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Notes to Accounts of Kanpur Plastipack Ltd.

Mar 31, 2015

1. Contingent Liabilities in respect of:

I Statutory Dues:

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2015 for a period of more than six months from the date of becoming payable.

b) The disputed statutory dues aggregating that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

2. The previous year''s figures have been regrouped / recasted, wherever necessary to make them comparablewith those of the current year. Figures in bracket indicate previous year''s figures.


Mar 31, 2014

1. Contingent Liabilities in respect of :

I. Statutory Dues :

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2014 for a period of more than six months from the date of becoming payable.

b) The disputed statutory dues aggregating that have not been deposited on account of disputed matters pending before appropriate authorities are as under :

In view of above facts, the Management feels that there shall not be any additional financial liabilities on the Company in all the above cases.

(c) Excise Duty :

In respect of Company''s claim with Central Excise authorities regarding wrong classification of product, which was partially settled and the company was allowed consequential relief in November, 1998, the appeal of the Department against the same was rejected by the CEGAT and contention of the company was accepted and refund of Rs. 1.16 Crores was granted. However, the department has filed reference, which is pending with the Allahabad High Court.

6. Related Party Disclosures :

The Company''s related party transactions during the year and outstanding balances as on 31.03.2014 are as under :

Details of Associate Companies

1. KSM Exports Ltd. — Associate Company

2. MSA Investment & Trading Co. Pvt. Ltd. — Associate Company

3. KPL Packaging Pvt. Ltd. — Associate Company

Details of Key Management Personnel & their relatives

1. Mahesh Swarup Agarwal – Chairman Emeritus

2. Manoj Agarwal – Managing Director

3. Sunil Mehta – Director (Operation)

4. Shashank Agarwal – Director (Technical)

5. Usha Agarwal – Sr. Manger (Marketing)

6. Manjari Agarwal – Professional

8. ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956

Balance Sheet Abstract and COmpany''s General Business Profile

I. Registration Details :

Registration No. L25209UP1971PLC003444

State Code 20

Balance Sheet Date 31st March, 2014

II. Capital raised during the year :

Public Issue NIL

Bonus Issue NIL

Right Issue NIL

Private Placement NIL


Mar 31, 2013

1. Contingent Liabilities in respect of :

I. Statutory Dues :

(a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. No undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2013 for a period of more than six months from the date of becoming payable.

(b) The disputed statutory dues aggregating that have not been deposited on account of disputed matters pending before appropriate authorities are as under :

(c) Excise Duty :

In respect of Company''s claim with Central Excise authorities regarding wrong classification of product, which was partially settled and the company was allowed consequential relief in November, 1998, the appeal of the Department against the same was rejected by the CEGAT and contention of the company was accepted and refund of Rs. 1.16 Crores was granted. However, the department has filed reference, which is pending with the Allahabad High Court.

2. The previous year''s figures have been regrouped / recasted, wherever necessary to make them comparable with those of the current year. Figures in bracket indicate previous year''s figures.

3. Related Party Disclosures :

The Company''s related party transactions during the year and outstanding balances as on 31.03.2013 are as under :

Details of Associate Companies

1. KSM Exports Ltd. — Associate Company

2. MSA Investment & Trading Co. Pvt. Ltd. — Associate Company

3. KPL Packaging Pvt. Ltd. — Associate Company

Details of Key Management Personnel & their relatives

1. Mahesh Swarup Agarwal – Chairman Emeritus

2. Manoj Agarwal – Managing Director

3. Sunil Mehta – Director (Operation)

4. Shashank Agarwal – Director (Technical)

5. Usha Agarwal – Sr. Manger (Marketing)


Mar 31, 2012

1.1 Term Loan in Foreign Currency amounting to (Rs. in Lacs) 597.90 (Previous Year Rs. NIL has been taken 2011-12 for 10 Years.) has been converted from Term Loan in INR to Term Loan in Foreign Currency.

1.2 Term Loan in Foreign Currency as on 31-03-2012 is (Rs. in Lacs) 304.05 (Previous Year 368.94) and is to be paid in 6 Years.

1.3 Balance of Term Loan from State Bank of India as on 31-03-2012 is (Rs. in Lacs) 1022.78 (Previous Year Rs. 1452.95).

1.4 The above Term Loans are secured by hypothecation of stocks of Raw Materials, Goods in Process, Finished Goods, Spares, Book Debts, Export Documents and mortgage of FixedAssets.

1.5 The above Term Loans have been guaranteed (Personal) by Chairman, Managing Director and Director (Tech.) of the Company.

1.6 Vehicle Finance under Hire purchase is Secured by Hypothecation of Vehicle

1.7 (Rs. in Lacs) 54.43 (Previous year (Rs. in Lacs) NIL) taken from UPSIDC Secured by Hypothecation of Land-Jainpur.

1.8 (Rs. in Lacs) 201.00 (Previous year (Rs. in Lacs) 98.5 out of Deposits is for 3 Years and Interest Rate is 12.5%.

1.9 Rs. in Lacs NIL (Previous year (Rs. in Lacs) 32.00) out of Deposits is for 2 Years and Interest Rate is 12.5%.

1.10 Rs. in Lacs NIL (Previous year (Rs. in Lacs) 7.50) out of Deposits is for 6 Months and Interest Rate is 12.5%.

1.11 Rs. in Lacs 50.00 (Previous year (Rs. in Lacs) 25.00) out of Inter Corporate Deposits is for 3 Years and Interest Rate is 12.5%.

1.12 Rs. in Lacs 25.00 (Previous year (Rs. in Lacs) 25.00) out of Inter Corporate Deposits is for 2 Years and Interest Rate is 12.5%.

2.1 In accordance with Accounting Standard (AS - 22) on Accounting for Taxes on Income as issued by The Institute of Chartered Accountants of India, the Company has provided for deferred tax liability resulting from timing differences between book and taxable profit using the rates and the laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable / virtual certainty that the asset will be realised in future.

3.1 The provision for gratuity has been calculated in accordance with the provisions of the Payment of Gratuity Act, 1972. The provision has been made only for those employees,who have completed five years of service with the company. 2/5th provision relating to enhanced liability consequent to the increase in maximum limit of gratuity from earlier Rs 3.50 lacs to Rs 10.00 lacs has been made. Balance provision shall be made in next three years.

3.2 The liability of the Company for Gratuity are estimated at each year end and liability accordingly is provided in the books of the Company.

4.1 The liability of the Company for Leave Wages are estimated at each year end and liability accordingly is provided in the books of the Company.

NOTES:

Depreciation on Building, Plant & Machinery, Electric Installation has been charged on straight line method, whereas the same has been charged on WDV method on Furniture & Fixtures, Office Equipments & Vehicles- as per the rates of Schedule XIV of the Companies Act, 1956.

Plant & Machinery are charged to Depreciation @ 5.28% (continuous process plant).

Gross Block of Plant & Machinery and Building Includes (T in Lacs) 239.70 and (T in Lacs) 2.72 worth of assets respectively,which has been fully depreciated.

The Company is registered as a 'Technical Textile Unit' by Ministry of Textiles vide registration no 19101004. Consequently, Capital Subsidy (Rs. in Lacs NIL).

(Previous year (Rs. in Lacs) 21.01) is being availed.

4.1 The Company has opted for accounting the exchange differences arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules, 2011 relating to Accounting Standards 11 Accordingly, the effect of (AS-11) notified by Government of Indiaon 11th May, 2011. Exchange differences on foreign currency loans of the company is accounted by transfer to 'Foreign Currency Monetary Items Translation Difference Account' to be amortised over the balance period of the long term monetary items or period upto 31st March, 2012, whichever is earlier.

5.1 The Company is registered as a 'Technical Textile Unit' by Ministry of Textiles vide registration no 19101004. Consequently, interest reiumbursement (Rs.in Lacs 64.06) (Previous year (Rs. in Lacs) 68.50) is being availed.

6. Contingent Liabilities in respect of :

(A) Income Tax :

a. For Assessment Years 1995-96 to 1997-98, the department reopened the cases and made arbitrary additions in respective year. The Company went into Appeal in all the cases and they were decided at Income Tax Appelate Tribunal, Lucknow in favour of the Company. Department granted refund and simultaneously has filed appeals with Hon'ble High Court, Allahabad in respective cases, which have not yet been admitted for any of the Assessment years.

b. For the assessment years 2001-02, the A.O. made arbitrary additions on certain points, the Company had paid the alleged demand and went into appeal with ITAT and partially favourable orders were made by the Tribunal. After giving effect to the orders of the Tribunal,a refund was granted by the Assessing Officer. Simultaneously, the Company has gone into appeal only on one point sustained disallowance deduction claimed u/s 80HHC amounting to Rs.52.74 lacs with Hon'ble Allahabad High Court, Lucknow Bench, which has been admitted and is pending for disposal.

c. For assessment Years 2002-03, 2003-04 & 2004-05, where the cases were re-opened and for the regular assessment of Assessment Year 2008-09, certain arbitrary additions were made by A.O. The Company had gone for appeal in all the cases with CIT Appeals, Kanpur and in appeal CIT (A) -2, Kanpur has fully allowed the appeal for A.Y. 2002-03 & 2004-05 in favour of the company and Appeal for the A.Y. 2003-04 & A.Y. 2008-09 were partially allowed in favour of the company. After giving effect to the orders of CIT (A)-2,Kanpur A.O. has granted refund and simultaneously filed appeals with ITAT Lucknow in all the cases.

d. For Assessment year 2005-06 to 2007-08, arbitrary additions were made by A.O. The company has gone for Appeal before ITAT Lucknow and on appeal, all the cases were decided partly in favour of the Company. After giving effect of the orders of ITAT, A.O. has granted refund and simultaneously filed appeals with Allahabad High Court, Allahabad which have not yet been admitted for any of the Assessment years.

e. For Assessment year 2009-10, assessment has been completed and the demand raised has been paid.

f. Penalty proceeding u/s 271(1)(c ) regarding Assessment Years 2002-03 to 2004-05 and 2008-09 are pending for disposal, as the Income Tax Department appeals are pending at ITAT Lucknow. However, the penalty proceeding for A.Y.2009-10 has been dropped by A.O.

In view of above facts, the Management feels that there shall not be any additional financial liabilities on the Company in all the above cases.

(B) Excise Duty :

In respect of Company's claim with Central Excise authorities regarding wrong classification of product, which was partially settled and the company was allowed consequential relief in November, 1998, the appeal of the Department against the same was rejected by the CEGAT and contention of the company was accepted and refund of Rs. 1.16 crores was granted. However, the department has filed reference, which is pending with the Allahabad High Court.

2. The previous year's figures have been regrouped / recasted, wherever necessary to make them comparable with those of the current year. Figures in bracket indicate previous year's figures.


Mar 31, 2010

2009-10 Increase/ 2008-09

(Decrease) during

1. Contingent Liabilities in respect of : the year

a) Counter Guarantees given to Bank for issue of performance guarantees by Bank 257.00 (29.88) 286.88

b) Foreign bills discounted by the bank under Letter of Credit 30.32 (106.30) 136.62

c) Legal Undertakings submitted to Customs & DGFT under Duty Exemption Scheme for import of raw materials against which all exports have been completed and Advance Licences are under redemption. 3651.94 72.46 3579.48

d) Labour cases pending with Labour Courts/High Court. 1.90 - 1.90



2. In respect of the Companys claim with Central Excise authorities regarding wrong classification of product, which was partially settled and the Company was allowed consequential relief in November, 1998, the appeal of the Department against the same was rejected by the CEGAT and contention of the company was accepted. The Departmental reference filed with Honble Allahabad High Court is still pending.

3. Regarding Income Tax matters :-

a. For Assessment Years 1995-96 to 2000-01, the department reopened the cases and made Arbitrary additions in respective years. The Company went into Appeal in all the cases and they were decided at Income Tax Appellate Tribunal, Lucknow in favour of the Company, where the revised assessment orders were quashed and demand raised annulled. Department granted refund and simultaneously has filed appeals with Honble High Court, Allahabad in respective cases, which have not yet been admitted for any of the Assessment Years.

b. For the assessment years 2001-02, a demand of Rs 39,40,390/- was raised which was fully adjusted with brought forward losses. On certain counts, the Company went into appeal, which was not allowed and decided in favour of the Department. Against the same, the Company has appealed with Honble Allahabad High Court, Lucknow Bench, which has been admitted and is pending for disposal. Further, Departments appeal against the judgement of CIT Appeals was partly allowed by ITAT, Lucknow and accordingly, a refund of Rs. 34,07,466/- has been granted to the Company.

c. For Assessment Year 2002-03, the case was reopened by ITO-6(2), Kanpur and certain arbitrary additions were made and accordingly, a demand of Rs. 3,06,740/- was raised. Against this, the Company had filed an appeal with CIT (Appeals), which is pending.

d. For Assessment years 2005-06, 2006-07 and 2007-08, arbitrary additions were made and demand of Rs. 22,84,990/-, Rs. 14,25,701, and Rs. 15,25,545/- respectively, were raised. Against this, the Company went into appeal with ITAT, Lucknow / CIT (Appeals), Kanpur. All the cases were decided partly in favour of the Company and giving effect of these orders, a refund of Rs. 22,49,872/-, Rs. 15,98,864/- and Rs. 14,62,720/- respectively, have been granted in April / May 2010.

In view of above facts, the Management feels that there shall not be any additional financial liabilities on the Company in all the above cases.

4. The previous years figures have been regrouped / recasted, wherever necessary to make them comparable with those of the current year. Figures in bracket indicate previous years figures.

5. Depreciation includes an impairment loss of Computer Software of Rs. 31,226/- as required under Accounting Standard – 28.

6. The provision for gratuity has been calculated in accordance with the provisions of the Payment of Gratuity Act, 1972. The provision has been made only for those employees, who have completed five years of service with the Company.

7. The amount of foreign exchange fluctuation amounting to Rs.12,10,840/- (debit) (Last year debit Rs. 8,22,587/-) has been included in Administrative Expenses.

8. Sundry Creditors includes Rs. 2.20 Lacs (Previous year Rs. 2.43 lacs) due to Small Scale Industrial Undertakings and Rs. 391.93 Lacs (previous year Rs. 447.24 lacs) due to other creditors. The disclosure is based on the information available with the Company regarding the status of the suppliers. There are no sundry creditors, whose dues are outstanding for more than 30 days and exceeding Rs. 1.00 lac.

9. Excise Duty includes excise rebate on export sales amounting to Rs. 16.72 Lacs (Previous Year Rs. 28.41 lacs).

10. The Receivables and Cash & Bank Balances as mentioned in the Balance Sheet includes Rs. 3,32,972/- and (-) Rs. 3,20,314/- respectively, as related to Consignment Stockist Division of the company.

11. The Company has surrendered the Consignment Stockistship of Gail (India) Ltd. and has been appointed as DCA cum CS by Indian Oil Corporation Ltd. for polymer marketing.

12. 1/5th Provision (3rd instalment) for Leave encashment has been made.

13. Intangible assets as per Accounting Standard – 26 include computer software depreciated @ 40%. The gross value and accumulated depreciation thereon are Rs 4.75 lacs and Rs 4.38 lacs respectively.

14. A sum of Rs. 3,54,824/- on account of profits in foreign exchange transactions made for export sales has been credited to sales account and thus the overall sales have been increased by that amount.

15. As against outstanding Foreign Currency Term Loan of USD 950410 taken for fixed assets, there is a negative exchange difference of Rs 6.46 lacs as on 31st March 2010 resulting into notional increase in the term liability of the Company by the similar amount. Further, the Company has taken a Foreign Currency Demand Loan of USD 400000 against working capital limits, which is fully hedged and accordingly, there shall be an additional liability of Rs. 5.77 lacs at the time of payment of said loan in Sept 2010 on account of hedging cost.

16. The Company is registered as a Technical Textile Unit by Ministry of Textiles vide registration no 19101004. Consequently, interest reiumbursement and capital subsidy is being availed.

17. The Company makes regular contribution for Employees Provident Fund and Employees State Insurance and these are charged to revenue. The liability of the Company for Gratuity and Leave Wages are estimated at each year end and liability accordingly is provided in the books of the Company.

18. Deferred Tax :

In accordance with Accounting Standard (AS – 22) on Accounting for Taxes on Income as issued by The Institute of Chartered Accountants of India, the Company has provided for deferred tax liability resulting from timing differences between book and taxable profit using the rates and the laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable / virtual certainty that the asset will be realised in future. The details are given hereunder:

19. Earning per Share :

Net Profit after Tax Rs. 254.01 Lacs (Previous Year Rs. 186.36 lacs) (as per Profit/Loss account)

Weighted Average number of fully Paid up 53,06,250 Equity shares

Equity Shares of Rs. 10/- Each (Previous Year 53,06,250 Equity Shares)

Earning per Share Rs. 4.79 (Previous Year Rs. 3.51)

20. Related Party Disclosures :

The Companys related party transactions during the year and outstanding balances as on 31.03.2010 are as under :

Details of Associate Companies

1. KSM Exports Ltd. - Associate Company

2. MSA Investment & Trading Co. Pvt. Ltd. - Associate Company

3. KPL Packaging Pvt. Ltd. - Associate Company