Notes to Accounts of Kitply Industries Ltd.

Mar 31, 2014

The Company has entered into a revised restructuring agreement with the current investor debenture holder where the company is to pay Rs, 1,831,439,879/- by 31st March, 2015, towards redemption of the said debentures, subject to terms & conditions.

All the above debentures are secured as under:

(i) First Exclusive Priority Charge on Immovable properties at, Margherita, Art Margherita, Long Island, Rampur and Gondia, Godown / Immovable Property at Thane, Trade mark ' Kitply', Movable and Current Assets (Inventories & Debtors), IFCI, IDBI and IIBI Financed equipments and Insurance contracts.

(ii) Third party Assets i.e. all that piece and parcel of agricultural land admeasuring 52.96 acres at Bhaiya Nagla, Muradabad.

(iii) Pledge of new promoter's shares proposed to be issued under the Scheme of Arrangement and a Second Parri Passu Charge on Third Party Assets I i.e. Office premises at 119, Park Street Kolkata - 700 016.

Further, of the above, series A debentures amounting to Rs, 1,000,000,000 are also secured by a First Exclusive Priority Charge on Agro Immovable Property, Agro Movable assets and pledge of existing promoters shares.

(b) 50,400 secured redeemable non-convertible debentures of Series 1, 2 and 3 of the face value of Rs, 10,000/- each aggregating to Rs, 504,000,000 (interest free) are redeemable at par as follows:-

On 15th September, 2013 Rs, 190,000,000 (Redemption could not be done since the Company is sick) On 15th September, 2014 Rs, 269,000,000 On 15th September, 2015 Rs, 45,000,000

Further, 5,440 Secured redeemable non-convertible debentures of the face value ofRs, 10,000/- each aggregating to Rs, 54,400,000 are convertible into Equity as envisaged in the Scheme of Arrangement.

Out of above, 13,160 debentures amounting to Rs, 131,600,000 are secured by a Second Pari-Passu Charge on Agro Immovable and Movable Assets and Third Exclusive Priority Charge on the Godown / Immovable Property at Thane. Further 5,440 debentures are secured by:

First Exclusive Charge on Third party Assets I i.e. premises at 119, Park Street Kolkata - 700 016.

Second Pari-Passu Charge on pledge of existing promoter shares.

Besides, 42,680 debentures amounting to Rs, 426,800,000 and 5,440 debentures amounting to Rs, 54,400,000 are further secured by:

Second exclusive priority Charge on the trade mark, Third Party Assets 1 i.e. Office premises at 119, Park Street Kolkata - 700 016 and Third Party Asset 2 i.e. all that piece and parcel of agricultural land admeasuring 52.96 acres at Bhaiya Nagla, Muradabad. (Provided that the claim should not exceeds Rs, 17.76 crores).

Second parri-Passu Charge on Movable Assets, Current Assets and Immovable property at Margherita, Art- Margherita, Long Island, Rampur, Gondia (Provided that the claim should not exceeds Rs, 19.46 crores) & other current assets of the Company.

42,680 debentures are further secured by Third Exclusive Priority Charge on the Godown / Immovable property at Thane.

Further, 55,840 debentures are also secured by a personal guarantee of Mr. P. K. Goenka (Chairman & Managing Director).

(c) 31,551 secured redeemable non-convertible debentures of the face value of Rs, 10,000/- each aggregating to Rs, 315,510,000 which carry interest @ 6.00% (6.00%) are redeemable at par along with interest in two equal installments on 31st March, 2013 & 31st March, 2014. Redemption could not be done since the Company is sick, however interest has been charged and are secured by:

Second Pari-Passu Charge on Agro Immovable Property, Agro movable assets and pledge of existing promoter shares.

Second Exclusive Priority Charge on the Godown / Immovable property at Thane and IDBI Financed Equipments

(d) 8,404 secured redeemable non-convertible debentures of the face value of Rs, 10,000/- each aggregating to Rs, 84,040,000 which carry interest @ 6.00% (6.00%) are redeemable at par along with interest in two equal installments of Rs 40,485,000 on 31st March, 2013 & of Rs 43,555,000 on 31st March, 2014. Redemption could not be done since the Company is sick, however interest has been charged.

400 secured redeemable non-convertible debentures valuing Rs, 4,000,000 (interest free) are redeemable at par in three yearly installments on 15th September, 2013, 15th September, 2014 & 15th September, 2015. Redemption could not be done since the Company is sick. The above debentures are secured by:

Second Pari-Passu Charge on the Movable Assets, Current Assets and Immovable property at Margherita, Art- Margherita, Gondia, Rampur & Long Island and other current assets of the Company.

Fourth Pari-Passu Charge on the Godown / Immovable property at Thane.

(e) 278 secured redeemable non-convertible debentures aggregating to Rs, 2,780,000 will be converted into equity as envisaged in Scheme of Arrangement and 1,436 secured redeemable non-convertible debentures aggregating to Rs, 14,360,000 which carry interest @ 8.40% (8.40%) are redeemable at par along with interest in three yearly installments on 30th September, 2013, 30th September, 2014 & 30th September, 2015. Redemption could not be done since the Company is sick. The above debentures are secured by:

Second Exclusive Priority Charge on IFCI Financed Equipments.

Fourth Pari-Passu Charge on the Godown immovable property at Thane.

(f) 1,111 secured redeemable non-convertible debentures aggregating to Rs, 11,110,000 which carry interest @ 6.00% (6.00%) are redeemable at par along with interest in two equal installments on 31st March, 2013 & 31st March, 2014. Redemption could not be done since the Company is sick, however interest has been charged and are secured by:

Second Pari-Passu Charge on Agro Immovable Property and Agro movable assets.

Second Exclusive Priority Charge on IIBI Financed Equipments.

(g) 166 secured redeemable non-convertible debentures aggregating to Rs, 1,660,000 will be converted into equity as envisaged in Scheme of Arrangement and 860 secured redeemable non-convertible debentures aggregating to Rs,8,600,000 which carry interest @ 8.40% (8.40%) are redeemable at par along with interest in three yearly installments on 30th September, 2013, 30th September, 2014 & 30th September, 2015. Redemption could not be done since the Company is sick, however interest has been charged. The above debentures are secured by:

Second Pari-Passu Charge on Movable Assets, Current Assets and Immovable property at, Margherita, Art- Margherita, Gondia, Rampur, & Long Island and other current assets of the Company.

Fourth Pari-Passu Charge on the Godown / Immovable property at Thane.

B. 8,800 unsecured redeemable non-convertible debentures aggregating to Rs, 88,000,000 will be converted into equity as envisaged in Scheme of Arrangement.

C. Unsecured loan from a scheduled bank (interest free) is repayable in eight quarterly installments ofRs, 4,887,000 each starting from July 01, 2015.

D. Unsecured loans from bodies corporate includes Rs, 70,300,000 which were proposed to be converted into equity as envisaged in the Scheme of Arrangement. The lender has recalled the loan in earlier years. However, since the Company's suit against the above lender for specific performance is pending before Hon'ble Calcutta High Court as stated in Note 39 (c), the above loan has been considered as Non-current.

E. Finance lease obligations were secured by hypothecation of the assets purchased there against and carried interest @ 10.00% to 13.00% (10.00% to 13.00%).

F. In the absence of profit, Debenture Redemption Reserve ofRs, 452,915,275 has not been created.

G. Period and amount of continuing default as on the balance sheet date in repayment of debentures, loans, interest and premium on debentures thereon:

(a) Debentures aggregating toRs, 767,216,446 (including interest) which has become due on 31st March 2014, has not been redeem by the Company due to sickness.

(b) Debentures aggregating to Rs, 4,413,769 (including interest and redemption premium) and loans of Rs, 70,300,000 have been recalled by the lenders, but the same is disputed by the Company as stated in Notes 38, 39 (c) and accordingly, not considered as a continuing default as on the Balance Sheet date.

1. Gratuity - Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed at least five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is not funded.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the plan.

* The management has relied on the overall actuarial valuation conducted by the actuary. However, experience adjustments on plan liabilities for earlier years are not readily available and hence not disclosed.

2. Segment information

The primary segment reporting format is determined to be business segments as the Company's risks and rates of return are affected predominantly by differences in the products and services produced. Secondary information is reported geographically. The operating businesses are organized and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. Accordingly, the Company has identified "Plywood" and "Agro Forestry" as the business segments.

Plywood - Consists of manufacture and sale of plywood, block board, particle boards, Veneer, timber and Laminates.

Agro forestry - Consists of plantation timber.

The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas Operations.

3. Leases

Operating lease: Company as lessee

Certain office premises, go down etc are obtained on operating leases. The lease term is for 1-3 years and renewable for further period either mutually or at the option of the Company. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease arrangements. There are no subleases. The leases are cancelable.

Finance lease: Company as lessee

Fixed Assets include certain Vehicles obtained on finance lease. The year-wise break-up and future obligation towards minimum lease payments of Rs, Nil (Rs, Nil) consisting of present value of lease payments of Rs, Nil (Rs, Nil) and financial charges of Rs, Nil (Rs, 5,703) under the respective agreements as on 31st March, 2014, is given below:

Note: Based on discussion with the solicitors / favorable decisions in similar cases / legal opinions taken by the Company, the management believe that the Company has a good chance of success in above mentioned cases and hence, no provision there against is considered necessary.

4. No provision against demand from a lender amounting to Rs, 321,037,000 towards principal and interest on withdrawal of One Time Settlement (OTS) entered in earlier years, due to alleged non fulfillment of agreed conditions by the Company, has been made in the accounts since the above amount is not payable by the Company and the Company has also been legally advised that the above demand is not tenable. Against the above, Rs, 3,110,000 and Rs, 13,03,769 is being carried forward in the books under the heads Long term borrowings and Interest accrued and due respectively as per the said OTS.

5. (a) The Company had filed a scheme of arrangement in an earlier year, u/s 391-394 read with section 78, 100 to 104 of the Companies Act, 1956 with the Hon'ble Guwahati High Court which envisages reduction of capital, conversion of debt into equity and restructuring of certain assets and liabilities of the Company with effect from 1st Day of March, 2008. Pending approval of the Hon'ble High Court of Guwahati, the effect of reduction in Share Capital and conversion of portion of a Debt into Equity has not been given in the books of account. However, the effect of restructuring of Assets and Liabilities has already been given in accounts in earlier years.

6. (b) No interest has been provided on loans/debentures amounting to Rs, 417,140,000 which are proposed to be converted into equity in terms of scheme of arrangement filed with the Hon'ble High Court of Guwahati under section 391-394 of the Companies Act, 1956 whose approval is pending as on date as stated above.

7. (c) Out of the above amount ofRs, 417,140,000 certain lenders whose dues as on the Balance Sheet date stands at Rs, 70,300,000 have recalled their loans and have also demanded interest amounting to Rs, 42,526,685 (including Rs, Nil for the year). In addition to above, they have also demanded overdue interest and liquidated damage charges amounting to Rs, 17,088,575. Further, the said lenders have filed petitions for winding up of the Company for nonpayment of their dues under the relevant provisions of the Companies Act, 1956. The Company has also filed a suit against the above lenders for specific performance and the matter is pending before Hon'ble Kolkata High Court and in the opinion of the management, no amount towards interest including overdue interest or liquidated damages is payable. Pending the High Court decision, no interest liability as stated above, has been provided in these accounts.

8. As at the Balance Sheet date, the net-worth of the Company has become negative, since the accumulated losses of the Company stands atRs, 3,974,841,289 as compared to the Shareholders fund ofRs, 575,645,590 (excluding revaluation reserve ofRs, 110,379,409). The Company has made a reference to the Hon'ble Board for Industrial & Financial Reconstruction (BIFR) pursuant to the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and it has been registered u/s 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985.

Consequently, a revival plan would be formulated by the operating agency in due course under the BIFR Act and the Company is hopeful of working out a scheme for its rehabilitation. Further, the Company is in the process of resolving certain disputes/litigation in its favour, which are more fully discussed in Notes 33 and 34 (c) above. Considering the above, these financial statements have been drawn up as per the going concern assumption, which is appropriate in the opinion of the management.

9. The Company has entered into a revised restructuring agreement with the current invester debenture holder (Snowblue Shoppers Private Limited) where the company is to pay Rs, 1,831,439,879/- by 31st March, 2015, towards redemption of the debentures, subject to terms & conditions.

10. Interest amounting to Rs, 60,00 lacs on loan of Rs, 400 lacs from an unsecured creditor is not provided for as the Company has been restrained by the Hon'ble Board for Industrial & Financial Reconstruction (BIFR) by order dated 21.09.2012, had it not been for the standing order the Company would have paid the amount the matter currently is subjudice and hence no interest has been provided, pending outcome at Hon'ble Board for Industrial & Financial Reconstruction (BIFR).

11. Deferred tax asset (net) amounting to Rs, 385,522,033 (Rs, 1,367,760,080), as detailed below, has not been recognized in these accounts in view of the accounting policy specified in 1.1 (n) above.

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Mar 31, 2013

1. Gratuity - Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed at least five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is not funded.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the plan.

* The management has relied on the overall actuarial valuation conducted by the actuary. However, experience adjustments on plan liabilities for earlier years are not readily available and hence not disclosed.

2. Segment information

The primary segment reporting format is determined to be business segments as the Company's risks and rates of return are affected predominantly by differences in the products and services produced. Secondary information is reported geographically. The operating businesses are organized and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. Accordingly, the Company has identified "Plywood" and "Agro Forestry" as the business segments.

Plywood - Consists of manufacture and sale of plywood, block board, particle boards, Veneer, timber and Laminates.

Agro forestry - Consists of plantation timber.

The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas Operations.

Note : The Company has common fixed assets for producing goods for domestic and overseas markets. Hence, separate figures for fixed assets/additions to fixed assets have not been furnished.

Finance lease: Company as lessee

Fixed Assets include certain Vehicles obtained on finance lease. The year-wise break-up and future obligation towards minimum lease payments of Rs, Nil (Rs, 217,120) consisting of present value of lease payments of Rs, Nil (Rs, 209,638) and financial charges of Rs, 5,703 (Rs, 7,482) under the respective agreements as on 31st March, 2013, is given below:

3. Leases

Operating lease: Company as lessee

Certain office premises, go down etc are obtained on operating leases. The lease term is for 1-3 years and renewable for further period either mutually or at the option of the Company. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease arrangements. There are no subleases. The leases are cancelable.

Note: Based on discussion with the solicitors / favorable decisions in similar cases / legal opinions taken by the Company, the management believe that the Company has a good chance of success in above mentioned cases and hence, no provision there against is considered necessary.

4. No provision against demand from a lender amounting to Rs, 321,037,000 towards principal and interest on withdrawal of One Time Settlement (OTS) entered in earlier years, due to alleged non fulfillment of agreed conditions by the Company, has been made in the accounts since the above amount is not payable by the Company and the Company has also been legally advised that the above demand is not tenable. Against the above, Rs, 3,110,000 and Rs, 818,240 is being carried forward in the books under the heads Long term borrowings and Interest accrued and due respectively as per the said OTS.

5. (a) The Company had filed a scheme of arrangement in an earlier year, u/s 391-394 read with section 78, 100 to 104 of the Companies Act, 1956 with the Hon'ble Guwahati High Court which envisages reduction of capital, conversion of debt into equity and restructuring of certain assets and liabilities of the Company with effect from 1st Day of March, 2008. Pending approval of the Hon'ble High Court of Guwahati, the effect of reduction in Share Capital and conversion of portion of a Debt into Equity has not been given in the books of account. However, the effect of restructuring of Assets and Liabilities has already been given in accounts in earlier years.

6. (b) No interest has been provided on loans/debentures amounting to Rs, 417,140,000 which are proposed to be converted into equity in terms of scheme of arrangement filed with the Hon'ble High Court of Guwahati under section 391-394 of the Companies Act, 1956 whose approval is pending as on date as stated above.

7. (c) Out of the above amount of Rs, 417,140,000 certain lenders whose dues as on the Balance Sheet date stands at Rs, 70,300,000 have recalled their loans and have also demanded interest amounting to Rs, 42,526,685 (including Rs, 8,436,000 for the year). In addition to above, they have also demanded overdue interest and liquidated damage charges amounting to Rs, 17,088,575. Further, the said lenders have filed petitions for winding up of the Company for non payment of their dues under the relevant provisions of the Companies Act, 1956. The Company has also filed a suit against the above lenders for specific performance and the matter is pending before Hon'ble Kolkata High Court and in the opinion of the management, no amount towards interest including overdue interest or liquidated damages is payable. Pending the High Court decision, no interest liability as stated above, has been provided in these accounts.

8. As at the Balance Sheet date, the net-worth of the Company has become negative, since the accumulated losses of the Company stands at Rs, 3,888,875,576 as compared to the Shareholders fund of Rs, 575,645,590 (excluding revaluation reserve of Rs, 110,379,409). The Company has made a reference to the Hon'ble Board for Industrial & Financial Reconstruction (BIFR) pursuant to the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and it has been registered u/s 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985.

Consequently, a revival plan would be formulated by the operating agency in due course under the BIFR Act and the Company is hopeful of working out a scheme for its rehabilitation. Further, the Company is in the process of resolving certain disputes/litigation in its favor, which are more fully discussed in Notes 33 and 34 (c) above. Considering the above, these financial statements have been drawn up as per the going concern assumption, which is appropriate in the opinion of the management.

9. The Company in under discussion for the revision of terms and conditions with the current holder of 120,000 debenture of Rs, 10,000 each to whom the same were sold during the year by the erstwhile holders M/s India Debt Management Private Limited, whose outcome is pending as on date. In view of above, interest of Rs, 2,200,00 lacs (including Rs, 1,200,00 lacs for the year) and redemption premium Rs, 4,687,51 lacs (including Rs, 1,992,62 lacs for the year) on the said debentures has not been provided on and from April 01, 2011.

10. Interest amounting to Rs, 60,00 lacs on loan of Rs, 400 lacs from an unsecured creditor is not provided for as the Company has disputed the same and the matter is subjudice.

11. Based on the information/documents available with the Company, no Trade Payable is covered under The Micro, Small and Medium Enterprises Development Act, 2006. As a result, no interest provisions/payments have been made by the Company to such Trade Payables, if any, and no disclosures thereof are made in these accounts.

12. Previous year figures

Previous year's figures including those

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Mar 31, 2012

1. Basis of preparation

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by the Companies Accounting Standards Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in respect of insurance and other claims, which on the grounds of prudence or uncertainty in realization, are accounted for as and when accepted /received.

The accounting policies applied by the Company are consistent with those used in the previous year, except for the change in accounting policy explained in 1.1 (a) below.

(a) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The above debentures carry interest @10.00% (4.00%)

Series B and C Debentures were proposed to be converted into equity. The lender has recalled the above loans during the year, which has been disputed by the Company for the reasons mentioned in Note 38 and since the matter is sub-judice, the above loan has been considered as Non-current.

All the above debentures are secured by First Exclusive Priority Charge on Immovable property at, Marguerite, Art Margherita, Long Island, Rampur and Gondia, Godown / Immovable Property at Thane, Trade mark ‘Kitply', Movable and Current Assets (Inventories & Debtors), IFCI, IDBI and IIBI Financed equipments and Insurance contracts.

Third party Assets 2 i.e. all that piece and parcel of agricultural land admeasuring 52.96 acres at Bhaiya Nagla, Muradabad.

Pledge of new promoter's shares proposed to be issued under the Scheme of Arrangement and a Second Pari Passu Charge on Third Party Assets I i.e. Office premises at 119, Park Street, Kolkata - 700 016.

Further, of the above, series A debentures amounting to Rs. 1,000,000,000 are also secured by a First Exclusive Priority Charge on Agro Immovable Property, Agro Movable assets and pledge of existing promoters shares.

(b) 50,400 secured redeemable non-convertible debentures of Series 1, 2 and 3 of the face value of Rs. 10,000/- each aggregating to Rs. 504,000,000 (interest free) are redeemable at par as follows:-

On 15th September, 2013 Rs. 190,000,000

On 15th September, 2014 Rs. 269,000,000

On 15th September, 2015 Rs. 45,000,000

Further, 5,440 Secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to Rs. 54,400,000 are convertible into Equity as envisaged in the Scheme of Arrangement.

Out of above, 13,160 debentures amounting to Rs.131,600,000 are secured by a Second Pari-Passu Charge on Agro Immovable and Movable Assets and Third Exclusive Priority Charge on the Godown / Immovable Property at Thane. Further 5,440 debentures are secured by:

First Exclusive Charge on Third party Assets I i.e. premises at 119, Park Street, Kolkata - 700 016.

Second Pari-Passu Charge on pledge of existing promoter shares.

Besides, 42,680 debentures amounting to Rs. 426,800,000 and 5,440 debentures amounting to Rs. 54,400,000 are further secured by: Second exclusive priority Charge on the trade mark, Third Party Assets 1 i.e. Office premises at 119, Park Street, Kolkata - 700 016 and Third Party Asset 2 i.e. all that piece and parcel of agricultural land admeasuring 52.96 acres at Bhaiya Nagla, Muradabad. (Provided that the claim should not exceeds Rs. 17.76 crores).

Second parri-Passu Charge on Movable Assets, Current Assets and Immovable property at Margherita, Art-Margherita, Long Island, Rampur, Gondia (Provided that the claim should not exceeds Rs.19.46 crores) & other current assets of the Company.

42,680 debentures are further secured by Third Exclusive Priority Charge on the Godown / Immovable property at Thane.

Further, 55,840 debentures are also secured by a personal guarantee of Mr. P. K. Goenka (Chairman & Managing Director).

(c) 31,551 secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to Rs. 315,510,000 which carry interest @6.00% (6.00%) are redeemable at par along with interest in two equal installments on 31st March, 2013 & 31st March, 2014 and are secured by:

Second Pari-Passu Charge on Agro Immovable Property, Agro movable assets and pledge of existing promoter shares.

Second Exclusive Priority Charge on the Godown / Immovable property at Thane and IDBI Financed Equipments.

(d) 8,404 secured redeemable non-convertible debentures of the face value of Rs.10,000/- each aggregating to Rs. 84,040,000 which carry interest @ 6.00% (6.00%) are redeemable at par along with interest in two equal installments on 31st March, 2013 & 31st March, 2014.

However out of above, the lender for 311 secured redeemable non-convertible debentures of Rs. 3,110,000 has recalled the loan in earlier years (refer Note 33) and since the matter is disputed, the said loan has been considered as Non-current.

400 secured redeemable non-convertible debentures valuing Rs. 4,000,000 (interest free) are redeemable at par in three yearly installments on 31st March, 2013, 31st March, 2014 & 31st March, 2015. The above debentures are secured by:

Second Pari-Passu Charge on the Movable Assets, Current Assets and Immovable property at Margherita, Art-Marguerite, Gondia, Rampur & Long Island and other current assets of the Company.

Fourth Pari-Passu Charge on the Godown / Immovable property at Thane.

(e) 278 secured redeemable non-convertible debentures aggregating to Rs. 2,780,000 will be converted into equity as envisaged in Scheme of Arrangement and 1,436 secured redeemable non-convertible debentures aggregating to Rs.14,360,000 which carry interest @ 8.40% (8.40%) are redeemable at par along with interest in three yearly installments on 30th September, 2013, 30th September, 2014 & 30th September, 2015. The above debentures are secured by:

Second Exclusive Priority Charge on IFCI Financed Equipments.

Fourth Pari-Passu Charge on the Godown immovable property at Thane.

(f) 1,111 secured redeemable non-convertible debentures aggregating to Rs. 11,110,000 which carry interest @ 6.00% (6.00%) are redeemable at par along with interest in two equal installments on 31st March, 2013 & 31st March, 2014 and are secured by:

Second Pari-Passu Charge on Agro Immovable Property and Agro movable assets.

Second Exclusive Priority Charge on IIBI Financed Equipments.

(g) 166 secured redeemable non-convertible debentures aggregating to Rs. 1,660,000 will be converted into equity as envisaged in Scheme of Arrangement and 860 secured redeemable non-convertible debentures aggregating to Rs. 8,600,000 which carry interest @ 8.40% (8.40%) are redeemable at par along with interest in three yearly installments on 30th September, 2013, 30th September, 2014 & 30th September, 2015. The above debentures are secured by:

Second Pari-Passu Charge on Movable Assets, Current Assets and Immovable property at, Margherita, Art-Margherita, Gondia, Rampur, & Long Island and other current assets of the Company.

Fourth Pari-Passu Charge on the Godown/Immovable property at Thane.

B. 8,800 unsecured redeemable non-convertible debentures aggregating to Rs. 88,000,000 will be converted into equity as envisaged in Scheme of Arrangement.

C. Unsecured loan from a scheduled bank (interest free) is repayable in eight quarterly installments of Rs. 4,887,000 each starting from July 01, 2015.

D. Unsecured loans from bodies corporate includes Rs. 70,300,000 which were proposed to be converted into equity as envisaged in the Scheme of Arrangement. The lender has recalled the loan in earlier years. However, since the Company's suit against the above lender for specific performance is pending before Hon'ble Calcutta High Court as stated in Note 34 (c), the above loan has been considered as Non-current.

E. Finance lease obligations are secured by hypothecation of the assets purchased there against and carry interest @10.00% to 13.00% (10.00% to 13.00%).

F. In the absence of profit, Debenture Redemption Reserve of Rs. 360,636,941 (including Rs. 80,170,834 for the year) has not been created.

G. Period and amount of continuing default as on the balance sheet date in repayment of debentures, loans, interest and premium on debentures thereon:

Debentures aggregating to Rs. 1,835,368,119 (including interest and redemption premium) and loans of Rs. 70,300,000 have been recalled by the lenders, but the same is disputed by the Company as stated in Notes 33, 34 (c) and 38 and accordingly, not considered as a continuing default as on the Balance Sheet date.

2. Gratuity - Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed at least five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is not funded. The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the plan.

3. Segment information

The primary segment reporting format is determined to be business segments as the Company's risks and rates of return are affected predominantly by differences in the products and services produced. Secondary information is reported geographically. The operating businesses are organized and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. Accordingly, the Company has identified "Plywood" and "Agro Forestry" as the business segments.

Plywood - Consists of manufacture and sale of plywood, block board, particle boards, Veneer, timber and Laminates.

Agro forestry - Consists of plantation timber.

The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas Operations.

4. Leases

Operating lease: Company as lessee

Certain office premises, godown etc are obtained on operating leases. The lease term is for 1-3 years and renewable for further period either mutually or at the option of the Company. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease arrangements. There are no subleases. The leases are cancelable.

Finance lease: Company as lessee

Fixed Assets include certain Vehicles obtained on finance lease. The year-wise break-up and future obligation towards minimum lease payments of Rs. 217,120 (Rs. 1,078,458) consisting of present value of lease payments of Rs. 209,638 (Rs. 1,029,308) and financial charges of Rs. 7,482 (Rs. 49,150) under the respective agreements as on 31st March, 2012, is given below:

5. Contingent liabilities

As at As at 31st March, 2012 31st March, 2011

(Amount in Rs.) (Amount in Rs.)

(a) Demands/claims by various Government authorities and others not acknowledged as debts and contested by the Company:

Excise Duty 103,490,634 74,800,334

Sales Tax / VAT 11,637,725 11,637,725

OthersT 113,140,629 113,140,629

228,268,988 199,578,688

Against the above, payments have been made under protest and/ or debts have been withheld by respective parties. 10,704,505 9,854,505

(b) Also refer notes 33 and 34(c) below. includes Rs. 112,857,429 (Rs. 112,857,429) being claim from an overseas customer M/s. California Pacific Trading Corp., who had claimed interest, damages and other compensation for materials supplied to them by the Company in earlier years. The above claims were refuted by the Company since the materials had been shipped only after inspection by the representatives of the overseas party. However, a District Court in US passed an order for payment of damages by the Company to the extent of US$ 2,257,147 equivalent to 112,857,429 plus interest thereon as damages, loss of profit, etc, suffered by the overseas party. The writ petition filed by the overseas party to

wind up the Company under the provisions of the Companies Act, 1956 for non- payment of above dues has been dismissed by

Hon'ble Guwahati High Court by its order dated May 02, 2011 and thus no liability may accrue to the Company on this account.

6. No provision against demand from a lender amounting to Rs. 321,037,000 towards principal and interest on withdrawal of One Time Settlement (OTS) entered in earlier years, due to alleged non fulfillment of agreed conditions by the Company, has been made in the accounts since the above amount is not payable by the Company and the Company has also been legally advised that the above demand is not tenable. Against the above, Rs. 3,110,000 and Rs. 818,240 is being carried forward in the books under the heads Long term borrowings and Interest accrued and due respectively as per the said OTS. Further, the above lender had filed a petition for winding up of the Company before the Hon'ble Calcutta High Court which has been dismissed by the Hon'ble High Court vide its order dated November 14, 2011.

7. (a) The Company had filed a scheme of arrangement in an earlier year, u/s 391-394 read with section 78, 100 to 104 of the Companies Act, 1956 with the Hon'ble Guwahati High Court which envisages reduction of capital, conversion of debt into equity and restructuring of certain assets and liabilities of the Company with effect from 1st Day of March, 2008. Pending approval of the Hon'ble High Court of Guwahati, the effect of reduction in Share Capital and conversion of portion of a Debt into Equity has not been given in the books of account. However, the effect of restructuring of Assets and Liabilities has already been given in accounts in earlier years.

7. (b) No interest has been provided on loans/debentures amounting to Rs. 417,140,000 which are proposed to be converted into equity in terms of scheme of arrangement filed with the Hon'ble High Court of Guwahati under section 391-394 of the Companies Act, 1956 whose approval is pending as on date as stated above.

8. (c) Out of the above amount of Rs. 417,140,000 certain lenders whose dues as on the Balance Sheet date stands at Rs. 70,300,000 have recalled their loans and have also demanded interest amounting to Rs. 34,090,685 (including Rs. 8,436,000 for the year). In addition to above, they have also demanded overdue interest and liquidated damage charges amounting to Rs. 17,088,575. Further, the said lenders have filed petitions for winding up of the Company for non payment of their dues under the relevant provisions of the Companies Act, 1956. The Company has also filed a suit against the above lenders for specific performance and the matter is pending before Hon'ble Kolkata High Court and in the opinion of the management, no amount towards interest including overdue interest or liquidated damages is payable. Pending the High Court decision, no interest liability as stated above, has been provided in these accounts.

9. As at the Balance Sheet date, the net-worth of the Company has become negative, since the accumulated losses of the Company stands at Rs. 3,772,559,019 as compared to the Shareholders fund of Rs. 575,645,589 (excluding revaluation reserve of Rs. 111,528,209). The Company has made a reference to the Hon'ble Board for Industrial & Financial Reconstruction (BIFR) pursuant to the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and it has since been permitted to be registered u/s 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985.

Consequently, a revival plan would be formulated by the operating agency in due course under the BIFR Act and the Company is hopeful of working out a scheme for its rehabilitation. Further, the Company is in the process of resolving certain disputes/litigation in its favour, which are more fully discussed in Notes 33 and 34 (c) above. Considering the above, these financial statements have been drawn up as per the going concern assumption, which is appropriate in the opinion of the management.

10. There had been a pest attack on a large number of trees at various sites of the Company's Agro Forestry during the year 2010-11 which had caused significant damage to the timber plantation. Impairment loss of Rs. 453,822,199 was provided for in the previous year based on management estimate, pending assessment by an external valuer. Further impairment loss of Rs. 759,734,436 based on market value determined on the basis of price prevailing in the local market of above timber plantation, has been provided during the year on completion of assessment by the external valuer. As advised by the said valuer, the management intends to sale the above timber plantation during the next year (2012-13) and accordingly the resultant value of above timber plantation has been considered as Current Assets and transferred to Inventory.

11. During the year, the department of Central Excise has raised a demand of Rs. 100,154,306 (including interest & penalty) towards excise duty on prelaminated Particle Board relating to earlier years on disposal of department's appeal on classification issue by the Hon'ble Supreme Court vide its order dated 7th September, 2011. Although, the Company has filed a revision petition against the above demand with the Hon'ble Supreme Court, the above demand, as a matter of prudence, has been provided in the books of accounts.

12. The Company has received a notice of default dated January 13, 2012 from its lender namely India Debt Management Private Limited (IDM) for occurrence of certain alleged defaults as per Debenture Subscription Agreement dated March 14, 2008 and subsequently, the above lender has recalled the total principle amount of Rs. 1,200,000,000 along with interest, redemption premium, default interest and all other outstanding dues towards the Debentures subscribed by them along with interest @10% p.a. on such aggregate amounts from March 15, 2012 till payment thereof. However, the Company has disputed and denied these alleged defaults/recall notice, which in the opinion of the management is not only barred by time but is also malafide and contrary to the terms of the debenture subscription agreement. The Company has also filed a Civil Suit before the Hon'ble Calcutta High Court inter alia raising a claim of Rs. 2,910,000,000 against IDM on account of damages caused to the agro forestry of the Company which is pending adjudication.

In view of the pending disputes which are sub-judicied, no provision has been made for interest and redemption premium amounting to Rs. 100,000,000 and Rs. 268,788,913 respectively on the above debentures on and from 1st April, 2011.

13. Deferred tax asset (net) amounting to Rs. 1,302,390,998 (Rs. 1,473,043,127), as detailed below, has not been recognized in these accounts in view of the accounting policy specified in 1.1 (o) above.

14. Based on the information/documents available with the Company, no creditor is covered under The Micro, Small and Medium Enterprises Development Act, 2006. As a result, no interest provisions/payments have been made by the Company to such creditors, if any, and no disclosures thereof are made in these accounts.

15. Previous year figures

Previous year's figures including those given in brackets have been rearranged where necessary to confirm to the current year's classifications under revised Schedule VI as stated in note 1.1 (a) above.

---

Mar 31, 2010

(Amount in Rs.)

As at 31st As at 31st March, 2010 March, 2009

1. Estimated amount of contracts 200,000 Nil remaining to be executed on Capital Account (net of advances Rs. 60,000) and not provided for

2. Contingent Liabilities not provided for in respect of :–

(a) Demands / Claims by various Government Authorities and others not acknowledged as debts:

(i) Excise Duty 74,800,334 97,401,225

(ii) Sales Tax / VAT 15,306,846 8,041,292

(iii) Others* 113,140,629 113,140,629

Total 203,247,809 218,583,146



*includes Rs. 112,857,429 (Rs 112,857,429) being claim from an overseas customer M/s California Pacific Trading Corp., who had claimed interest, damages and other compensation for materials supplied to them by the Company in earlier years. The above claims were refuted by the Company since the materials had been shipped only after inspection by the representatives of the overseas party. However, a District

Court in US passed an order for payment of damages by the Company to the extent of US$ 2,257,147, equivalent to Rs.112,857,429 plus interest thereon as damages, loss of profit, etc, suffered by the overseas party. The overseas party had also filed a case for recovery before the Hon’ble High Court of Guwahati which decided the case in their favour. However, the Company had appealed against the above order before the Division Bench of the above court which has remanded back the matter to the single bench judge to hear the matter afresh and take into consideration the Company’s view. Although the company is contingently liable to the extent of Rs.112,857,429 plus interest as stated above, the management feels that based on the facts and legal opinion, the above claim is not sustainable as per the Indian Law and thus, no liability may accrue to the company on this account.

3. (a) The Company had filed a scheme of arrangement in an earlier year, u/s 391-394 read with section 78, 100 to 104 of the Companies Act, 1956 with the Hon’ble Guwahati High Court which envisages reduction of capital, conversion of debt into equity and restructuring of certain assets and liabilities of the Company with effect from 1st Day of March, 2008. Although the approval of scheme by Hon’ble High Court is pending, yet to meet the requirements of Schedule VI to the Companies Act, 1956 and the relevant Accounting Standards, the effect of restructuring of such assets and liabilities of the Company was carried out in the books of account for the period ended 31st March, 2009 through “Business Reorganisation Reserve Account” as envisaged in the scheme of arrangement. The resultant surplus of Rs. 2,186,443,579 credited to Business Reorganisation Reserve Account in the previous year, since it consisted of all revenues items, has now been adjusted during the year against the debit balance of Profit & Loss Account as envisaged in the scheme of arrangement. However, the effect of reduction of capital and conversion of debt into equity in view of the specific provisions of the Companies Act, 1956, would be given in the accounts only after approval of the said scheme by the Hon’ble Guwahati High Court.

(b) No interest has been provided on loans/debentures amounting to Rs. 417,140,000 which are proposed to be converted into equity in terms of scheme of arrangement filed with the Hon’ble High Court of Guwahati under section 391-394 of the Companies Act, 1956 whose approval is pending as on date as stated above.

(c) Out of the above amount of Rs. 417,140,000, certain lenders whose dues as on the Balance Sheet date stands at Rs. 70,300,000, have recalled their loans and have also demanded interest amounting to Rs. 17,218,685 (including Rs. 8,436,000 for the year). In addition to above, they have also demanded overdue interest and liquidated damage charges amounting to Rs. 17,088,575. In the opinion of the management no amount towards interest including overdue interest or liquidated damages is payable. Against the above lenders, the Company has filed a suit for specific performance and the matter is pending before Hon’ble Kolkata High Court. Pending the High Court decision, no interest liability as stated above, has been provided in these accounts.

4. Exceptional items as indicated in the Profit & Loss Account consist of the following:

(a) Doubtful advances Rs. 54,807,481 outstanding for a considerable period of time and written off during the year.

(b) Obsolete/Non Moving stock of raw materials and stores & spares lying for a considerable period of time and written off during the year Rs. 21,876,673 and Rs. 1,844,609 respectively.

5. As at the Balance Sheet date, the net worth of the Company has become negative, since the accumulated losses of the Company stands at Rs. 2,078,165,846 and the Shareholders’ fund of Rs. 843,700,107 (excluding revaluation reserve of Rs132,954,447).

The revised Business Plan and Profitability statements have been noted by the Board of Directors. These projections reflect that the Company will be in a position to generate positive cash flows and operational surplus in the near future. Considering the above, these financial statements have been drawn up as per the going concern assumption, which is appropriate in the opinion of the management. No reference is required to be made to BIFR where financial assets have been acquired by any securitization or reconstruction company u/s 5(1) of the SARFAESI Act.

6. Prior period items represent excise duty amounting to Rs17,753,831 and interest amounting to Rs15,605,789 on excise duty/sales tax pertaining to earlier years.

7. Excise Duty on sales has been reduced from sales in Profit & Loss Account and excise duty on increase/decrease in stocks has been considered as income / expenses in Profit & Loss Account.

8. Advances against sale of Fixed Assets as appearing under the head Current Liabilities in Schedule 11 represents part payment received from certain parties against sale of fixed assets since the possession of the relevant fixed asset has not been given to such parties, no accounting adjustment thereof has been carried out in the books.

9. Deferred tax asset (net) amounting to Rs. 1,223,120,588 (Rs 1,223,356,986), as detailed below, has not been recognized in these accounts in view of the accounting policy specified in 1 (xv) above.

10. SECURED LOANS

A. DEBENTURES

Terms of redemption and Nature of Security, for the debentures are as under:

i) (a) 120000 Secured redeemable non-convertible debentures of Rs.10,000/-each issued to India Debt Management Pvt. Ltd consist of the following:

- Series B and C Debentures are proposed to be converted into equity as envisaged in the Scheme of Arrangement.

All the above debentures are secured by First Exclusive Priority Charge on the following:

- Immovable property at, Margherita, Art Margherita, Long Island, Rampur and Gondia.

- Godown Immovable Property at Thane

- Trade mark ‘ Kitply’

- Movable and Current Assets

- IFCI, IDBI and IIBI Financed equipments

- Insurance contracts

- Third party Assets 2 i.e. all that piece and parcel of agricultural land admeasuring 52.96 acres at Bhaiya Nagla, Muradabad.

- Pledge of new promoter’s shares proposed to be issued under the Scheme of Arrangement.

A Second Parri Passu Charge on Third Party Assets 1 i.e. Office premises at 119, Park Street Kolkata-700016.

Further, of the above, series A debentures amounting to Rs. 1,000,000,000 are also secured by First Exclusive Priority Charge on Agro Immovable Property, Agro Movable assets and pledge of existing promoters shares.

5440 Secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to Rs. 54,400,000 are convertible into Equity as envisaged in the Scheme of Arrangement.

Out of above, 13,160 debentures amounting to Rs. 131,600,000 are secured by Second Pari-Passu Charge on Agro Immovable Assets and Agro Movable Assets and Third Exclusive Priority Charge on the Godown Immovable Property at Thane. Further, 5440 debentures are secured by

- First Exclusive Charge on Third party Assets 1 i.e. premises at 119, Park Street Kolkata-700016.

- Second Pari-Passu Charge on pledge of existing promoter shares. and 42,680 debentures amounting to Rs. 426,800,000 and 5440 debentures amounting to Rs. 54,400,000 are secured by:

- Second Exclusive priority Charge on the trade mark ‘‘KITPLY’’, Third Party Assets 1 i.e. Office premises at 119, Park Street Kolkata-700016 and Third Party Asset 2 i.e. all that piece and parcel of agricultural land admeasuring 52.96 acres at Bhaiya Nagla, Muradabad. (Provided that the claim should not exceeds Rs. 17.76 crores).

- Second parri-Passu Charge on Movable Assets, Current Assets and Immovable property at

Margherita, Art Margherita, Long Island, Rampur, Gondia ( Provided that the claim should not exceeds Rs. 19.46 crores) & other current assets of the Company.

42,680 debentures are further secured by Third Exclusive Priority Charge on the Godown immovable property at Thane.

Further, 55,840 debentures are also secured by a personal guarantee of Mr. PKGoenka (Chairman & Managing Director).

(c) 31,551 secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to Rs. 315,510,000 are redeemable at par along with interest in two equal installments on 31st March, 2013 & 31st March, 2014 and are secured by:

- Second Pari-Passu Charge on Agro Immovable Property, Agro movable assets and pledge of existing promoter shares.

- Second Exclusive Priority Charge on the Godown immovable property at Thane and IDBI Financed Equipments.

(d) 8,404 secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to Rs. 84,040,000 are redeemable at par along with interest in two equal installments on 31st March, 2013 & 31st March, 2014.

400, secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to Rs. 4,000,000 are redeemable at par in three yearly installments on 31st March, 2013, 31st March, 2014 & 31st March, 2015.

The above debentures are secured by:

- Second Pari-Passu Charge on the Movable Assets, Current Assets and Immovable property at Margherita, Art- Margherita, Gondia, Rampur & Long Island and other current assets of the Company.

- Fourth Pari-Passu Charge on the Godown immovable property at Thane

(e) 278 secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to Rs. 2,780,000 will be converted into equity as envisaged in Scheme of Arrangement and 1436 secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to Rs14,360,000 is redeemable at par along with interest in three yearly installments on 30th September, 2013, 30th September, 2014 & 30th September, 2015.

The above debentures are secured by:

- Second Exclusive Priority Charge on IFCI Financed Equipments.

- Fourth Pari-Passu Charge on the Godown immovable property at Thane.

(f) 1,111 secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to Rs. 11,110,000 are redeemable at par along with interest in two equal installments on 31st March, 2013 & 31st March, 2014 and are secured by:

- Second Pari-Passu Charge on Agro Immovable Property and Agro movable assets.

- Second Exclusive Priority Charge on IIBI Financed Equipments

(g) 166 secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to Rs. 1,660,000 will be converted into equity as envisaged in Scheme of Arrangement and 860 secured redeemable non-convertible debentures of the face value of Rs. 10,000/- each aggregating to 8,600,000 is redeemable at par along with interest in three yearly installments on 30th September, 2013, 30th September, 2014 & 30th September, 2015.

The above debentures are secured by:

- Second Pari-Passu Charge on Movable Assets, Current Assets and Immovable property at, Margherita, Art- Margherita, Gondia, Rampur, & Long Island and other current assets of the Company.

- Fourth Pari-Passu Charge on the Godown immovable property at Thane.

(B) In the absence of profit, Debenture Redemption Reserve of Rs. 188,183,602 (including Rs. 92,282,504 for the year) has not been created.

(C) Hire Purchase finance is secured by hypothecation of the assets purchased there against.

(D) Interest accrued includes Rs. 98,502,954 (Rs75,111,108 ) which as per stipulated terms are payable on a long term basis.

(E) Secured loans includes Rs. 27,516,941 (Rs 6,340,894) falling due for payment within one year.

11. Based on the information / documents available with the Company, no creditor is covered under The Micro, Small and Medium Enterprises evelopment Act, 2006. As a result, no interest provisions / payments has been made by the Company to such creditors, if any, and no disclosures thereof are made in these accounts.

Notes:

a) As the provision for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the Managing Director/Whole Time Director is not separately determined and therefore not included above.

b) Since there is no profit under Section 349 of the Companies Act, 1956 during the year, the Commission payable to Managing Director is NIL.

12. (a) Operating Lease:

Certain office premises, godowns etc are obtained on operating lease. The lease term is for 1-3 years and renewable for a further period either mutually or at the option of the Company. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. The leases are cancelable.

(b) Fixed Assets include certain Vehicles obtained on finance lease. The year-wise break-up and future obligation towards minimum lease payments of Rs. 3,261,714 (Rs. 4,148,390) consisting of present value of lease payments of Rs. 2,994,637 (Rs. 3,656,693) and financial charges Rs 267,077 (Rs. 491,697) under the respective agreements as on 31st March, 2010, is given below:

13. In terms of the scheme filed with the Honble High Court of Guwahati, the fixed assets were written down significantly as on 31st March, 2009. Thus, depreciation for the year ended 31st March, 2010 having been provided at the reduced fixed assets figures, is much lower compared to last year.

14. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity as per the provisions of The Payment of Gratuity Act, 1972. The scheme is not funded with any insurance company.

The following tables summarize the components of net benefit expenses recognized in the Profit & Loss Account and the funded status and amounts recognized in the balance sheet for the Gratuity.

(vi) The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

15 The Figures of previous year were audited by firm of Chartered Accountants other than S. R. Batliboi & Co. Figures in brackets are for previous year and the same have been regrouped and / or rearranged wherever necessary. Further, previous period figures being for a period of 18 months are not comparable with current years figures.