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Notes to Accounts of Nath Pulp & Paper Mills Ltd.

Mar 31, 2015

NOTE 1: CORPORATE INFORMATION:

The company is registered with the Registrar of Companies, Maharashtra State, Mumbai vide Regn No. L2100MH1975PLC018289 dated 10/04/1975 under the Companies Act,1956 (No.1 of 1956). The registered office of the Company is situated at Nath House, Nath Road, Aurangabad. The Company is the leading producer of high strength core board and Thermal grade paper used by text tube manufacturers.

2.01 Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006.Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management and relied upon by the auditors.

The company has compiled the above information based on confirmations from some suppliers. As at the year end, no other supplier has intimated the company about its status as a Micro, Small & Medium Enterprises or its registration under the Micro, Small & Medium Enterprises Development Act 2006. No interest payment is likely to be made to unsecured creditors as per sanction order of Hon'ble BIFR dt. 14/02/12 and hence, no interest liability in respect of above category of creditors is provided / disclosed.

2.02 Land, certain Buildings and Plant and Machinery were revalued as on June 30, 1994 and the resultant increase in value amounting to Rs. 3,77,23,368 for Land, Rs.1,75,87,749 for Buildings and Rs.6,66,86,621 for Plant and Machinery aggregating to Rs.12,19,97,738 had been transferred to Revaluation reserve . The Valuation was carried out by an external approved valuer on the basis of replacement value of similar assets after considering the obsolescence and age of individual asset.

The following revalued amounts (net of withdrawals) remain substituted for the historical cost in the gross block of Fixed Assets.

2.03 The Company is making concerted efforts to appoint a Whole time Company Secretary as required under the provisions of Section 203 of the Companies Act, 2013.

2.04 (a) The accounts of certain Debtors, Creditors / Loans given are subject to confirmations, reconciliations and adjustments, if any, having consequential impact on the profit for the year, assets and liabilities, the amounts whereof are presently not ascertainable. However, the management does not expect any material difference in the above accounts affecting the current year's financial statements.

(b) In the opinion of management, Current Assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

2.05 In the opinion of the management, the Company is mainly engaged in the business of manufacturing of paper. As such, there are no separate reportable segments.

(Figures in brackets pertain to previous year)

(i) In respect of the above parties, rate of interest is Nil.

(ii) In respect of loans/advances referred to above, in view of financial exigencies, the Company has not complied with Section 186 of the Act, in as much as these are interest free loans and approval of financial institutions has not been obtained.

2.06 i) The Company is in the process of getting its cost records audited by a cost auditor for the current financial year as required under the provisions of Section 148 of the Companies Act, 2013.

ii) During the year, Company has not appointed internal auditor as per the provisions of section 138 of the Companies Act, 2013.

2.07 The Financial Statements for the year ended 31st March, 2015 have been prepared on a "going concern basis" as the long term prospects appear better for the paper industry as also in view of the reliefs/concessions that the Company has obtained on sanction of rehabilitation package by the Board of Industrial and Financial Reconstructions (BIFR).

2.08 a) The Company had submitted Draft Rehabilitation Scheme as per the direction given (including for restructuring of Loans) by Hon'ble BIFR, vide summary of proceedings dated 28th September 2010 through its Operating Agency namely IDBI. The Hon'ble BIFR approved the scheme and passed the sanction order on dated 14th February 2012.

b) The Company being aggrieved by certain directions of the summary of proceedings passed by Hon'ble BIFR, has filed an appeal with Hon'ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) against the direction given by Hon'ble BIFR for reducing the capital of company. Hon'ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) has remanded back the matter involved in appeal to Hon'ble BIFR and deciding the issue afresh. Now Hon'ble BIFR vide Order dated 01/07/2013 approved reduction of Capital. The existing share capital of the company shall be reduced by 95% by writing off accumulated losses to that extent and then every twenty equity shares ofRs. 0.50/- each are to be consolidated into one equity share of Rs. 10/- each fully paid up in terms of sec. 18(2) (f) of the SICA without the requirement of following the provisions of section 100-103 of the erstwhile Companies Act, 1956 and without following any guidelines of SEBI/ BSE / ASE or any other guidelines. Reduction of share capital as per above order has taken place on 30.05.2014.

c) The Company has allotted 2,000,000 equity shares of Rs.10/- each on 31.05.2014 against the conversion of secured loan of Arc- Trust as per BIFR order dated 01.07.2013. Further the Company has made preferential allotment of shares as follows on 31.05.2014 with a lock in period of 3 years

2.09 Deferred Sales Tax liability under 1988 Package Scheme of Incentives of the Government of Maharashtra is repayable in five annual installments after 10 years from the respective years, after the commencement date i.e., 1st October 2000. Hon'ble BIFR in its sanction scheme dated 14/02/12 directed to State Govt. to consider the repayment period of the deferred sales tax liability by eight years from the due date for the respective installments against the existing outstanding without charging any interest during the extended period. The extension is pending; hence the contingent liability arising in the event of non-extension is not ascertainable.

2.10 Repayment Schedule, as per sanction order dt. 14/02/2012 of Hon'ble BIFR towards repayment to secured and unsecured borrowings and their overdue as on 31March 2015 is as under:

i) Arc-Trust: Balance as on 31 December 2008 of Rs.237,200,000 to be converted into non-convertible debentures and redeemed along with premium of Rs. 98,800,000, amounting toRs.336,000,000 in 16 quarterly installments w.e.f 31.12.2008.In addition to this Arc Trust to subscribe 2,000,000 equity shares of Rs.10 each at par aggregating to Rs. 20,000,000. These shares have been issued in dematerialized form. There is an overdue principal amount as on 31 March 2015 of Rs.104, 910,000(Previous year Rs.106, 410,000) and un -provided interest of Rs.128,640,719 (Previous year Rs115,433,476)

ii) IFCI: The Dues payable to IIBI have been taken over by IFCI. Hon'ble BIFR Substituted name of Industrial Investment Bank of India (IIBI) to Industrial Finance Corporation of India (IFCI) , Therefore dues payable to IIBI are now shown payable to IFCI. Repayment is to be made in 16 equal quarterly installments of Rs.512,500 per quarter along with simple interest @ 12.50% p.a. on reducing balance method w.e.f. from 14.02.12(date of sanction of scheme).There is Rs. 6,554,733 (Previous year Rs.8,828,689) overdue as on 31 March 2015.

iii) MSFC: Repayment was scheduled in 16 equal quarterly installments of Rs.937, 500 per Quarter along with simple interest @ 12.50% p.a. on reducing balance method w.e.f. from 14.02.12 (date of sanction of scheme). During the year OTS scheme granted as per letter No:.MSFC/HO/NPPML/2014-15/108, dated 5.11.2014 according to which Rs.6, 000,000 payable in 15 monthly installments starting from 1.12.2014. There is Rs.4, 00,000(previous year Rs. 10,861,925) overdue as on 31 March 2015.

2.11 Overdue installments of financial Institutions as on 31 March 2015 are recognized as long term Borrowings instead of current liabilities as required under Schedule III. Outstanding balances as on 31st March 2015 subject to reconciliation.

2.12 Pursuant to the enactment of Companies Act 2013, the company has applied the estimated Useful lives as specified in Schedule II.

Accordingly the unamortized carrying value is being depreciated / amortized over the revised/remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted in the opening balance of Profit and Loss Account.

NOTE 3: DISCLOSURES UNDER ACCOUNTING STANDARDS

3.01 Employee benefit plans

Defined contribution plans

The Company makes Provident Fund contribution to defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs.2, 762,043 (Year ended 31 March, 2014 Rs.3, 033,863) for Provident Fund contribution in the Statement of Profit and Loss. The contribution payable to this plan by the Company is at the rates specified in the rules of the schemes.

Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

3.02 Related Party Transactions Details of related parties:

Associates

1. Nath Bio-Genes (India) Ltd.

2. Nath Nirman Infra Pvt. Ltd.

3. Tapovan International Trading Pvt. Ltd.

4. Nath Industrial & Chemicals Ltd.

Key Management Personnel (KMP)

Mr. Akash N. Kagliwal (Whole Time Director)

Mr. Vijay L. Saboo (CFO)

Relatives of KMP

Mr. Nandkishor Kagliwal (Father of Mr. Akash Kagliwal)

NOTE 4: PREVIOUS YEAR FIGURES:

The financial statements for the year ended March 31, 2015 are prepared as per Schedule III of the Companies Act, 2013. Accordingly, the previous year figures have also been reclassified to conform to this Year's classification.


Mar 31, 2014

I) Capital work-in-progress includes advance of Rs 1,911,195 (Previous year Rs 1,911,195} in respect of various plots of Agricultural Land, possession taken by the Company pursuant to the Agreement to Sale, pending payment of balance amount and registration in the name of the company and on payment of prescribed stamp duty and relevant expenses. (Amount not ascertained)

ii) The Company is in possession of Lease hold land admeasuring 87 acre 34 guntha at Issarwadi Paithan, pursuant to Agreement to lease with Maharashtra Waqf Board entered in the year 1985 for 51 years, for which final Lease deed is yet to be executed.

iii) Depreciation and amortization

Note 2: ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

2.01 Contingent Liabilities and Capital Commitments (to the extent not provided for)

Particulars As at 31 March, As at 31 March, 2014 2013 (i) Contingent liabilities

(a) Claims against the Company not acknowledged as debts

(i) Disputed Demands of Central Excise 5,568,659 5,568,659

(ii) Disputed demands of Sales Tax 19,817,049 19,817,049

(iii) Disputed demands of Water Cess (including interest upto the date 1,598,193 1,598,193 of demand)

(iv) Disputed demand of Property Tax from Gram Panchayat 2,755,934 2,755,934

(v) Deferred sales tax Liability transferred to another Company (with 158.636.440 158.636.440 recourse)

(vi) Amount of interest liability/ Amount presently Amount presently penalty, if any on delayed / unascertamable unascertainable non-deduction/ non-payments of certain creditors/ loans / debenture trustee remuneration /statutory dues /Lease liability/ penal interest/ liquidated damages on secured /unsecured borrowings / Redeemable Bonds/ Labour related liability

(vii) Claims against the Company not acknowledged as debt. 850,000 850,000

(b) Guarantees - -

(c) Other money for which the Company is contingently liable:

(i) Liability that may arise on account of waiver being withdrawn with Amount Amount retrospective effect due to default Unascertainable Unascertainable in repayment to Arc Trust.

(ii) Liability that may arise on account of non extension of Package Scheme of Incentives by eight year by Govt, of Maharashtra as Amount presently Amount presently per sanction order of Hon''ble BIFR unascertainable unascertainable dt. 14/02/12. Refer Note No. 27.15 below.

(ii) Capital Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Tangible assets 2,955,914 2,955,914

2.02 Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management and relied upon by the auditors.

The company has compiled the above information based on confirmations from some suppliers. As at the year end, no other supplier has intimated the company about its status as a Micro, Small & Medium Enterprises or its registration under the Micro, Small & Medium Enterprises Development Act 2006. No interest payment is likely to be made to unsecured creditors as per sanction order of Hon''ble BIFR dt. 14/02/12 and hence, no interest liability in respect of above category of creditors is provided / disclosed.

2.03 Land, certain Buildings and Plant and Machinery were revalued as on June 30, 1994 and the resultant increase in value amounting to Rs 3,77,23,368 for Land , 1,75,87,749 for Buildings and Rs.6,66,86,621 for Plant and Machinery aggregating to Rs.12,19,97,738 had been transferred to Revaluation reserve . The Valuation was carried out by an external approved valuer on the basis of replacement value of similar assets after considering the obsolescence and age of individual asset.

The following revalued amounts (net of withdrawals) remain substituted for the historical cost in the gross block of Fixed Assets.

2.04 The Company is making concerted efforts to appoint a Whole time Company Secretary as required under the provisions of Section 383 A of the Companies Act, 1956.

2.05 (a) The accounts of certain Debtors, Creditors / Loans given are subject to confirmations, reconciliations and adjustments, if any, having consequential impact on the profit for the year, assets and liabilities, the amounts whereof are presently not ascertainable. However, the management does not expect any material difference in the above accounts affecting the current year''s financial statements.

(b) In the opinion of management. Current Assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

2.06 In the opinion of the management, the Company is mainly engaged in the business of manufacturing of paper. As such, there are no separate reportable segments.

(i) In respect of the above parties, rate of interest is Nil.

(ii) In respect of loans/advances referred to above, in view of financial exigencies, the Company has not complied with Section 372A of the Act, in as much as these are interest free loans and approval of financial institutions has not been obtained.

2.07 The Company is in the process of getting its cost records audited by a cost auditor for the current financial year as required under the provisions of Section 233B of the Companies Act, 1956.

2.08 The Financial Statements for the year ended 31st March, 2014 have been prepared on a "going concern basis" as the long term prospects appear better for the paper industry as also in view of the reliefs/concessions that the Company has obtained on sanction of rehabilitation package by the Board of Industrial and Financial Reconstructions (BIFR).

2.09 (a) The Company had submitted Draft Rehabilitation Scheme as per the direction given (including for restructuring of Loans) by Hon''ble BIFR, vide summary of proceedings dated 28th September 2010 through its Operating Agency namely IDBI. The Hon''ble BIFR approved the scheme and passed the sanction order on dated 14th February 2012.

(b) The Company being aggrieved by certain directions of the summary of proceedings passed by Hon''ble BIFR, has filed an appeal with Hon''ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) against the direction given by Hon''ble BIFR for reducing the capital of company. Hon''ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) has remanded back the matter involved in appeal to Hon''ble BIFR and deciding the issue afresh. Now Hon''ble BIFR vide Order dated 01/07/2013 approved reduction of Capital has the existing share capital of the company shall be reduced by 95% by writing off accumulated losses to that extent and then every twenty equity shares of Rs. 0.50/- each are to be consolidated into one equity share of Rs. 10/- each fully paid up in terms of sec. 18(2) (f) of the SICA without the requirement of following the provisions of section 100-103 of the Companies Act, 1956 and without following any guidelines of SEBI/ BSE / ASE or any other guidelines.

2.10 Deferred Sales Tax liability under 1988 Package Scheme of Incentives of the Government of Maharashtra is repayable in five annual installments after 10 years from the respective years, after the commencement date i.e., 1st October 2000. Hon''ble BIFR in its sanction scheme dated 14/02/12 directed to State Govt, to consider the repayment period of the deferred sales tax liability by eight years from the due date for the respective installments against the existing outstanding without charging any interest during the extended period. The extension is pending, hence the contingent liability arising in the event of non- extension is not ascertainable.

2.11 Repayment Schedule, as per sanction order dt. 14/02/2012 of Hon''ble BIFR towards repayment to secured and unsecured borrowings and their overdue as on 31March 2014 is as under:

i) Non-Convertible Debentures: Repayment of said debentures are scheduled in 16 equal quarterly installments w.e.f 14.02.2012 (date of sanction of scheme) to Indian Bank MF Rs.78, 125 and to SBI MF Rs. 234,375 per quarter along with simple interest @ 12.50% p.a. on reducing balance method .There is Rs. 487,904 (previous year Rs. 146,871) overdue amount as on 31 March 2014.

ii) Arc-Trust: Balance as on 31 December 2008 of Rs. 237,200,000 to be converted into non convertible debentures and redeemed along with premium of Rs. 98,800,000, amounting to total Rs. 336,000,000 in 16 quarterly installments w.e.f 31.12.2008. In addition to this Arc Trust to subscribe 2,000,000 equity shares of Rs.10 each at par aggregating to Rs. 20,000,000. These shares would be issued in dematerialized form and will be with lock-in requirements. There is an overdue principal amount as on 31 March 2014 of Rs. 106,410,000 (previous year Rs. 121,910,000) and un -provided interest of Rs. 115,433,476 (previous yearRs 101,709,966)

iii) HDFC: Repayment is to be made in 16 equal quarterly installments ofRs. 45938/- per quarter along with simple interest @ 12.50% p.a. on reducing balance method w.e.f. from 14.02.12 (date of sanction of scheme).There is Rs.49,745 (previous year Rs Nil) overdue amount as on 31 March 2014.

iv) IFCI: The Dues payable to IIBI have been taken over by IFCI. Hon''ble BIFR Substituted name of Industrial Investment Bank of India (IIBI) to Industrial Finance Corporation of India (IFCI), Therefore dues payable to IIBI are now shown payable to IFCI. Repayment is to be made in 16 equal quarterly installments of Rs.512,50Q per quarter along with simple interest @ 12.50% p.a. on reducing balance method w.e.f. from 14.02.12(date of sanction of scheme).There is Rs. 8,828,689 (previous year Rs 8,078,8871) overdue as on 31 March 2014.

v) MSFC: Repayment is scheduled in 16 equal quarterly installments of Rs.937, 500 per Quarter along with simple interest @ 12.50% p.a. on reducing balance method w.e.f. from 14.02.12 (date of sanction of scheme). There is Rs. 10,861,925 (previous year Rs. 9,293,913) as on 31 March 2014.

2.12 Over due installments of financial Institutions as on 31 March 2014 are recognized as long term Borrowings instead of current liabilities as required under revised schedule VI. Outstanding balances as on 31st March 2014 subject to reconciliation.

Note 3: DISCLOSURES UNDER ACCOUNTING STANDARDS

3.01 Employee benefit plans Defined contribution plans

The Company makes Provident Fund contribution to defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs 3,043,313 (Year ended 31 March, 2013 Rs 2,885,846) for Provident Fund contribution in the Statement of Profit and Loss. The contribution payable to this plan by the Company is at the rates specified in the rules of the schemes.

Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

ii) Para 132 of Accounting Standard 15 (Revised 2005) does not require any specific disclosures except where expense resulting from compensative absence is of such size, nature or incidence that its disclosure is relevant under Accounting Standard 5 or Accounting Standard 18. In the opinion of the management, the expense resulting from compensated absence is not significant and hence disclosures under various paragraphs of Accounting Standard 15 (Revised 2005) are not applicable. The liability for leave entitlement and compensated absences as at period end is Rs.3, 392,369 (March 31, 2013 Rs.3,336,154).

3.02 Related Party Transactions Details of related parties: Associates

1. Nath Seeds Ltd.

2. Nath Industrial & Chemicals Ltd.

3. Nath Bio-Genes (India) Ltd.

4. Nath Nirman Infra Pvt. Ltd.

Key Management Personnel (KMP)

Mr. Akash N. Kagliwal (Whole Time Director)

Relatives of KMP

Mr. Nandkishor Kagliwal (Director and Father of Mr. Akash Kagliwal)

As per AS - 22 "Accounting for taxes on Income" Deferred Tax Assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which Deferred Tax Assets can be realized. Deferred tax assets are reviewed at each Balance Sheet Date.

The Company has recognized deferred tax asset on unabsorbed depreciation and brought forward business losses based on the Management''s estimates of future profits of the Company.

Note 4: PREVIOUS YEAR FIGURES

The financial statements for the year ended March 31, 2014 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year''s classification.


Mar 31, 2013

1.01 Contingent Liabilities and Capital Commitments (to the extent not provided for)

Particulars As at 31 March, 2013 As at 31 March, 2012

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debts

(i) Disputed Demands of Central Excise 5,568,659 5,568,659

(ii) Disputed demands of Sales Tax 19,817,049 19,817,049

(iii) Disputed demands of Water Cess (including interest upto the date of demand) 1,598,193 1,598,193

(iv) Disputed demand of Property Tax from Gram Panchayat 2,755,934 2,755,934

(v) Deferred sales tax Liability transferred to another Company (with recourse) 158,636,440 158,636,440

(vi) Amount of interest liability/ penalty, if any on delayed /non-deduction/ non-payments of certain creditors/ loans/ Amount presently Amount presently debenture trustee remuneration / statutory dues /Lease unascertainable unascertainable liability/ penal interest/ liquidated damages on secured /unsecured borrowings / Redeemable Bonds/ Labour related liability

(vii) Claims against the Company not acknowledged as debt. 850,000 850,000

(b) Guarantees

(c) Other money for which the Company is contingently liable:

ii Amount Amount

i Liability that may arise on account of waiver being withdrawn A Unascertainable Unascertainable with retrospective effect due to default in repayment to Arc Trust.

(ii) Liability that may arise on account of non extension of Amount Amount

Unascertainable Unascertainable Maharashtra as per sanction order of Hon ble BIFR dt. 14/02/12. Refer Note No. 27.15 below.

(ii) Capital Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Tangible assets 3,671,537 3,671,537

1.02 Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006. Principal amount remaining unpaid to any supplier as at the end of 192,243 263,041 the accounting year

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

The company has compiled the above information based on confirmations from some suppliers. As at the year end, no other supplier has intimated the company about its status as a Micro, Small & Medium Enterprises or its registration under the Micro, Small & Medium Enterprises Development Act 2006. No interest payment is likely to be made to unsecured creditors as per sanction order of Hon''ble BIFR dt. 14/02/12 and hence, no interest liability in respect of above category of creditors is provided / disclosed.

1.03 Land, certain Buildings and Plant and Machinery were revalued as on June 30, 1994 and the

resultant increase in value amounting to ? 3,77,23,368 for Land , ? 1,75,87,749 for Buildings ?.6,66,86,621 for Plant and Machinery aggregating to ?. 12,19,97,738 had been transferred to Revaluation reserve . The Valuation was carried out by an external approved valuer on the basis of replacement value of similar assets after considering the obsolescence and age of individual asset.

1.04 The Company is making concerted efforts to appoint a Whole time Company Secretary as required under the provisions of Section 383 A of the Companies Act, 1956.

1.05 (a) The accounts of certain Debtors, Creditors / Lenders given are subject to confirmations, reconciliations and adjustments, if any, having consequential impact on the profit for the year, assets and liabilities, the amounts whereof are presently not ascertainable. However, the management does not expect any material difference in the above accounts affecting the current year''s financial statements.

(b) In the opinion of management, Current Assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. 27.08 In the opinion of the management, the Company is mainly engaged the business of manufacturing of paper. As such, there are no separate reportable segments.

(i) In respect of the above parties, rate of interest is Nil.

(ii) In respect of loans/advances referred above, in view of financial exigencies, the Company has not complied with Section 372 A of the Act, in as much as these are interest free loans and approval of financial institutions has not been obtained.

1.06 The Company is in the process of getting its cost records audited by a cost auditor for the current financial year as required under the provisions of Section 233B of the Companies Act, 1956.

1.07 The Financial Statements for the year ended 31st March, 2013 have been prepared on a "going concern basis" as the long term prospects appear better for the paper industry as also in view of the reliefs/concessions that the Company has obtained on sanction of rehabilitation package by the Board of Industrial and Financial Reconstructions (BIFR).

1.08 (a) The Company had submitted Draft Rehabilitation Scheme as per the direction given (including for restructuring of Loans) by Hon''ble BIFR, vide summary of proceedings dated 28th September 2010 through its Operating Agency namely IDBI. The Hon''ble BIFR approved the scheme and passed the sanction order on dated 14th February 2012.

(b) The Company being aggrieved by certain directions of the summary of proceedings passed by Hon''ble BIFR , has filed an appeal with Hon''ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) against the direction given by Hon''ble BIFR for reducing the capital of company. Hon''ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) has remanded back the matter involved in appeal to Hon''ble BIFR for deciding the issue afresh.

1.09 Deferred Sales Tax liability under 1988 Package Scheme of Incentives of the Government of Maharashtra is repayable in five annual installments after 10 years from the respective years, after the commencement date i.e., 1st October 2000. Hon''ble BIFR in its sanction scheme dated 14/02/12 directed to State Govt, to consider the repayment period of the deferred sales tax liability by eight years from the due date for the respective installments against the existing outstanding without charging any interest during the extended period. The extension is pending, hence the contingent liability arising in the event of non-extension is not ascertainable.

1.10 Repayment Schedule, as per sanction order dt. 14/02/2012 of Hon''ble BIFR towards repayment to secured and unsecured borrowings and their overdue as on 31 March 2013 is as under:

i) Non-Convertible Debentures: Repayment of said debentures are scheduled in 16 equal quarterly installments w.e.f 14.02.2012 (date of sanction of scheme) to Indian Bank MF ?.78,000 and to SBI MF ?. 234,000 per quarter along with simple interest @ 12.50% p.a. on reducing balance method .There is ? 146,871(Previous Year Nil) overdue amount as on 31 March 2013.

ii) Arc-Trust: Balance as on 31 December 2008 of ?. 237,200,000 to be converted into non convertible debentures and redeemed along with premium of ?.98,800,000, amounting to total ?.336,000,000 in 16 quarterly installments w.e.f 31.12.2008. In addition to this Arc Trust to subscribe 2,000,000 equity shares of ?. 10 each at par aggregating to ?.20, 000,000. These shares would be issued in dematerialized form and will be with lock-in requirements. There is an overdue principal amount as on 31 March 2013 of ?.121, 910,000 (Previous Year ? 134,110,000) and unprovided interest of?. 101,709,966 (Previous Year ? 147,768,520).

iii) HDFC: Repayment is to be made in 16 equal quarterly installments of?. 46,000 per quarter along with simple interest @ 12.50% p.a. on reducing balance method w.e.f. from 14.02.12 (date of sanction of scheme) .There is no overdue amount as on 31 March 2013 (Previous Year ? Nil).

i) IIBI: Repayment is to be made in 16 equal quarterly installments of ?.512,500 per quarter along with simple interest @ 12.50% p.a. on reducing balance method w.e.f. from 14.02.12(date of sanction of scheme) .There is overdue of? 8,078,887 (Previous year ? 3,075,000) as on 31 March 2013.

ii) MSFC: Repayment is scheduled in 16 equal quarterly installments of ?.937,500 per Quarter along with simple interest @ 12.50% p.a. on reducing balance method w.e.f. from 14.02.12 (date of sanction of scheme). There is an overdue amount of ?.9,293,913 (Previous Year ? 312,500) as on 31 March 2013.

1.11 Over due installments of financial Institutions as on 31 March 2013 are recognized as long term

Borrowings instead of current liabilities as required under revised schedule VI. Outstanding balances as on 31 st March 2013 subject to reconciliation.

Note 2: DISCLOSURES UNDER ACCOUNTING STANDARDS 28.01 Employee benefit plans

Defined contribution plans

The Company makes Provident Fund contribution to defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized ? 2,885,846 (Year ended 31 March, 2012 ? 2,685,019) for Provident Fund contribution in the Statement of Profit and Loss. The contribution payable to this plan by the Company is at the rates specified in the rules of the schemes.

Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

ii) Para 132 of Accounting Standard 15 (Revised 2005) does not require any specific disclosures except where expense resulting from compensative absence is of such size, nature or incidence that its disclosure is relevant under Accounting Standard 5 or Accounting Standard 18. In the opinion of the management, the expense resulting from compensated absence is not significant and hence disclosures under various paragraphs of Accounting Standard 15 (Revised 2005) are not applicable. The liability for leave entitlement and compensated absences as at period end is .3,336,154 (March 31,2012 ?.2,849,329).

2.01 Related Party Transactions Details of related parties:

Associates

1. Nath Seeds Ltd.

2. Nath Industrial & Chemicals Ltd.

3. Nath Bio-Genes (India) Ltd.

4. Nath Nirman Infra Pvt. Ltd.

Key Management Personnel (KMP)

Mr. Akash N. Kagliwal (Whole Time Director)

Relatives of KMP

Mr. Nandkishor Kagliwal (Director and Father of Mr. Akash Kagliwal)

As per AS - 22 "Accounting for taxes on Income" Deferred Tax Assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which Deferred Tax Assets can be realized. Deferred tax assets are reviewed at each Balance Sheet Date.

The Company has recognized deferred tax asset on unabsorbed depreciation and brought forward business losses based on the Management''s estimates of future profits of the Company.

Note 3: PREVIOUS YEARS FIGURES

The financial statements for the year ended March 31, 2013 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year''s classification.


Mar 31, 2010

1. Land, certain Buildings and Plant and Machinery were revalued as on June 30,1994 and the resultant increase in value amounting to Rs. 377.23 lacs for Land ,Rs.175.85 lacs for Buildings and Rs. 666.87 lacs for Plant and Machinery aggregating to Rs. 1219.98 lacs had been transferred to Revaluation reserve. The Valuation was carried out by an external approved valuer on the basis of replacement value of similar assets after considering the obsolescence and age of individual asset.

2. The Financial Statements for the year ended 31st March, 2010 have been prepared on a "going concern basis" as the long term prospects appear better for the paper industry as also in view of the expected reliefs/concessions that the Company may get, on sanction of rehabilitation package by the Board of Industrial and Financial Reconstructions (BIFR). (Also refer Note No. 9 below).

3. Based on legal opinion in the matter taken by others, the provisions of Section 274(1) (g) of the Companies Act, 1956, dealing with the disqualification of directors of the same Company for unpaid deposits, redeemable debentures, interest thereon and unpaid dividend are not applicable to the Company.

4. The Company is making efforts to appoint a Whole time Company Secretary as required under the provisions of Section 383 A of the Companies Act, 1956.

5. a) Sundry Credit Balances Written Back includes forfeiture of Share Application Money amounting to Rs. 5,750,000, because of Non-compliance by respective warrant holders.

b) During the year Loss arising out of Fire on the wast paper, has been accounted for Rs. 1,071,908 (net of Insurance claimed received rs. 970,000) the same has been shown under exceptional items aggregating to Rs. 101,908, in the financial statement for the year.

6. a) The accounts of certain Debtors, Creditors / Lenders and Loans and advances given are subject to confirmations, reconciliations and adjustments, if any, having consequential impact on the loss for the year, assets and liabilities, the amounts whereof are presently not ascertainable. However, the management does not expect any material difference in the above accounts affecting the current years financial statements.

b) In the opinion of management, Current Assets, Loans and Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

7. The balance of Rs. 514,512 lying in the dividend account of the Companys bankers is under reconciliation with reference to the direct payments made by the Company through other bank accounts and unencashed dividend warrants. Pending such reconciliations, dividend amounts remaining unpaid and outstanding for more than 3 years upto 31/10/1998 could not be transferred to revenue account of the Central Government as required under Section 205A of the Act. The Company is in the process of complying with the provisions.

8. a) During the year, the Company has submitted revised Draft Rehabiliation Scheme (including for restructuring of Loans) to the Honble BIFR through its Operating Agency namely IDBI, which is pending before the Honble BIFR.

b) The Company has not paid installments due in respect of certain debts as per the letter of assignment of loan of ARCIL. Consequently, the lender shall have the right to revoke the assignment in case of non fulfillment of commitment and have the right to convert entire part of loan outstanding into equity. The Company has not provided for interest on the amount settled with ARCIL.

c) The Company has not provided for interest on the amount settled with MSFC, since the same will become payable only after sanctioning of the Scheme by Honble BIFR, as per the terms of the Scheme.

9. Disclosure in accordance with Section 22 of Micro, Small Medium Enterprises development Act, 2006.

10. Profit and Loss on sale of raw materials and stores are not ascertained/ shown separately and the sale proceeds have been credited to the respective accounts.

11. The Management is of the opinion that, there will be adequate future taxable income against which, deferred tax assets will be realised.

12. In the opinion of the management, the Company is mainly engaged in the business of manufacturing of paper. As such, there are no separate reportable segments.

13. Deferral of Sales Tax under 1988 Package Scheme of Incentives of the Government of Maharashtra is repayable in five annual installments after 10 years from respective years, after the commencement date i.e., 1 October 2000.

14. Loans and Advances in the nature of loans where there is no repayment schedule or no interest or at an interest rate below what is specified in Section 372A of the Act:

In respect of the above parties, rate of interest is Nil »

In respect of loans/advances referred above, in view of financial exigencies, the Company has not complied with Section 372A of the Act, in as much as these are interest free loans and approval of the financial institutions has not been obtained.

15. Related Parties Disclosure as per Accounting Standard 18 :

a) List of Related Parties:

Parties with whom the Company has entered into transactions during the year

Associates:

Nath Seeds Ltd.

Nath Industrial Chemicals Ltd.

Paresh Farms Pvt. Ltd.

Nath Bio-Genes (India) Ltd.

b) Key Managerial Personnel

Mr. Akash Kagliwal (Whole time Director)

NOTE:

a) No amount pertaining to associates has been provided for as doubtful debt. Also no amount has been written

off/back during the year.

b) Related parties are as identified by the Company and relied upon by the Auditors.

16. As per requirement of Accounting Standard 15 (Revised) Employees Benefit, the Company has provided for actuarial liability as per the figures confirmed by the Life Insurance Corporation of India. However, the report as required for disclosure of defined benefit scheme is awaited.

17. Previous years figures have been regrouped / rearranged wherever necessary to conform to the current years presentation.

 
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