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Notes to Accounts of Nath Industries Ltd.

Mar 31, 2018

A. CORPORATE INFORMATION: Rama Pulp and Papers Limited is a public company domiciled in India and incorporated under the provisions of the Company’s Act. The Company’s principal business is manufacturing of papers & chemicals.

a) Notes on accounts. First time adoption of Ind-AS

These financial statements, for the year ended 31 March 2018, have been prepared in accordance with Ind AS, for the purposes of transition to Ind AS, the company has followed the guidance prescribed in Ind AS 101- First time adoption of Indian Accounting Standards, with April 01, 2017 as the transition date and IGAAP as the previous GAAP.

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2016. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

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

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.

(c) Ind AS Optional Exemptions:

Ind AS 101 allow first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The company has applied the following exemptions:

i) The company has elected to measure an item of Property plant and Equipments and intangible assets at the date of transition to Ind AS as at its fair value and use that fair value as deemed cost at that date

ii) Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the company has done the assessment of lease in contracts based on conditions in prevailing as at the date of transition.

iii) The company has elected to apply previous GAAP carrying amount of its investment in subsidiaries, associates and joint ventures as deemed cost as on the date of transition to Ind AS.

iv) Ind AS 101 permits an entity to designate particular equity investment ( Other than equity investment in subsidiaries, joint ventures and associates ) as at fair value through other Comprehensive Income (FVOCI) based on facts and circumstances as the date of transition to Ind AS ( rather than at initial recognition). Other equity investment are classified at Fair Value through Profit & Loss (FVTPL). The Company has availed this exemption to designate certain equity investment as FVOCI on the date of transition.

v) The company has continued the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP

(d) Ind AS mandatory Exceptions:

The following mandatory exceptions have been applied in accordance with Ind AS 101 in preparing the financial statements.

i) Estimates

The estimates at April 01, 2016 and March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences if any, in accounting policies) apart from the items where application of Indian GAAP did not require estimation. The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at the transition date and as of March 31, 2017.

ii) De-recognition of financial assets and financial liabilities

The Company has elected to apply the de-recognition requirements for financial assets and financial liabilities in Ind AS 109 prospectively for transitions occurring on or after the date of transition to Ind AS.

iii) Classification and measurement of financial assets

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

Notes to the reconciliation of equity as at April 01, 2016 and March 31, 2017 and total comprehensive income for the year ended i) Fair Value as deemed cost - Property Plant and Equipment (PPE)

The Company has opted the option of fair value as deemed cost for the Property Plant and Equipment as on the date of transition to Ind AS. This has resulted in increase of Rs. 2988.49 Lakhs as at 01.04.2016 in the value of the Property Plant and Equipment, reversal of earlier Revaluation reserve outstanding of Rs. 419.18 lakhs as at 01.04.2016 with corresponding increase in retained earnings of Rs. 3407.67 Lakhs as at 01.04.2016 and increase in deferred tax liability of Rs. 1120.14 Lakh as at 01.04.2016.

Fair value adjustments led to additional depreciation of Rs. 88.23 Lakh during the year ended March 31, 2017.

As the Company has opted the option of fair value as deemed cost for the Property Plant and Equipment as on the date of transition to Ind AS, hence the carrying value of revaluation reserve of Rs. 419.18 Lakhs has been adjusted against retained earnings on the date of transition. Subsequently during 2016-17, depreciation charged to revaluation reserve under previous GAAP has been reversed and depreciation as per Ind AS has been accounted for.

ii) As per the provisions of Ind AS 105, any non- current assets are to be classified as assets held for sale, if the sale of such assets is highly probable within a period of 12 months from the date of its classification.

(e) Investments (Non - Current & Current)

i) For investment in Quoted Instrument, company has elected to fair value through OCI.(FVTOCI)

(f) Financial instruments

(i) Derivative financial instruments

Under Indian GAAP, derivative contracts are restated at each balance sheet date to the extent of any reduction in value is recognized in Statement of Profit and Loss. A gain on valuation is only recognized by the Company if it represents the subsequent reversal of an earlier loss. Also under IGAAP premium on forward contract is amortized over the contract period and value was calculated excluding the premium.

Under Ind AS, both reductions and increases to the fair values of derivative contracts are recognized in profit & loss. Premium is not separately accounted and amortized.

(ii) Financial assets and financial liabilities measured at amortized cost

Under the previous GAAP, security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS 109-Financial Instruments, security deposits are required to be valued at fair value and difference between cost and fair value is to be amortized over the period of security as rental expenses and consequently interest income is to be booked at Effective Interest method in Profit and Loss Account

(iii) Cost of borrowing

Borrowing designated and carried at amortized cost are accounted on EIR method. The upfront fee or cost of borrowing incurred is deferred and accounted on EIR basis. Borrowings are shown as net of unamortized amount of upfront fee incurred.

(g) Proposed Dividend

Under Indian GAAP, proposed dividends are recognized as liability in the period to which they relate irrespective of the approval by shareholders. Under Ind AS a proposed dividend is recognized as liability in the period in which it is declared (on approval of shareholders in a general meeting) or paid.

(h) Deferred Tax

i) Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences, which was not required under Indian GAAP.

ii) In addition, the various transitional adjustments lead to different temporary differences resulting in recognition of deferred tax. Such deferred tax asset has been recognized in retained earnings.

(i) Excise Duty-

Paragraph 8 of Ind AS 18, Revenue states that ‘Revenue includes only the gross inflows of economic benefits received and receivable by the entity on its own account. Amounts collected on behalf of third parties such as sales taxes, goods and services taxes and value added taxes are not having any economic benefits which flow to the entity and do not result in increases in equity. Therefore, Excise Duty has been excluded from the Gross Sales and shown separately.

(j) Depreciation on Property, Plant and Equipment

Company has reversed depreciation charged on revaluation of PPE as per previous GAAP and Depreciation on Property, Plant and Equipment has been calculated on the fair value for the F.Y. 2016-17 and depreciation as per Ind AS has been accounted

(k) Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.


Mar 31, 2015

Not available


Mar 31, 2014

1. Segment Information :

The Company has identified one reportable business segment i.e Manufacturing and Trading of Paper in this year.

Geographical reportable segment.

The company produces and sales, its products in India & also Export the same directly or indirectly to overseas countries. The overseas sales operations are managed by its office located in India. For the purpose of AS 17 regarding segment reporting secondary segment Information on geographical segment is considered on the basis of revenue generated from Domestic & Export market.

2. Fixed Assets:

Land, Buildings, Plant & Machinery and Furniture & Fixture were revalued for Rs. 1255.54 lacs as on 31.03.1993 and Rs. 925.77 lacs as on 31.03.2004. The revaluation in respect of these assets on based on current replacement cost by the Approved Valuer appointed for the purpose. As a result, the increased book value of such assets as above has been transferred to Revaluation Reserve in respective year.

3. Taxation:

(a) 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 Asset are reviewed at each Balance Sheet date.

4. Miscellaneous: There are no claims for interest payment from any supplier with reference to interest on delayed payments to Small and Ancillary Industrial Undertakings Ordinance, 1992.

5. Micro, Small and Medium Enterprises Development Act, 2006 In accordance with the Notification No. GSR 719 ( E ) dt 16.11.2007, issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro and Small Enterprises as defined under the Micro, Small and Medium Development Act 2006. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is still not available, no disclosures have been made in the accounts.

6. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

1. Contingent Liabilities in respect of :

As at 31.03.2013 As at 31.03.2012

Claims against the Company not acknowledged as debts hence not provided (Rs. in Lacs) (Rs. in Lacs)

(i) Bank Guarantee given to the GPCB 1.00 1.00

(ii) Bank Guarantee given to the DGVCL 110.00

2. Segment Information :

The Company has identified one reportable business segment i.e. Manufacturing and Trading of Paper during the year

Geographical reportable segment.

The company produces and sales, its products in India & also Export the same directly or indirectly to overseas countries. The overseas sales operations are managed by its office located in India. For the purpose of AS 17 regarding segment reporting secondary segment information on geographical segment is considered on the basis of revenue generated from Domestic & Export market.

3. Fixed Assets:

Land, Buildings, Plant & Machinery and Furniture & Fixture were revalued for Rs. 1255.54 lacs as on 31.03.1993 and Rs. 925.77 lacs as on 31.03.2004. The revaluation in respect of these assets on based on current replacement cost by the Approved Valuer appointed for the purpose. As a result, the increased book value of such assets as above has been transferred to Revaluation Reserve in respective year.

4. Taxation:

(a) No provision has been made for current income tax due to carry forward benefit of profit earned u/s 115JB(2)(ix), for the years starting from the year in which company has become sick industrial company ending with the year in which entire net-worth of the company becomes equal or exceeds the accumulated losses.

(b) 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 realised. Deferred Tax Asset are reviewed at each Balance Sheet date.

5. MISCELLANEOUS:

There are no claims for interest payment from any supplier with reference to interest on delayed payments to Small and Ancillary Industrial Undertakings Ordinance, 1992.

6. Micro, Small and Medium Enterprises Development Act, 2006 In accordance with the Notification No. GSR 719 ( E ) dt 16.11.2007, issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro and Small Enterprises as defined under the Micro, Small and Medium Development Act 2006. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is still not available, no disclosures have been made in the accounts.

7. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

1 Contingent Liabilities :

Claims against the Company not acknowledged as debts hence not provided

As at As at 31.03.2012 31.03.2011 (Rs. in Lacs) (Rs. in Lacs)

(i) Suits filed by Trade Payable - 0.14

(ii) Bank Guarantee given to the GPCB 1.00 1.00

2. FIXED ASSETS:

Land, Buildings, Plant & Machinery and Furniture & Fixture were revalued for Rs. 1255.54 lacs as on 31.03.1993 and Rs. 925.77 lacs as on 31.03.2004. The revaluation in respect of these assets on based on current replacement cost by the Approved Valuer appointed for the purpose. As a result, the increased book value of such assets as above has been transferred to Revaluation Reserve in respective year.

3. TAXATION:

(a) No provision has been made for current income tax due to carry forward benefit of profit earned u/s 115JB(2)(ix), for the years starting from the year in which company has become sick industrial company ending with the year in which entire net-worth of the company becomes equal or exceeds the accumulated losses.

4. MISCELLANEOUS:

There are no claims for interest payment from any supplier with reference to interest on delayed payments to Small and Ancillary Industrial Undertakings Ordinance, 1992.

5. Micro, Small and Medium Enterprises Development Act, 2006 In accordance with the Notification No. GSR 719 (E) dt 16.11.2007, issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro and Small Enterprises as defined under the Micro, Small and Medium Development Act 2006. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is still not available, no disclosures have been made in the accounts.

6. The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements.

7. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2010

1. Application Money for Warrants :

The company issued 22,50,000 Nos of convertible warrants on preferential basis of Rs.10/- each at Rs. 25/- (Including a premium of Rs. 15/- per warrants) and received 10% advance money of Rs. 56.25 lacs with an option to convert into equity shares within 18 months as per SEBI guidelines. Out of above 22,50,000 Nos convertible warrants the company received application to convert 10,00,000 warrants in to Equity Shares with balance amount of Rs.225.00 lacs

The Company also issued 22,50,000 Nos of convertible warrants on preferential basis of Rs.10/-each and raised warrant application money of Rs.56.25 lacs(i.e.25% per Warrants with an option to convert into equity shares within 18 months as per SEBI Guidelines in the year 2009-10

2. Contingent Liabilities:

As at 31st March 2010 As at 31st March 2009 (Rs. in Lacs) (Rs. in Lacs)

Claims against the Company not acknowledge as debts hence not provided

(i) Demand Notice from Gujarat Electricity Board (GEB) Nil 14.63

(ii) Central Excise Demands (Interest) Nil 3.00

(iii) Suits filed by creditors 0.42 4.75

(iv) Income Tax Liability for the A.Y. 2007-08 which the company 80.32 has disputed and appeal against which is pending before CIT(A). Nil

3. Fixed Assets :

Land, Buildings, Plant & Machinery and Furniture & Fixture were revalued for Rs. 1255.54 lacs as on 31.03.1993 and Rs. 925.77 lacs as on 31.03.2004. The revaluation in respect of these assets on based on current replacement cost by the Approved Valuer appointed for the purpose. As a result, the increased book value of such assets as above has been transferred to Revaluation Reserve in respective year.

4. Taxation :

(a) No provision has been made for current income tax due to carry forward benefit of profit earned u/s 115JB(2)(ix), for the years starting from the year in which company has become sick industrial company ending with the year in which entire net-worth of the company becomes equal or exceeds the accumulated losses.

(b) 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 realised. Deferred Tax Asset are reviewed at each Balance Sheet date.

5. Miscellaneous :

a) There are no claims for interest payment from any supplier with reference to interest on delayed payments to Small and Ancillary Industrial Undertakings Ordinance, 1992.

b) Sales includes Manufacturing Facility Receipt of Rs. 559.33 Lac (Previous Year Rs. 677.08 Lac)

c) Other income includes Rs. 7.30 Lac of Sundry Balances Written back, (Previous Year Rs. 4.89 Lac) Interest on Fixed Deposit Rs. 3.66 Lac (Previous Year Rs. 2.88 Lac) & Others Miscellaneous income Rs. 62.02 Lac (Previous Year Rs. 47.67 Lac)

d) The company has not identified transactions with small scale industrial undertakings during the year.

6. Disclosure as required by Accounting Standard 19, "Leases" issued by the Institute of Chartered Accountants of India are given below:

(a) Operating Lease:

Where the Company is a Lessor

Details in respect of assets given on operating lease: Factory Building and Plant & Machinery

The assets given on lease are cancelable and agreed for 36 months and generally and are usually renewable by mutual consent, on mutually agreeable terms.

The total of future minimum non-cancelable leave & license fee receivable as of the Balance Sheet dates are as under:

Not later than one year – Rs. 6.00 lacs

Later than one year but not later than two years from 01.04.2010 – Rs.NIL

In addition the company is entitled for reimbursement of expenses @ Rs.8,500/- per hour for the usages of manufacturing facility.

The aggregate lease rentals are recognized in the Profit & Loss account for the year Rs.6.00 lacs and gross manufacturing receipts of Rs.559.33 lacs Initial direct costs are recognized as an expense in the year in which these are incurred.

Note : Components and Spare Parts referred to in para 4 D (c) of Part II of Schedule VI to the Companies Act, 1956 are assumed to be those incorporated in goods produced and not those used for maintenance of Plant and Machinery.

7. Previous year's figures have been regrouped / recast wherever necessary.

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