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Notes to Accounts of N R Agarwal Industries Ltd.

Mar 31, 2023

(a) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of R10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. 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.

d) Shares Held by Holding Company

There is no Holding Company

Note:- Working capital loan from Banks are secured by a) first pari passu charge by way of hypothecation of all the stocks, book debts and all other movable current assets of the Company. b) Second pari passu charge over the Fixed Assets of the Company situated at Unit I,III, IV at Vapi both present and future.c) Second Pari passu charge over the Fixed Assets of the Company situated at Unit V & Unit V PM2 at Sarigam both present and future except non -agricultural land admeasuring to 26.26 Acres and d) personal Guarantee of Shri R N Agarwal , Smt. Reena Agarwal and Shri Raunak Agarwal.

The total dues of Micro and Small Enterprises which were outstanding for more than stipulated period are R Nil (R5.05 lakhs - March 2022)

This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

Note 36: Contingent Liabilities and Commitments

(H in lakhs)

Particulars

Year ended March 31,2023

Year ended March 31,2022

i) Contingent Liabilities

(i) Disputed Excise Duty/Custom Duty demands

516.10

516.10

(ii) Disputed Income Tax demands

38.86

255.77

(iii) On account of counter guarantees given to the bankers

683.30

119.55

(iv) Other claims against the Company not acknowledged as debts

Labour

101.43

221.95

Other matters(Pipeline)

441.54

441.54

ii) Commitments:

(i) Capital commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances)

17,540.26

4,266.98

(ii) EPCG Commitments

Future export obligations / commitments under import of Capital Goods at Concessional rate of customs duty.

103.75

103.75

Notes:

(i) The Asst. Commissioner of Income Tax, Vapi had raised a demand of R352.ll lakhs as penalty u/s 271(1) (C) for the assessment years 2007-08 to 2010-11. In order to stay this demand the Company offered to adjust refund of earlier years amounting to R168.56 lakhs and also paid R50 lakhs in addition to that the department had adjusted R133.55 lakhs of refund of the assessment year 2009-10. The Company had appealed against these orders before the CIT (A) and the same is pending disposal.

(ii) The Income Tax department is in appeal before the Hon’ble High Court, Gujarat for the assessment years 2007-08 to 2013-14 on various grounds decided by the Income Tax Appellate Tribunal.

(iii) The Asst. Commissioner of Income Tax, Vapi had raised a demand of R154.63 lakhs as penalty u/s 271(1) (C) for the assessment years 2011-12 and 2012-13. Refund of R9.64 lakhs and also paid R21.31 lakhs and department had adjusted R84.82 lakhs refund of the assessment year 2009-10 and 2010-11.The Company had appealed against these orders before the CIT (A) and the same is pending disposal.

The remuneration paid to key managerial personal excludes gratuity and compensated absences as the provision is computed for the Company as a whole and separate figures are not available.

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

(e) Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest bearing and settlement occurs in cash. There have been no financials guarantees provided to a Related Party. For the year ended March 31, 2023, the Company has not recorded any impairment of receivables relating to amount owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and market in which the related party operates.

As per Ind AS 19 "Employee Benefits", the disclosures of Employee benefits as defined in the Accounting Standard are given below :

a) Other long-term benefits - Compensated absences

The Company permits encashment of compensated absence accumulated by their employees on retirement,separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the balance sheet date performed by an independent actuary.

The Company doesn’t maintain any plan assets to fund its obligation towards compensated absences.

b) Defined benefits plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The plan is funded with an insurance Company in the form of a qualifying insurance policy.

The following tables summarise the components of net employee benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the balance sheet for the respective plans.

c) Defined contribution plan

Company''s employees are covered by Provident Fund to which the Company makes a defined contribution measured as a fixed percentage of salary. The contributions are made to registered provident fund adminitered by Government. During the year, amount of 204.83 lakhs (Previous Year: 213.88 lakhs) has been charged to the Statement of Profit and Loss towards employer''s contribution to the funds.

Note 40: Segment information

The operations of the Company are limited to one segment viz. Paper and Paper Boards. The products being sold under this segment are of similar nature and comprises of paper products only.

Operating segments are defined as components of a Company for which discrete financial information is available that is evaluated regularly by the Managing Director (Chief Operating Decision Maker) ("CODM"), in deciding how to allocate resources and assessing performance.

*The carrying amounts of trade receivables, cash and cash equivalents, current loans, other current financial assets, current borrowings, trade payables and other financial liabilities are considered to be approximately equal to the fair value.

The fair values of non current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs.

Fair value hierarchy

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Level 1: Hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. 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.

During the years mentioned above, there have been no transfers amongst the levels of hierarchy. The fair values of unquoted equity instruments are not significantly different from their carrying value and hence the management has considered their carrying amount as fair value.

Valuation processes

The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the Chief Financial Officer (CFO) and the Audit Committee (AC). Discussions of valuation processes and results are held between the CFO, AC and the valuation team at least once every three months, in line with the Company’s quarterly reporting periods.

Note 43: Financial risk management objectives and policies

The Company’s principal financial liabilities, comprise of borrowings, security deposits, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include investments, loans, trade and other receivables, cash and cah equivalents and other bank balances that are derived directly from its operations.

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company’s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee.

This process provides assurance to Company’s senior management that the Company’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

The management reviews and agrees policies for managing each of these risks which are summarized 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 prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include borrowings, security deposits, investments and foreign currency receivables and payables.

(i) Foreign Currency Risk

The Company operates internationally and portion of the business is transacted in several currencies. Consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Exports of the Company are significantly lower in comparison to its imports. Foreign currency exchange rate exposure is party balanced by exports of goods and prudent hedging policy.

(ii) Interest rate risk:

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Company’s financial liabilities comprises of interest bearing loans, vehicle loans and advances and security deposits; however these are not exposed to risk of fluctuation in market interest rate as the rates are fixed at the time of contract/agreement and do not change for any market fluctuation.

(iii) Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing manufacture of paper and paper boards and therefore require a continuous supply of raw materials i.e. waste paper, chemicals, coal etc. being the major input used in the manufacturing. Due to the significantly increased volatility of the price of waste paper and coal the Company had entered into various purchase contracts for these material for which there is an active market. The Company’s management has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company partly mitigated the risk of price volatility by entering into the contract for the purchase of these material and further the Company increases prices of its products as and when appropriate to minimize the impact of increase in raw material prices.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation under a financial instrument, 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 deposits with banks, foreign exchange transactions and other financial instruments.

i) Trade receivables

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before orders are accepted and the payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, financial statements, credit agency information, industry information and business intelligence. Sales limits are established for each customer and reviewed annually. Any sales exceeding those limits require approval from the appropriate authority as per policy.

Expected credit loss for trade receivables:

The Company estimates its allowance for trade receivable using lifetime expected credit loss. The Company has also taken advances and trade deposits from its customers which mitigate the credit risk to an extent. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.

ii) Financial Instruments and cash deposits

The Company considers factors such as track record, size of the instutition, market reputation, financial strength/ rating and service standards to select the banks with which balances and deposits are maintained. Generally the balances are maintained with the institutions with which the Company has also availed borrowings.

(c) Liquidity Risk

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its current requirements. Further, the Company’s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due and Company monitors rolling forecasts of its liquidity requirements.

Note 44: Capital Management and Distribution made and proposed (a) Capital Management

The Company’s objectives when managing capital are to

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders

• maintain an optimal capital structure to reduce the cost of capital

Loan Covenants

Bank loans contain certain debt covenants relating to limitation on indebtedness, debt-equity ratio, debt to EBIDTA ratio, interest service coverage ratio and debt service coverage ratio. The limitation on indebtedness covenant gets suspended once the Company meets certain prescribed criteria. The debt covenant related to limitation on indebtedness remained suspended as of the date of adoption of the financial statements. The Company has also satisfied all the debt covenants prescribed in respective sanction of bank loans.

Note 45:

Sundry Debtors, Sundry Creditors, Unsecured Loans and Loans and Advances balances are subject to confirmation and reconciliation.

Note 47 : Ind AS 116 - Leases

The Company’s lease asset primarily consist of leases for land and buildings for offices and warehouses having the lease terms between 3 and 30 years. Effective April 1,2019, the Company adopted Ind AS 116 "Leases" and applied the standard to all lease contracts existing on April 1, 2019 using the modified retrospective method and has taken the adjustment to retained earnings, on the date of initial application. Consequently, the Company recorded the lease liability at the present value of the lease payments discounted at the incremental borrowing rate and the right of use asset at its carrying amount as if the standard had been applied since the commencement date of the lease, but discounted at the Company’s incremental borrowing rate at the date of initial application.

The maturity analysis of lease liabilities are disclosed in Note 43 (c)

The effective interest rate for lease liabilities for previous years is 9% to 10.65%, while the leases added during the year had effective interest rate is 9% to 10.65%.

Rental expense recorded for short-term leases was R695.28 lakhs (R749.35 lakhs March 31,2022)

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

Note 48 : Assets Held for Sale in previous year

One of the writing printing unit of the Company (Unit II) had closed in previous year, pursuant to which Unit II was in process to sell below assests which has been classified as ''asset held for sale'' in previous year, subsequently the Company received necessary approvals and has completed the entire transaction of sale to M/s Shree Ajit Pulp and Paper Limited on April 12, 2022.

Note 49 : Registration of charges or satisfaction with Registrar of Companies (ROC)

All charges or satisfaction are registered with within the statutory period. No charges or satisfactions are yet to be registered with beyond the statutory period.

Note 50 : Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

Note 51 : Compliance with approved Scheme(s) of Arrangements

The Company has no scheme of arrangements which have been approved by the competent Authority in terms of Sec 230 to 237 of the Companies Act, 2013 during the reporting period.

Note 52 : Utilisation of borrowed funds and share premium

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

(a) 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

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

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

(a) 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

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

Note 53 : Undisclosed income

The Company have 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)

Note 54 : Title deeds of Immovable properties not held in name of the Company

The Company does not possess any immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the Company.

Note 56 : Details of crypto currency or virtual currency

The Company has not traded or invested in Crypto currency or Virtual currency.

Note 57 : Details of Benami Held

No proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

Note 58 : Wilful Defaulter

The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender.

Note 60 : Previous year figures have been regrouped/ rearranged, wherever considered necessary to conform to current year’s classification.


Mar 31, 2018

Note 34 : Contingent Liabilities and Commitments

(Rs. in lakhs)

Particulars

As at March 31, 2018

As at March 31, 2017

i) Contingent Liabilities

a) Claims against the Company not acknowledged as debts (Net of Advances):

(i) Excise Duty/Cusom Duty liability in respect of matter in appeals

510.60

296.53

(ii) Income Tax liability in respect of matter in appeals

278.55

832.34

(iii) Other matters under dispute

103.60

77.99

b) Other money for which the Company is contingently liable

(i) Guarantees and counter guarantees given

659.90

45.93

(ii) Letters of Credit outstanding

1,027.20

914.06

(ii) Commitments:

(i) Contracts remaining to be executed on capital account (Net of Advances)

3,379.12

1,123.73

(ii) Export commitments against import of capital goods under EPCG scheme

1,523.42

292.57

Notes:

(i) The Deputy Commissioner of Income Tax, Surat has raised a demand for Rs 1084.45 lakhs while completing the assessment for the A. Y. 2007-08 to 2010-11. The Company had appealed against these orders before the CIT (A) and obtained partial relief reducing the demand to ? 359.45 lakhs. The demand has been paid by the Company. The Company and the department are in appeal before the Income Tax Appellate Tribunal, Ahmedabad.

(ii) The Asst. Commissioner of Income Tax, Surat had raised a demand ofRs 782.86 lakhs while completing the assessment for the A.Y. 2011-12 and 2012-13. The Company had appealed against these orders before the CIT (A) and obtained partial relief reducing the demand to ? 94.55 lakhs. The Company has paid the Demand. The Company and the department are in appeal before the Income Tax Appellate Tribunal, Ahmedabad

(iii) The Income tax officer, Vapi had raised a demand of ? 88.99 lakhs while completing the assessment for the year 2013-14. The Company had appealed against this order before the CIT (A) and obtained partial relief reducing the demand to ? Nil. The Company and the department are in appeal before the Income Tax Appellate Tribunal, Ahmedabad.

(iv) The Income Tax Officer, Vapi had raised a demand of ? 26.23 lakhs while completing the assessment for the year assessment year 2014-15. However the Company had filed application u/s 154 for rectification of order which has resulted in "NIL" demand.". The Company had appealed against assessment order before the CIT (A) and the same is pending disposal.

(v) The Asst. Commissioner of Income Tax, Vapi had raised a demand of Rs 352.11 lakhs as penalty u/s 271(1) (C) for the assessment years 2007-08 to 2010-11. In order to stay this demand the Company offered to adjust refund of earlier years amounting to ? 168.56 lakhs and also paid ? 50 lakhs . Net outstanding demand is ? 133.55 lakhs The Company had appealed against these orders before the CIT (A) and the same is pending disposal.

(vi) The Income Tax department is in appeal before the Hon''ble High Court, Gujarat for the assessment years 2007-08 and 2008-2009 on various grounds decided by the Income Tax Appellate Tribunal.

(vii) The Asst. Commissioner of Income Tax, Vapi had raised a demand ofRs 154.64 lakhs as penalty u/s 271(1) (C) for the assessment years 2011-12 and 2012-13. Refund of ? 9.64 lakhs for the previous assessment year has been adjusted reducing demand to ? 145 lakhsA.The Company had appealed against these orders before the CIT (A) and the same is pending disposal.

(viii) The Assessment for the assessment year 2016-17 is in progress.

b) Financial Liabilities

(Rs in lakhs)

Particulars

Level

As at March 31, 2018

As at March 31, 2017

As at April 1,2016

Carrying Amount

Fair Value

Carrying Amount

Fair Value

Carrying Amount

Fair Value

Financial liability at amortised cost

a) Borrowings

3

24,116.23

24,116.23

26,557.46

26,557.46

33,449.88

33,449.88

b) Trade payables*

3

4,489.12

4,489.12

5,561.49

5,561.49

6,227.56

6,227.56

c) Other financial liability*

3

17,056.10

17,056.10

15,967.44

15,967.44

15,556.23

15,556.23

45,661.45

45,661.45

48,086.38

48,086.38

55,233.67

55,233.67

The carrying amounts of trade receivables, cash and cash equivalents, current loans, other current financial assets, current borrowings, trade payables and other financial liabilities are considered to be approximately equal to the fair value.

The fair values of non current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs

Fair value hierarchy

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. 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.

During the years mentioned above, there have been no transfers amongst the levels of hierarchy. The fair values of unquoted equity instruments are not significantly different from their carrying value and hence the management has considered their carrying amount as fair value.

Valuation processes

The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the chief financial officer (CFO) and the audit committee (AC). Discussions of valuation processes and results are held between the CFO, AC and the valuation team at least once every three months, in line with the Company''s quarterly reporting periods.

Note 42: FIRST TIME ADOPTION of Ind AS

The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from April 01, 2017 with a transition date of April 01, 2016. The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements for the year ended March 31, 2018 be applied retrospectively and consistently for all financial years presented. However, in preparing these Ind AS financial statements, the Company has availed of certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity).

Disclosures as required by Indian Accounting standard (Ind AS 101) first time adoption of Indian accounting standards exemption and exceptions availed

Below mentioned are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

(A) Ind AS Optional Exemptions:

Ind AS 101 allows first time adopters certain exemptions from the retrospective application of certain requirements under Ind AS.

The Company has applied the following exemptions
i) Deemed cost

Ind AS 101 permits a first time adopter to elect to fair value of its property, plant and equipment as recognised in financial statements as at the date of transition to Ind AS, measured as per previous GAAP and use that as its deemed cost as at the date of transition or apply principles of Ind AS retrospectively. Ind AS 101 also permits the first time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS. This exemption can be also used for intangible assets covered by Ind-AS 38.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

(B) Ind AS mandatory exceptions i) Estimates:-

An entity estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP except where Ind AS required a different basis for estimates as compared to the previous GAAP.

ii) Derecognition of financial assets and financial liabilities:-

Ind AS 101 requires a first time adopter to apply the derecognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. Accordingly, the Company has applied the derecognition requirement for financial assets and financial liabilities in Ind AS 109 prospectively for transactions occurring on or after date of transition to Ind AS.

iii) Classification of financial assets and liabilities:-

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of facts and circumstances that exist on the date of transition to Ind AS. Accordingly, the Company has applied the above requirement prospectively.

D. Reconciliation of profit for the year ended March 31, 2017 between previous GAAP and Ind AS:

(Rs in lakhs)

Particulars

Refer note below

As at March 31, 2017

Net Profit after tax reported under previous GAAP

7,023.17

Borrowings measured at amortised cost

3

568.75

Reclassification of Actuarial gains/losses to Other Comprehensive Income (OCI)

5

34.68

Others

2

(38.83)

Tax adjustments as per IND AS

6

(2,614.58)

Net Profit after tax reported under Ind AS

4,973.19

Other Comprehensive lncome/(Loss) (net of tax)

7

(13.96)

Total Comprehensive Income for the period as reported under Ind AS

4,959.22

Note: The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements

D. There is no significant reconciliation items between cash flow prepared under Previous GAAP and prepared under Ind AS.

NOTES TO FIRST TIME ADOPTION

Note 1: Fair Valuation of Investments

Under previous GAAP, investment in equity instruments were classified into long term and current investments. Long term investments were carried at cost less provision other than temporary in nature. Current investments were carried at lower of cost or fair value. Under Ind AS, these investments are require to be measured at fair value either through OCI (FVTOCI) or through Profit & loss (FVTPL). For investment in Unquoted Instrument, Company has elected to fair value through Profit and Loss Account(FVTPL) & For investment in Quoted Instrument, Company has elected to fair value through OCI.(FVTOCI)

Note 2: Fair valuation of Financial Asset

Under previous GAAP, interest free lease security deposits (that are refundable in cash on completion of lease term) are recorded at transaction price. Under Ind AS All financial assets are required to be recognised at fair value. Accordingly, the Company has fair valued the security deposits and the difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent which is amortised over the period of security as rental expenses and consequently Notional interest income is to be booked in Profit and Loss Account.

Rent free periods are considered as a part of the lease term and accounted for as lease incentives. Hence lease rentals are straight lined over entire lease period, including the rent-free period as well.

Note 3: Borrowings

Ind AS 109 requires transaction costs incurred towards borrowings to be deducted from the transaction value on initial recognition. These cost are recognised in profit and loss over the tenure of borrowings as a part of the interest expense by applying effective interest rate method.

Note 4: Excise duty

Under previous GAAP, revenue from sale to goods was presented exclusive of excise duty. Under Ind AS revenue from sales of goods is presented inclusive of excise duty. Excise duty paid is presented on face of statement of profit and loss account as a part of expense. This change has resulted in increase in total revenue and total expense . There is no impact on total equity and profit.

Note 5 : Remeasurements of post employment benefit obligations

Under previous GAAP, cost relating to post employment benefit obligations including actuarial gain/losses were recognised in Profit & Loss. Under Ind AS, actuarial gain/losses on the net defined benefit liability are recognised in other comprehensive income instead of profit & loss.

Note 6: Deferred taxes

Under previous GAAP, deferred taxes were recognised based on Profit & loss approach i.e. tax impact on difference between the accounting income and taxable income. Under Ind AS, deferred tax is recognised by following balance sheet approach i.e. tax impact on temporary difference between the carrying value of asset and liabilities in the books and their respective tax base.

Note 7: Other comprehensive income

Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of expenses, incomes, losses and gains are required to be presented in other comprehensive income.

Note 43: Financial risk management objectives and policies

The Company''s principal financial liabilities, comprise of borrowings, security deposits, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include investments, loans, trade and other receivables, cash and cah equivalents and other bank balances that are derived directly from its operations.

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company''s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee.

This process provides assurance to Company''s senior management that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

The management reviews and agrees policies for managing each of these risks which are summarized 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 prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include borrowings, security deposits, investments and foreign currency receivables and payables.

(i) Foreign Currency Risk

The Company operates internationally and portion of the business is transacted in several currencies. Consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Exports of the Company are significantly lower in comparison to its imports. Foreign currency exchange rate exposure is party balanced by exports of goods and prudent hedging policy.

Foreign Currency Exposure

Name of the Instrument

March 31,

2018

March 31, 2017

In Million US$

? in lakhs

In Million US$ ? in

lakhs

Open Foreign Exchange Exposures - Receivable

$2.17

1390.58

$0.71

465

Open Foreign Exchange Exposures - Payable

$0.11

73.44

$1.41

886

Foreign Currency Risk Sensitivity

A change of 1% in Foreign currency would have following Impact on profit before tax:

Rs in lakhs

Name of the Instrument

2017-18

2016

-17

1% appreciation

1% depreciation

1% appreciation

1% depreciation

In US$

In US$

In US$

In US$

Increase / (decrease) in profit or loss (Rs in lakhs)

13.17

(13.17)

(4.21)

4.21

(ii) Interest rate risk:

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Company''s financial liabilities comprises of interest bearing loans, vehicle loans and advances and security deposits; however these are not exposed to risk of fluctuation in market interest rate as the rates are fixed at the time of contract/agreement and do not change for any market fluctuation.

(iii) Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing manufacture of paper and paper boards and therefore require a continuous supply of raw materials i.e. waste paper, chemicals, coal etc. being the major input used in the manufacturing. Due to the significantly increased volatility of the price of waste paper and coal the Company had entered into various purchase contracts for these material for which there is an active market. The Company''s management has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company partly mitigated the risk of price volatility by entering into the contract for the purchase of these material and further the Company increases prices of its products as and when appropriate to minimize the impact of increase in raw material prices.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation under a financial instrument, 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 deposits with banks, foreign exchange transactions and other financial instruments.

i) Trade receivables

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Company''s review includes external ratings, if they are available, financial financial statements, credit agency information, industry information and business intelligence. Sale limits are established for each customer and reviewed annually. Any sales exceeding those limits require approval from the appropriate authority as per policy. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, whether they are a institutional dealers or end-user customer, their geographic location, industry, trade history with the Company and existence of previous financial difficulties.

Expected credit loss for trade receivables:

The Company based on internal assessment which is driven by the historical experience/ current facts available in relation to default and delays in collection thereof, has assess the credit risk for trade receivables as low. The Company estimates its allowance for trade receivable using lifetime expected credit loss. The Company has also taken advances and trade deposits from its customers which mitigate the credit risk to an extent.

ii) Financial Instruments and cash deposits

The Company considers factors such as track record, size of the instutition, market reputation, financial strength/rating and service standards to select the banks with which balances and deposits are maintained. Generally the balances are maintained with the institutions with which the Company has also availed borrowings.

iii) The ageing analysis if the receivables (gross of provision) has been considered from the date of invoice falls due.

(Rs in lakhs)

Particulars

Neither Due nor impaired

Past Due

Total

UptoS months

6 to 12 months

Above 12 months

Trade Receivables

As at March 31, 2018 Unsecured

8,58570

2,331.27

149.58

74.01

11,140.56

Loss allowance

-

-

-

(66.59)

(66.59)

Total

8,585.70

2,331.27

149.58

7.42

11,073.97

As at March 31, 2017 Unsecured

7,637.12

1,298.47

350.11

158.83

9,444.53

Total

7,637.12

1,298.47

350.11

158.83

9,444.53

As at April 1,2016 Unsecured

5,927.84

1,444.02

249.84

245.45

7,867.16

Total

5,927.84

1,444.02

249.84

245.45

7,867.16

(c) Liquidity Risk

The Company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its current requirements. Further, the Company''s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due and Company monitors rolling forecasts of its liquidity requirements.


Mar 31, 2016

1. CONTINGENT LIABILITIES AND PROVISIONS

(a) Guarantees and counter guarantees Rs. 12,00,000/- (Previous year Rs. 32,00,000/-)

(b) Excise duty demands and penalties Rs. 2,89,98,901/- (Previous year Rs. 2,21,16,306/-)

(c) Customs duty demands and penalties Rs. 34,90,152/- (Previous year Rs. 34,90,152/-)

(d) Claims against the Company not acknowledged as debts Rs. 12,52,354/- (Previous year Rs. 9,03,286/-)

(e) Letters of Credit outstanding Rs. 15,16,09,563/- (Previous year Rs. 22,90,88,107/-)

(f) The Company has imported capital goods under "Export Promotion Capital Goods" scheme for which the company has an given export obligation of Rs. 15,76,54,650/- (Previous Year Rs. 42,00,26,154 /-)

(g) The Income tax assessments of the Company have been completed up to Assessment Year 2013-14.

i) The Income Tax Department, had raised a demand of Rs. 18,67,30,693/- for the Assessment Years 2007-08 to 2012-13. The Company had remitted Rs. 13,07,61,494/- against the said demand. The Company had appealed against these orders with the Commissioner of Income tax (Appeals) and obtained partial relief reducing the demand to Rs. 4,54,00,026/- vide orders dated 27/11/2015 and 09/03/2016. The Income Tax Department and the Company are in appeal before the Income Tax Appellate Tribunal, Ahmedabad. Further, the Company has already received refund amounting to Rs. 7,98,63,520/- on 24/05/2016.

The Income Tax Department had raised a demand of Rs. 88,99,000/- while completing the assessment for the Assessment Year 2013-14. The Company has filed an appeal before the Commissioner of Income Tax (Appeals) against the order. The demand has been adjusted by the department against the refund available for the earlier assessment years as stated above.

ii) The Income Tax Department is in appeal before the Hon''ble High Court of Ahmedabad on various grounds decided by the Income Tax Appellate Tribunal.

2. Estimated amount of Contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 1,34,32,043/-(Previous year Rs. 1,35,47,265/-).

3. The Company had entered into an MOU dated February 3, 2011 with Damanganga Recycling Resources LLP (DRR) for availing the services of conversion of waste to energy. In terms of the MOU, the Company has paid Rs. 1,20,00,000/- as interest free deposit adjustable against the tipping bills. However, the said project has not materialized and the amount of Rs. 1,20,00,000/- paid by the Company as Deposit has been forfeited by DRR. Consequently, the Company has initiated legal proceedings. Pending the outcome of legal proceedings, the Company has not made any provision in the books of account.

4. Sundry Debtors, Sundry Creditors, Unsecured Loans and Loans and Advances balances are subject to confirmation and reconciliation.

5. SEGMENT REPORTING

The Company''s business activity falls within a single primary business segment which is "Manufacture of Paper, Paper Boards and Newsprint" and sales being mainly in the domestic market, therefore disclosure requirements of AS-17 are not applicable.

6. Remuneration to the Chairman and Managing Director (CMD)

For the year 2013-14 the Central Government vide approval dated 17th June, 2015 has approved waiver of excess remuneration paid to the Chairman and Managing Director over the limits prescribed under Section 198 read with Schedule XIII of the Companies Act, 1956.

7. Previous year''s figures have been regrouped wherever necessary to conform to this year''s classification.


Mar 31, 2015

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 equity shareholder is entitled to one vote per share.

1 Term loan from Bank of Baroda, balance outstanding amounting to ' 3924.38 Lacs (March : 2014 Rs 9025.00 Lac) is secured by way of first pari passu charge (i) on movable assets including plant and machinery and immovable assets at Unit I at Vapi and excluvise first charge on movable assets including plant and machinery and immovable assets at Unit II, III and IV at Vapi and Unit V at Sarigam (excluding vacant non-agricultural land of 37.61 acres at Sarigam, Gujarat) (ii) second pari passu charge on current assets of the Company, (iii) pledge of entire unencumbered shares of the company held by Shri R.N. Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal on pari passu basis and (iv) personal guarantees of Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena R. Agarwal.

Repayble in 32 quarterly installments starting from 30.1 1.2014. Last installment due on 31.08.2022. Rate of interest 14.00% p.a. as at year end. (Previous year 11.50% p.a.)

2 Term loan from Bank of Baroda, balance outstanding amounting to Rs 2071.87 Lacs (March : 2014 Rs 3516.39 Lac) is secured by way of first pari passu charge (i) on movable assets including plant and machinery and immovable assets at Unit I at Vapi and excluvise first charge on movable assets including plant and machinery and immovable assets at Unit II, III and IV at Vapi and Unit V at Sarigam (excluding vacant non-agricultural land of 37.61 acres at Sarigam, Gujarat) (ii) second pari passu charge on current assets of the Company, (iii) pledge of entire unencumbered shares of the company held by Shri R.N. Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal on pari passu basis and (iv) personal guarantees of Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena R. Agarwal.

Repayble in 32 quarterly installments starting from 30.1 1.2014. Last installment due on 31.08.2022. Rate of interest 11.00% p.a. as at year end. (Previous year 11.00% p.a.)

3 Term loan from Bank of Baroda, balance outstanding amounting to ' 6562.50 Lacs (March : 2014 Rs 4838.61 Lac) is secured by way of first pari passu charge (i) on movable assets including plant and machinery and immovable assets at Unit I at Vapi and excluvise first charge on movable assets including plant and machinery and immovable assets at Unit II, III and IV at Vapi and Unit V at Sarigam (excluding vacant non-agricultural land of 37.61 acres at Sarigam, Gujarat) (ii) second pari passu charge on current assets of the Company, (iii) pledge of entire unencumbered shares of the company held by Shri R.N. Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal on pari passu basis and (iv) personal guarantees of Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena R. Agarwal.

Repayble in 32 quarterly installments starting from 30.1 1.2014. Last installment due on 31.08.2022. Rate of interest 13.00% p.a. as at year end. (Previous year 13.00% p.a.)

4 Funded Interest Term Loan (FITL)from Bank of Baroda, balance outstanding amounting to Rs 2189.38 Lacs (March : 2014 Rs 1809.88 Lac) is secured by way of first pari passu charge (i) on movable assets including plant and machinery and immovable assets at Unit I at Vapi and excluvise first charge on movable assets including plant and machinery and immovable assets at Unit II, III and IV at Vapi and Unit V at Sarigam (excluding vacant non-agricultural land of 37.61 acres at Sarigam, Gujarat) (ii) second pari passu charge on current assets of the Company, (iii) pledge of entire unencumbered shares of the company held by Shri R.N. Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal on pari passu basis and (iv) personal guarantees of Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena R. Agarwal.

Repayble in 16 quarterly installments starting from 30.1 1.2014. Last installment due on 31.08.2018. Rate of interest 10.50% p.a. as at year end. (Previous year 10.50% p.a.)

5 Foreign Currency Non-Resident (FCNR-B-Loan) from Bank of Baroda, as part conversion of term loans, balance outstanding amounting to Rs 6337.50 Lacs (March : 2014 Rs 0.00 Lac) is secured by way of first pari passu charge (i) on movable assets including plant and machinery and immovable assets at Unit I at Vapi and excluvise first charge on movable assets including plant and machinery and immovable assets at Unit II, III and IV at Vapi and Unit V at Sarigam (excluding vacant non-agricultural land of 37.61 acres at Sarigam, Gujarat) (ii) second pari passu charge on current assets of the Company, (iii) pledge of entire unencumbered shares of the company held by Shri R.N. Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal on pari passu basis and (iv) personal guarantees of Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena R. Agarwal.

Repayble in 32 quarterly installments starting from 30.1 1.2014. Last installment due on 31.08.2022. Rate of interest 6.328% p.a. as at year end. (Previous year 0.00% p.a.)

6 Corporate Loan from The Saraswat Co-Operative Bank Ltd., balance outstanding amounting to Rs 2257.13 Lacs (March : 2014 Rs 2315.00 Lac) is secured by way of first pari passu charge on movable assets including plant and machinery and immovable assets at Unit I at Vapi. The loan is further secured on exclusive basis (i) Directors residential bunglow at Lokhandwala, Andheri (W), Mumbai 400053, (ii) the non agricultural land admeasuring 37.61 acres at Sarigam, Gujarat (iii) pledge of entire unencumbered shares of the company held by Shri R.N. Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal on pari passu basis and (iv) personal guarantees of Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena R. Agarwal .

Repayble in 32 quarterly installments starting from 30.1 1.2014. Last installment due on 31.08.2022. Rate of interest 13.50% p.a. as at year end. (Previous year 13.50% p.a.)

7 Funded Interest Term Loan(FITL) from The Saraswat Co-Operative Bank Ltd., balance outstanding amounting to Rs 539.87 Lacs (March : 2014 Rs 487.34 Lac) is secured by way of first pari passu charge on movable assets including plant and machinery and immovable assets at Unit I at Vapi. The loan is further secured on exclusive basis (i) Directors residential bunglow at Lokhandwala, Andheri (W), Mumbai 400053, (ii) the non agricultural land admeasuring 37.61 acres at Sarigam, Gujarat (iii) pledge of entire unencumbered shares of the company held by Shri R.N. Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal on pari passu basis and (iv) personal guarantees of Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena R. Agarwal .

Repayble in 16 quarterly installments starting from 30.1 1.2014. Last installment due on 31.08.2018. Rate of interest 10.50% p.a. as at year end. (Previous year 10.50% p.a.)

8 Mortgage Loan from India Infoline Finance Ltd., balance outstanding amounting to Rs 900.00 Lacs (March : 2014 Rs 0.00 Lac) is secured by exclusive charge on office premises situated at Office No. 1101, 11th Floor, Fortune Terraces, Mahashree Compound, New Link Road, Oshiwara, Andheri - West, Mumbai - 400 053 and personal guarantees of Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena R. Agarwal .

Repayble in 120 monthly installments starting from 05.04.2015. Last installment due on 05.03.2025. Rate of interest 14.00% p.a. as at year end. (Previous year 0.00% p.a.)

9 Vehical Loan from HDFC Bank Ltd., balance outstanding amounting to Rs 9.05 Lacs (March : 2014 Rs 16.02 Lacs) is secured by hypothecation of Motor Car.

Repayble in 36 monthly installments starting from 07.06.2013. Last installment due on 07.05.2016. Rate of interest 10.00% p.a. as at year end. (Previous year 10.00% p.a.)

10 Vehical Loan from HDFC Bank Ltd., balance outstanding amounting to Rs 0.53 Lacs (March : 2014 Rs 3.51 Lacs) is secured by hypothecation of Forklift.

Repayble in 35 monthly installments starting from 20.07.2012. Last installment due on 20.05.2015. Rate of interest 11.00% p.a. as at year end. (Previous year 11.00% p.a.)

11 Vehical Loan from HDFC Bank Ltd., balance outstanding amounting to Rs 0.53 Lacs (March : 2014'3.51 Lacs) is secured by hypothecation of Forklift.

Repayble in 35 monthly installments starting from 20.07.2012. Last installment due on 20.05.2015. Rate of interest 11.00% p.a. as at year end. (Previous year 11.00% p.a.)

12 Vehical Loan from HDFC Bank Ltd., balance outstanding amounting to Rs 0.53 Lacs (March : 2014 Rs 3.51 Lacs) is secured by hypothecation of Forklift.

Repayble in 35 monthly installments starting from 20.07.2012. Last installment due on 20.05.2015. Rate of interest 11.00% p.a. as at year end. (Previous year 11.00% p.a.)

13 Vehical Loan from HDFC Bank Ltd., balance outstanding amounting to Rs 1.03 Lacs (March : 2014 Rs 6.85 Lacs) is secured by hypothecation of Forklift.

Repayble in 35 monthly installments starting from 20.07.2012. Last installment due on 20.05.2015. Rate of interest 11.00% p.a. as at year end. (Previous year 11.00% p.a.)

14 Vehical Loan from HDFC Bank Ltd., balance outstanding amounting to Rs 0.82 Lacs (March : 2014 Rs 5.43 Lacs) is secured by hypothecation of JCB.

Repayble in 35 monthly installments starting from 20.07.2012. Last installment due on 20.05.2015. Rate of interest 11.00% p.a. as at year end. (Previous year 11.00% p.a.)

15 Vehical Loan from HDFC Bank Ltd., balance outstanding amounting to Rs 1.03 Lacs (March : 2014 Rs 6.85 Lacs) is secured by hypothecation of Bolero.

Repayble in 35 monthly installments starting from 20.07.2012. Last installment due on 20.05.2015. Rate of interest 11.00% p.a. as at year end. (Previous year 11.00% p.a.)

16.(a) In accordance with the provisions of Schedule II of the Companies Act, 2013 in case of fixed assets which have completed their useful life as at April 1,2014, the carrying value (net of residual value) amounting to Rs 90.33 lacs (net of deferred tax of Rs 40.39 lacs) as a transitional provision has been recognised in the Retained Earnings.

(b) Further in case of assets acquired prior to 1st April, 2014, the carrying value of assets (net of residual value) is depreciated over the remaining useful life as determined effective 1st April, 2014

(c) Depreciation expenses for the year would have been higher by '197.35 lacs had the Company continued with the previous assessment of useful life of such assets.

17. RELATED PARTY DISCLOSURES

Key Management Personnel & Relatives

1 Shri. R N Agarwal

2 Shri. Raunak Agarwal

3 Shri Mangilal Suthar

4 Smt. Reena R Agarwal

5 Shri Gopal Uchil

6 Smt. Hemali Shah

7 Shri RHK Sinha

8 Ms Pooja Daftary

18. Notes:

a. Loans to Employees as per Company's policy are not considered

b.Related party relationship is as identified by the Company and relied upon by the auditors.

19. CONTINGENT LIABILITIES AND PROVISIONS

(a) Guarantees and counter guarantees ' 32,00,000/- (Previous Year Rs 1,200,000/-)

(b) Excise duty demands and penalties Rs 2,21,16,306/- (Previous Year Rs 17,05,071/-)

(c) Custom duty demands and penalties Rs 34,90,152/- (Previous Year Rs NIL)

(d) Claims against the Company not acknowledged as debts - Rs 9,03,286/-- (Previous year Rs 7,79,936/-)

(e) Letters of Credit outstanding Rs 22,90,88,107/- (Previous Year Rs 9,16,79,769/-)

(f) The Company has imported capital goods under "Export Promotion Capital Goods" scheme for which the company has an given export obligation of Rs 42,00,26,154/- (Previous Year Rs 2,60,38,382 /-)

(g) Income tax matters disputed in appeal Rs 18,67,30,693/- (previous year Rs 15,36,77,003/-)

The Income tax assessments of the Company have been completed upto Assessment Year 2012-13

The total demand outstanding as on 31.03.2015 on account of income tax dues for Assessment Year 2007-08 to Assessment Year 2012-13 is Rs 18,67,30,693/- (previous year Rs 15,36,77,003). The Income Tax Appellate Tribunal, Ahmedabad disposed off the appeals filed by the Company for the disputed tax demand of Rs 108,445,192 for the Assessment Years 2007-08 to 2010-11 by remitting back the mater to CIT(A) for disposal on merits and law. The proceedings are under progress.

The income tax department is in appeal before the Hon'ble High Court of Ahmedabad on various grounds decided by the Income Tax Appeallate Tribunal

The Company has preferred an appeal to the Commissioner of Income Tax (Appeals), Ahmedabad for the demand notice of Rs 4,52,31,811/- received from the Income Tax Department for the Assessment Year 2011-12 The matter is pending for disposal. The Management is of the opinion that the Company is entitled to deduction under Section 80-IA(4)(iv) of the Income Tax Act, 1961 and hence, no provision for aforesaid demand/notices has been made in the books of accounts.

The Company has preferred an appeal to the Commissioner of Income Tax (Appeals), Ahmedabad for the demand notice of Rs 3,30,53,690/- received from the Income Tax Department for the Assessment Year 2012-13 The matter is pending for disposal. The Management is of the opinion that the Company is entitled to deduction under Section 80-IA(4)(iv) of the Income Tax Act, 1961 and hence, no provision for aforesaid demand/notices has been made in the books of accounts.

20. Estimated amount of Contracts remaining to be executed on capital account and not provided for (net of advances) Rs 1,35,47,265/- (Previous year Rs 6,83,44,674/-).

21. The Company had entered into an MOU dated February 3, 2011 with Damanganga Recycling Resources LLP (DRR) for availing the services of conversion of waste to energy. In terms of the MOU, the Company has paid Rs 1,20,00,000 as interest free deposit adjustable against the tipping bills. However, the said project has not materialized and the amount of Rs 1,20,00,000 paid by the Company as Deposit has been forfeited by DRR. Consequently, the Company has initiated legal proceedings. The management is confident that the outcome would be decided in the Company's favour and hence, no provision for the said amount has been made in the books of accounts.

22. Sundry Debtors, Sundry Creditors, Unsecured Loans and Loans and Advances balances are subject to confirmation and reconciliation.

23. Segment Reporting

The Company operates in Single Business Segment of 'Manufacturing of Paper Boards & Newsprint'. Therefore, the Company is of the view that the disclosure requirement of Accounting Standard AS-17 issued by the Institute of Chartered Accountants of India is not applicable to the Company.

24. Bank of Baroda has issued a counter guarantee (DPG) to Deutsche Bank AG, amounting to Rs Nil to fulfill certain contractual payment obligations for the import of certain capital goods. However, the company has provided the full liability of the said contract and same is included under Sundry Creditors (Previous Year Rs 1,27,61,925/-).

25. Remuneration to the Chairman and Managing Director (CMD)

(a) For the year 2012-13 the Central Government vide approval dated July 22, 2014 has approved waiver of excess remuneration paid to the Chairman and Managing Director over the limits prescribed under Section 198 read with Schedule XIII of the Companies Act, 1956.

(b) In view of the inadequacy of profit for the year 2013-14 remuneration paid to the Chairman and Managing Director was in excess of the limit prescribed under Section 198 read with Schedule XIII of the Companies Act, 1956. Pending approval by the Central Government, the Chairman and Managing Director holds the excess remuneration paid amounting to Rs 19,50,000/- in trust for the Company.

26. Previous year's figures have been regrouped wherever necessary to conform to this year's classification.


Mar 31, 2014

1. Notes:

Corporate Loan from Saraswat Co-operative Bank Ltd. is secured by a first pari passu charge on the plant and machinery situated at Unit I at Vapi and further secured by extension of existing security on immovable properties at Unit I, Vapi. It is also further secured by exclusive charge by way of equitable mortgage of Directors residential bunglow at Lokhandwala, Andheri (W), Mumbai 400053 along with an exclusive charge by way of legal mortgage on non agricultural land admeasuring 37.61 acres at Sarigam, Gujarat. The loan is further secured by personal guarantees of Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal.

The Project Loan from Bank of Baroda is secured by first pari passu charge by way of hypothecation of plant and machinery situated at Vapi and at Sarigam and first pari passu charge on immovable properties (Unit I, II, III, IV and V) situated at Vapi and Sarigam, together with buildings and other structures thereon (excluding vacant non-agricultural land of 37.61 acres at Sarigam, Gujarat) and second pari passu charge on current assets of the Company. It is further secured by the personal guarantees of Shri. R N Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal.

All the above loans are further secured by pledge of entire unencumbered shares of the Company held by Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal.

The New office premises Loan from Bank of India is exclusively secured by equitable mortgage on the said property and further secured by the personal guarantee of Shri. R N Agarwal.

Term loan is inclusive of the loan availed from HDFC Bank against hypothecation of forklift, Loader and Terex.

2. The Cash Credit from Banks are secured by hypothecation of present and future stock of raw materials, steam coal, goods in process, finished goods and books debts etc. ranking pari passu inter-se and second charge on Company''s movable and immovable fixed assets (excluding non-agricultural land admeasuring 37.61 acres situated at Sarigam, Gujarat) and office premises situated at Mumbai which are exclusively charged to other lenders. It is further secured by personal guarantees of Shri. R N Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal. The Cash Credit from Banks is additionally secured by pledge of entire unencumbered shares of the Company held by Shri R. N. Agarwal, Shri Raunak Agarwal and Smt. Reena Agarwal.

3. Out of the said amount Rs. 4,436,416 (March 31,2013 : Rs. 6,678,921) pertains to micro, small and medium enterprises as defined under Micro, Small, and Medium Enterprises Development Act, 2006 based on the information available with the Company. There is no interest payable to such parties as at March 31,2014 (March 31,2013: Rs. Nil).

4. Capital work in progress includes Rs. 2,775,440,244/- pertaining to Unit V. The Company has received approval from the Ministry of Environment & Forest, New Delhi and from the state government for the co-generation plant and the project is under implementation.

Capital work in progress includes Rs. 118,371,544/- under construction of new office premises at Fortune Terraces. According to the sale agreement dated January 20, 2010 the possession of the said premises were agreed to be given on March 31,2011. However, due to delay in obtaining of the occupation certificate by the developer possession of the said premises further delayed. As per the Sale Agreement, Company has to pay 18 months outgoing charges of Rs. 1,730,600/- alongwith other charges on taking the possession for which Company has not made provision in the accounts.

5. CONTINGENT LIABILITIES AND PROVISIONS

(a) Guarantees and Counter Guarantees Rs. 1,200,000/- (Previous Year Rs. 1,200,000/-)

(b) Excise Duty Demands and Penalties Rs. 1,705,071/- (Previous Year Rs. 1,705,071/-)

(c) Claims against the Company not acknowledged as Debts - Rs. 779,936/- (Previous year Rs. 642,524/-)

(d) Letters of Credit Outstanding Rs. 91,679,769/- (Previous Year Rs. 152,371,620/-)

(e) Custom Penalties on Imports - Rs. NIL (Previous year Rs. NIL)

(f) The Company has imported capital goods under "Export Promotion Capital Goods" scheme for which the Company has an given export obligation of Rs. 26,038,382 /- (Previous Year Rs. 537,114,937/-)

(g) Income tax matters disputed in appeal Rs. 153,677,003/- (Previous Year Rs. 108,445,192/-)

The Income tax assessments of the Company have been completed upto Assessment Year 2011-12.

The total demand outstanding as on 31.03.2014 on account of income tax dues for Assessment Year 2007-08 to Assessment Year 2011-12 is Rs. 153,677,003/- (Previous year Rs. 108,445,192). During the year the Income Tax Appellate Tribunal, Ahmedabad disposed off the appeals filed by the Company for the disputed tax demand of Rs. 108,445,192 for the Assessment Years 2007-08 to 2010-11 by remitting back the matter to CIT(A) for disposal on merits and law. The proceedings are under progress.

The income tax department is in appeal before the Hon''ble High Court of Ahmedabad on various grounds decided by the Income Tax Appeallate Tribunal The Company has preferred an appeal to the Commissioner of Income Tax (Appeals), Ahmedabad for the demand notice of Rs. 45,231,811/- received from the Income Tax Department for the Assessment Year 2011-12. The matter is pending for disposal. The Management is of the opinion that the Company is entitled to deduction under Section 80-IA(4)(iv) of the Income Tax Act, 1961 and hence, no provision for aforesaid demand/notices has been made in the books of accounts.

6. Estimated amount of Contract remaining to be executed on capital account and not provided for (net of advances) Rs. 68,344,674/- (Previous year Rs. 445,464,403/-).

7. The Company had entered into an MOU dated February 3, 2011 with Damanganga Recycling Resources LLP (DRR) for availing the services of conversion of waste to energy. In terms of the MOU, the Company has paid Rs. 12,000,000 as interest free deposit adjustable against the tipping bills. However, the said project has not materialized and the amount of Rs. 12,000,000 paid by the Company as Deposit has been forfeited by DRR. Consequently the Company has initiated legal proceedings.

8. Sundry Debtors, Sundry Creditors, Unsecured Loans and Loans and Advances balances are subject to confirmation and reconciliation.

9. SEGMENT REPORTING:

The Company operates in Single Business Segment of ''Manufacturing of Paper Boards & Newsprint''. Therefore, the Company is of the view that the disclosure requirement of Accounting Standard AS-17 issued by the Institute of Chartered Accountants of India is not applicable to the Company.

10. Bank of Baroda has issued a counter guarantee (DPG) to Deutsche Bank AG, amounting to Rs. 12,761,925/- to fulfill certain contractual payment obligations for the import of certain capital goods. However, the Company has provided the full liability of the said contract and same is included under Sundry Creditors (Previous Year Rs. 21,712,165/-).

11. Remuneration to the Chairman and Managing Director (CMD)

(a) Remuneration paid by the Company to the CMD for FY 2011-12 over and above the the limit prescribed under Section 198 read with Schedule XIII to the Companies Act, 1956, amounting to Rs. 3,392,838/- has since been refunded to the company by the CMD.

(b) In view of inadequacy of profit for FY 2012-13, remuneration paid by the Company to the CMD was in excess of the limit prescribed under Section 198 read with Schedule XIII to the Companies Act, 1956. Pending approval by the Central Government, the CMD holds the excess remuneration paid amounting to Rs. 5,276,035/- in trust for the Company.

(c) In view of inadequacy of profit for FY 2013-14, remuneration paid by the Company to the CMD was in excess of the limit prescribed under Section 198 read with Schedule XIII to the Companies Act, 1956. The Company is in the process of making application to the Central Government u/s 309(5B) of the Companies Act, 1956 to waive the recovery of the said excess remuneration. Pending approval of the Central Government, the CMD holds the excess remuneration paid amounting to Rs. 1,950,000/- in trust for the Company.

12. Previous year''s figures have been regrouped wherever necessary, to conform to current year''s classification.


Mar 31, 2013

NOTE 1 CONTINGENT LIABILITIES AND PROVISIONS

(a) Guarantees and counter guarantees given by the Company Rs. 1,200,000/- (Previous Year Rs.NIL)

(b) Excise duty demands and penalties Rs. 1,705,071/- (Previous Year Rs. 1,705,071/-)

(c) Claims against the Company not acknowledged as debts - Rs. 642,524/- (Previous year Rs. 538,758/-)

(d) Letter of Credit outstanding Rs.152,371,620/- (Previous Year Rs. 139,665,667/-)

(e) Custom penalties on Imports - Rs. NIL (Previous year Rs. NIL)

(f) The Company has imported capital goods under "Export Promotion Capital Goods" scheme for which the Company has given export obligation of Rs. 537,114,937 /- (Previous Year Rs. 698,177,456/-)

(g) Income tax matters disputed in appeal amount Rs. 108,445,192/- (previous year Rs. 119,756,754)

The Company has received a demand from Income TaBc Department for Rs. 189,448,031 reduced subsequently by rectification order to Rs. 119,756,754/- in respect of Assessment Years 2007-08 to 2010-11 mainly on account of 80-IA(4)(iv) of Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) vide their order dated June 12, 2012 further reduced the demand to Rs.108,445,192/-.

The Company preferred an appeal with the Income Tax Appellate Tribunal, Ahmedabad for stay of demand and the other reliefs. The tribunal while disposing of the stay application of the Company, had ordered to make payment by installment of Rs.15,00,000/- per month. The Company has remitted Rs. 47,712,514/- so far. The other matter of reliefs is pending for disposal. The Management is of the opinion that the Company is entitled to deduction under Section 80-IA(4)iv) of the Income Tax Act, 1961 and hence, no provision for aforesaid demand/notices has been made in the books of accounts.

NOTE 2

Estimated amount of Contract remaining to be executed on capital account and not provided for (net of advances) Rs. 445,464,403/- (Previous year Rs.395,907,291/-).

NOTE 3

The Company had entered into an MOU dated February 3, 2011 with Damanganga Recycling Resources LLP (DRR) for availing the services of conversion of waste to energy. In terms of the MOU, the Company has paid Rs. 12,000,000 as interest free deposit adjustable against the tipping bills. However, the said project has not materialized and the amount of Rs. 12,000,000 paid by the Company as deposit has been forfeited by DRR. Consequently the Company has initiated legal proceedings.

NOTE 4

Sundry Debtors, Sundry Creditors, Unsecured Loans and Loans and Advances balances are subject to confirmation and reconciliation.

NOTE 5 SEGMENT REPORTING:

The Company operates in Single Business Segment of ''Manufacturing of Paper Boards & Newsprint''. Therefore, the Company is of the view that the disclosure requirement of Accounting Standard AS-17 issued by the Institute of Chartered Accountants of India is not applicable to the Company.

NOTE 6

Bank of Baroda has issued a counter guarantee (DPG) to Deutsche Bank AG, amounting to Rs. 21,712,165/- to fulfill certain contractual payment obligations for the import of certain capital goods. However, the Company has provided the full liability of the said contract and same is included under Sundry Creditors (Previous Year Rs. 32,304,759/-).

NOTE 7

During the financial year under consideration, due to factors affecting economies at macro-economic level and industry downturn and delay in implementing the project at Sarigam, the Company was facing liquidity crunch and to fulfill its repayment obligations. In order to overcome debt repayment obligations, Bank of Baroda has made a reference to the Corporate Debt Restructuring (CDR) cell for restructuring of the debts of the Company through CDR Mechanism. The final restructuring package was approved by CDR Empowered Group on March 28, 2013. The Master Restructuring Agreement has also been signed with the lenders participating in the CDR package (''CDR Lenders'') on March 30, 2013.

The approved CDR package, inter-alia envisages the following;

(a) The restructuring of principal outstanding in respect of Term Loan of Bank of Baroda and Saraswat Bank as on cut-off date September 1, 2012 and rephasement of said Loan (Rs. 149.65 Crs) to be repaid in 32 quarterly installments commencing from November 30, 2014.

(b) Funding of interest on the above loans from cut-off date September 1, 2012 to August 31, 2014 and the said Funded Interest of Rs. 31.50 Crs to be repaid over 16 quarterly installments commencing from November 30, 2014, bearing interest 10.50% per annum.

(c) Re-fixing the interest on the above Term Loan on step-up basis ranging from 11% per annum to 20% per annum.

(d) Sanctioning of additional Term Loan of Rs.70 Crs by Bank of Baroda bearing interest at 13% per annum for completion of the ongoing project at Sarigam and need based additional working capital of Rs. 37.50 Crs. by working capital lenders.

(e) Infusion of Rs. 1.60 crs by the Promoters to support the packages over and above the margin for fresh term loan and additional Working Capital limits.

(f) Apart from the existing securities, furnishing of personal guarantee by Shri. Raunak Agarwal, Director and Smt. Reena Agarwal and pledging of shares held by Shri. R N Agarwal, CMD, Smt. Reena Agarwal and Shri. Raunak Agarwal.

NOTE 8

Remuneration of Rs. 9,000,000/- paid to the Managing Director and debited to the Statement of Profit and Loss for the financial year 2012-13 includes Rs. 5,276,035/- in excess of the limits specified in Section 309 of the Companies Act, 1956. The excess payment is as a result of lower profits in the wake of adverse market conditions. The Company is in the process of making application to Central Government u/s 309(5B) of the Companies Act, 1956 to waive the recovery of the said excess remuneration. Pending such approval the Managing Director holds the excess remuneration paid in trust for the Company.


Mar 31, 2012

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 equity shareholder is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of dividend, per share, recognized as distributions to equity shareholders is Rs 1.20 (year ended March 31, 2011, Rs 1.80) .

Notes:

Corporate Loan from IDBI Bank is secured by hypothecation of plant and machinery and extension of existing security on immovable properties situated at Vapi and at Sarigam on pari pasu basis with other term lenders.

The Corporate Loan of Saraswat Co-operative Bank Ltd. is secured by a first pari passu charge on the plant and machinery situated at Unit I at Vapi and further secured by extension of existing security on immovable properties at Unit I, Vapi. It is also further secured by exclusive charge by way of equitable mortgage of Directors residential bunglow at Lokhandwala, Andheri (W), Mumbai 400053 and also an exclusive charge by way of legal mortgage on non agricultural land admeasuring 37.61 acres at Sarigam, Gujarat. The loan is further secured by personal guarantee of Shri R N Agarwal.

The Term loan from Kotak Mahindra Bank Ltd., is secured by exclusive charge on Unit 415-418, situated at Janki Centre, 4th Floor, 29 Shah Industrial Estate, Off. Veera Desai Road, Andheri (W), Mumbai 400053. The loan is further secured by personal guarantee of Shri R N Agarwal

The Project Loan from Bank of Baroda is secured by first pari passu charge by hypothecation of plant and machinery situated at Vapi and at Sarigam and first pari passu charge on immovable properties (Unit I, II, III, IV and V)situated at Vapi and Sarigam, together with buildings and other structures thereon excluding vacant land of 37.61 acres at Sarigam and second pari passu charge on current assets of the Company and further secured by the personal guarantee of Shri R N Agarwal.

The New office Loan of Bank of India is exclusively secured by equitable mortgage on the said property and further secured by the personal guarantee of Shri R N Agarwal.

Out of the said amount, Rs 4,228,228 (March 31, 2011: Rs 1,775,517) pertains to micro, small and medium enterprises as defined under Micro, Small, and Medium Enterprises Development Act, 2006 based on the information available with the Company. There is no interest payable to such parties as at March 31, 2012 (March 31, 2011: Rs Nil).

NOTE 1.1

Capital Work in Progress includes Rs 1,729,032,658 pertaining to Sarigam Project (Unit V). The commencement of Unit -V has been delayed due to pending approval of the Ministry of Environment and Forest which resulted in the rescheduling of the Term Loan exposure by Bank of Baroda Capital Work in Progress includes Rs 110,204,851 under construction of new office premises at Fortune Terraces, According to the sale agreement dated January 20,2010 the possession of the said premises were agreed to be given on March 31,2011. However, due to delay in obtaining of the Occupation Certificate by the developer possession of the said premises further delayed. As per the Sale Agreement, Company has to pay 18 months outgoing charges of Rs 1,730,600 alongwith other charges on taking the possession for which Company has not made provision in the accounts.

NOTE 2 CONTINGENT LIABILITIES AND PROVISIONS

(a) Guarantees and counter guarantees given by the Company on behalf of the Group Companies Rs NIL (Previous Year Rs NIL)

(b) Excise duty demands and penalties Rs 1,705,071 (Previous Year Rs 1,705,071)

(c) Claims against the Company not acknowledged as debts - Rs 538,758 (Previous year X 359,512)

(d) Letter of Credit outstanding Rs 139,665,667 (Previous Year Rs 182,487,068)

(e) Custom penalties on imports - Rs NIL (Previous year Rs NIL)

(f) The Company has imported capital goods under "Export Promotion Capital Goods" scheme for which the Company has an given export obligation of Rs 698,177,456 (Previous Year Rs 864,583,512)

(g) Income tax matters disputed in appeal amount Rs 119,756,754 (previous year Rs NIL)

The Company has received demand from Income Tax Department for Rs 189,448,031 reduced subsequently by rectification order to Rs 119,756,754 in respect of Assessment Years 2004-05 to 2010-11 mainly on account of 80-IA(4)(iv) of Income Tax Act, 1961. The Company has disputed the above demands and the matter is pending at appellate stage with appropriate authorities. The Management is of the opinion that the Company is entitled to deduction under section 80-IA(4) (iv) of the Income Tax Act, 1961 and hence, no provision for the aforesaid demand/notices has been made in the books of accounts.

In the meantime, the Income Tax Department has frozen some of the Bank Accounts of the Company. The Company has filed a Writ Petition in the Hon'ble High Court of Gujarat for releasing the Bank Accounts of the Company. While disposing the Writ Petition the Hon'ble Court has directed the Company to pay Rs 3.00 Cr and furnish security for the balance amount of Rs 9.00 Cr to release the Bank Accounts, which is pending to be fulfilled. The Hon'ble High Court has also directed the Commissioner of'lncome Tax (Appeals) to dispose of the appeal as expeditiously as possible but not beyond two months from April 2, 2012.

NOTE 3

Estimated amount of Contract remaining to be executed on capital account and not provided for (net of advances) Rs 395,907,291 (Previous year Rs 479,477,224).

NOTE 4

The Company had entered into an MOU dated February 3, 2011 with Damanganga Recycling Resources LLP (DRR) for availing the services of conversion of waste to energy. In terms of the MOU, the Company has paid Rs 12,000,000 as interest free deposit adjustable against the tipping bills. However, the said project has not materialized and the amount of Rs 12,000,000 paid by the Company as Deposit has been forfeited by DRR. Consequently the Company has initiated legal proceedings.

NOTE 5

Sundry Debtors, Sundry Creditors, Unsecured Loans and Loans and Advance Balances are subject to confirmation and reconciliation.

NOTE 6

SEGMENT REPORTING:

The Company operates in Single Business Segment of "Manufacturing of Paper Boards & Newsprint'. Therefore, the Company is of the view that the disclosure requirement of Accounting Standard AS-17 issued by the Institute of Chartered Accountants of India is not appealable to the Company.

NOTE 7

Bank of Baroda has issued a counter guarantee (DPG) to Deutsche Bank AG, amounting to t 32,304,759 to fulfill certain contractual payment obligations for the import of certain capital goods. However, the company has provided the full liability of the said contract and same is included under Sundry Creditors (Previous Year Rs 28,062,326).


Mar 31, 2011

1. CONTINGENT LIABILITIES:

(a) Guarantees and counter guarantees given by the Company on behalf of group companies Rs. NIL lacs (Previous year Rs. NIL).

(b) During the year commissioner of Central Excise raised demand of Rs. 1,643,254/- towards excise duty and interest thereon. The Company has paid the demand and preferred an appeal with CESTAT (Previous Year Rs. 1,705,071).

(c) Claims against the Company not acknowledged as debts - Rs. 359,512/- (Previous year- Rs. 333,807/-).

(d) Letter of Credit outstanding Rs. 1,824.87 lacs (Previous year Rs. 2,962.11 lacs).

(e) Customs penalties on Imports- Rs. NIL (Previous year Rs. NIL).

2. Estimated amount of Contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 4 794 77 lacs (Previous Year Rs. 4,767.96 lacs).

3. There are no Micro, Small and Medium Enterprises, to whom the Companies owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. Further, the Company has neither paid nor payable any interest to any Micro, Small and Medium Enterprises on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors,

4. The names of the Small Scale Undertakings to whom the Company owes a sum exceeding Rs. 1.00 lac outstanding for more than 30 days as on March 31, 2011 are; Vertex Chem Pvt. Ltd, Polysol Industries, Synergy Multichem Pvt. Ltd, Vipul Chemicals (India) Pvt. Ltd, Alok Trade & Investment Pvt. Ltd, Bhavik Enterprises, Good Cast Industries and A B Engineering Industries. The Information regarding Small Scale Industrial Undertakings has been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the auditors.

5. Advances recoverable in cash or kind or value to be received includes an amount Rs. NIL of short term advance bearing no interest (Previous Year Rs. 55.00 lacs). However it includes amount of Rs. 230 lacs bearing interest (Previous Year Rs. NIL).

6. The Company's Income Tax assessment has been completed up to A.Y 2006-07. Tax Liabilities and interest in respect thereof demanded by the Income Tax Department has been paid. However in terms of search and seizure operations u/s 132 of Income Tax Act, 1961, conducted during July, 2009, revised returns have been filed in response to notices received u/s 153A of the Income Tax Act, 1961 in respect of six Assessment years from 2004-05 to 2009-10. Assessments are yet to commence.

7. Sundry Debtors, Sundry Creditors, Unsecured Loans and Loans and Advances balances are subject to confirmation and reconciliation.

8. Sundry Creditors includes a sum of Rs. 132,007,238 (including advances received against sale of staff quarters Rs. 714,000/-) payable for Capital Goods (Previous Year Rs. 53,492,952).

9. Segment Reporting:

The Company operates in Single Business Segment of "Manufacturing of Paper Boards & Newsprint". Therefore, the Company is of the view that the disclosure requirement of Accounting Standard AS-17 issued by the Institute of Chartered Accountants of India is not applicable to the Company.

10. The Company has imported Capital Goods under Export Promotion Capital Goods' Scheme for which the Company has an export obligation of Rs. 864,583,512 (previous year Rs. 460,225,488).

11. Bank of Baroda has issued a counter guarantee (DPG) to Deutsche Bank AG, amounting to Rs. 28,062,326.00 to fulfill certain contractual payment obligations for the import of certain capital goods. However, the Company has provided the full liability of the said contract and same is included under Sundry Creditors.

12. Disclosure in respect of related parties pursuant to Accounting Standard AS-18:

Key Management Personnel & Relatives:

Shri R. N. Agarwal

Shri Raunak Agarwal

Relatives of Directors

Smt. R. R. Agarwal

Smt. Padma Chhabra

Notes:

1. Loans to Employees as per Company's policy are not considered.

2. Related party relationship is as identified by the Company and relied upon by the auditors.

13. Balance Sheet abstract and Company's general business profile as required in terms of the Part IV of the Schedule VI of the Companies Act, 1956 is attached herewith.

14. Previous year's figures have been regrouped, reworked and reclassified wherever necessary.


Mar 31, 2010

1. Contingent Liabilities:

(a) Guarantees and counter guarantees given by the Company on behalf of group companies Rs. NIL Lacs (Previous year Rs. 140 Lacs).

(b) Excise duty demands and penalties - Rs.17,05,071 (Previous Year Rs.16,82,460) (Against old cases to the tune of Rs.16.82 lacs, payments have already been made under protest and under appeal and hence no contingent liability exists).

(c) Claims against the Company not acknowledged as debts – Rs333807/- (Previous year - Rs. NIL).

(d) Letter of Credit outstanding Rs.2,962.11 lacs (Previous year Rs. 2,237.59 lacs).

(e) Customs penalties on Imports - Rs. NIL (Previous year Rs.NIL).

2. Estimated amount of Contracts remaining to be executed on capital account and not provided for (net of advances) Rs.4767.96 lacs (Previous Year Rs.797.77 lacs).

A The planned asset is represented by investment made under the Group Gratuity Scheme operated by Life Insurance Corporation of India.

1. During the year, consequent upon a change in the actuarial assumptions, there is a reversal of the provision required to be made in the valuation of Gratuity and Leave Encashment benefits to the tune of Rs. 63,37,015. This has been disclosed in the Profit & Loss Account under the head--Excess Provision Written Back.

3. There are no Micro, Small and Medium Enterprises, to whom the Companies owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. Further, the company has neither paid nor payable any interest to any Micro, Small and Medium Enterprises on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.

4. The names of the Small Scale Undertakings to whom the Company owes a sum exceeding Rs.1.00 lac outstanding for more than 30 days as on 31st March 2010 are: Prakash Steelage Ltd, Bhavik Enterprises. The Information regarding Small Scale Industrial Undertakings has been determined to the extent such parties have been identified on the basis of information available with the company and relied upon by the auditors.

5. Advances recoverable in cash or kind or value to be received includes an amount of Rs.55.00 lacs short term advances made not bearing any interest.

6. The Companys Income Tax assessment has been completed up to A.Y.2006-07. Tax Liabilities and interest in respect thereof demanded by the Income Tax Department has been paid. However in terms of search and seizure operations u/s 132 of Income Tax Act, 1961 conducted during July, 2009, revised returns have been filed in response to notices received u/s 153A of the Income Tax Act, 1961 in respect of six Assessment years from 2004-05 to 2009-10. The company has admitted additional income of Rs. 761.80 lacs for the current year (previous year Rs. 250 lacs). The said amounts have been shown under exceptional Items in the profit & Loss account. Pending further proceedings, additional provision for income tax of Rs. 258.94 lacs has been made in the accounts in respect of the said additional income.

7. Sundry Debtors, Sundry Creditors, Unsecured Loans and Loans and Advances balances are subject to confirmation and reconciliation.

8. Sundry Creditors include a sum of Rs.5,34,92,952 (Previous Year Rs.27,81,836) payable for Capital Goods.

9. Segment Reporting:

The Company operates in Single Business Segment of "Manufacturing of Paper Boards & Newsprint". Therefore, the Company is of the view that the disclosure requirement of Accounting Standard AS-17 issued by the Institute of Chartered Accountants of India is not applicable to the Company.

10. The Company has imported Capital Goods under "Export Promotion Capital Goods" Scheme for which the Company has an export obligation of Rs.46,02,25,488 (previous year Rs.5,91,57,326).

11. Disclosure in respect of related parties pursuant to Accounting Standard AS-18: (a) Related parties with whom transactions have been taken place during the year:

Associates:

Gayatrishakti Paper & Boards Limited Kherani Paper Mills Private Limited

Key Management Personnel & Relatives:

Shri N. R. Agarwal Shri R. N. Agarwal Shri Raunak Agarwal

Relatives of Directors

Smt. R. R. Agarwal

(c) Loans and Advances in the nature of Loans given to Associates: Loans and Advances in the nature of Loans Maximum balance.

Notes:

1. Loans to Employees as per Companys policy are not considered.

2. Related party relationship is as identified by the Company and relied upon by the auditors.

a. Licensed capacity is not applicable in view of the Companys products having been de-licensed as per the licensing policy of the Government of India.

3. Installed capacity is as certified by the management and accepted by auditors, being technical matter.

12. Additional information pursuant to the Provisions 3 and 4 of Part II of Schedule VI of the Companies Act, 1956:

13. Balance Sheet abstract and Companys general business profile as required in terms of the Part IV of the Schedule VI of the Companies Act, 1956 is attached herewith.

14. Previous years figures have been regrouped, reworked and reclassified wherever necessary.

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