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Notes to Accounts of Todays Writing Instruments Ltd.

Mar 31, 2015

1. CONTINGENT LIABILITIES: (Amt. in Rs.)

Particulars 31-Mar-15 31-Mar-14

i) Claims against the Company not acknowledgement as debts

a) Income tax matters disputed in appeal 103,283,133 103,283,133

b) Sales tax matter disputed in appeal 188,426,315 184,826,315

In all the above matters, the Company is hopeful of succeeding and as such does not expect any significant liabilITy to crystallize.

ii) Bank guarantee

a) Guarantee issued to various government 1,995,166 12,800,900 departments and the Company is hope full to meet ITs obligations.

b) Corporate guarantee given on behalf of 305,000,000 305,000,000 others covered by indemnITy under taking form Today's Petrotech LimITed.

In all the above guarantee and corporate guarantee the Company is hopeful that there will be no default and as such does not expect any significant liabilITy to crystallize.

2. EMPLOYEE BENEFITS PLANS:

Disclosure as required by Accounting Standard 15

LiabilITy In respect of gratuITy and leave encashment are accounted on payment basis which is not in conformITy wITh Accounting Standard (AS)15 (Revised 2005) on Employee BenefITs as issued by the InstITute of Chartered Accountant of India, which requires that gratuITy and Leave Encashment LiabilITies be accounted for on accrual and actuarial basis.

3. RELATED PARTY INFORMATION:

Related party information as required by AS 18 is given below:

Relationships:

Sr. Nature of Relationship Name of Related Parties No.

1) Subsidiary Company Today's Stationery Mart LimITed

Today's Infrastructure and Construction LimITed

Today's Petrotech LimITed

Today's Fluid Technologies LimITed

2) Key Management Personnel Shri Rajesh Kumar Drolia

Shri Ronald Netto

3) Associate Companies / Firms Jaidurga Engineering Company

Tirupati Tips Industries

4) Relatives of Key Management Smt. AnITa Drolia Personnel Rajesh Kumar Drolia (HUF)

Smt. AkrITi Gupta

4. The net worth of the Company is fully eroded as on 31/03/2011 and the Company has filed reference wITh the Board of Industrial and Financial Restriction (BIFR) under the section 15 of the sick Industrial Companies (Special provisions) Act, 1985 (SICA). The Company has been declared as sick Company wIThin the meaning of section 3(o) of SICA Act, 1985 vide order of Honorable BIFR dated 24/01/2014. The Company is in the process of preparing and filing a draft rehabilITation scheme wITh BIFR. On approval and implementation of the said scheme the net worth of the Company is expected to turn posITive hence the Company is treated as a going concern, So no adjustments are required to the carrying value of assets and liabilITies.

5. Some of the sundry debtors, sundry credITors and loans & advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment.

6. In the opinion of the Board, the Current Assets, Loans & Advances are approximately of the value stated and are realizable in the ordinary course of business except for those which are considered doubtful & provided for. The provision for all known liabilITies is adequate.

7. As the Company is registered wITh BIFR, all proceedings in DRT and winding up cases & other suITs for recovery of money has been stayed, except in the DRT proceeding instITuted by RBS at New Delhi, where the Honorable Tribunal has taken a different view based on a Delhi High Court judgement.

8. Provision for interest on loans taken from banks, financial instITutions has been provided as per earlier years. However, in respect of banks where settlement has been arrived no interest has been provided.

9. Since 01.01.2009 the Company has not paid any term loan installments & also interest on term loan & working capITal loans . The Company has approached the banks & financial InstITution for a settlement. The unpaid interest provision of earlier years has been regrouped under the head other current liabilITies.

10. A portion of accumulated deferred tax assets of earlier years has been wrITten off as the management thought that looking to the current business operation IT is not possible to reverse deferred tax assets in near future.

11. Pursuant to notification of Schedule II to The Companies Act, 2013, the Company has assessed the useful life of fixed assets and the depreciation for the year has been provided on the basis of the useful lives w.e.f from April 01,2014. This change has resulted in a higher depreciation of Rs. 21.29 Lacs.

12. Previous year figure have been regrouped / reclassified to confirm wITh current year presentation, whenever considered necessary.




Mar 31, 2014

1 SHARE CAPITAL

a. Terms /rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10. The equity shares have rights, preferences and restrictions which are in accordance provisions of law, in particular the Companies Act, 1956 and MOA & AOA of the Company.

Details of Security

The Company has created a mortagage on all its assets both current and fixed assets, both moveable and immovable in favour of lenders to SBI Trusteeship services(SBIT). vide security trust deed dated 19th March 2008. and accordingly the term lenders ICICI Bank Ltd and Axis Bank Ltd are secured by frst paripassu charge on immovable and movable fixed assets (except those pertaining to the current assets charged in favour of working capital bankers) and second charge on current assets and movable assets. Further, the Immovable property of Premium Writing Products(PWP) has been charged to the lenders through a guarantee by PWP to the extent of value of the immovable property of PWP, pending transfer to the Company. Also, personal gurantee of Mr. Rajesh Kumar Drolia has been provided to all secured lenders except ICICI Bank Ltd and Mrs. Anita Drolia''s personal guarantee is given only to SBI and Bank of India.

Terms of Repayment

The repayment of term loans amounting to Rs. 16,56,00,000/- were rescheduled by CDR cell on restructuring and it was payable @ 3.75 % per quarter commencing from 01/10/2015. The Company subsequently opted to enter in to settlment with the lenders and consequently CDR scheme was withdrawn. The Company is currently in advance stage of discussion with the lenders for a settlement.

2 SHORT TERM BORROWINGS

Details of Security

The Company has a created a mortgage on all its assets both current and fixed assets both movable and immovable in favour of the lenders through State Bank of India trusteeship services (SBIT) vide security trust deed dated 19th March 2008 and accordingly the working capital lenders State Bank of India, Bank of India, ICICI Bank Ltd. and HSBC Bank Ltd. are secured by frst paripassu charge on all current assets and movable assets (except those charged in favour of term lenders) and second charge on all immovable assets Further, the Immovable property of Premium Writing Products(PWP) has been charged to the lenders through a guarantee by PWP to the extent of value of immovable property pending transfer of immovable property to the Company. Also, personal gurantee of Mr. Rajesh Kumar Drolia have been provided to all secured lenders except ICICI Bank and Anita Drolia''s personal guarantee is given only to SBI and Bank of India.

3 CONTINGENT LIABILITIES:

(Amt. in Rs.)

Particulars 31-Mar-14 31-Mar-13

i) Claims against the Company not acknowledgement as debts

a) Income tax matters disputed in appeal 103,283,133.00 103,283,133.00

b) Sales tax matter disputed in appeal 184,826,315.00 70,431,625.00

In all the above matters, the Company is hopeful of succeeding and as such does not expect any significant liability to crystallize.

ii) Bank guarantee

a) Guarantee issued to various government departments and the 12,800,900 12,800,900 Company is hopefull to meet its obligations.

b) Corporate guarantee given on behalf of others - covered by 305,000,000 312,000,000 indemnity undertaking from Today''s Petrotech Limited.

Dues to micro and small enterprises have been determined to the extent such parties have been identified on the basis of intimation received from the "suppliers" regarding their status under the Micro, small and Medium Enterprises Development Act, 2006.

4 EMPLOYEE BENEFITS PLANS:

Disclosure as required by Accounting Standard 15 Liability In respect of gratuity and leave encashment are accounted on payment basis which is not in conformity with Accounting Standard (AS)15 (Revised 2005) on Employee benefits as issued by the Institute of Chartered Accountant of India, which requires that gratuity and Leave Encashment Liabilities be accounted for on accrual basis and as per actuarial basis.

5. The networth of the Company is fully eroded as on 31/03/2011 and the Company has fled reference with the Board of Industrial and Financial Restruction (BIFR) under the section 15 of the sick Industrial Companies (Special provisions) Act, 1985 (SICA). The Company has been declared as sick Company within the meaning of section 3(o) of SICA Act, 1985 vide order of Honorable BIFR dated 24/01/2014. The Company is in the process of preparing and fling a draft rehabilitation scheme with BIFR. On approval and implementation of the said scheme the net worth of the Company is expected to turn positive hence the Company is treated as a going concern, So no adjustments are required to the carrying value of assets and liabilities.

6. Some of the sundry debtors, sundry creditors and loans & advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment.

7. In the opinion of the Board, the Current Assets, Loans & Advances are approximately of the value stated and are realizable in the ordinary course of business except for those which are considered doubtful & provided for. The provision for all known liabilities is adequate.

8. As the Company is registered with BIFR, all proceedings in DRT and winding up cases & other suits for recovery of money has been stayed, except in the DRT proceeding instituted by Royal Bank of Scotland at New Delhi, where the Honarable Tribunal has taken a different view based on a Delhi High Court''s judgement.

9. Provision for interest on loans taken from banks, financial institutions has been provided as per earlier years. However, in respect of banks where settlement has been arrived, no interest has been provided.

10. Since 01.01.2009 the Company has not paid any term loan installments & also interest on term loan & working capital loans. The Company has approached the banks & financial Institution for a settlement. The unpaid interest provision of earlier years has been regrouped under the head other long term liabilities.

11. The management did not considered creating more deferred tax assets during the year since in their opinion and looking at the present status of the Company, the accumulated deferred tax assets of earlier year would not be recovered. Hence, no deferred tax assets has been booked.

12. The Company has discarded few obsolete and idle assets during the year, the cost of repairing were much more than it''s utility and have outlived the average life of assets. It was decided to discard these assets as Scrap or ''as is where is basis'' and utilize the fund for working capital needs. In respect of fats, they were in a dilapidated condition and as such the cost of repairs were prohibitive and unviable. The tenants occupying the same were also not vacating. Hence, it was decided to sell the fats to the occupants at a nominal value considering the huge cost of repairs.

13. Previous year figure have been regrouped / reclassified to confirm with current year presentation, wherever considered necessary.


Mar 31, 2013

1 EMPLOYEE BENEFITS PLANS:

Disclosure as required by Accounting Standard 15 Liability In respect of gratuity and leave encashment are accounted on payment basis which is not in conformity with Accounting Standard (AS)15 (Revised 2005) on Employee Benefts as issued by the Institute of Chartered Accountant of India, which requires that gratuity and Leave Encashment Liabilities be accounted for on accrual basis and as per actuarial basis.

2 The networth of the Company is fully eroded as on 31/03/2011 and the Company has fled reference with the Board of Industrial and Financial Reconstruction (BIFR) under section 15 of the Sick Industrial Companies (Special provisions) Act, 1985 (SICA). The Companies Corporate Debt Restructuring (CDR) Scheme has been approved by lenders on 24/09/2010 and on implementation of CDR scheme Company''s net worth is expected to turn positive hence the Company is treated as a going concern. So no adjustments are required to the carrying value of assets and liabilities. However, the Company is currently in discussion for a settlement with the banks and in the event of settlement the networth is expected to turn positive much earlier than under CDR scheme.

3 Some of the sundry debtors, sundry creditors and loans & advances are subject to confrmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment.

4 In the opinion of the Board, the Current Assets, Loans & Advances are approximately of the value stated and are realizable in the ordinary course of business except for those which are considered doubtful & provided for. The provision for all known liabilities is adequate.

5 As the Company is registered with BIFR, all proceedings in DRT and winding up cases & other suits for recovery of money has been stayed.

6 Provision for interest on loans taken from banks, fnancial institutions has been provided as per the rates mentioned in CDR scheme.

7 After the approval of CDR scheme on 24 /09/2010 the unpaid interest provision of earlier years has been regrouped under the head other long term liabilities.

8 Previous year fgure have been regrouped / reclassifed to confrm with current year presentation, whenever considered necessary.


Mar 31, 2012

1. CONTINEGENT LIABILITIES (Amount in Rs.)

Particulars 31-Mar-12 31-Mar-11

a) Income tax matters disputed in appeal

In all the above matters, the Company is hopeful of succeeding and as such

does not expect any significant liability to crystallize. 103,283,133 75,350,127

b) Bank guarantee

i) Guarantee issued to various government departments and the Company is

hopefull to meet its obligations. '12,800,900 12,800,900

ii) Corporate guarantee given on behalf of others - covered by indemnity under

taking from Today's Petrotech Limited and Today's Stationery Mart Limited 31,20,00,000 31,20,00,000

2. EMPLOYEE BENEFITS PLANS

Liability In respect of gratuity and leave encashment are accounted on payment basis which is not in conformity with Accounting Standard (AS)15 (Revised 2005) on Employee Benefits as issued by the Institute of Chartered Accountant of India, which requires that gratuity and Leave Encashment Liabilities be accounted for on accrual basis and as per actuarial basis.

3 The networth of the Company is fully eroded as on 31/03/2011 and the Company has filed reference with the Board of Industrial and Financial Restruction (BIFR) under the clause (o), sub section (1) of section (3) of the sick Industrial Companies (Special provisions) Act, 1985 (SICA). The Companies Corporate Debt Restructring (CDR) Scheme has been approved by lenders on 24/09/2010 and on implementation of CDR scheme Company's net worth is expected to turn positive hence the Company is treated as a going concern. So no adjustments are required to the carrying value of assets and liabilities. However, the Company is currently in discussion for a settlement with the banks and in the event of settlement the networth is expected to turn positive much earlier than under CDR scheme.

4 Some of the sundry debtors, sundry creditors and loans & advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment.

5 In the opinion of the Board, the Current Assets, Loans & Advances are approximately of the value stated and are realizable in the ordinary course of business except for those which are considered doubtful & provided for. The provision for all known liabilities is adequate.

6 The company has made provision for bad & doubtful debts of'Rs. 3821.67 Lacs on non recovery even after regular followup to save money and energy. The management has considered it prudent to make provisions for the debts in view of the slow movement of the debtors due to the advent of the DF pens affecting its sales, which constitute bulk of the sales. The loss in terms of non realization has not crystallized-. However, in view of the market conditions the management considered it prudent to make provisions based on its assessment as some of the overall debtors across major distributors could turn doubtful. Further, this was considered prudent by the management under the circumstances after it was deliberated and approved by the Audit Committee headed by an eminent independent Director Mr. S. M . Parande.

7 The company has made provision for bad & doubtful advances of Rs. 567.05 Lacs on non recovery even after regular followup to save money and energy. The management has considered it prudent to make provisions for such advances in view of very slow / non recovery. The loss in terms of hon realization has not crystallized. However, in view of the market conditions the management considered it prudent to make provisions based on its assessment as some of the advances could turn doubtful. Further, this was considered prudent by the management under the circumstances after it was deliberated and approved by the Audit Committee headed by an eminent independent Director Mr. S. M. Parande.

8 The Company has made valuation of inventory as per its policy however inventory held for more than six months has been revalued taking their utility and realistic value in consideration . The details of said diminution in value it has deliberated and approved by the Audit Committee headed by an eminent independent Director Mr. S. M.

9 HDFC bank has filed a petition against the company for winding up of operations and they have also moved the Debt Recovery Tribunal to recover it dues. The company has defended the petition and had earlier made claims against the company for the loss it had incurred due to the banks actions. The matter is sub-judice. However , as the Company is registered with BIFR all proceedings in DRT and winding up cases & other suits for recovery of money has been stayed.

10 Provision for interest on loans taken from banks, financial institutions has been provided as per the rates mentioned in CDR scheme.

11 Since 01.01.2009 the Company has not paid any term loan installments & interest on term loan & working capital loans. The Company has approached the banks & financial Institution-for restructuring of the loans & the banks has approved CDR scheme on 24/09/2010. The unpaid interest provision of earlier years has been regrouped under the head other long term liabilities.

12 Previous year figure have been regroped / reclassified to confirm with current year presentation, whenever considered necessary.


Mar 31, 2010

1) Liability In respect of gratuity and leave encashment are accounted on payment basis which is not in conformity with Accounting Standard (AS)15 (Revised 2005) on Employee Benefits as issued by the Institute of Chartered Accountant of India, which requires that gratuity and Leave Encashment Liabilities be accounted for on accrual basis.

2). In the opinion of the Board,the Current Assets, Loans & Advances are approximately of the value stated and are realizable in the ordinary course of business except for those which are considered doubtful & provided for. The provision for all known liabilities is adequate.

3) Some of the sundry debtors, sundry creditors and loans & advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment.

4) The provision for bad 6 doubtful debts for Rs. 15,80,04,588 has been made during the year. The management has considered it prudent to make provisions for the debts in view of the slow movement of the debtors due to the advent of the DF pens affecting its sales, which constitute bulk of the sales. The loss in terms of non realization has not crystallized. However, in view of the market conditions the management considered it prudent to make provisions based on its assessment as some of the overall debtors across major distributors could turn doubtful. Further, this was considered prudent by the management under the circumstances.

5) HDFC bank has filed a petition against the company for winding up of operations and they have also moved to Debt Recovery Tribunal to recover it dyes. The company has defended the petition and had earlier made^claims against the company for the loss it had incurred due to the banks actions. The matter is sub-judice.

6). Contingent liabilities not provided for:-

i) Outstanding liabilities in respect of

(Rs. in lacs)

March, 2010 March,2009

Letter of Credit to Bank - 494.20

Bank Guarantee 101.56 101.56



ii) In respect of Income Tax demands for the Assessment Years 2005-06, 2006-2007 a 2007-2008 amounting to Rs.47.37 lakhs, Rs. 173.79 Lakhs &Rs. 14.03 Lakhs respectively, the Company preferred appeal before Appellate authority for both the years and has not made any provision for this amount in their books of accounts, since the company is confident that The Appeal will be decided in its favour.

iii) The team of investigation wing of The Maharashtra VAT department raised a demand of Rs. 85,83,911/- on the company on 07/07/2010 in respect of non payment of VAT by suppliers of the company U/S 48 (5) of MVAT Act, 2002 for the financial year 2006-2007 and 2007-2008. The company has revised its VAT returns for the above financial years and admitted the liabilities under protest. Since this liabilities is not directly due to fault of the company and it is after balance sheet date no provision in this respect was made by the company.

iv) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 10 Lakhs (Mar09: Rs.50 Lakhs).

7. Related Party disclosure under Accounting Standard 18 (As certified by management) Relationships:

i) Subsidiary of Company

Todays Stationery Mart Ltd.

Todays Infrastructure & Construction Ltd.

Todays Fluid Technologies Ltd.



ii) Other related parties in the group

where common control exists:

Rajesh Kumar Drolia (HUF)

Premium Writing Products

Millennium Writing Products Pvt Ltd

Jai Durga Engineering Co.

Todays Petrotech Ltd



iii) Functional Directors



Shri Rajesh Kumar Drolia

Shri Ronald Netto

Shri SunilAgarwal

Shri Pushpak Chavan



iv) Relatives of Functional Directors

Smt. Anita Drolia

Shri Chirag Drolia

Shri Pawan Drolia

Ms. Akriti Drolia

8. The Company has made valuation of inventory as per its policy and has also taken into consideration the utility and realistic value of inventory.

9. The Company has incurred substantial losses resulting erosion of net worth of the company to a great extent. Further the company is a defaulter to its lending banks resulting in NPAand recalled notice / recovery action is taken by banks. Three banks moved to DRT (Debt Recovery Tribunal) and one of the bank has also filed winding up petition before Honorable High Court of Maharashtra. However, having regard to the future growth plans submitted by the company with its bankers on CDR (corporate debt restructuring scheme) which is admitted by their bankers and a TEV (Techno Economic Viability) report conducted by the bankers through Professionals also confirmed the feasibility and Viability of the business of the company and on the basis of this the company is treated as a going concern. So no adjustments are required to the carrying value of assets and liabilities.

10. Since more than 50% net worth is eroded from its peak net worth during the immediately preceding four financial year the company should give intimation to BIFR (Board and Appellate Authority for Industrial and Financial Reconstruction) within the stipulated time under The Sick Industrial Companies (Special Provisions) Act, 1985.

11. Secured Loans

(a) Term Loan

(i) The company has transferred all its assets both current and fixed assets( both moveable and immovable) to SBI Trusteeship services(SBIT). vide security trust deed dated 19th March 2008. and accordingly the term lenders ICICI Bank Ltd and Axis Bank Ltd are secured by first paripassu charge on immovable and movable fixed assets (except those pertaining to the current assets charge in favour of working capital bankers) and second charge on current assets and movable assets. Further, the Immovable assets of Premium Writing Products(PWP) has been charged to the lenders through a guarantee by PWP pending transfer of immovable property to the Company . Also, personal guarantee of Mr. Rajesh Kumar Drolia and Mrs. Anita Drolia have been provided except to ICICI Bank Ltd.

(ii) Term loan from Kotak Mahindra Bank Ltd is secured by Equitable mortgage of four flats situated at Powai and present outstanding is Rs. 280.74 Lacs.

(iii) Vehicles loans aggregating to Rs. 4.40 Lacs taken from various banks are secured by hypothecation of respective vehicles purchased.

(b) Cash Credit

The company has transferred all its assets both current and fixed assets (both movable and immovable) to State Bank of India trusteeship services (SBIT) vide security trust deed dated 19th March 2008 and accordingly the working capital lenders State Bank of India, Bank of India, ICICI Bank Ltd. and HSBC Bank Ltd. are secured by first paripassu charged on all current assets and movable assets (except those pertaining to the charged in favour of term lenders) and second charge on all immovable assets charged in favour of term lenders. Further, the Immovable assets of Premium Writing Products(PWP) has been charged to the lenders through a guarantee by PWP pending transfer of immovable property to the Company. Also, personal guarantee of Mr. Rajesh Kumar Drolia and Mrs. Anita Drolia have been provided.

12. Names of small scale Industries against whom accounts outstanding for more than 30 days at the end of the year, (to the extent such parties have been identified from available information) (witihin terms of payment);

(a) Hi Shine Inks Pvt Ltd (Rs.91.53 lacs);

(b) Coburg Print & Pack(Rs.5.81 lacs)

(c) Alok Master Batches Ltd(Rs. 1.86 lacs);

(d) Colourtek (India) Ltd.(Rs. 0.78 lacs)

(e) Bulbul Master Batches Pvt. Ltd(Rs.3.58 lacs); (f) Jacuzi Pharma (Rs.9.52 lacs)

(g) Shree Extrusion Ltd. (Rs.20.22 lacs)

Note: The outstanding amounts to the above parties are not due for payment as per the terms and conditions of purchase orders.

13. Trade deposits being unsecured are taken from debtors parties as per the norms of the business and Short Loan taken from banks fr institutions are termed as unsecured because these are secured by Promoters Shares, personal Guarantee of Directors and assets of third parties.

14. Figures in brackets are in respect of previous year.

15. Previous years figure have been regrouped/rearranged wherever necessary.

16. The Company has allotted 20,00,000 warrants on July 11, 2008. However the Warrant holders have not opted to subscribe for equity shares. Therefore amount received on allotment of Rs. 1,60,00,000 is forfeited as per Clause 13.1.2.3(c) of the SEBI (Disclosure & Investor Protection) Guidelines, 2000.

 
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