified and measured at fair value through OCI if both of the following conditions are met:

• The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair Value through Profit or Loss:

A financial asset shall be classified and measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through OCI.

All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Impairment of financial assets:

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. The Company assesses on a forward looking basis the expected credit losses associated with its assets.

The impairment methodology applied depends on whether there has been a significant increase in credit risk. In case of trade receivables, the Company follows the simplified approach permitted by Ind AS 109 -- Financial Instruments for recognition of impairment loss allowance. The application of simplified approach does not require the Company to track changes in credit risk. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.

Derecognition of financial assets:

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Classification and Subsequent Measurement: Financial liabilities:

Financial liabilities are classified as either financial liabilities at FVTPL or ''other financial liabilities''.

Financial Liabilities at FVTPL:

Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial recognition as FVTPL:

Gains or Losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

Other Financial Liabilities

Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another financial liability from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.

(t) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(u) Derivative financial instruments

The Company enters into derivative financial instruments viz. foreign exchange forward contracts to manage its exposure to foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately.

(v) Employee benefits

(i) Short term obligations

Liabilities for wages and salaries, short term compensated absence and ex-gratia including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefits obligations in the balance sheet.

(ii) Post-employment obligations

The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligations at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.

(iii) Defined contribution plans

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and is charged to the Statement of Profit and Loss.

(w) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker [CODM]. The Operating Segment is the level at which discrete financial information is available. The CODM allocates resources and assess performance at this level. The Company has Operating segments comprising of Textile, Sugar and Others.

(x) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within the credit period allowed. Trade and other payables are presented as current liabilities when payment is due within 12 months after the reporting period. Long term trade payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

(y) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using effective interest method.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

(z) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

The profit attributable to owners of the Company

By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

The after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

The weighted average number of additional equity shares that would been outstanding assuming the conversion of all dilutive potential equity shares.

Note: 2.1 Critical estimates and judgements

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company''s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

Critical estimates and judgements

The areas involving critical estimates or judgements are:

• Estimation of current tax expense and payable -

• Estimation of defined benefit obligation -

• Recognition of deferred tax assets for carried forward tax losses -

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on Company and that are believed to be reasonable under the circumstances.

30. CONTINGENT LIABILITIES NOT PROVIDED FOR :

a) Letter of Credits in favour of suppliers and others '' 1,437.41 (Previous Year Nil)

b) Bank Guarantees in favour of suppliers and others '' 1,954.68 Lacs (Previous Year '' 1,513.98 Lacs)

c) Sales tax demands against which the company has preferred appeals '' 57.74 Lacs (Previous Year '' 57.74 Lacs)

d) Income tax demands against which the company has preferred appeals '' 10,976.31 Lacs (Previous Year '' 203.65 Lacs)

e) The Central Excise Authorities have issued show cause notices to the Company for '' 522.82 Lacs on various matters under the Central Excise Rules (Previous Year '' 522.82 Lacs). The Company has filed suitable reply with the concerned authorities.

f) The Company has executed bonds / legal undertakings for an aggregate amount of '' 83.11 Lacs (Previous Year '' 83.11 Lacs) in favour of the President of India for fulfilment of its obligation under the rules made Central Excise Act, 1944 and Customs Act, 1962.

g) Claims of '' 3,976.09 Lacs (Previous Year '' 3,866.58 Lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities.

h) Employees State Insurance corporation has raised demand of '' 124.62 Lacs (Previous Year '' 124.62 Lacs) The Company deposited '' 94.64 Lacs against the said demand .The company has filed the Civil Suit before the Civil Judge (Sr. Div.), ESI Court , Ludhiana. Now transfer from Ludhiana court to Dera Bassi court.

i) Advances recoverable amount includes '' 609.56 Lacs (Previous Year '' 609.56 Lacs) on account of GST paid under protest as mentioned in the Note No. 32 (i) of the balance sheet as at 31st March, 2019.

31. Capital Commitment

Estimated amount of contracts in capital account (net of advances/LC issued) remaining to be executed and not provided

for '' 1,313.69 Lacs (Previous Year '' Nil Lacs).

32. The Company has undertaken export obligations of '' 2,444.51 Lacs (Previous Year '' 2,444.51 Lacs) to export goods against the issuance of Import Licenses / Advance Licenses for the Import of Raw Materials. Out of this, export obligations of '' 864.82 Lacs (Previous Year '' 864.82 Lacs) have been fulfilled up to 31 March, 2024.

33. The Company has considered the possible impact on its business operations, financial assets, contractual obligations and its overall liquidity position and recoverability of the carrying value of its assets on account of future uncertainties in the Global Market, based on the internal and external sources of information and application of the reasonable estimates, the company does not foresee presently any significant incremental risk to the recoverability of its assets or in its ability to meet its financial obligations over the foreseeable future.

34. In the opinion of the Board of Directors, the Current Assets and Loans & Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

35. Export/domestic bills discounted during the year under Letter of Credit outstanding as on 31.03.2024 for '' 1,587.03 Lacs (Previous Year '' 2,959.12 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

39. Material accounting judgements, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgements, 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.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation 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 tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

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 calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Income taxes

The Company''s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profit for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.

Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company''s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

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 valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions.

42. Financial risk management objectives and policies

The Company''s principle 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 investments, loans, trade and other receivables, cash & cash equivalents and other bank balances 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 summarised 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 rate. The Company expects the variable rate to decline, accordingly the Company is currently carrying its loans at variable interest rates.

(B) Credit risk

Credit risk is the risk that counter party 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) and from its financing activities, deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

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.

(i) Low credit risk on reporting date

(ii) Moderate credit risk

(iii) High credit risk

43. 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 maximise 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 , interest bearing loans and borrowings, trade payables, less cash and cash equivalents.

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

(g) The restrictions related to the number of layers as prescribed under Companies (Restriction on Number of Layers) Rules, 2017 do not apply to our company, not being having any subsidiary.

(h) The company has not advanced or loaned or invested funds to any other person(s) or entities, 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.

(i) The Company has not received any funds 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 to or on behalf of the Ultimate Beneficiaries.

(j) The Company has borrowings from banks and financial institutions on the basis of the security of current assets and movable assets. The Company has complied with the requirement of filing of monthly/ quarterly returns/statements of current assets with the banks or financial institutions, as applicable, and these returns were in agreement with the books of accounts for the year ended March 31,2024.

(k) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.

(l) The Company has not any such transaction which is 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).

(m) The company has not revalued any of its Property, Plant, and Equipment, or Intangible assets during the year.

(n) 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 the Companies Act, 2013), either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.

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

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

49. The Company has used accounting software for maintaining its books of account for the Financial Year ended 31st March 2024 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.

Further no instance of audit trail feature being tampered with was noted in respect of accounting software.

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

---

Mar 31, 2018

1. Background

Nahar Industrial Enterprises Limited (the “Company”) incorporated in 1983 is engaged in the business of Textiles and Sugar in India. The company is a public company domiciled in India under the provision of companies Act, 1956. Its shares are listed in recognized stock exchange BSE/NSE of India. The registered office of the company is located in Focal Point, Ludhiana.

Note: 1.1 Critical estimates and judgements

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

Critical estimates and judgements

The areas involving critical estimates or judgements are:

- Estimation of current tax expense and payable - Note 30

- Estimation of defined benefit obligation - Note 40

- Recognition of deferred tax assets for carried forward tax losses - Note 15

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on Company and that are believed to be reasonable under the circumstances.

* Figures of term loan stated in para 13a .1(I) includes current maturities of Long term debt shown separately in notes no. 17c and exclude Rs. 27.50 lacs transaction cost amortised over the period of Term loan.

Term Loan from IDBI Bank Limited, State Bank of India, Allahabad Bank, Punjab & Sind Bank, Canara Bank, Dena Bank and Corporation Bank are secured by hypothecation as pari-passu first charge on whole of the immovable properties of the Company situated at Village Jalalpur, Chandigarh Ambala Road, Lalru, Distt. Mohali, Industrial Focal Point, Phase-VIII, Village Mundian,Distt. Ludhiana, Village Jaladiwal, Near Raikot, Distt. Ludhiana (Punjab), Village Udaipur / Khljuriwas, Bhiwadi, Distt. Alwar (Rajasthan), Focal Point Phase IV Ludhiana (Punjab) and Village Salana Jeon Singh Wala, Tehsil Amloh, Distt. Fatehgarh Sahib (Punjab) Including the Company''s movable Plant and Machinery, Machinery Spares and other moveables both present and future and subject to the charge or charges created or to be created by the Company in favour of its Bankers on its movables and also personally guaranteed by some of the Directors of the Company.

ii) Loans and advances from the related parties will be paid after three years.

* Figures of term loan stated in para 13a .1(I) includes current maturities of Long term debt shown separately in notes no. 17c and exclude Rs. 33.69 lacs transaction cost amortised over the period of Term loan.

Term Loan from IDBI Bank Limited, State Bank of Patiala, State Bank of Hyderabad, Allahabad Bank, Punjab National Bank, Punjab & Sind Bank, Dena Bank and Corporation Bank are secured by hypothecation as pari-passu first charge on whole of the immovable properties of the Company situated at Village Jalalpur, Chandigarh Ambala Road, Lalru, Distt. Mohali, Industrial Focal Point, Phase-VIII, Village Mundian,Distt. Ludhiana, Village Jaladiwal, Near Raikot, Distt. Ludhiana (Punjab), Village Udaipur / Khljuriwas, Bhiwadi, Distt. Alwar (Rajasthan), Focal Point Phase IV Ludhiana (Punjab) and Village Salana Jeon Singh Wala, Tehsil Amloh, Distt. Fatehgarh Sahib (Punjab) Including the Company''s movable Plant and Machinery, Machinery Spares and other moveables both present and future and subject to the charge or charges created or to be created by the Company in favour of its Bankers on its movables and also personally guaranteed by some of the Directors of the Company.

ii) Loans and advances from the related parties will be paid after three years.

1.2 Working Capital Borrowings are secured by hypothecation of stock of Raw Materials, work-in-Progress, Finished Goods, Stores and Book Debts and further secured by 2nd charge on fixed Assets of the Company and also personally guaranteed by some of the Directors of the Company.

2) CONTINGENT LIABILITIES NOT PROVIDED FOR :

a) Letter of Credits in favour of suppliers and others Rs.7,602.85 Lacs (Previous Year Rs.864 Lacs)

b) Bank Guarantees in favour of suppliers and others Rs.1,532.79 Lacs (Previous Year Rs.2,218.26 Lacs)

c) Sales tax demands against which the company has preferred appeals Rs.57.74 Lacs .(Previous Year Rs.67.17 Lacs)

d) Income tax demands against which the company has preferred appeals Rs.1,339.89 Lacs. (Previous Year Rs.1,368.89 Lacs).

e) The Central Excise Authorities have issued show cause notices to the Company for Rs.571.84 Lacs on various matters under the Central Excise Rules (Previous Year Rs.640.83 Lacs ) .The Company has filed suitable reply with the concerned authorities.

f) The Company has executed bonds / legal undertakings for an aggregate amount of Rs.426.73 Lacs (Previous Year Rs.3,124.90 Lacs). In favour of the President of India for fulfilment of its obligation under the rules made Central Excise Act, 1944 and Customs Act, 1962.

g) Claims of Rs.3,680.22 Lacs. (Previous Year Rs.3,602.98 Lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities.

h) Employees’ state Insurance Corporation has raised demand of Rs.124.62 Lacs.(Previous Year Nil) The Company deposited Rs.94.64 Lacs against the said demand. The Company has filed Civil Suit before the Civil Judge (Sr. Div.), ESI Court, Ludhiana.

3. Capital Commitment

Estimated amount of contracts in capital account (net of advances/LC issued) remaining to be executed and not provided for Rs.5,911.33 Lacs (Previous Year Rs.908.89 Lacs).

4. The Company has undertaken export obligations of Rs.40,671.89 Lacs (Previous Year Rs.50,005.74 ) to export goods against the issuance of Import Licenses / Advance Licenses for the Import of Capital Goods and Raw Materials. Out of this, export obligations of Rs.39,092.20 Lacs (Previous Year Rs.48,426.05 Lacs) have been fulfilled up to 31 March, 2018.

5. In the opinion of the Board of Directors, the Current Assets and Loans and Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

6. Export/domestic bills discounted under Letter of Credit outstanding as on 31.03.2018 for Rs.3,196.84 Lacs (Previous Year Rs.3,531.48 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

7) Significant accounting judgements, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgements, 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.

Judgements

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

Operating lease commitments - Company as lessee

The Company has taken ceratin land on long term lease basis. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the property and the fair value of the asset, that it does not have all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation 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 tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

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 calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

8) Post Retirement Benefits Plan (Ind AS 19)

Defined Benefit Plan

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. For the funded plan the Company makes contributions to recognized funds in India.

These assumptions were developed by management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year-end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

Expected Future cash flow

The expected future cash flow in respect of gratuity as at 31st March, 2018 were as follows

Expected contribution

The expected future employer contributions for defined benefit plan as at 31st March, 2018 (for the year ended 31st March, 2019 i.e. Rs.977.71 Lacs)

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2 : The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

The carrying amounts of trade receivables, other financial assets, trade payables and cash and cash equivalents are considered to be the same as their fair values, due to short term nature. The fair values for loans, security deposits and investments in preference shares were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk. The fair values of non-current borrowings are based on discounted cash flows using a current borrowings rate . They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

9) Financial risk management objectives and policies

The Company''s 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 investments, loans, trade and other receivables, cash & cash equivalents and other bank balances 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 summarised 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 rate. The Company expects the variable rate to decline, accordingly the Company is currently carrying its loans at variable 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:

b) Foreign currency risks

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure in foreign currency is in Trade payables denominated in foreign currency. The Company is not restricting its exposure of risk in change in exchange rates.

Foreign currency sensitivity

The following table demonstrate the sensitivity to a reasonably possible change in foreign currency exchange rates. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities.

(B) Credit risk

Credit risk is the risk that counter party 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) and from its financing activities, including loans to related parties, deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

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.

(i) Low credit risk on reporting date

(ii) Moderate credit risk

(iii) High credit risk

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 Credit insurance for domestic sales/letter of credit for export sales, which results in low credit risk. 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.

Other financial assets measured at amortised 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.

10. 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 maximise 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 , interest bearing loans and borrowings, trade payables, less cash and cash equivalents.

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 healthcare project. The company would contribute its CSR obligation as and when it is finalized. In the meantime amount of CSR obligation Rs.68.52 lacs has been set apart towards Corporate social responsibility reserve and Rs.54.89 as CSR liability.

11. Reconciliation of changes in liabilities arising from the financing activities including both changes arising from the cash flows and non-cash changes as per the requirement of the Ind AS-7 "Statement of Cash Flows" .

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

---

Mar 31, 2016

1) CONTINGENT LIABILITIES NOT PROVIDED FOR :

a) Estimated amount of contracts remaining to be executed on capital account (net of advances/ Letter of credit issued) Rs.1,076.15 Lacs (Previous year Rs.5,398.67 Lacs).

b) Letter of Credits in favour of suppliers and others Rs. 2,408.62 Lacs (Previous year Rs. 694.98 Lacs).

c) Bank Guarantees in favour of suppliers and others Rs. 1,803.22 Lacs (Previous year Rs. 1,159.11 Lacs).

d) Sales tax demands against which the company has preferred appeals Rs. 67.17 Lacs (Previous year Rs. 67.17 Lacs).

e) Income tax demands against which the company has preferred appeals Rs. 1,175.84 Lacs (Previous year Rs. 646.83 Lacs).

f) The Central Excise Authorities have issued show cause notices to the Company for Rs. 603.16 Lacs on various matters under the Central Excise Rules (Previous year Rs. 819.44 Lacs). The Company has filed suitable replies with the concerned authorities.

g) The Company has executed bonds / legal undertakings for an aggregate amount of Rs. 3,124.90 Lacs (Previous year Rs. 8,681.30 Lacs) in favour of the President of India for fulfillment of its obligations under the rules made under Central Excise Act, 1944 and Customs Act, 1962.

h) Claims of Rs. 3,525.40 Lacs (Previous year Rs. 3,525.40 Lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities.

2) The Company has undertaken export obligations of Rs. 49,246.31 Lacs (Previous year Rs. 67,461.51 Lacs) to export goods against the issuance of Import Licenses / Advance Licenses for the Import of Capital Goods and Raw Materials. Out of this, export obligations of Rs. 47,666.62 Lacs (Previous year Rs. 65,881.82 Lacs) have been fulfilled up to 31^st March, 2016.

3) Advances include Rs. 27.76 Lacs (Previous year Rs. 27.76 Lacs) paid to the machinery supplier that are under dispute. The matter is pending in the Delhi High Court.

4) In the opinion of the Board of Directors, the Current Assets and Loans and Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

5) Export/domestic bills discounted during the year under Letter of Credit outstanding as on 31.03.2016 for Rs. 4,474.56 Lacs (Previous year Rs. 5,723.35 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

6) The Company was diversifying its business by installing a distillery unit at Village Salana Jeon Singh Wala, Tehsil Amloh, District Fatehgarh Sahib. However because of strategic reason, the Company has abandoned this project.

7) Segment Information as required by Accounting Standard 17 “Segment Reporting” issued by the ICAI and compiled on the basis of the financial statements is as under :-

---

Mar 31, 2015

1) CONTINGENT LIABILITIES NOT PROVIDED FOR :

a) Estimated amount of contracts remaining to be executed on capital account (net of advances/ Letter of credit issued) Rs.5,398.67 Lacs (Previous year Rs.1,010.03 Lacs).

b) Letter of Credits in favour of suppliers and others Rs. 694.98 Lacs (Previous year Rs. 868.81 Lacs).

c) Bank Guarantees in favour of suppliers and others Rs. 1,159.11 Lacs (Previous year Rs. 916.08 Lacs).

d) Sales tax demands against which the company has preferred appeals Rs. 67.17 Lacs (Previous year Rs. 67.17 Lacs).

e) Income tax demands against which the company has preferred appeals Rs. 646.83 Lacs (Previous year Rs. Nil Lacs).

f) The Central Excise Authorities have issued show cause notices to the Company for Rs. 819.44 Lacs on various matters under the Central Excise Rules (Previous year Rs. 809.52 Lacs). The Company has filed suitable replies with the concerned authorities.

g) The Company has executed bonds / legal undertakings for an aggregate amount of Rs. 8,681.30 Lacs (Previous year Rs. 8,161.57 Lacs) in favour of the President of India for fulfillment of its obligations under the rules made under Central Excise Act, 1944 and Customs Act, 1962.

h) Claims of Rs. 3,525.40 Lacs (Previous year Rs. 486.49 Lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities.

2) The Company has undertaken export obligations of Rs. 67,461.51 Lacs (Previous year Rs. 52,048.08 Lacs) to export goods against the issuance of Import Licenses / Advance Licenses for the Import of Capital Goods and Raw Materials. Out of this, export obligations of Rs. 65,881.82 Lacs (Previous year Rs. 50,468.39 Lacs) have been fulfilled up to 31st March, 2015.

3) Advances include Rs. 27.76 Lacs (Previous year Rs. 27.76 Lacs) paid to the machinery supplier that are under dispute. The matter is pending in the Delhi High Court.

4) In the opinion of the Board of Directors, the Current Assets and Loans and Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

5) Export/domestic bills discounted during the year under Letter of Credit outstanding as on 31.03.2015 for Rs. 5,723.35 Lacs (Previous year Rs. 6,597.01 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

6) In accordance with the section 135 of the Companies Act, 2013 the company is covered by the provision of the said section-"Corporate Social Responsibility (CSR)"

a) The amount required to be spent- Rs.40.56 Lacs

b) The amount Spent - Nil However the company jointly with other group companies have joined hands under one umbrella, namely Oswal Foundation to carry out CSR activities in future.

7) Consequent to the enactment of the Companies Act, 2013 and its applicability for accounting periods commencing from 1st April, 2014, the Company has recalculated the remaining useful life of fixed assets in accordance with the provisions of Schedule-II of the Act. In case of Fixed Assets which have already completed their useful life in terms of Schedule-II of the Act, the carrying value (net of residual value) of such assets as at 1st April, 2014 amounting to Rs. 3,348.44 Lacs (net of deferred tax ) has been adjusted to the Retained Earnings and in case of other fixed assets the carrying value (net of residual value) is being depreciated over the re-calculated remaining useful life.

8) The Company is setting up a distillery unit with a capacity of 200 KLPD and 5 MW co-generation power plant at Village Salana Jeon Singh Wala , Tehsil Amloh , District Fatehgarh Sahib in the State of Punjab. After obtaining all necessary approvals for setting up the unit, orders for purchase of plant and machinery was placed and civil construction has also started. Unfortunately, farmers of the nearby area have filed an appeal in the National Green Tribunal (NGT), Delhi challenging Environmental Clearance and the central ground water approval regarding extraction of water through bore wells. The Tribunal heard the arguments from both the sides and the order was reserved on 19.3.2015 and the same is pending till date. In the meantime Company has incurred Rs. 16.61 crore as capital expenditure in the project.

9) Related Party Disclosures as required by Accounting Standard 18 issued by the ICAI are as under: - (a) Disclosure of Related Parties and relationship between the parties.

1 Associates J.L.Growth Fund Limited

Vardhman Investment Limited

Atam Vallabh Financers Limited

Cotton County Retail Limited

2 Key Management Personnel Sh. Kamal Oswal Vice Chairman-cum-Managing Director

Sh. Bharat Bhushan Gupta Chief Financial Officer

Sh. Mukesh Sood Company Secretary

3 Relatives of Key Management Personnel Sh. Jawahar Lal Oswal

Sh. Dinesh Oswal

Mrs. Abhilash Oswal

Mrs. Manisha Oswal

Mrs. Ritu Oswal

Mrs. Ruchika Oswal

Mrs. Monika Oswal

Mr. Rishab Oswal

Mr. Abhinav Oswal

4 Enterprises in which Key Management Personnel and relative of such personnel is able to exercise significant influence or control

Oswal Woollen Mills Ltd.

Nahar Spinning Mills Ltd.

Nahar Capital and Financial Services Ltd.

Nahar Industrial Infrastructure Corporation Ltd.

Monte Carlo Fashions Ltd.

Nahar Poly Films Ltd.

Kovlam Investment & Trading Co. Ltd.

Nagdevi Trading & Investment Co. Ltd.

Sankheshwar Holding Co. Ltd.

Vanaik Investors Ltd.

Vinayak Spinning Mills Ltd.

Crown Star Ltd.

Hug Foods Pvt. Ltd.

Abhilash Growth Fund Pvt. Ltd.

Nahar Growth Fund Pvt. Ltd.

Neha Credit & Investment Pvt. Ltd.

Nahar Financial and Investment Ltd.*

Retailerkart E-Venture Pvt. Ltd.*

Simran & Shanaya Co. Ltd.*

Sidhanth & Mannat Co. Ltd.*

Palam Motels Ltd.*

Monika Growth Fund Pvt. Ltd.*

Ruchika Growth Fund Pvt. Ltd.*

Girnar Investment Ltd.*

10) The previous year figures have been reclassified to confirm to this year's classification.

---

Mar 31, 2013

1) CONTINGENT LIABILITIES NOT PROVIDED FOR :

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs.3,498.34 Lacs (Previous year Rs.3,645.75 Lacs).

b) Letter of Credits in favour of suppliers and others Rs.4,852.15 Lacs (Previous year Rs.3,505.94 Lacs).

c) Bank Guarantees in favour of suppliers and others Rs.335.57 Lacs (Previous Year Rs.128.98 Lacs)

d) Corporate guarantee given on behalf of others Rs. Nil Lacs (Previous year Rs.1,195 Lacs)

e) Sales tax demands against which the company has preferred appeals Rs.120.46 Lacs (Previous year Rs.120.46 Lacs).

f) Income tax demands against which the company has preferred appeals Rs.552.00 Lacs (Previous year Rs.Nil Lacs).

g) The Central Excise Authorities have issued show cause notices to the Company for Rs.749.29 Lacs on various matters under the Central Excise Rules (Previous Year Rs.850.68 Lacs). The Company has filed suitable replies with the concerned authorities.

h) Punjab State Power Corporation Ltd. has raised a net demand of Rs.121.78 Lacs (Previous Year Rs.121.78 Lacs) on account of paralleling operation charges for the captive power generation by the Company. The Company has protested the demand in the Hon''ble Courts. i) The Company has executed bonds / legal undertakings for an aggregate amount of Rs.6,900.39 Lacs (Previous year Rs.6,041.87 Lacs) in favour of The President of India for fulfillment of its obligations under the rules made under Central Excise Act, 1944 and Customs Act, 1962. j) Claims of Rs.437.35 lacs (Previous Year Rs.368.06 lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities. k) On the basis of liability under disputed derivative contracts the banks have created interest demand of Rs.135.03 lacs so far on account of non payment. Since the derivative contracts are subjudice and disputed, thus the interest liability is contingent and has not been provided for.

2) The Company has undertaken export obligations of Rs.38,251.63 Lacs (Previous year Rs.26,130.59 Lacs) to export goods against the issuance of Import Licenses / Advance Licenses for the Import of Capital Goods and Raw Materials. Out of this, export obligations of Rs.36,671.95 Lacs (Previous year Rs.23,046.27 Lacs) have been fulfilled up to 31st March, 2013.

3) Advances include Rs.27.76 Lacs (Previous Year Rs.27.76 Lacs) paid to the machinery suppliers that are under dispute. The matter is pending in the Delhi High Court.

4) In the opinion of the Board of Directors, the Current Assets and Loans and Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

5) Export/domestic bills discounted during the year under Letter of Credit outstanding as on 31.03.2013 for Rs.6,896.92 Lacs (Previous year Rs.2,952.57 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

6) The previous year figures have been reclassified to confirm to this year''s classification.

---

Mar 31, 2012

A. Terms/rights attached to equity shares:

The company has only one class of Equity Shares having Face value of Rs. 10/-each. Each holder of equity share is entitled to only one vote per share.

1.1 Term loan from ICICI Bank Limited, IDBI Bank Limited, Canara Bank, State Bank of Patiala, Indian Overseas Bank, Allahabad Bank, Punjab National Bank, Axis Bank , State Bank Of Mysore, Punjab & Sind Bank , Corporation Bank and Government of India, Ministry of Consumer Affairs are secured by hypothecation as pari-passu first charge on whole of the immovable properties of the Company situated at Village Jalalpur, Chandigarh Ambala Road, Lalru, Distt. Mohali, Industrial Focal Point, Phase VIII, Village Mundian, Distt. Ludhiana, Village Jalaldiwal, Near Raikot, Distt. Ludhiana (Punjab), Village Udaipur/ Khijuriwas, Bhiwadi, Distt. Alwar (Rajasthan), Focal Point Phase IV Ludhiana (Punjab) and Village Salana Jeon Singh Wala, Tehsil Amloh, Distt. Fatehgarh Sahib (Punab) including the Company's movable Plant and Machinery, Machinery Spares and other moveables both present and future and subject to the charge or charges created or to be created by the Company in favour of its Bankers on its movables and also personally guaranteed by some of the Directors of the Company.

2.1 Working Capital Borrowings are secured by hypothecation of stock of Raw Materials, Work-in-Progress, Finished Goods, Stores and Book Debts and further secured by 2nd charge on Fixed Assets of the Company and also personally guaranteed by some of the Directors of the Company.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market. Discount rate is based on market yields prevailing on government bond as at 31 March 2012 for the estimated term of defined benefit obligation.

3) CONTINGENT LIABILITIES NOT PROVIDED FOR :

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 3,645.75 Lacs (Previous year Rs. 14,036.28 Lacs).

b) Letter of Credits in favour of suppliers and others Rs. 3,505.94 Lacs (Previous year Rs. 8,032.67 Lacs).

c) Bank Guarantees in favour of suppliers and others Rs. 128.98 Lacs (Previous Year Rs. 113.34 Lacs).

d) Corporate guarantee given on behalf of others Rs. 1,195 lacs (Previous year Rs. 8,500lacs).

e) Sales tax demands against which the company has preferred appeals Rs. 120.46 Lacs (Previous year Rs. 120.46 Lacs).

f) The Central Excise Authorities have issued show cause notices to the Company forRs. 850.68 Lacs on various matters under the Central Excise Rules (Previous Year Rs. 618.81 Lacs). The Company has filed suitable replies with the concerned authorities.

g) Punjab State Power Corporation Ltd. has raised a net demand of Rs. 121.78 Lacs (Previous Year Rs. 158.66 Lacs) on account of paralleling operation charges for the captive power generation by the Company. The Company has protested the demand in the Hon'ble Courts.

h) The Company has executed bonds / legal undertakings for an aggregate amount of Rs. 6,041.87 Lacs (Previous yearRs. 6,293.03 Lacs) in favour of The President of India for fulfillment of its obligations under the rules made under Central Excise Act, 1944 and Customs Act, 1962.

i) Claims of Rs. 368.06 lacs (Previous YearRs. 349.67 lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities.

j) Contingent liablities were provided in respect of Foreign Exchange Contracts which were under dispute in the courts, The net contingent liability at the end of year 2011-12 come to Rs. 1,609.04 lacs.

Since the liability arising out of the derivative contracts are sub judice before the Civil Courts and has been considered by the company as Contingent liability, thus the interest of Rs. 135.03 lacs computed by the banks on the disputed amount is not acknowledged and accordingly not provided for as status quo order is already in force.

4) The Company has undertaken export obligations of Rs. 26,130.59 Lacs (Previous year Rs. 19,929.98 Lacs) to export goods against the issuance of Import Licenses / Advance Licenses for the Import of Capital Goods and Raw Materials. Out of this, export obligations of Rs. 23,046.27 Lacs (Previous year Rs. 18,798.44 Lacs) have been fulfilled up to 31st March, 2012.

5) Advances include Rs. 27.76 Lacs (Previous YearRs. 27.76 Lacs) paid to the machinery suppliers that are under dispute. The matter is pending in the Delhi High Court.

6) In the opinion of the Board of Directors, the Current Assets and Loans and Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

7) Export/domestic bills discounted during the year under Letter of Credit outstanding as on 31.03.2012 forRs. 2,952.57 Lacs (Previous yearRs. 2,211.88 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

Associates*

Nahar Spinning Mills Limited , Nahar Poly Films Limited, Nahar Capital and Financial Services Limited, Oswal Woolen Mills Limited, Atam Vallabh Financers Limited, J.L.Growth Fund Limited, Vardhman Investments Limited, Abhilash Growth Fund Pvt. Limited, Kovlam Investment Trading Co. Limited, Ludhiana Holding Limited, Nagdevi Trading Investment Co. Limited, Nahar Growth Fund Pvt. Limited, Neha Credit Investment Pvt. Limited, Sankheshwar Holding Co. Limited, Vanaik Investor Limited, Vinayak Spinning Mills Limited, Nahar Industrial Infrastructure Corporation Limited, Cotton County Retail Limited, Crown Star Limited, Nahar Financial and Investment Limited, Monte Carlo Fashions Limited.

Key Management Personnel

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

Relatives of Key management Personnel

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

* Associates include enterprises in which Key Management Personnel or their relatives have significant Influence, it also includes enterprises with which no transaction has taken place during the peroid.

8) The financial statements for the year ended 31st March, 2012 have been prepared as per Revised Schedule-VI to the Companies Act, 1956. Accordingly the previous year figures have been reclassified to confirm to this year's classification.

---

Mar 31, 2011

1) CONTINGENT LIABILITIES NOT PROVIDED FOR:

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 14,036.28 Lacs (Previous year Rs. 1,570.14 Lacs).

b) Letter of Credits in favour of suppliers and others Rs. 8,032.67 Lacs (Previous year Rs. 2,074.50 Lacs).

c) Bank Guarantees in favour of suppliers and others Rs. 113.34 Lacs (Previous Year Rs. 267.69 Lacs).

d) Corporate guarantee given on behalf of others Rs. 8,500 lacs (Previous year Rs. 8,500 lacs).

e) Sales tax demands against which the company has preferred appeals Rs. 120.46 Lacs (Previous year Rs. 120.46 Lacs).

f) The Central Excise Authorities have issued show cause notices to the Company for Rs. 618.81 Lacs on various matters under the Central Excise Rules (Previous Year Rs. 2,129.06 Lacs). The Company has filed suitable replies with the concerned authorities.

g) Punjab State Electricity Board has raised a net demand of Rs. 158.66 Lacs (Previous Year Rs. 158.66 Lacs) on account of paralleling operation charges for the captive power generation by the Company. The Company has protested the demand in the Hon'ble Courts.

h) The Company has executed bonds / legal undertakings for an aggregate amount of Rs. 6,293.03 Lacs (Previous year Rs. 3,166.52 Lacs) in favour of the President of India for fulfillment of its obligations under the rules made under Central Excise Act, 1944 and Customs Act, 1962.

i) Claims of Rs. 349.67 lacs (Previous Year Rs. 372.56 lacs) lodged against the company on various matters are not acknowledged as debts. The company has filed suitable replies with the concerned authorities.

j) Foreign Exchange contracts which were under dispute in the Courts, for which contingent liablities were provided, have been partly settled during the year. The net contingent liability at the end of year 2010-11 come to Rs. 1,609.04 lacs.

Since the liability arising out of the derivative contracts are sub judice before the Civil Courts and has been considered by the company as Contingent liability, thus the interest of Rs. 135.03 lacs computed by the banks on the disputed amount is not acknowledged and accordingly not provided for as status quo order is already in force.

2) The Company has undertaken export obligations of Rs. 19,929.98 Lacs (Previous year Rs. 17,793.98 Lacs) to export goods against the issuance of Import Licenses for the Import of Capital Goods. Out of this, export obligations of Rs.18,798.44 Lacs (Previous year Rs. 17,397.65 Lacs) have been fulfilled up to 31st March, 2011.

3) The outstanding liability towards Zero Coupon Foreign Currency Convertible Bonds (FCCBs), which were due for redemption on its maturity date i.e. 16th February, 2011 have been redemed in full alongwith redemption premium for the entire peroid.

FCCB's peroidic cost reserve of Rs. 1,272.91 Lacs Created upto 31st March, 2010 has been transferred to the Profit/ Loss Account in the year ended results.

4) Market value of quoted investments is Rs. 3,742.92 Lacs (Previous Year Rs. 3,242.39 Lacs). Aggregate value of quoted investments is Rs. 5,057.66 Lacs (Previous Year Rs. 5,091.24 Lacs) and unquoted investment is Rs. 9,028.34 Lacs (Previous Year Rs. 9,025.53 Lacs).

5) Advances include Rs. 27.76 Lacs (Previous Year Rs. 27.76 Lacs) paid to the machinery suppliers that are under dispute. The matter is pending in the Delhi High Court.

6) The balances of Sundry debtors and Sundry creditors are subject to confirmation.

7) In the opinion of the Board of Directors, the Current Assets and Loans and Advances have a value on realization in the ordinary course of business at least equal to the value at which they are stated in the foregoing Balance Sheet, unless stated otherwise.

During the financial year 2007-08 the company had paid managerial remuneration of Rs. 464.78 lacs as approved by the shareholders in their meeting held on 29.09.2007. The company moved an application with the Central Government for approval which was denied. Accordingly, the amount of excess remuneration of Rs.358.75 lacs was considered as advance salary in the year of payment and was adjusted in the subsequent years remuneration. Out of this, Rs.145.49 lacs was adjusted in 2009-10 and Rs. 213.26 lacs was adjusted in 2010-11. After adjustment, the remuneration of Rs. 14.13 lacs is paid/payable to the Vice Chairman Cum-Managing Director.

Associates*

Nahar Spinning Mills Limited , Nahar Poly Films Limited, Nahar Capital and Financial Services Limited, Oswal Woolen Mills Limited, Atam Vallabh Financers Limited, J.L.Growth Fund Limited, Vardhman Investments Limited, Abhilash Growth Fund Pvt. Limited, Kovlam Investment Trading Co. Limited, Ludhiana Holding Limited, Nagdevi Trading Investment Co. Limited, Nahar Growth Fund Pvt. Limited, Neha Credit Investment Pvt. Limited, Sankheshwar Holding Co. Limited, Vanaik Investor Limited, Vinayak Spinning Mills Limited, Nahar Industrial Infrastructure Corporation Limited, Cotton County Retail Limited, Crown Star Limited, Nahar Financial and Investment Ltd.

Key Management Personnel

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

Relatives of Key management Personnel

Mrs. Abhilash Oswal, Mrs. Manisha Oswal, Mrs. Ritu Oswal and Ms Neha Oswal

* Associates include enterprises in which Key Management Personnel or their relatives have significant Influence, it also includes enterprises with which no transaction has taken place during the peroid.

8) Export/domestic bills discounted during the year under Letter of Credit outstanding as on 31.03.2011 for Rs. 2,211.88 Lacs (Previous year Rs. 1,639.16 Lacs) have been reduced from Bank Borrowings and correspondingly from Sundry Debtors.

9) Previous year's figures have been regrouped / rearranged wherever considered necessary in order to make them comparable with the current year's figures.

10) Annexure I to XX form integral part of the Balance Sheet and Profit and Loss Account and have been duly authenticated as such.

11 Additional informations as required under paragraph 3 and 4 of Part-II of Schedule VI of the Companies Act, 1956 are as follows :

1 Production excludes 517 MTs. material reprocessed (Previous year 115 MTs.) and excludes 3,368 MTs. for captive consumption (Previous year 3,288 MTs.). Sales Includes interunit transfer of 20,761 MTs. amounting to Rs. 4,016,618 thousands (Previous Year 19,820 MTs. amounting to Rs. 2,592,957 thousands).

2 Production excludes 633,385 Mtrs. reprocessed (Previous year 361,806 Mtrs.) It also excludes 27,161,755 Mtrs. for captive consumption (Previous Year 21,554,951 Mtrs.). Sales includes interunit transfer of 16,513,629 Mtrs amounting to Rs. 1,204,728 thousands (Previous Year 16,485,423 Mtrs. amounting to Rs. 960,693 thousands).

3 Production excludes 1,632,437 Mtrs. material reprocessed (Previous year 1,403,659 Mtrs.) and include 159,935 Mtrs. on Job work basis (Previous year 940,559). Sales Includes interunit transfer of 871,110 Mtrs. amounting to Rs. 76,541 thousands (Previous year 2,177,726 Mtrs. amounting to Rs. 183,216 thousands).

4 Sale Includes interunit transfer of 1,625 MTs. amounting to Rs.124,551 thousands (Previous year 76 MTs. amounting to Rs. 4,507 thousands).

5 Production excludes 4,720 Qtls. of Brown sugar reprocessed (Previous Year 3,950 Qtls.).

6 Production includes 815,387 Qtls. for captive consumption (Previous Year 467,755 Qtls.). Sale include interunit transfer of 65,995 Qtls. amounting to Rs. 13,199 thousands (Previous year 13,870 Qtls. amounting to Rs. 3,814 thousand).

7 Other sales includes interunit transfer of Rs. 923,046 thousands (Previous year Rs. 804,440 thousands).

(1) Excludes interunit transfer of 4,288 MTs. (Previous Year 3,394 MTs.) amounting to Rs. 270,512 thousands (Previous Year Rs. 143,499 thousands).

(2) Excludes interunit transfer of 18,836 MTs. (Previous Year 17,908 MTs.) amounting to Rs. 3,703,192 thousands (Previous Year Rs. 2,339,650 thousands).

(3) Excludes interunit transfer of 17,050,430 Mtrs. amounting to Rs. 1,260,377 thousands (Previous Year excludes interunit transfer of 18,356,313 Mtrs. amounting to Rs. 1,127,748 thousands).

(4) Includes 4,478.30 Qtls. amounting to Rs. 930 thousands of Sugar Cane Cultivated at Company's own R & D Farms (Previous Year 3,514.90 Qtls. amounting to Rs. 752 thousands).

(5) Excludes interunit transfer of 154 MTs. amounting to Rs. 2,315 thousands (Previous Year nil MTs. amounting to Rs. nil thousands).