Notes to Accounts of Malu Paper Mills Ltd.

Mar 31, 2018

Nature and description of reserve

(i) General Reserve - General reserve are free reserves of the company which are kept aside out of company’s profits to meet the future requirements as and when they arise. The Company had transferred a portion of the profit after tax (PAT) to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

(ii) Retained Earnings - Retained earnings are the accumulated profits earned by the Company till date, less transfer to general reserves, dividend (including dividend distribution tax) and other distributions made to the shareholders.

(iii)Security Premium: It is created from amount collected on issue of shares in excess of the face value of such shares.

(iv) Capital Grant: It is the value of deferred government grant to be recognised in Profit and Loss account over the period in which the entity recognises the related interest on the value of deffered sales tax liability which the grant is intended to compensate.

(Loans of Sr. No a (i) to (v) of Note 16 are secured by :

1. Primary : First paripassu charge on the entire Curent Assets of the Company both present & future.

2. Collateral : Second pari pasu charge on entire Fixed assets of the company and second pari passu charge by way of equitable mortgage of Land and Plant & Machinery of Solar Carbon Pvt Ltd.

3. Guarantee : Personal guarantee of Directors Shri Punamchand Malu & Shri Banwarilal Malu and corporate guarantee of Solar Carbons Pvt Ltd.)

4. Pledge of Promoters Shareholding to the extent of 51% of the paid up capital of the Company.

NOTE : 1 SEGMENT INFORMATION :

The Company operates in only one main segment i.e. manufacturing of paper. Since the company has only one reportable business segment and geographical segment, no further disclosure is required as per the Indian Accounting Standard 108-Operating Segment.

NOTE : 2 EARNING PER SHARE (EPS)

EPS is calculated by dividing the earning available for equity shareholders or loss attributable to equity shareholders by the weighted average number of equity shares outstanding the year. Numbers used for calculating basic and diluted earnings per equity share are as stated below :

NOTE : 3 Financial Instrument-Accounting Classifications and fair value Measurements

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

The following methods and assumptions were used to estimate the fair values:

1 Fair Value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to the short term maturities of these instruments.

2 Financial instruments with fixed and variable interest rates are evaluated by the company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to the account for the expected losses of these receivables.

The company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2: Other techniques for which all inputs which have a signifi cant eff ect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a signifi cant eff ect on the recorded fair value that are not based on observable market data.

NOTE : 4 Financial Risk Management Objectives and Policies :-

The Company’s financial risk management is an integral part of how to plan and execute its business strategies :-

a) Market Risk :-

Market risk is the risk of loss of future earnings, or future cash flows arising out of changes in Market Conditions of Paper Industry, which include changes in prices of Raw Material (indigeneously procured as well as import) .

The company manages market risk through evaluation and identification of risk factors with the object of governing/mitigating them according to Company’s objectives and declared policies in specific context of impact thereof on operating performance of the company. The Board provides oversight and reviews the Risk management policy on regular basis.

b) 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 is not exposed to signifi cant interest rate risk as at the respective reporting dates.

c) Foreign currency risk :-

The Company operates internationally with transactions entered into several currencies.Still the Company is not exposed to foreign exchange risk as there are no financial instruments to be settled in foreign currency.

d) Credit Risk :-

Credit risk arising from trade receivables is managed in accordance with the Company’s established policy with regard to credit limits, control and approval procedures. The Company provides for expected credit losses on trade receivables based on a simplified approach as per Ind AS 109. Under this approach, expected credit losses are computed basis the probability of defaults over the lifetime of the asset. This allowance is measured taking into account credit profile of the customer, geographical spread, trade channels, past experience of defaults, estimates for future uncertainties etc.

e) 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 a reasonable price. As per regular reviews by management.the company is not facing any liquidity risk.

NOTE: 5 OTHERS:

a Balances in various personal accounts remain unverified since confirmations from the parties are awaited.

b The current assets, loans and advances are approximately of the values stated if realized in the ordinary course of business. The provision for depreciation and

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

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Mar 31, 2016

1 (Loans of Sr. No a (i) to (v) of Note 4 are secured by :

1. Primary : First paripassu charge on the entire Fixed Assets of the Company both present & future.

2. Collateral : Second pari pasu charge on entire current assets of the company and First pari passu charge by way of equitable mortgage of Land and Plant & Machinery of Solar Carbon Pvt Ltd.

3. Guarantee : Personal guarantee of Directors Shri Punamchand Malu & Shri Banwarilal Malu and corporate guarantee of Solar Carbons Pvt Ltd.)

4. Pledge of Promoters Shareholding to the extent of 51% of the paid up capital of the Company.

5 (Loans of Sr. No a (vi) and (viii) of Note 4 are secured by hypothecation of vehicle of company.)

6 In the financial year 2011-12, Loans of Sr. No. a (i) to (v) of Note 4 are restructured under the Corporate Debts Restructure (CDR) mechanism.

Deferred Sales Tax Liability includes:

(7) Interest free deferred Sales Tax Liability amounting to Rs. 1664.62 Lacs (PY Rs 1627.09) has been outstanding at the year end. During the year company has availed further deferred sales tax liability in Kraft Division of Rs.37.53 Lacs (PY Rs. 37.62 Lacs)

(8) The repayment of the Deferred sales tax liability will be made after 31.03.2016 as per the schedule.

(Loans of Sr. No a (i) to (v) of Note 7 are secured by :

9. Primary : First paripassu charge on the entire Curent Assets of the Company both present & future.

10. Collateral : Second pari pasu charge on entire Fixed assets of the company and second pari passu charge by way of equitable mortgage of Land and Plant & Machinery of Solar Carbon Pvt Ltd.

11. Guarantee : Personal guarantee of Directors Shri Punamchand Malu & Shri Banwarilal Malu and corporate guarantee of Solar Carbons Pvt Ltd.)

12. Pledge of Promoters Shareholding to the extent of 51% of the paid up capital of the Company.

b The information required to be disclosed under Micro, Small & Medium Enterprises Development Act, 2006 is not available with the Company.

NOTE 13 SEGMENT INFORMATION :

The Company operates in only one main segment i.e. manufacturing of paper. Since the company has only one reportable business segment and geographical segment, no further disclosure is required as per the Accounting Standard 17 on Segment Reporting.

NOTE 14 EARNING PER SHARE (EPS)

EPS is calculated by dividing the earning available for equity shareholders or loss attributable to equity shareholders by the weighted

NOTE 15 OTHERS:

a Balances in various personal accounts remain unverified since confirmations from the parties are awaited.

b The current assets, loans and advances are approximately of the values stated if realized in the ordinary course of business. The provision for depreciation and all known liabilities are adequate and not in excess of the amount considered reasonably necessary.

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

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Mar 31, 2015

A. Rights, preference 6s restriction attached to Equity Shares

The company has only one class of equity Share. Each Shareholder is eligible for one vote per share. In the event of liquidation of company, the shareholders are entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution shall be in proportion to number of equity shares held by the shareholder.

1 (Loans of Sr. No a (i) to (v) of Note 4 are secured by :

1. Primary : First paripassu charge on the entire Fixed Assets of the Company both present & future.

2. Collateral : Second pari pasu charge on entire current assets of the company and First pari passu charge by way of equitable mortgage of Land and Plant & Machinery of Solar Carbon Pvt Ltd.

3. Guarantee : Personal guarantee of Directors Shri Punamchand Malu & Shri Banwarilal Malu and corporate guarantee of Solar Carbons Pvt Ltd.)

4. Pledge of Promoters Shareholding to the extent of 51% of the paid up capital of the Company.

2 (Loans of Sr. No a (vi) and (viii) of Note 4 are secured by hypothecation of vehicle of company.)

3 In the financial year 2011-12, Loans of Sr. No. a (i) to (v) of Note

4 are restructured under the Corporate Debts Restructure (CDR) mechanism.

(Loans of Sr. No a (i) to (v) of Note 7 are secured by :

1. Primary : First paripassu charge on the entire Curent Assets of the Company both present & future.

2. Collateral : Second pari pasu charge on entire Fixed assets of the company and second pari passu charge by way of equitable mortgage of Land and Plant & Machinery of Solar Carbon Pvt Ltd.

3. Guarantee : Personal guarantee of Directors Shri Punamchand Malu & Shri Banwarilal Malu and corporate guarantee of Solar Carbons Pvt Ltd.)

4. Pledge of Promoters Shareholding to the extent of 51% of the paid up capital of the Company.

NOTE 2. SEGMENT INFORMATION :

The Company operates in only one main segment i.e. manufacturing of paper. Since the company has only one reportable business segment and geographical segment, no further disclosure is required as per the Accounting Standard 17 on Segment Reporting.

NOTE 3. OTHERS:

a Balances in various personal accounts remain unverified since confirmations from the parties are awaited.

b The current assets, loans and advances are approximately of the values stated if realized in the ordinary course of business. The provision for depreciation and all known liabilities are adequate and not in excess of the amount considered reasonably necessary.

c The company has revised depreciation rates on fixed assets effective 1st April, 2014 in accordance with requirements of schedule II of Companies Act 2013 ("the Act"). The remaining useful life has been revised by adopting standard useful life as per New Companies Act, 2013. The carrying amount as on 1st April 2014 is depreciated over the remaining useful life. As a result of this changes the depreciation charged for the year ended 31st March 2015 is lower by Rs. 1,64,39,968/-.

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

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Mar 31, 2014

NOTE 1 SEGMENT INFORMATION :

The Company operates in only one main segment i.e. manufacturing of paper. Since the company has only one reportable business segment and geographical segment, no further disclosure is required as per the Accounting Standard 17 on Segment Reporting.

NOTE 2 CONTINGENT LIABILITIES :

Bank Guarantee Outstanding 14,423,377 13,494,775

Letter of Credit/Buyer''s Credit 113,431,776 116,201,000

Bonds Executed in Favour of Government Authorities in respect of EPCG Licence towards 61,401,000 61,401,000 duty saved against which Export obligation has to be made.

NOTE 3 OTHERS:

a Balances in various personal accounts remain unverified since confirmations from the parties are awaited.

b The current assets, loans and advances are approximately of the values stated if realized in the ordinary course of business. The provision for depreciation and all known liabilities are adequate and not in excess of the amount considered reasonably necessary.

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

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Mar 31, 2013

NOTE 1 SEGMENT INFORMATION :

The Company operates in only one main segment i.e. manufacturing of paper. Since the company has only one reportable business segment and geographical segment, no further disclosure is required as per the Accounting Standard 17 on Segment Reporting.

NOTE 2 CONTINGENT LIABILITIES :

Bank Guarantee Outstanding 13,494,775

Letter of Credit 116,201,000

Bonds Executed in Favour of Government Authorities in respect of EPCG Licence towards duty saved against which Export 61,401,000 ogligation has to be made.

NOTE 3 OTHERS :

a Balances in various personal accounts remain unverified since confirmations from the parties are awaited.

b The current assets, loans and advances are approximately of the values stated if realized in the ordinary course of business. The provision for depreciation and all known liabilities are adequate and not in excess of the amount considered reasonably necessary.

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

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Mar 31, 2012

A Rights, preference & restriction attached to Equity Shares

The company has only one class of equity Share. Each Shareholder is eligible for one vote per share. In the event of liquidation of company, the shareholders are entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution shall be in proportion to number of equity shares held by the shareholder.

1 (Loans of Sr. No a (i) to (v) of Note 4 are secured by :

1. Primary : First paripassu charge on the entire Fixed Assets of the Company both present & future.

2. Collateral : Second pari pasu charge on entire current assets of the company and First pari passu charge by way of equitable mortgage of Land and Plant & Machinery of Solar Carbon Pvt Ltd.

3. Guarantee : Personal guarantee of Directors Shri Punamchand Malu & Shri Banwarilal Malu and corporate guarantee of Solar Carbon Pvt Ltd.)

2 (Loans of Sr. No a (vi) and (vii) of Note 4 are secured by hypothecation of vehicle of company.)

3 During the financial year 2011-12, Loans of Sr. No. a (i) to (v) of Note 4 are restructured under the Corporate Debts Restructure (CDR) mechanism.

((Loans of Sr. No a (i) to (iii) of Note 5 are secured by :

(1) Primary : First pari passu charge by way of hypothecation on entire current assets of the Company including Raw Materials, Finished Goods, Stock In Process and Book Debts.

(2) Collateral : Second pari passu charge on the entire Fixed Assets of the Company and First pari passu charge by way of equitable mortgage of Land and Plant & Machineiy of Solar Carbon Pvt Ltd.

(3) Personal guarantee of Directors Shri Punamchand Malu & Shri Banwarilal Malu and corporate guarantee of Solar Carbon Pvt Ltd.)

NOTE 1 SEGMENT INFORMATION :

The Company operates in only one main segment i.e. manufacturing of paper. Since the company has only one reportable business segment and geographical segment, no further disclosure is required as per the Accounting Standard 17 on Segment Reporting.

NOTE 2 CONTINGENT LIABILITIES :

Bank Guarantee Outstanding 13,240,938

Letter of Credit 84,530,000

Bonds Executed in Favour of Government Authorities in respect of EPCG Licence towards duty saved 61,401,000 against which Export ogligation has to be made.

NOTE 3 OTHERS:

a Balances in various personal accounts remain unverified since confirmations from the parties are awaited.

b The current assets, loans and advances are approximately of the values stated if realized in the ordinary course of business. The provision for depreciation and all known liabilities are adequate and not in excess of the amount considered reasonably necessary.

c The Revised Schedule VI has become effective from 1 April 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.