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Notes to Accounts of RDB Rasayans Ltd.

Mar 31, 2018

1. Company Overview

RDB Rasayans Limited (“the Company”) is a listed company incorporated in India on 13th October, 1995 having its registered office at Bikaner Building, 8/1 Lal Bazar Street, 3rd Floor, Room No. 9, Kolkata-700001. The Company is principally engaged in the business of manufacturing Polymer-based Woven Bags & Flexible Intermediate Bulk Container (Jumbo Bags) .

The Companys’ equity shares are listed on the Bombay Stock Exchange (BSE) since 2011.

2. Basis of preparation

a) Statement of Compliance

These financial statements are prepared in accordance with the provisions of the Companies Act, 2013 (‘Act’) (to the extent notified) and Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 (as amended).

The Company has adopted all the Ind AS standards and adoptions was carried out in accordance with Ind AS 101 - First time adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP) which was the previous GAAP. Reconciliations and descriptions of the effect of transition has been sumarised in Note 39.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing standard requires a change in the accounting policy hitherto in use.

b) Functional and presentation currency

The financial statements are presented in Indian Rupees (‘Rs’) which is Company’s presentation currency. The functional currency of the Company is also Indian Rupees (‘Rs’).

c) Basis of measurement

The financial statements have been prepared on historical cost convention on the accrual basis, except for the following items:

(i) Certain financial assets and financial liabilities measured at fair value;

(ii) Employee’s defined benefit plan as per actuarial valuation.

Fair value is the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using another valuation technique. In determining the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

d) Use of judgments and estimates

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.

Critical accounting judgements and key sources of estimation uncertainty: Key assumptions -

(i) Useful lives of Property, plant and equipment:

The Company uses its technical expertise along with historical and industry trends for determining the economic life of an asset/component of an asset. The useful lives are reviewed by management periodically and revised, if appropriate. In case of a revision, the unamortised depreciable amount is charged over the remaining useful life of the assets.

(ii) Fair value measurement of financial instruments:

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using certain valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

(iii) Defined benefit plans:

The cost of the defined benefit plan includes gratuity and the present value of the gratuity obligation are determined using actuarial valuations using projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

(iv) Recognition and measurement of provisions and contingencies:

The certain key assumptions about the likelihood and magnitude of an outflow of resources. Provision is towards known contractual obligation, litigation cases and pending assessments in respect of taxes, duties and other levies, if any, in respect of which management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for.

e) Measurement of fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values.

The management regularly reviews significant unobservable inputs and valuation adjustments.

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

f) Standard issued but not yet effective Revenue from contracts with customers- Ind AS 115

Ind AS 115 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The effective date of Ind AS 115 is yet to be announced.

B. The description of the nature and purpose of each reserve within equity is as follows:

(a) Securities Premium: Securities premium account represents the premium received on issue of shares over and above the face value of equity shares. The account is available for utilisation in accordance with the provisions of the Companies Act, 2013.

(b) Retained earnings: This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This Reserve can be utilized in accordance with the provisions of the Companies Act, 2013.

Nature of security

Above loans are secured against exclusive hypothecation charge of all assets of the Company along with extension of equitable mortgage on Leasehold Lands of the Company and the personal guarantee of directors.

Terms of repayment

1. Axis Bank: Term loan amounting to Rs. NIL (31st March 2017: Rs. NIL , 1st April 2016: Rs. 1,20,30,005), is repayable in 116 monthly installments of Rs. 6,30,980 from 20/07/2009 to 20/02/2019. Interest is payable at base rate as on date plus 1.60% p.a.

2. Axis Bank: Term loan amounting to Rs. NIL (31st March 2017: Rs. NIL , 1st April 2016: Rs. 17,22,025), is repayable in 110 monthly installments of Rs. 60,690 from 20/01/2010 to 20/02/2019. Interest is payable at base rate as on date plus 1.60% p.a.

3. Axis Bank: Term loan amounting to Rs. 1,06,33,672 (31st March 2017: Rs. 1,54,26,344, 1st April 2016: Rs. NIL), is repayable in 60 monthly installments of Rs. 4,00,000 from 30/04/2017 to 31/03/2022. Interest is payable at Marginal Cost of funds based Lending Rate (MCLR) plus 0.75% p.a.

4. Axis Bank: Term loan amounting to Rs. 3,18,51,574 (31st March 2017: Rs. NIL, 1st April 2016: Rs. NIL), is repayable in 60 monthly installments of Rs. 6,67,000 (last installment of Rs. 6,47,000) from 30/04/2017 to 31/03/2022. Interest is payable at Marginal Cost of funds based Lending Rate (MCLR) plus 2.00% p.a.

3. Operating lease: Company as lessee

The Company has entered into agreements in the nature of lease with lessor for the purpose of establishment of factory premises. These are generally in the nature of operating lease. These leasing arrangements which are not non-cancellable, are for ninety years, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as ‘Rent’ under Note 29.

4. Segment information

The business of the company falls under a single operating segment i.e. manufacturing and trading of PP woven sacks/ Fabric/ Liner and its related raw material. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. As the Company is engaged in a single operating segment, segment information that has been tabulated below is Company-wide:

Note: Non-current assets exclude financial assets, deferred tax assets, post-employment benefit assets and rights under insurance contracts.

The Company is not reliant on revenues from transactions with any single external customer and does not receive 10% or more of its revenues from transactions with any single external customer.

Contribution to Gratuity

The Company’s gratuity benefit scheme for its employees in India is a defined benefit plan (unfunded).

The Company provides for gratuity from employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of completed service.

The present value of obligation is determined based on the actuarial valuation using the Projected Unit Credit Method as on 31st March, 2018 which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The Company’s gratuity expense is recognized under the head - “Employee Benefit Expense”

These defined benefit plans expose the Company to actuarial risks, such as interest rate risk, liquidity risk, salary escalation risk and regulatory risk.

Inherent risk

The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risk pertaining to the plan. In particular, this exposes the Company, to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to longevity risk.

The following tables analyze present value of defined benefit obligations, expense recognised in statement of Profit and Loss, actuarial assumptions and other information.

5. Financial instruments and related disclosures

5.1 Fair value measurement

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchange in a current transaction between willing parties, other than in forced or liquidation sale.

The Company has established the following fair value hierarchy that categories the value into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: The hierarchy uses quoted (adjusted) price or NAV is measured at quoted price.

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 company 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.

The management assessed that trade receivables, cash and cash equivalent, other bank balances, trade payable and other financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of there instruments.

The company uses the discounted cash flow techniques (in relation to interest-bearing borrowings and loans) which involves determination of present value of expected receipt/payment discounted using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The fair value so determined is classified as Level 2.

5.2 Financial instruments by category

The following table shows fair values of financial assets and liabilities, including their levels in financial hierarchy, together with the carrying amounts shown in the statement of financial position. The table does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying a amount is a reasonable approximation of fair value.

5.3 Financial risk management Risk management framework

The Company’s principal financial liabilities comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company operations. The Company’s principal financial assets include loans, trade and other receivables and cash and cash equivalents that derive directly from its operations.

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s primary risk management focus is to minimise potential adverse effects of market risk on its financial performance. The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk.

The Company has exposure to the following risks arising from financial instruments:

(i) Credit risk

(ii) Liquidity risk

(iii) Market risk

(i) Credit risk

Credit risk is the risk of financial loss of the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally form the Company receivables from customers . Credit arises when a customer or counterparty does not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing/investing activities, including deposits with bank. The Company has no significant concentration of credit risk with any counterparty. The carrying amount of financial assets represent the maximum credit risk exposure.

Trade receivable

The risk management committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company’s standard 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 in some cases bank references.

Exposure to credit risks

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry. Details of concentration percentage of revenue generated from top customer and top five customers are stated below :

Trade receivables are primarily unsecured and are derived from revenue earned from customers. Credit risk is managed through credit approvals, establishing credit limits and by continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. As per simplified approach, the Company makes provision of expected credit loss on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provisions at each reporting date whenever is for longer period and involves higher risk.

(ii) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s finance team is responsible for liquidity, funding as well as settlement management. In addition, Processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows.

The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

(iii) Market risk

Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of a financial instrument . The value of a financial instrument may change as a result of changes in the interest rates and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments, receivables, payables and borrowings.

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates related primarily to the Company’s borrowing with floating interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

Exposure to interest rate risk

The interest rate profile of the Company ‘s interest bearing financial instruments at the end of the reporting period are as follows:

Sensitivity analysis

Fixed rate instruments that are carried at amortised cost are not subject to interest rate risk for the purpose of sensitive analysis.

Cash flow sensitivity analysis for variable rate instruments

A reasonably possible change of 100 basis points in variable rate instruments at the reporting dates would have increased or decreased profit or loss by the amounts shown below.

(b) Equity price risk

The Company is not exposed to equity risks arising from equity investments. The Company have not made any equity investments.

(c) Currency risk

The Company does not have currency risks since it is not exposed to any foreign currency transaction.

6. Capital management

The Company’s management objective are :

- to ensure the Company’s ability to continue as a going concern

- to provide an adequate return to shareholders by pricing products commensurately with the level of risk.

The Company monitors capital on the basis of carrying amount of equity including retained earnings as presented on the face of Balance Sheet. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. There is no change in the overall capital risk management strategy as compared to the last year.

The Company’s equity share capital comprises of 1,77,14,800 shares as on 31st March, 2018 (1,77,14,800 shares as on 31st March, 2017 and 1,77,14,800 shares as on 1st April, 2016) of Rs. 10 each aggregating to Rs. 17,71,48,000 as on 31st March, 2018 (Rs. 17,71,48,000 as on 31st March, 2017 and Rs. 17,71,48,000 as on 1st April, 2016). Other equity aggregares to Rs. 58,72,00,540 (Rs. 51,39,32,613 as on 31st March, 2017 and Rs. 45,63,48,321 as on 1st April, 2016)

Its total debt is Rs. 18,91,40,187 as on 31st March 2018 (Rs. 12,97,78,308 as on 31st March, 2017 and Rs. 7,38,86,895 as on 1st April, 2016).

7. First time adoption

These are the Company’s first financial statements prepared in accordance with Ind AS. For the year ended 31 March 2017, the Company had prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (‘previous GAAP’).

The accounting policies set out in note have been applied in preparing these financial statements for the year ended 31 March 2018 including the comparative information for the year ended 31 March 2017 and the opening Ind AS balance sheet on the date of transition i.e. 1 April 2016.

In preparing its Ind AS balance sheet as at 1 April 2016 and in presenting the comparative information for the year ended 31 March 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

Optional exemptions availed and mandatory exceptions

In preparing these financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

A. Optional exemptions availed

1. Property plant and equipment

The Company has elected to avail exemption under Ind AS 101 to use India GAAP carrying value as deemed cost at the date of transition for all items of property, plant and equipment and intangible assets as per the statement of financial position prepared in accordance with previous GAAP.

2. Fair value measurement of financial assets or liabilities at initial recognition

The Company has applied the requirements of Ind AS 109, “Financial Instruments: Recognition and Measurement”, wherever applicable.

B. Mandatory exceptions

1. Estimates

The estimates at 1 April 2016 and at 31 March 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- Fair valuation of financial instruments carried at FVTPL and/ or FVOCI.

- Impairment of financial assets based on the expected credit loss model.

- Determination of the discounted value for financial instruments carried at amortised cost.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2016, the date of transition to Ind AS and as of March 31, 2017.

2. Derecognition of financial assets and liabilities

As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, Financial Instruments, prospectively for transactions occurring on or after the date of transition to Ind AS. However, an entity may apply the derecognition requirements retrospectively from a date chosen by it if the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the derecognition principles of Ind AS 109 retrospectively as reliable information was available at the time of initially accounting for these transactions.

3. Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

There were no significant reconciliation items between cash flows prepared under previous GAAP and those prepared under Ind AS.

D. Notes to the reconciliations

(a) 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 required to be measured at fair value either through OCI (FVTOCI) or through Profit & loss (FVTPL).The company has opted to fair value these investments through Profit & loss (FVTPL). Accordingly, resulting fair value change of these investments have been recognised in retained earnings as at the date of transition and subsequently in the profit & loss account for the year ended March 31 2017.

(b) Borrowings at amortised cost

Under Indian GAAP, transaction costs incurred in connection with borrowings are amortised upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability measured at amortised cost and charged to Statement of Profit and Loss using the Effective Interest Rate (EIR) method.

(c) Government Grant

Under previous GAAP, government grants in respect of Property, Plant & Equipment (PPE) was presented as part of Reserves & surplus. Under Ind AS, Grant from Government are recognised at their fair value, when there is reasonable assurance that the grant will be received and the Company will comply with all the attached conditions. Government grants relating to income are deferred and recognised in the Statement of profit or loss over the period necessary to match them with the costs that they are intended to compensate and are deducted from the related expenses. Government grants relating to the purchase of property, plant and equipment are included in non current liabilities / current liabilities as deferred income and are credited to the Statement of profit and loss on written down value basis over the expected lives of the related assets and presented within other income.

(d) 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. Also, deferred tax have been recognised on the adjustments made on transition to Ind AS.

(e) Excise duty

Under previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as an expense. This has resulted in an increase in the revenue from operations and expenses for the year ended 31 March 2017. The total comprehensive income for the year ended and equity as at 31 March 2017 has remained unchanged.

(f) Actuarial gain and loss

Under Ind AS, all actuarial gains and losses are recognised in other comprehensive income. Under previous GAAP the Company recognised actuarial gains and losses in profit or loss. However, this has no impact on the total comprehensive income and total equity as on 1 April 2016 or as on 31 March 2017.


Mar 31, 2016

Note 1 - Amounts in the financial statements are presented in Rupees and rounded off to the nearest decimals thereof. The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year presentation.

2. Rights, preferences and restriction attaching to various classes of shares including restriction on distribution of dividends and repayment of capital.

The Company has only one class of shares which does not enjoy any preferential right or bear any restriction with regard to distribution of dividend or repayment of capital. Each holder of equity shares is entitled to one vote per share.

3. In accordance with the West Bengal Incentive Scheme 2000, announced by the Govt, of West Bengal, the company has approved an action plan for availing the subsidy benefits based on the eligibility certificate issued by the West Bengal Industrial Development Corporation Ltd. In view of the reasonable uncertainty and the method of calculation of subsidies, such subsidies are accounted for as and when the disbursements will be received. During the year under review, the Company has received subsidy of Rs.3,755,000 (P.Y. Nil).

4. In the opinion of the Board the Current Assets, Loans and Advances are not less than the stated value if realized in ordinary course of business. The provision for all known liabilities is adequate. There is no contingent liabilities except stated, as informed by the Management.

5. The Business of the company falls under a single segment i.e. manufacturing and trading of PP woven sacks / Fabric / Liner and its related raw material. In view of the general classification notified by Central Government in exercise of powers conferred u/s 133 of Companies Act, 2013 for Companies operating in single segment, the disclosure requirement as per Accounting Standard-17 on “Segment Reporting” is not applicable to the Company. The Company’s business is mainly concentrated in similar geographical, political and economical conditions; hence disclosure for geographical segment is also not required.

6. The Company is in communication with its suppliers to ascertain the applicability of “The Micro, Small and Medium Enterprises Development Act, 2006”. As on the date of this Balance Sheet the Company has received communication from few of its suppliers regarding the applicability of this Act to them and the same has been disclosed under note no 2.7.

7. Post employment benefits:

8. Defined contribution plans: The Company has recognized an expense of Rs. 1,110,358 (Previous Year Rs. 1,024,950) towards the defined contribution plans.

9. Defined benefit plans: As per actuarial valuation as on March 31,2016 and recognized in the financial statements in respect of Employee Benefit Schemes:

10. The Company was under process of investigation as per SEBI ad interim exparte order WTM/PS/45/ID9/DEC/2011 dated 28.12.2011 in exercise of the powers conferred upon SEBI under section 11(1), 11(4), 11A and 11B of the said act and issued certain directions for the Company to comply with. Accordingly the Company recalled the secured loan from its group company and deposited the same in Escrow account.

11. As per direction of SEBI WTM’s order dated 19.12.2014, the Company has been granted liberty to utilize the funds raised in IPO lying in Escrow Account for the purpose disclosed in prospectus. However, the proceeding under Sec 4(1) of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 has been initiated and the same is in under process.

12. Pursuant to the order dated 19.12.2014 of SEBI, the Company in last year has accounted for interest income of Rs. 68,632,314 and TDS there on Rs. 6,863,231 of which interest of Rs. 42,605,637 and TDS of Rs. 4,260,565 pertain to earlier years which was not accounted for before in accordance with the guideline prescribed under AS-9 with regard to “Revenue Recognition”.

13. The company and the notice directors have filed appeal before the Securities Appellate Tribunal, Mumbai on 16.12.2015 and 23.12.2015 respectively against the SEBI WTM''s Order dated 19.12.2014

14. The Company has filed a WRIT petition with the Hon’ble High Court of Calcutta challenging the vires of the West Bengal Tax on Entry of Goods into Local Areas Act, 2012. The Company has received an interim order from Court admitting the WRIT petition filed. Outstanding Liability on account of West Bengal Tax on Entry of Goods is Rs. 2,083,603 (P.Y. Rs. 795,082)

15. Note no 1 to2.38forms an integral part of financial statement.


Mar 31, 2015

1. Rights, preferences and restriction attaching to various classes of shares including restriction on distribution of dividends and repayment of capital.

The Company has only one class of shares which does not enjoy any preferential right or bear any restriction with regard to distribution of dividend or repayment of capital. Each holder of equity shares is entitled to one vote per share.

2. In accordance with the West Bengal Incentive Scheme 2000, announced by the Govt. of West Bengal, the company has approved an action plan for availing the subsidy benefits based on the eligibility certificate issued by the West Bengal Industrial Development Corporation Ltd. In view of the reasonable uncertainty and the method of calculation of subsidies, such subsidies are accounted for as and when the disbursements will be received.

3. In the opinion of the Board the Current Assets, Loans and Advances are not less than the stated value if realized in ordinary course of business. The provision for all known liabilities is adequate. There is no contingent liabilities except stated, as informed by the Management.

4. The Business of the company falls under a single segment i.e. manufacturing and trading of PP woven sacks / Fabric / Liner and its related raw material. In view of the general classification notified by Central Government in exercise of powers conferred u/s 133 of Companies Act, 2013 for Companies operating in single segment, the disclosure requirement as per Accounting Standard-17 on "Segment Reporting" is not applicable to the Company. The Company's business is mainly concentrated in similar geographical, political and economical conditions; hence disclosure for geographical segment is also not required.

5. The Company is in communication with its suppliers to ascertain the applicability of "The Micro, Small and Medium Enterprises Development Act, 2006". As on the date of this Balance Sheet the Company has received communication from few of its suppliers regarding the applicability of this Act to them and the same has been disclosed under note no 2.7.

6. Post employment benefits:

a) Defined contribution plans: The Company has recognized an expense of Rs. 1,024,950 (Previous Year Rs. 998,839) towards the defined contribution plans.

b) Defined benefit plans: As per actuarial valuation as on March 31, 2015 and recognized in the financial statements in respect of Employee Benefit Schemes:

7. Related party disclosures in accordance with AS-18

a) Other related parties to whom the Company had transactions:

i. Key management personnel and their relatives :

Sl. No. Name Designation / Relationship

1. Sri Shanti Lal Baid Managing Director

2. Sri Sandeep Baid Whole time Director

3. Sri Vinod Dugar Son-in-law of Managing Director

ii. Enterprises over which key management personnel / major shareholders / their relatives have significant Influence :

Sl. No. Name of enterprise Relationship with enterprise

1. M/s. Ajanta Trading Company Director's Brother & Son are partner

2. M/s. R D Motors Private Ltd Director's son-in-law is director

3. M/s. NTC Industries Ltd. Entity under significant influence of KMP / 4. M/s. Infra Vision Developers P Ltd relative of KMP.

8. Contingent liabilities:

a) Unexpired bank guarantee is given by the Company against EPGC scheme and Public issue for Rs. 1,948,431 (Previous year Rs.1,948,431).

b) Outstanding liability on account of letter of credit is given by the Company against electricity security deposit for Rs. 4,300,000 (Previous year Rs. 3,800,000).

c) Outstanding liability on account of West Bengal Tax on Entry of Goods will be for Rs. 7,95,082 (Previous year Rs. Nil)

9. During the year under review, the Company has aligned the useful life of its Tangible Fixed Assets in the line with Schedule II to Companies Act, 2013.

10. The Company was under process of investigation as per SEBI ad interim exparte order WTM/PS/45/ID9/DEC/2011 dated 28.12.2011 in exercise of the powers conferred upon SEBI under section 11(1), 11(4), 11A and 11B of the said act and issued certain directions for the Company to comply with. Accordingly the Company recalled the secured loan from its group company and deposited the same in Escrow account.

11. As per direction of SEBI WTM's order dated 19.12.2014, the Company has been granted liberty to utilize the funds raised in IPO lying in Escrow Account for the purpose disclosed in prospectus. However, the proceeding under Sec 4(1) of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 has been initiated and the same is in under process.

12. Pursuant to the order dated 19.12.2014 of SEBI, the Company during the year under review has accounted for interest income of Rs. 68,632,314 and TDS there on Rs. 6,863,231 of which interest of Rs. 42,605,637 and TDS of Rs. 4,260,565 pertain to earlier years which was not accounted for before in accordance with the guideline prescribed under AS-9 with regard to "Revenue Recognition".

13. The Company has filed a WRIT petition with the Hon'ble High Court of Calcutta challenging the vires of the West Bengal Tax on Entry of Goods into Local Areas Act, 2012. The Company has received an interim order from Court admitting the WRIT petition filed.


Mar 31, 2014

1. Share Capital

a. Rights, preferences and restriction attaching to various classes of shares including restriction on distribution of dividends and repayment of capital.

The Company has only one class of shares which does not enjoy any preferential right or bear any restriction with regard to distribution of dividend or repayment of capital. Each holder of equity shares is entitled to one vote per share.

2. Short-term provisions

Note : The Board of Directors has recommended, subject to approval of shareholders, dividend of Rs. 0.50 per equity shares of Rs. 10/- each on 17,714,800 equity shares, aggregating to Rs. 10,362,715 for the year ended 31.03.2014 (Previous year : Rs. 0.50, aggregating Rs. 10,294,292) including dividend distribution tax.

3. In accordance with the West Bengal Incentive Scheme 2000, announced by the Govt, of West Bengal, the company has approved an action plan for availing the subsidy benefits based on the eligibility certificate issued by the West Bengal Industrial Development Corporation Ltd. In view of the reasonable uncertainty and the method of calculation of subsidies, such subsidies are accounted for as and when the disbursements will be received.

4. In the opinion of the Board the Current Assets, Loans and Advances are not less than the stated value if realized in ordinary course of business. The provision for all known liabilities is adequate. There is no contingent liabilities except stated, as informed by the Management.

5. The Business of the company falls under a single segment i.e. manufacturing and trading of PP woven sacks / Fabric / Liner and its related raw material. In view of the general classification notified by Central Government in exercise of powers conferred U/S 211 (3C) of Companies Act, 1956 for Companies operating in single segment, the disclosure requirement as per Accounting Standard-17 on "Segment Reporting" is not applicable to the Company. The Company''s business is mainly concentrated in similar geographical, political and economical conditions; hence disclosure for geographical segment is also not required.

6. The Company is in communication with its suppliers to ascertain the applicability of "The Micro, Small and Medium Enterprises Development Act, 2006". As on the date of this Balance Sheet the Company has received communication from few of its suppliers regarding the applicability of this Act to them and the same has been disclosed under note no 2.7.

7. Post employment benefits:

a) Defined contribution plans: The Company has recognized an expense of Rs. 1,413,723 (Previous Year Rs. 1,046,701) towards the defined contribution plans.

b) Defined benefit plans: As per actuarial valuation as on March 31,2014 and ecognized in the financial statements in respect of Employee Benefit Schemes:

8. Contingent liabilities:

a) Estimated amount of contract remaining Rs. Nil (Previous Year Rs. 45,000,000) is to be executed on capital account and not provided for.

b) Unexpired bank guarantee is given by the Company against EPGC scheme and Public issue for Rs. 1,948,431 (Previous year Rs. 1,948,431).

c) Outstanding liability on account of letter of credit is given by the Company against electricity security deposit for Rs. 3,800,000 (Previous year Rs. 2,910,000).

9. The Company is under process of investigation as per SEBI ad interim exparte order WTM/PS/45/ID9/DEC/2Q11 dated 28.12.2011 in exercise of the powers conferred upon SEBI under section 11(1), 11(4), 11A and 11B of the said act and issued certain directions for the Company to comply with. Accordingly the Company recalled the secured loan from its group company and deposited the same in Escrow account.

10. The Company filed a WRIT petition (1971 (W) of 2012) dated 04.02.2012 in Calcutta High Court challenging validity of SEBI''s direction under Article 226. On 08.02.2012, the Company received an interim order from Court allowing SEBI to continue further investigation but restrained them to pass further order.

11. Pursuant to the application filed by the Company, the Hon''ble High Court, Calcutta vide their order dated 18.07.2012 has granted liberty to the Company to withdraw and utilize Rs. 6.50 crore out of Rs. 31.60 crore lying in Escrow Account. Accordingly the Company utilized Rs. 5.47 out of Rs. 6.50 as on date, balance remained in Escrow /current Account.

12. SEBI being aggrieved by the interim order dated 18.07.2012 of Hon''ble High Court, Calcutta filed a Special leave petition on dated 15.02.2013 before Hon''ble Supreme Court of India.

13. As a matter of prudence and following the guideline prescribed under AS -9 with regard to "Revenue recognition", also the matter being sub judice interest accrued on Escrow Account of Rs. 20,453,591 (Previous Year Rs. 19,598,109) and TDS there on of Rs. 2,045,360 (Previous year Rs. 1,959,811) for the year ended 31.03.2014 has not been accounted for in the Books of Accounts.


Mar 31, 2013

1.1 In accordance with the West Bengal Incentive Scheme 2000, announced by the Govt. of West Bengal, the Company has approved an action plan for availing the subsidy benefits based on the eligibility certificate issued by the West Bengal Industrial Development Corporation Ltd. In view of the reasonable uncertainty and the method of calculation of subsidies, such subsidies are accounted for as and when the disbursements will be received.

1.2 In the opinion of the Board the Current Assets, Loans and Advances are not less than the stated value if realized in ordinary course of business. The provision for all known liabilities is adequate. There is no contingent liabilities except stated, as informed by the Management.

1.3 The Business of the Company falls under a single segment i.e. manufacturing and trading of PP Woven Sacks / Fabric / Liner and its related raw material. In view of the general classification notified by Central Government in exercise of powers conferred U/S 211(3C) of Companies Act, 1956 for Companies operating in single segment, the disclosure requirement as per Accounting

Standard-17 on "Segment Reporting" is not applicable to the Company. The Company''s business is mainly concentrated in similar geographical, political and economical conditions; hence disclosure for geographical segment is also not required.

1.4 The Company is in communication with its suppliers to ascertain the applicability of "The Micro, Small and Medium Enterprises Development Act, 2006". As on the date of this Balance Sheet the Company has not received any communication from any of its suppliers regarding the applicability of this Act to them. This has been relied upon by the Auditors.

1.5 CONTINGENT LIABILITIES:

a) Estimated amount of contract remaining Rs. 45,000,000 (Previous year Rs. 45,000,000) is to be executed on capital account and not provided for.

b) Unexpired bank guarantee is given by the Company against EPGC scheme and Public Issue for Rs. 1,948,431 (Previous year Rs. 1,948,431).

c) Outstanding liability on account of letter of credit is given by the Company against electricity security deposit for Rs. 2,910,000 (Previous year Rs. 2,910,000).

d) On account of corporate guarantee given to bank for secured loan taken by group companies, Rs. Nil (Previous year Rs. 99,472,250).

1.6 The Company is under process of investigation as per SEBI ad interim exparte order WTM/PS/45/ID9/DEC/2011 dated 28.12.2011 in exercise of the powers conferred upon SEBI under section 11(1), 11(4), 11A and 11B of the said act and issued certain directions for the Company to comply with. Accordingly the Company recalled the secured loan from its group Company and deposited the same in Escrow Account.

1.7 The Company filed a WRIT petition (1971(W) of 2012) dated 04.02.2012 in Hon''ble High Court, Calcutta challenging validity of SEBI''s direction under Article 226. On 08.02.2012, the Company received an interim order from Court allowing SEBI to continue further investigation but restrained them to pass further order.

1.8 Pursuant to the application filed by the Company, the Hon''ble High Court, Calcutta vide their order dated 18.07.2012 has granted liberty to the Company to withdraw and utilize Rs. 6.50 crore out of Rs. 31.60 crore lying in Escrow Account.

1.9 SEBI being aggrieved by the interim order dated 18.07.2012 of Hon''ble High Court, Calcutta filed a Special leave petition on dated 15.02.2013 before Hon''ble Supreme Court of India.

1.10 As a matter of prudence, interest accrued on Escrow Account of Rs. 19,598,109 (Previous Year Rs. 2,553,937) and TDS there on of Rs. 1,959,811 (Previous year Rs. 255,394) for the year ended 31.03.2013 has not been accounted for in the Books of Accounts as the matter is sub judice, the recognition of interest has been postponed in accordance with AS-9 "Revenue Recognition".

1.11 Note No 1 to 2.38 forms an integral part of financial statement.


Mar 31, 2012

Note 1- Amounts in the financial statements are presented in Rupees and rounded off to the nearest decimals thereoff. The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current period presentation.

a. Rights, preferences and restriction attaching to various classes of shares including restriction on distribution of dividends and repayment of capital.

The Company has only one class of shares which does not enjoy any preferential right or bear any restriction with regard to distribution of dividend or repayment of capital. Each holder of equity shares is entitled to one vote per share.

Note: The Board of Directors has recommended dividend @ Rs.0.75 per equity shares of Rs.10/- each on 17,714,800 equity shares for the year ended 31.03.2012 (Previous year: Rs. Nil).

1.1 In accordance with the West Bengal Incentive Scheme 2000, announced by the Govt. of West Bengal, the Company has approved an action plan for availing the subsidy benefits based on the eligibility certificate issued by the West Bengal Industrial Development Corporation Ltd. In view of the reasonable uncertainty and the method of calculation of subsidies, such subsidies are accounted for as and when the disbursements will be received.

1.2 In the opinion of the Board the Current Assets, Loans and Advances are not less than the stated value if realised in ordinary course of business. The provision for all known liabilities is adequate. There is no contingent liabilities except stated, as informed by the Management.

1.3 The Business of the Company falls under a single segment i.e. Manufacturing of PP Woven Sacks / Fabric / Liner. In view of the general classification notified by Central Government in exercise of powers conferred u/s 211(3C) of Companies Act, 1956 for Companies operating in single segment, the disclosure requirement as per Accounting Standard-17 on "Segment Reporting" is not applicable to the Company. The Company's business is mainly concentrated in similar geographical, political and economical conditions; hence disclosure for geographical segment is also not required.

1.4 The Company is in communication with its suppliers to ascertain the applicability of "The Micro Small and Medium Enterprises Development Act, 2006". As on the date of this Balance Sheet the Company has not received any communication from any of its suppliers regarding the applicability of this Act to them. This has been relied upon by the Auditors.

1.5 Changes in Accounting Policy:

During the year, the Company has made provision for employee benefits in accordance with Accounting Standard-15 (Revised 2005) on "Employee Benefits". Consequent to this change, the employee cost for the current year is lower by Rs.314,896. Further in accordance with the transitional provisions of AS-15, the excess provision towards Employee Benefits as on 01.04.2011 amounting to Rs.236,874 has been credited to the Statement of Profit and Loss.

1.6 Post employment benefits:

a) Defined contribution plans: The Company has recognised an expense of Rs.1,005,696 (Previous year Rs.975,364) towards the defined contribution plans.

5 The estimates of future salary increases, considered in actuarial valuation takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in employment market.

6 Discount rate is based upon the market yields available on Government Bonds at the accounting date with a term that matches with that of liabilities.

1.7 Contingent liabilities:

a) Estimated amount of contract remaining Rs. Nil (Previous year Rs.50,000) is to be executed on capital account and not provided for.

b) Unexpired bank guarantee is given by the Company against EPGC scheme and Public issue for Rs.1,948,431(Previous year Rs.193,431).

c) Outstanding liability on account of letter of credit is given by the Company against electricity security deposit for Rs.2,910,000 (Previous year Rs.2,910,000).

d) On account of corporate guarantee given to bank for secured loan taken by group companies, Rs. 99,472,250 (Previous year Rs.99,472,250)

1.8 The Company is under process of investigation as per SEBI ad interim exparte order WTM/PS/45/ID9/DEC/2011 dated 28.12.2011 in exercise of the powers conferred upon SEBI under section 11(1), 11(4), 11A and 11B of the said act and issued certain directions for the Company to comply with. Accordingly the Company recalled the secured loan from its group company and deposited the same in Escrow account.

1.9 The Company filed a WRIT petition (1971(W) of 2012) dated 04.02.2012 in Calcutta High Court challenging validity of SEBI's direction under Article 226. On 08.02.2012, the Company received an interim order from Court allowing SEBI to continue further investigation but restrained them to pass further order.

1.10 As a matter of prudence, interest accrued on Escrow Account of Rs.2,553,937 and TDS there on of Rs.255,394 for the year ended 31.03.2012 has not been accounted for in the Books of Accounts as the matter is sub judice, the recognition of interest has been postponed in accordance with AS-9 "Revenue recognition".

1.11 Note No 1 to 2.38 forms an integral part of financial statement.


Mar 31, 2011

1. In accordance with the West Bengal Incentive Scheme 2000, announced by the Gov., of West Bengal, the company has approved an action plan for availing the subsidy benefits based on the eligibility certificate issued by the. West Bengal Industrial Development Corporation Ltd. In view to the reasonable uncertainty and the method of calculation of subsidies, such subsidies shall be accounted for as and want the disbursements are received.

2. In the opinion of the Board the Current Assets Loans and Advances are not less than the stated value if realized in ordinary course of business. The provision for all known liabilities is adage Thereto s no contingent liabilities except stated, as informed by the Management

3 a) Estimated amount, of contract remaining Rs. 50,000.00 (Previous Year Rs Nil) to be executed on capital account and not provided for.

b) Unexpired Bank guarantee in way of Fixed Deposit ofRs.200,000.00 (Previous Year Rs 200,000.00)

c) On account of corporate guarantee given to bank for secured loan taken by the group companies Rs.110,000,000.00 (Previous Year 100,000,000.00)

4) The Company is in communication with its suppliers to ascertain the applicability of "The micro, small and Medium Enterprises Development Act, 2006". As on the date of this Balance sheet the Company has not received any communication from any of its suppliers regarding the applicability of this at to them. This has been relied upon by the Auditors.

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