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Notes to Accounts of West Coast Paper Mills Ltd.

Mar 31, 2022

The Board of Directors of the Company recommended a Dividend of '' 6.00/- per share (for the year ended March 31,2021 dividend of '' 1.00/- per share) be paid on fully paid Equity Shares. This equity dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The total equity dividend to be paid is '' 3962.93 Lakhs (for the year ended March 31,2021 dividend '' 660.49 Lakhs ).

a. Security Premium Account : This Reserve represents the premium on issue of shares and can be utilised 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 measurement of defined benefit obligations. This reserve can be utilised in accordance with the provisions of the Companies Act, 2013.

c. Capital Redemption Reserve : This Reserve has been created in relation to issuance of debentures and can be utilised in accordance with the provisions of the Companies Act, 2013.

d. Equity Share Warrant Forfeited: This Reserve represents forfeiture of share warrant by failing to meet purchase requirements and can be utilised in accordance with the provisions of the Companies Act, 2013.

e. General Reserve : This Reserve created by an appropriation from one component of Equity (generally retained earnings) to another, not being an item of Other Comprehensive Income. The same can be utilised by the Company in accordance with the provisions of the Companies Act, 2013.

f. Other Comprehensive Income: Other Comprehensive Income is created in compliance with Ind AS notified under the Companies (Indian Accounting Standard) Rules, 2015, as amended.

Nature of Security

Term loans

1 ECB Euro Loan from Standard Chartered Bank (SCB) is secured by way of a first charge on the movable fixed assets of the Company pertaining to the Paper Division at Dandeli ranking pari passu with other term loan facilities and Short Term Loan from SCB.

2 ECB USD loan from Axis Bank Ltd is secured by way of first charge on company''s movable fixed assets including plant & machinery of Paper Division at Dandeli, ranking pari passu with Short Term Loan from SCB.

3 Term loans from ICICI Bank are secured by way of first pari-passu charge on entire movable fixed assets of the Company (excluding assets pertaining to cable division), both present and future.

As at

March 31, 2022

March 31, 2021

Note 38 | CONTINGENT LIABILITIES AND COMMITMENTS

Contingent Liabilities & Commitments

a. Contingent Liabilities :

I. Claims against the Company not acknowledged as debts in respect of

a. Income tax matters, pending decisions on various appeals

2,831.35

3,012.30

made by the Company and by the Department (refer Note I below) (refund adjusted against demand '' 657 Lakhs, Previous Year '' 664 Lakhs)

b. Excise matters & Service Tax under dispute

87.81

89.63

c. Custom matter under dispute

540.27

540.27

d. Other matters under dispute

82.78

82.78

II. Other money for which the company is contingently liable :

- Corporate Guarantee given to Subsidiary''s Bankers (at the close of the year)

-

337.50

b. Commitments :

I. Estimated amount of contracts remaining to be executed on Capital account and not provided for (net of advance of '' 261.00 Lakhs - Previous Year '' 865.53 Lakhs)

1,658.79

420.99

I. Income Tax

a. The Income Tax assessments of the Company have been completed up to AY 2017-18.

b. In the books of Accounts, the company is accounting Income tax refunds after adjustment of tax demands by IT authorities, if any. The matters are pending before High Court and ITAT for various issues. Based on legal opinion the Company is contesting those tax demands/ disallowances at appropriate level. The company has therefore not recorded adjustment of taxes/order in books.

c. MATERIAL DEMANDS AND DISPUTES CONSIDERED AS "REMOTE" BY THE COMPANY:

The Company claimed deduction under Section 80 IA of the Income Tax Act 1961 in its return of Income for Power Undertaking for Financial Year 1998-99 to 2020-21 and for Effluent (Water) treatment for financial year 1997-98 to 2020-21. The assessing officer disallowed the benefit of deductions at assessment stage. Company had preferred appeals with Commissioner Appeals and / or ITAT. The ITAT partly allowed the appeals of the company. Department / Company have preferred appeal against the order of ITAT. As advised by legal advisors, Company has a strong case / merit for claiming the deduction and thus expects a favorable outcome.

d. The total demand outstanding as on 31.03.2022 on account of income tax dues is '' 2831.35 lakhs ('' 3012.30 lakhs), net of tax paid/adjusted under protest '' 657 Lakhs.

Note 39 | LOAN PURCHASE AGREEMENT_

The Company had entered into a loan purchase agreement with ICICI Bank Ltd. for '' 4000 Lakhs in respect of borrowings of Shree Rama Newsprint Limited (SRNL) after sale of its investment in shares of SRNL. The loan purchase agreement stipulates that upon occurrence of default ICICI Bank Ltd. will have "a right" to require the Company to purchase the loan outstanding of SRNL along with transfer of underlying security by ICICI Bank Ltd., to the Company. The outstanding balance as at March 31,2022 of SRNL loan is '' 3202.84 Lakhs with principal repayment due by June 30, 2025. The Company does not foresee any event of default, further the security value is significantly higher than the outstanding loan balance and hence no liability is envisaged in this respect.

Note 40 |_

During the previous year, a supplier has made an unsubstantiated claim of approximately '' 3600 Lakhs against the Cable division of the company for alleged breach of contract and has initiated Arbitration proceedings against the company. Based on the available facts of the case, the company has been legally advised that they have a strong case to defend, basis which the management presently does not envisage any material liability in this regard.

Pursuant to Accounting Ind AS 108 - Segment Reporting, information about Business Segments (Information provided in respect of revenue items for the year ended March 31, 2022 and in respect of assets / liabilities as at March 31, 2022 ) is disclosed as under :

a) Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable”.

b) Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as " Unallocable”.

1 Financial Risk

The company''s operational activities expose to various financial risks i.e., market risk, credit risk and risk of liquidity. The company realizes that risks are inherent and integral aspect of any business. The primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk & interest rate risk. The Company uses derivative financial instruments to reduce foreign exchange risk exposures. i Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of fluctuation in market prices. These comprise three types i.e., currency rate, interest rate and other price related risks. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. 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. Regular interaction with bankers, intermediaries and the market participants help us to mitigate such risk. a Foreign currency risk and sensitivity

The primary market risk to the company is foreign exchange risk. The Company uses derivative financial instruments to reduce foreign exchange risk exposure and follows its risk management policies to mitigate the same. After taking cognizance of the natural hedge, the company takes appropriate hedges to mitigate its risk resulting from fluctuation in foreign currency exchange rate(s).

b. Interest rate risk and sensitivity

The Company''s exposure to the risk of changes in market interest rates relates primarily to long term debt. The Company has entered into various interest rate swap contracts, in which it agrees to exchange, at specific intervals, the difference between fixed and variable interest amounts calculated by reference to an agreed upon principal amount. Borrowings at variable rates expose the Company to cash flow interest rate risk. With all other variables held constant, the following table demonstrates composition of fixed and floating rate borrowing of the company and impact of floating rate borrowings on company''s profitability.

ii Credit Risk

The Company evaluates the customer credentials carefully from trade sources before appointment of any distributor and only financially sound parties are appointed as distributors. The Company secures adequate deposits from its distributor and hence risk of bad debt is limited. The credit outstanding is sought to be limited to the sum of advances / deposits and credit limit determined by the company. The company have stop supply mechanism in place in case outstanding goes beyond agreed limits.

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to '' 8923.38 Lakhs and '' 8836.67 Lakhs as of March 31, 2022 and March 31,2021, respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers primarily located in India. Credit risk has always been managed by the company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account as per the Company''s historical experience for customers.

The following table gives details in respect of percentage of revenues generated from top customer and top five customers:

Liquidity risk arises when the Company will not be able to meet its present and future cash and collateral obligations. The risk management action focuses on the unpredictability of financial markets and tries to minimise adverse effects. The Company uses derivative financial instruments to hedge risk exposures. Risk management is carried out by the Finance department under Forex Policies as adopted and duly approved by the Board. The Company''s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due and company monitors rolling forecasts of its liquidity requirements.

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.

Note 59 OTHER STATUTORY INFORMATION

a) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

b) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

c) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediary shall;

i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or

ii. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

d) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall;

i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

ii. Provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

e) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as search, survey or any other relevant provisions of the Income Tax Act, 1961)

f) The Company has complied with number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction of number of layers) Rules, 2017.

g) The Company is not declared wilful defaulter by any bank or financial institutions or lender during the year.

h) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

i) Quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

j) The Company has not carried out revaluation of items of property, plant & Equipment during the year and

accordingly the disclosures as to whether the revaluation is based on the valuation by a registered valuer as defined under Rule (2) of the Companies (Registered valuers and valuation ) Rules, 2017 is not applicable.

k) The Company has used the borrowings from banks and financial statements for the specific purpose for which it was obtained.

l) The title deeds of all immovable properties (other than immovable properties where the Company is the lessee, and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment and capital work in progress are held in the name of the Company as at the balance sheet date.

m) The Company does not have any transactions with companies which are struck off under Section 288 of the Companies Act 2013 or Section 560 of Companies Act, 1956 during the financial year.

Note 60 Due to disruptions on account of 2nd wave of COVID-19 pandemic, the business was impacted in the initial period of the year, which has however substantially improved thereafter. The Company has made an assessment of possible impacts that may result from the COVID-19 pandemic on the carrying value of Property Plant & Equipment, Investments, MAT credit entitlements and other current and non-current assets, considering the internal and external information available and has concluded that no material adjustments are required at this stage in the financial statements. However, due to uncertainties around COVID 19, the eventual impact of it may differ from that estimated as at the date of approval of these financial statements and the Company will continue to closely monitor any material changes to future economic conditions.

Note 61 | Previous year''s figures have been regrouped and reclassified wherever necessary._

Note 62 The financial statements are approved and adopted by Board of Directors of the Company in their meeting held on May 26, 2022.

The accompanying notes are an integral part of the standalone financial statements.


Mar 31, 2018

I. The Company Overview:

West Coast Paper Limited, a Public Limited Company listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited. The registered office of the Company is situated at Bangur Nagar, Dandeli 581325 District Uttar Kannada, Karnataka. The Company was established in 1955. The Company has two business activities: Paper & Paper Board at Dandeli and Optical Fibre Cable at Mysore. The Company’s Dandeli Plant is integrated Pulp & Paper Plant and produce various type of quality Paper & Paper Board. This caters to needs of innumerable industries in printing, writing, publishing, stationary, notebooks and packaging sectors in India. The Company strongly believes on Continuous Improvement in product quality, reduction in cost, and Environment Management. The Company is ISO 90012015, ISO 14001-2015 FSC (R) & OHSAS 18000-2007. The Company’s Mysore Plant produces Optical Fibre Cable which cater requirement of telecom sector of India.

These financial statements were approved and adopted by Board of Directors of the Company in their meeting held on May 21, 2018.

II. Basis of Preparation of Financial Statements:

a) Statement of Compliance:

The Financial Statements of the Company, are prepared in accordance with the Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis.The Ind AS are prescribed under section 133 of the Companies Act, 2013, and the relevant provisions thereof.

b) Basis of Preparation:

Accounting policies have been consistently applied except where a newly issued Accounting Standard is initially adopted or a revision to an existing Accounting Standard requires a change in the accounting policy hitherto in use.The Company has prepared these Financial Statements as per the format prescribed in Schedule III to the Companies Act, 2013.

c) Functional and Presentation Currency:

The Financial Statements have been presented in Indian Rupees (INR), which is the Company’s functional currency. All financial information presented in INR has been rounded off to the nearest two decimals of Lakhs unless otherwise stated.

d) use of Estimates:

The preparation of the Financial Statements in conformity with the Ind AS requires Management to make estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities, disclosure of contingent liabilities as on the date of the Financial Statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

e) Classification of Assets and Liabilities as Current and Non-Current:

All Assets and Liabilities have been classified as Current or Non-Current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of product & activities of the Company and their realisation in cash and cash equivalent, the Company has determined its operating cycle as twelve months for the purpose of Current and Non-Current classification of assets and liabilities. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

1. Buildings are constructed on leasehold land for which company pays only ground rent except non-factory buildings worth Rs.188.03 Lakhs (Previous Year Rs.188.03 lakhs) being the cost of ownership premises.

2. Lease hold land represents the amount paid to Karnataka Industrial Area Development Board (KIADB), Bangalore against allotment of land at Kesaroli Village Haliyal on Lease cum sale basis.

3. During the current year, foreign exchange fluctuation gain amounting to Rs.18.70 Lakhs (Previous year Rs.105.17 Lakhs) has been capitalized to the block of plant & machinery pursuant to Notification no. G.S.R. 913(E) dated 29.12.2011, applicable up to March 31, 2020. Notional exchange rate variation capitalized till 31.03.2018 is Rs.1779.97 Lakhs. Other borrowing cost capitalised is Rs.77.48 Lakhs (Previous Year : ‘ Nil).

Rights, preference and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs.2 per share. Each Shareholder is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of all preferential amounts, in proportion of their shareholding.

The Board of Directors of the Company recommended a Dividend of Rs.4/- per share (for the year ended 31st March 2017 dividend of Rs.2.50/- per share) be paid on fully paid Equity Shares. This equity dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The total equity dividend to be paid is Rs.26,41,95,632/- (for the year ended 31st March 2017 dividend Rs.16,51,22,270/-).

Dividend Distribution Tax being Rs.5,37,84,026/- (for the year ended 31st March 2017 Rs.3,36,15,016/-).

a. Security Premium Account : This Reserve represents the premium on issue of shares and can be utilised 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 measurement of defined benefit obligations. This reserve can be utilised in accordance with the provisions of the Companies Act, 2013.

c. Capital Redemption Reserve : This Reserve has been transferred to the Company in the course of business combinations and can be utilised in accordance with the provisions of the Companies Act, 2013.

d. Equity Share Warrant Forfeited: This Reserve represents forfeiture of share warrant by failing to meet purchase requirements and can be utilised in accordance with the provisions of the Companies Act, 2013.

e. General Reserve : This Reserve created by an appropriation from one component of Equity (generally retained earnings) to another, not being an item of Other Comprehensive Income. The same can be utilised by the Company in accordance with the provisions of the Companies Act, 2017.

f. Other Comprehensive Income: Other Comprehensive Income is created in compliance with Ind AS notified under the Companies (Indian Accounting Standard) Rules, 2015, as amended.

Nature of security

1 Loan from Axis Bank Ltd., is secured by way of first charge on Plant and Machinery of Dandeli Plant on pari passu basis with IFC and Standard Chartered Bank.

2 ECB Loan from Standard Chartered Bank is secured by way first charge on Plant and Machinery of Dandeli Plant on pari passu with IFC and Axis Bank.

3 Term loan from IFC, Washington is secured by way of hypothecation on all movable fixed assets both present and future and are secured by equitable mortgage of immovable assets, both present and future on pari passu basis.

4 Interest free loan under Sales Tax Deferral Scheme is being repaid in 12 yearly installments starting from June 2014.

5 There is no default in repayment of loans and interest.

Notes :

I Income Tax

a. The Income Tax assessments of the Company have been completed up to AY 2014-15.

b. In the books of Accounts, the company is accounting Income tax refunds after adjustment of tax demands by IT authorities, if any. The matters are pending before High Court and ITAT for various issues. Based on legal opinion the Company is contesting those tax demands/ disallowances at appropriate level. The company has therefore not recorded adjustment of taxes/order in books.

c. MATERIAL DEMANDS AND DISPUTES CONSIDERED AS “REMOTE” BY THE COMPANY:

The Company is entitled for benefit under Section 80 IA of the Income Tax Act 1961 for Power and Steam generation. Company has availed benefit of deduction under this section in various returns for the year 1999-00 to 2013-14. The assessing officer has dis-allowed the benefit of deductions. Company had preferred appeals with Commissioner Appeals and / or ITAT. The ITAT has set aside the order of the Assessing officer. Department has preferred appeal against the order of ITAT. As advised by legal advisors, Company has a strong case / merit for claiming the deduction and thus expects a favourable outcome.

d. The total demand outstanding as on 31.03.2018 on account of income tax dues is ‘ NIL (Rs.19.74 lakhs ), net of tax paid/adjusted under protest Rs.2,284 lakhs.

II Loan Purchase Agreement

The Company had entered into Share Purchase Agreement with Riddhi Siddhi Gluco Biols Ltd., (Acquirer) on 21.05.2015 for sale of its Long Term Investments of 2,11,24,791 equity shares of Shree Rama Newsprint Ltd. (SRNL). Accordingly a Loan Purchase Agreement was executed for Rs. 40 Crores between company and ICICI Bank Ltd stipulating that in case SRNL defaults in payment of its debts obligation towards ICICI Bank Ltd, then the Company will have to purchase loan on notice from ICICI Bank Ltd and in such case security of the underlying agreement will be transferred to Company.

Note : Lease of 289.68 acres (116.11 Hectare) has been renewed for a further period of 30 years upto 28.06.2046. The Deputy Conservator of Forests Haliyal Division is in the process of concluding the execution of Lease Agreement. The Annual Lease rent has been fixed at Rs.5,000/- per Hectare.

1 RELATED PARTY DISCLOSURES AS PER IND AS 24

I. Relationship :

a. Associate Company

1) Speciality Coatings and Laminations Ltd

2) Fort Gloster (Upto 19.03.2018)

b. Subsidiary Company

1) West Coast Opticables Limited

c. Enterprises where principal shareholders have control

1) Veer Enterprises Ltd.

2) Shree Satyanarayan Investment Company Ltd.

3) Siddhi Trade & Holdings Pvt. Ltd.

4) Rangnath Bangur Charitable Trust

d. Key Management Personnel

1) Shri S.K.Bangur, Chairman & Managing Director

2) Shri Rajendra Jain (Executive Director)

3) Shri Brajmohan Prasad (Company Secretary)

e. Relative of Key Management Personnel 1) Shri Virendraa Bangur

f. Company in which Director is common 1) Gloster Cables Ltd

g. Non-Executive/Independent Directors on the Board

1) Shri Saurabh Bangur

2) Smt Shashi Bangur

3) Shri P N Kapadia

4) Lt.Gen.[Retd.] Utpal Bhattacharyya

5) Shri Krishna Kumar Karwa

6) Shri M P Taparia

7) Shri Amitav Kothari

8) Shri Sudharshan Somani (w.e.f 10.11.2017)

2 segment information

Pursuant to Accounting Ind AS 108 - Segment Reporting, information about Business Segments ( Information provided in respect of revenue items for the year ended 31.03.2018 and in respect of assets / liabilities as at 31.03.2018 is disclosed as under :

a) Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “Unallocable”

b) Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Investments, tax related assets and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as “ Unallocable”

3 Management expects that it would earn sufficient taxable income in future and therefore will be in a position to pay normal tax within the period specified under the Income Tax Act, 1961 and accordingly MAT credit entitlement of Rs.12022.98 lakhs (Current Year Rs.4,550.72 - Previous year Rs.7,852.53) has been recognized.

4 As per Ind AS 41 on “Agriculture” the company has fair valued its matured crops except for the crops fully maItured at its Kuluwali plantation, Karnataka, since there is an on-going litigation and same will be accounted in the books of accounts upon the final disposal of the case.

5 CHANGE IN INDIRECT TAXES

Consequent to the introduction of Goods and Service Tax Act (GST) w.e.f. 1st July 2017, Central Excise, Value Added Tax (VAT), etc have been subsumed into GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule III of the Companies Act, 2013, unlike Excise duties, levies like GST, VAT, etc are not part of Revenue. Accordingly, the figures for the periods upto 30th June, 2017 are not relatable to those thereafter.

6 EXPENDITURE INCURRED ON CORPORATE SOCIAL RESPONSIBILITIES

Details of expenditure on Corporate Social Responsibility Activities as per Section 135 of Companies Act , 2013 read with schedule III are as below :

7 MICRO, SMALL AND medium ENTERPRISES DEVELOPMENT (MSMED) ACT, 2006

Based on the information available, there are certain vendors who have confirmed that they are covered under the Micro, Small and Medium Enterprises Development Act, 2006. Disclosures as required by section 22 of The Micro, Small and Medium Enterprises Development Act, 2006, are given below :

8 INFORMATION RELATED TO CONSOLIDATED FINANCIAL STATEMENTS (IND AS 110)

The company is listed on stock exchange in India, the Company has prepared consolidated financial as required under Ind AS110, Sections 129 of Companies Act, 2013 and listing requirements. The consolidated financial statement is available on Company’s web site for public use.

9 financial risk management objectives, policies and disclosures

1 Financial Risk

The company’s operational activities expose to various financial risks i.e., market risk, credit risk and risk of liquidity. The company realizes that risks are inherent and integral aspect of any business. The primary focus is to foresee the unpredictabillity of financial markets and seek to minimize potential adverse effects on its financial performace. The primary market risk to the Company is foreign exchange risk & interest rate risk. The Company uses derivative financial instruments to reduce foreign exchange risk exposures.

i Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of fluctuation in market prices. These comprise three types i.e., currency rate, interest rate and other price related risks. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. 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. Regular interaction with bankers, intermediaries and the market participants help us to mitigate such risk.

a Foreign currency risk and sensitivity

The primary market risk to the company is foreign exchange risk. The Company uses derivative financial instruments to reduce foreign exchange risk exposure and follows its risk management policies to mitigate the same. After taking cognizance of the natural hedge, the company takes appropriate hedges to mitigate its risk resulting from fluctuation in foreign currency exchange rate(s).

b. Interest rate risk and sensitivity

The Company’s exposure to the risk of changes in market interest rates relates primarily to long term debt. The Company has entered into various interest rate swap contracts, in which it agrees to exchange, at specific intervals, the difference between fixed and variable interest amounts calculated by reference to an agreed upon principal amount. Borrowings at variable rates expose the Company to cash flow interest rate risk. With all other variables held constant, the following table demonstrates composition of fixed and floating rate borrowing of the company and impact of floating rate borrowings on company’s profitability.

ii Credit Risk

The Company evaluates the customer credentials carefully from trade sources before appointment of any distributor and only financially sound parties are appointed as distributors. The Company secures adequate deposits from its distibutor and hence risk of bad debt is limited. The credit outstanding is sought to be limited to the sum of advances / deposits and credit limit determined by the company. The company have stop supply mechanism in place in case outstanding goes beyond agreed limits

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs.11,892.79 Lakhs and Rs.12,831.13 Lakhs as of March 31, 2018 and March 31, 2017, respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers primarily located in India. Credit risk has always been managed by the company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account as per the Company’s historical experience for customers.

The following table gives details in respect of percentage of revenues generated from top customer and top five customers:

iii Liquidity Risk

Liquidity risk arises when the Company will not be able to meet its present and future cash and collateral obligations. The risk management action focuses on the unpredictability of financial markets and tries to minimise adverse effects. The Company uses derivative financial instruments to hedge risk exposures. Risk management is carried out by the Finance department under Forex Policies as adopted and duly approved by the Board. The Company’s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due and company monitors rolling forecasts of its liquidity requirements.

2 Competition and price risk

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.

3 Capital risk management

The Company’s policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to sustain future development. Capital includes issued capital, share premium and all other equity reserves attributable to equity holders. In order to strengthen the capital base, the company may use appropriate means to enhance or reduce capital, as the case may be.

10 derivative financial instruments

a The company has variable interest foreign currency borrowings, to offset the risk of variation in interest rates, the company has entered into, fix pay and variable receipt, interest rate swaps, these swap contracts are in US Dollar. Outstanding amortised notional value of loan for swap contracts and MTM taken there on are as follows :

b Foreign currency exposure not hedged as at the Balance Sheet date

The foreign currency exposures that have not been specifically hedged by a derivative instrument or otherwise are given below:

11 GOVERNMENT GRANT

Company had availed Interest Free Loan under Sales Tax Deferment Scheme from State Government of Karnataka which is repayable in 10 yearly instalments. Such sales tax deferment was recorded at historical cost till year ended March 2017. During the year, considering the recommendation given in Ind As Transition Facilitation Group (“ITGF”) bulletin 12, Company had changed the policy to account for the same at Fair Value as required under Ind AS 20 - Government Grant. The difference in fair value and book value is accounted for as Government Grant to be apportioned over the balance deferral period. Impact of change in accounting policy is as under:

12 Previous year’s figures have been regrouped and reclassified wherever necessary


Mar 31, 2017

Notes :

1. The Income tax assessments of the Company have been completed up to AY 2013-14.

2. The total demand outstanding as on 31.3.2017 on account of income tax dues is Rs, 19.74 lakhs. (Rs, 271.18 lakhs). The Company is expecting further refund from Income Tax Department as a result of favourable orders of Income Tax Appellate Tribunal and the said demand of Rs, 19.74 lakhs will get adjusted against the refund due to the Company.

3. The Company and the Income Tax Department are in appeal before the appellate authorities in respect of various years. Since most of the issues raised in these years are already covered by the decision of HonRs,ble Income Tax Appellate Tribunal in Company''s favour, the Company has been legally advised that the demands are likely to be either deleted or substantially reduced in the appeals before Appellate Authorities and in view of this, the Company has decided to adjust the excess/short provision, if any, after the appeals are disposed off.

4. The Company and the Income Tax Department are in appeal before the High Court of Bombay on various grounds decided by the Income Tax Appellate Tribunal. The Company has therefore not recorded adjustment of taxes/orders in the books.

5. The Company had entered into Share Purchase Agreement with Riddhi Siddhi Gluco Biols Ltd., ("Acquirer") on 21.05.2015 for sale of its Long Term Investments of 2,11,24,791 equity shares of Shree Rama Newsprint Ltd.(SRNL).

(All amounts of '' in Lakhs, except share data and unless otherwise stated) Accordingly a Loan Purchase Aggrement was executed for Rs, 40 crores between the company and ICICI bank Ltd stipulating that in case SRNL defaults in payment of its debts obligation towards ICICI Bank Ltd, then the Company will have to purchase loan on notice from ICICI Bank Ltd and in such case security of the underlying agreement will be transferred to the Company.

Note : Lease agreement for factory land measuring 289.68 acres has expired on 28.06.2016. The company has applied to the Govt. for renewal of the lease agreement. The same is pending for the renewal as on 31.03.2017. Lease payments not later than 1 year, 1 - 5 years & more than 5 years has been considered on the basis of 25% increase in current lease rent paid to Govt. Increase has been worked out as per the past trend for renewed lease.

Note 6 RELATED PARTY DISCLOSURES AS PER IND AS 24

I. Relationship :

a. Associate Company

1) Fort Gloster Industries Ltd. Kolkata (FGI)

2) Speciality Coatings and Laminations Ltd

b. Enterprises where principal shareholders have control

1) Veer Enterprises Ltd.

2) Shree Satyanarayan Investment Company Ltd.

3) Siddhi Trade & Holdings Pvt. Ltd.

4) Rangnath Bangur Charitable Trust

c. Key Management Personnel

1) Shri S.K.Bangur, Chairman & Managing Director

2) Shri Rajendra Jain (Executive Director)

3) Shri Brajmohan Prasad (Company Secretary)

d. Relative of Key Management Personnel

1) Shri Virendraa Bangur,

e. Non-Executive/Independent Directors on the Board

1) Shri Saurabh Bangur

2) Smt Shashi Bangur

3) Shri P N Kapadia

4) Lt.Gen.[Retd.] Utpal Bhattacharyya

5) Shri Krishna Kumar Karwa

6) Shri M P Taparia

7) Shri Amitav Kothari

Note 7 Management expects that it would earn sufficient taxable income in future and therefore will be in a position to pay normal tax within the period specified under the Income Tax Act, 1961 and accordingly MAT credit entitlement of Rs, 7852.53 lakhs (Current Year Rs, 3654.24 - Previous year Rs, 597.74) has been recognized.

Note 8 Exceptional items of previous year represents :

The Company had entered into Share Purchase Agreement with Riddhi Siddhi Gluco Biols Ltd., ("Acquirer") on 21.05.2015 for sale of its Long Term Investments of 2,11,24,791 equity shares of Shree Rama Newsprint Ltd., for Rs, 0.75 lakhs against book value of Rs, 4540.86 lakhs subject to release of Corporate Guarantees of Rs, 24625.00 lakhs given to various banks by the Company and the Acquirer complying with the requirement of the Open Offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 or any other statutory approval. The transaction was completed on 26.08.2015 and accordingly loss of Rs, 4540.11 lakhs has been accounted in the year 2015-16.

During the year 2015-16, the Company has provided for diminution in the value of its long term trade investments in Jayashree Chemicals Ltd of Rs, 47.61 lakhs as there has been substantial reduction in the market value of these investments, which is permanent in nature.

Note :

* Permitted Receipts are transfers within factory at Dandeli from petty cash with various departments. **Permitted Payments are made to the transporters as per the notification of the government Note 54 EVENT OCCURRING AFTER BALANCE SHEET DATE

The Board of Directors has recommended Equity dividend of Rs, 2.50/- per share for the year ended 31.03.2017 (Previous year Rs, 1/- per share).

Note 9 FIRST-TIME ADOPTION OF IND-AS

Financial Statements of the company for the year ended March 31, 2017 have been prepared in accordance with Ind AS. For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 - First Time adoption of Indian Accounting Standard, with April 1, 2015 as the transition date and IGAAP as the previous GAAP.

The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended March 31, 2017 and the comparative information. An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s Balance Sheet, Statement of Profit and Loss, is set out in note. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101 have been set out in note 55.1.

10. EXEMPTIONS AVAILED ON FIRST TIME ADOPTION OF IND-AS 101

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

1. Deemed Cost exemption:

- Property, Plant and equipments:

As per Para D7AA of the Ind AS 101 "First time adoption of Indian Accounting Standards" the company has opted to continue with the carrying value for all its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments in accordance with paragraph D21 and D21A of Ind AS 101.

* Investments in associates and Joint ventures:

Company has carried out its long term investments at deemed cost only which is previous GAAP carrying amount at transition date in accordance with Para D15 of Ind As 101.

2. Decommissioning and Dismantling Liability:

Ind AS 16 "Property, plant and equipment" requires the cost of an item of property, plant and equipment to include the initial estimate of the costs of dismantling/decommissioning and removing the asset and restoring the site on which it is located. Ind AS requires the liability, both initially and subsequently, to be measured at the amounts required to -settle the present obligation at the end of the reporting period, reflecting a current market-based discount rate.

Para D21 of Ind AS 101 provides a transitional exemption to calculate the decommissioning liability as on transition date instead of initial estimate at the time of capitalization.

Company has availed the exemption provided in Para D21 and included in the depreciated cost of the asset an amount calculated by discounting the liability at the date of transition to Ind AS back to, and depreciating it from, when the liability was first incurred.

3. Long term foreign currency monetary items:

According to the Para D13AA of Ind AS 101 company being first time adopter has continued the policy adopted for accounting for exchange differences arising from translation of long term foreign currency monetary items recognized in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP.

4. Government Grants:

Para B10 of Ind AS 101 contains an exemption with regard to government loans. In accordance with exception, a first time adopter should classify the government loan received as a financial liability or an equity instrument in accordance with the Ind AS 32. A first time adopter will apply the requirements in Ind AS 109 prospectively to government grants existing at the date of transition to Ind AS. Hence company being a first time adopter has not recognized the corresponding benefit of the Government loans at a below market rate of interest on a basis consistent to Ind AS requirements. Company has used its previous GAAP carrying amount of the loan at a date of transition to Ind AS, as the carrying amount of the loan in the opening Ind AS Balance sheet.

Note 11. As per Ind AS 41 on "Agriculture" the company has fair valued its matured crops except for the crops fully matured at its kuluwali plantation, Karnataka, since there is an on-going litigation and same will be accounted in the books of accounts upon the final disposal of the case.

Note 12. Previous year''s figures have been regrouped and reclassified wherever


Mar 31, 2016

Notes :

1. The Income tax assessments of the Company have been completed up to AY 2012-13. The assessment for AY 2013-14 will be completed pursuant to the provisions of Domestic Transfer price regulations.

2. As a result of favorable orders of Income Tax Appellate Tribunal for past assessment years, the Company has received refund order of income tax and interest aggregating to Rs. 17.02 crores. Accordingly the interest amount of Rs. 6.08 crores included in the refund has been accounted in the current year.

3. The Company and the Income Tax Department are in appeal before the appellate authorities in respect of various years. Since most of the issues raised in these years are already covered by the decision of Hon''ble Income Tax Appellate Tribunal in Company''s favour, the Company has been legally advised that the demands are likely to be either deleted or substantially reduced in the appeals before Appellate Authorities and in view of this, the Company has decided to adjust the excess/short provision, if any, after the appeals are disposed off.

4. The Company and the Income Tax Department are in appeal before the High Court of Bombay on various grounds decided by the Income Tax Appellate Tribunal. The Company has therefore not recorded adjustment of taxes/orders in the books.

5 | SEGMENT INFORMATION_

Pursuant to Accounting Standard 17 - Segment Reporting, information about Business Segments (Information provided in respect of revenue items for the year ended 31.03.2016 and in respect of assets / liabilities as at 31.03.2016 is disclosed as under :

a) Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

b) Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as " Unallocable".

6. Exceptional items represents :

(a) The Company had entered into Share Purchase Agreement with Riddhi Siddhi Gluco Biols Ltd.,("Acquirer") on 21.05.2015 for sale of its Long Term Investments of 2,11,24,791 equity shares of Shree Rama Newsprint Ltd., for Rs. 0.75 lacs against book value of Rs. 4540.86 lacs subject to release of Corporate Guarantees of Rs. 24625.00 lacs given to various banks by the Company and the Acquirer complying with the requirement of the Open Offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 or any other statutory approval. The transaction was completed on 26.08.2015 and accordingly loss of Rs. 4540.11 lacs has been accounted in the current financial year.

(b) Amount recoverable from Specialty Coatings and Laminations Ltd (SPCL) of Rs. 736.02 lacs comprising of payments made to a bank towards invocation of Corporate Guarantee of Rs. 362.22 lacs and ICD along with interest of '' 373.80 granted has been written off during the financial year.

(c) The Company has provided for diminution in the value of its long term trade investments in Jayashree Chemicals Ltd of Rs. 47.61 lacs as there has been substantial reduction in the market value of these investments, which is permanent in nature.

Management expects that it would earn sufficient taxable income in future and therefore will be in a position to pay normal tax within the period specified under the Income Tax Act, 1961 and accordingly MAT credit entitlement of Rs. 4266.18 lacs (Current Year Rs. 597.94 - Previous year Rs. Nil) has been recognized.

Previous year''s figures have been regrouped and reclassified wherever necessary.


Mar 31, 2015

[a] Reconcilation of the number of shares outstanding at the beginning and at the end of the year :

[b] Rights, Preferences & restrictions attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 2 per share. Each Shareholder is eligible for one vote per share. The dividend if proposed by the Board of Directors is subject to the approval of shareholders, except in case of interim dividend (No dividend proposed for accounting year 2014-15). In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribtuion of all preferential amounts, in proportion of their shareholding.

[c] Shares in the Company held by each Shareholder holding more than 5% Shares

[d] 33,00,000 Equity Shares belonging to Promoter Group are locked-in till 14-06-2015.

1. Term loans from IFC, Washington & ICICI Bank Ltd., are secured by way of hypothecation on all movable fixed assets both present and future and are secured by equitable mortgage of immovable assets, both present and future on pari- passu basis.

2. Loan from State Bank of Mysore is secured by second charge on plant and machinery acquired / to be acquired under the project.

3. Interest free loan under Sales Tax Defferal Scheme availed from August 1994 to July 2006 of Rs. 66.88 Crores is being repaid in 12 installments of Rs. 5.57 Crores payable yearly starting from August 2006. (Balance outstanding - Rs. 11.15 Crores excluding current maturities)

Interest free loan under Sales Tax Defferal Scheme availed from June 2002 to June, 2014 of Rs. 160.98 Crores is being repaid in 12 installments on a year to year basis from 2014 to 2025. (Balance outstanding - Rs. 153.56 Crores excluding current maturities).

4. Loan of Rs. 25 Crores from IDBI Bank Ltd., (Rs. 6.25 Crores excluding current maturities) is secured by second charge on movable fixed assets whereas Loan of Rs. 25 Crores (Rs. 2.08 Crores excluding current maturities) is secured by current assets on pari-passu basis.

5. Loan from Axis Bank Ltd., is secured by second charge on movable fixed assets both present and future.

6. There is no default in repayment of loans and interest.

Note : There is no default in repayment of loans and interest.

Note :

1) Buildings are constructed on leasehold land for which the Company pays only ground rent except Non-factory buildings worth Rs. 188.03 Lacs (Rs. 188.03 Lacs) being the cost of ownership premises.

2) Leasehold Land represents the amount paid to Karnataka Industrial Area Development Board (KIADB), Bangalore against allotment of land at Kesaroli Village, Haliyal on Lease- cum-sale basis.

3) During the current year, foreign exchange fluctuation loss amounting to Rs. 941.85 Lacs (Previous Year Rs. 4646.00 Lacs) has been capitalized to the block of Plant & Machinery pursuant to notification No.G.S.R. 913 (E) dated 29.12.2011, applicable upto March 31, 2020. Notional exchange rate variation capitalised till 31.03.2015 is Rs. 7829.12 Lacs.

4) The Company has not incurred any capital expenditure for Research & Development during the year (Previous Year - NIL).

5) The Company was providing depreciation on Straight Line Method (SLM) for certain Plant & Machinery as per Schedule XIV of the Companies Act, 1956 wherein useful life was 18 years for continuous process plant which is increased to 25 years as per Schedule II of the Companies Act, 2013. However, Company is of the view that looking to the Chemical process industry useful life should not be more than 18 years and will therefore continues to provide depreciation at 5.28% on SLM. Similary, on Road & Drainage of RCC, it will continue to provide depreciation @ 1.63% on SLM. Further, the Company has also been providing depreciation on Written Down Value Method on "Other Assets" which the Company has decided to retain in terms of Proviso to Clause 3(i) of Part A of Schedule II of the Companies Act, 2013. However, for such assets acquired / constructed on or after 01.04.2014 useful life method (SLM) is followed as per Schedule II of the Companies Act, 2013 (Refer Note No.1.d.1 of Significant Accounting Policies)

Note:

There are no amounts due for payment to the Investors Education and Protection Fund under Section 205C of the Companies Act, 1956 at the year end. Section 125 of Companies Act, 2013 which corresponds to Section 205C of Companies Act, 1956 has not yet been notified.

(Amount in Rs. Lacs)

2.1 CONTINGENT LIABILITIES AND COMMITMENTS

2015 2014

I. Contingent Liabilities & Commitments

a. Guarantees Issued by Banks 3,150.19 4,688.83

b. Letters of Credit outstanding 13,807.09 11,494.57

c. Corporate guarantees given to the Banks & Institutions on behalf of related party 24,625.00 24,625.00 Shree Rama Newsprint Limited. (Refer note 2.38)

II. Claims against the Company not acknowledged as debts in respect of

a. Income tax matters, pending decisions on various appeals made 468.50 468.50

by the Company and by the Department (refer notes below)

b. Excise matters & Service Tax under dispute 82.32 136.77

c. Custom matter under dispute 439.03 439.03

d. Sales Tax matter, under dispute 30.66 30.66

e. Other matters, under dispute 2,100.00 2,100.00

III. Estimated amount of contracts remaining to be executed on Capital account and not 4,171.12 3,316.94 provided for (net of advance)

Notes :

1. The Income tax assessments of the Company have been completed upto Assessment Year 2012-13.

2. The total demand outstanding as on 31.03.2015 on account of income tax dues of various years is Rs. 468.50 lacs (Rs. 468.50 lacs ). The Company and the Income Tax Department are in appeal before the appellate authorities for various years. Since most of the issues raised in these years are already covered by the decisions of Hon'ble Income Tax Appellate Tribunal and CIT(A) in Company's favour, the Company is of the opinion that the demand is likely to be either deleted or substantially reduced in appeal before appellate authorities and in view of this, the Company has decided to adjust the short/excess provision, if any, after the appeals are disposed off.

3. The Company and the Income Tax Department are in appeal before the High Court of Bombay on various grounds decided by the Income Tax Appellate Tribunal. The Company has therefore not recorded adjustment of taxes/orders in the books.

I. Relationship :

a. Associate Company

1) Fort Gloster Industries Ltd., Kolkata (FGI)

2) Shree Rama Newsprint Limited (SRNL)

3) Speciality Coatings and Laminations Ltd.

b. Enterprises where principal shareholders have control

1) Veer Enterprises Ltd.

2) Shree Satyanarayan Investment Company Ltd.

3) Siddhi Trade & Holdings Pvt. Ltd.

4) Rangnath Bangur Charitable Trust

c. Key Management Personnel represented on the Board

1) Shri S. K. Bangur, Chairman & Managing Director

2) Shri K. L. Chandak, Executive Director

d. Non-Executive/Independent Directors on the Board

1) Shri Saurabh Bangur

2) Smt. Shashi Devi Bangur

3) Shri P. N. Kapadia

4) Lt. Gen. [Retd.] Utpal Bhattacharyya

5) Shri Krishna Kumar Karwa

6) Shri M. P. Taparia

II. The following is a summary of related party transactions

Pursuant to Accounting Standard 17 - Segment Reporting, information about Business Segments (Information provided in respect of revenue items for the year ended 31.03.2015 and in respect of assets / liabilities as at 31.03.2015 is discolsed as under :

a) Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable"

b) Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Investments, tax related assets and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as " Unallocable"

The Company has agreed to accept payment of Rs. 70 Lacs on completion date of Share Purchase Agreement(SPA) dated 21.05.2015 executed between the Company and Riddhi Siddhi Gluco Biols Ltd.,("Acquirer") against the outstanding inter corporate deposits of Rs. 5229.50 Lacs given to Shree Rama Newsprint Ltd (SRNL) as per books of accounts and balance amount of Rs. 5159.50 Lacs has been written off. This has also been confirmed by SRNL & acknowledged by the Acquirer on the letter dated 21.05.2015 written by the Company in pursuance of the said SPA.

The Company has entered into Share Purchase Agreement with Riddhi Siddhi Gluco Biols Ltd.,("Acquirer") on 21.05.2015 for sale of its Long Term Investments of 2,11,24,791 equity shares of Shree Rama Newsprint Ltd., for Rs. 0.75 Lacs against book value of Rs. 4540.86 Lacs subject to release of Corporate Guarantees of Rs. 24625.00 Lacs given to various banks by the Company and the Acquirer complying with the requirement of the Open Offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 or any other statutory approval. Since the transaction will be completed on fulfillment of the above conditions, loss of Rs. 4540.11 Lacs will be accounted by the Company in the Accounting Year 2015-16 on date of completion of transaction.

The Company had paid Rs. 362.22 Lacs towards the invocation of Corporate Guarantee given to a Bank on behalf of Speciality Coatings and Laminations Ltd (SPCL) and has extended fresh ICD of Rs. 50.00 Lacs & Interest of Rs. 1.78 Lacs - net of TDS (during 2013-14) for O.T.S. with Oriental Bank of Commerce & further it has also to recover Rs. 27.41 Lacs against supplies made to SPCL. Also it has given fresh ICD of Rs. 290 Lacs & interest of Rs. 32.02 Lacs-net of TDS, during 2014-15. The Company is hopeful of recovering the said total amount of Rs. 763.43 Lacs out of disposal of the assets of SPCL and hence, no provision has been made in the books of accounts.

The Company has investment of Rs. 4540.86 Lacs in Shree Rama Newsprint Ltd. (SRNL) and Rs. 94.96 Lacs in Jayashree Chemicals Ltd. There has been continuous diminution in the value of investment and at the year end there has been substantial reduction in the market value of these investments by Rs. 3294.50 Lacs and Rs. 54.56 Lacs respectively. The company has not made any provision towards the diminution in value as said investments are long term trade investments and diminution in value is temporary in nature.

Management expects that it would earn sufficient taxable income in future and therefore will be in a position to pay normal tax within the period specified under the Income Tax Act, 1961 and accordingly MAT credit entitlement of Rs. 3668.24 Lacs (Current Year Rs. NIL Previous year Rs. 153.82 Lacs) has been recognized.

Previous year's figures have been regrouped and reclassified wherever necessary.


Mar 31, 2013

1.1 RELATED PARTY DISCLOSURES

a. Related parties where control exists or where significant influence exists and with whom transactions have taken place during the year:

Associate Company

1) Fort Gloster Industries Ltd., Kolkata (FGI)

2) Shree Rama Newsprint Limited (SRNL) Enterprises where principal shareholders have control

1) Veer Enterprises Ltd.

2) Shree Satyanarayan Investment Company Ltd.

3) Siddhi Trade & Holdings Pvt. Ltd.

4) Rangnath Bangur Charitable Trust

Key Management Personnel represented on the Board

1) Shri S. K. Bangur, Chairman & Managing Director

2) Shri K.LChandak, Executive Director Non-Executive/Independent Directors on the Board

1) ShriR.N.Mody

2) Shri Haigreve Khaitan

3) ShriPNKapadia

4) Lt.Gen.[Retd.] Utpal Bhattacharyya

5) Shri Krishna Kumar Karwa

6) ShriSanjayKothari

7) ShriMPTaparia

8) Shri Saurabh Bangur

9) SmtShashi Devi Bangur

1.2 SEGMENT INFORMATION

The Company is in the business of manufacture & sale of Paper and Paper Boards & Duplex Boards. Considering the core activities of the Company, management is of the view that manufacture and sale of Paper and Paper Boards & Duplex Boards is the only reportable business segment and hence information relating to primary segment is not required to be disclosed.

1.3 During the current year company has retrospectively changed the method of providing depreciation on Power Block, Effluent Treatment Plant from Straight Line Method to Written Down Value Method due to technological changes. Differential depreciation of earlier years amounting to Rs.3,993.95 Lacs (shown as an exceptional items) and that of current year of Rs.644.70 Lacs is charged to Profit & Loss Account for the year due to which the profit for the current year has been understated to that extent.

1.4 The Company had paid an amount of Rs.362.22 Lacs towards the invocation of Bank Guarantee given to a Bank on behalf of Speciality Coatings and Laminations Ltd (SPCL). The Company has also to recover Rs.27.41 Lacs against supplies made to SPCL. The Company is hopeful of recovering the said amount out of disposal of the assets of SPCL and hence, no provision has been made in the books of accounts.

1.5 The Company has investment of Rs.4,540.86 Lacs in Shree Rama Newsprint Ltd. (SRNL) and Rs.94.97 Lacs in Jayashree Chemicals Ltd. There has been continuous diminution in the value of investment and at the year end there has been substantial reduction in the market value of these investments by Rs.2,958.61 Lacs and Rs.51.63 Lacs respectively. The Company has not made any provision towards the diminution in value as said investments are long-term trade investments and diminution in value is temporary in nature.

1.6 The Company has paid minimum managerial remuneration to Chairman & Managing Director in the Financial Year 2011- 12 and has filed application before the Ministry of Corporate Affairs, Govt, of India on 14.08.2012 for approval of excess remuneration of Rs.9 Lacs. The Government of India has not yet given any decision in this matter.

1.7 Previous year''s figures have been regrouped and reclassified wherever necessary.


Mar 31, 2012

A Unsecured Loans from others

1) Interim dividend on Preference Shares and tax thereon and proposed dividend on equity shares and tax thereon is out of opening surplus.

1. Term loans from IFC, Washington, Barclays Bank PLC & ICICI Bank Ltd., are secured by way of hypothecation on all movable assets both present and future and are secured by equitable mortgage of immovable assets , both present and future on pari-passu basis

2. Loans from State Bank of Mysore are secured by second charge on plant and machinery acquired / to be acquired under the project whereas loan against Cenvat Receivables is also secured by hypothecation of the same.

3 Interest free loan under Sales Tax Defferal Scheme availed from August 1994 to July 2006 of Rs.66.88 Crores is being repaid in 12 installments of Rs.5.57 Crores payable yearly starting from August 2006. (Balance outstanding - Rs.3344.10 lacs)

Interest free loan under Sales Tax Defferal Scheme is being availed from June 2002 for a period of 12 years up to May 2014 and will be repayable in 12 installments on a year to year basis from 2014 to 2025. (Balance outstanding - Rs.8806.43 Lacs)

4 There is no default in repayment of loans and interest.

1.2 FIXED ASSETS

1) Buildings are constructed on leasehold land for which the Company parts only ground rent except Non-factory buildings worth Rs.188.03 Lakhs (Rs.188.03 Lakhs) being the cost of ownership premises.

2) Leasehold Land represents the amount paid to Karnataka Industrial Area Development Board, Bangalore against allotment of land at Industrial Area, Mysore and Kesarolli village, Haliyal on Lease- cum-sale basis for a period of 11 years.

3) During the current period, foreign exchange fluctuation loss amounting to Rs.10049.27 lakhs has been capitalized to the block of Plant & Machinery pursuant to notification No.G.S.R. 913 (E) dated 29.12.2011, applicable upto March 31, 2020.

4) Sales / Adjustments includes subsidy of Rs.50.00 Lakhs received from Government of Karnataka for Effluent Treatment Plant and impairment loss of Rs.102.59 Lakhs on Plant & Machinery which are reduced from their respective blocks.

5) The Company has not incurred any capital expenditure for Research & Development during the year (Previous Year - Rs.15.45 lacs).

[All amounts in Rupees Lakhs, except share data and unless otherwise stated]

2012 2011

1.2 CONTINGENT LIABILITIES AND COMMITMENTS

I. Contingent Liabilities & Commitments

a Guarantees Issued by Banks 2,892.45 3,599.66

b Letters of Credit outstanding 1,921.58 2,685.24

c Corporate guarantee given to the Banks & Institutions on behalf of related party - Rama Newsprint & Papers Limited. 19.720.23 12.067.54

II. Claims against the Company not acknowledged as debts in respect of

a Income tax matters, pending decisions on various appeals made by the Company and by the Department (refer notes below) 9,606.00 5,518.65 b Excise matters & Service Tax under dispute 26.24 13.75

c Sales Tax matter, under dispute 30.66 30.66

cl Other matters, under dispute 2,100.00 2,100.00

III. Estimated amount of contracts remaining to be executed on Capital account and not provided for (net of advance) 293.73 1,520.36

1 The Income tax assessments of the Company have been completed upto Assessment Year 2009-10.

2 The Total demand outstanding as on 31.03.2012 on account of income tax dues for various assessment years is Rs.9606 lacs (Rs.5518.65 lacs). The Company and the Income Tax Department are in appeal before the Appellate authorities for various assessment years. Since most of the issues raised in these years are already covered by the decisions of Hon'ble Income Tax Appellate Tribunal and CIT(A) in Company's favour, the Company is of the opinion that the demands are likely to be either deleted or substantially reduced in appeal before appellate authorities and in view of this, the Company has decided to adjust the short/excess provision, if any, after the appeals are disposed off.

3 The Company and the Income Tax Department are in appeal before the High Court of Bombay on various grounds decided by the Income Tax Appellate Tribunal. The Company has therefore not recorded adjustment of Taxes in the books.

1.3 RELATED PARTY DISCLORUES

a. Related parties where control exists or where significant influence exists and with whom transactions have taken place during the year :

Associate Company

1 Fort Gloster Industries Ltd., Kolkata (FGI)

2) Rama Newsprint & Papers Limited (RNPL) Enterprises where principal shareholders have control

1) Veer Enterprises Ltd.

2) Shree Satyanarayan Investment Company Ltd.

3) Siddhi Trade & Holdings Pvt.Ltd.

4) Rangnath Bangur Charitable Trust

Key Management Personnel represented on the Board

1) Shri S.K.Bangur, Chairman & Managing Director

2) Shri K. L.Chandak, Executive Director Non-Executive/Independent Directors on the Board

1) Shri R.N.Mody

2) Shri C.K.Somany

3) Shri P N Kapadia

4) Lt.Gen.fRetd.] Utpal Bhattacharyya

5) Shri Krishna Kumar Karwa

6) Shri Sanjay Kothari

7) Shri M P Taparia

8) Shri Saurabh Bangur

9) Smt Shashi Devi Bangur

1.4 SEGMENT INFORMATION

The Company is in the business of Manufacture & Sale of Paper and Paper Boards & Duplex Boards. Considering the core activities of the Company, management is of the view that manufacture and sale of Paper and Paper Boards & Duplex Boards is the only reportable business segment and hence information relating to primary segment is not required to be disclosed.

1.5 NOTE ON DEPRECIATION

During the current year company has retrospectively changed the method of providing depreciation on New Fibre Line & Chemical Recovery Island from Straight Line Method to Written Down value Method due to technological changes. Differential depreciation of earlier years amounting to Rs. 6219.78 Lacs (shown as an exceptional items) and that of current year of Rs. 4216.42 Lacs is charged to Profit & Loss Account for the year due to which the loss for the current year has been overstated to that extent.

1.6 The Company had paid an amount of Rs. 362.22 lacs towards the invocation of Bank Guarantee given to a Bank on behalf of Speciality Coatings and Laminations Ltd (SPCL).The Company has also to recover Rs. 27.41 lacs against supplies made to SPCL. The Company is hopeful of recovering the said amount out of disposal of the assets of SPCL and hence, no provision has been made in the books of accounts.

1.7 The Company has investment of Rs. 4540.86 lacs in Rama Newsprint & Papers Ltd. (RNPL). At the year end there has been substantial reduction in the market value of this investment by Rs 2895.24 lacs. The company has not made any provision towards the diminution in value as said investment is a long term trade investment and diminution in value is temporary in nature.

1.8 The company has paid minimum managerial remuneration to the Chairman & Managing Director of Rs, 89.23 lacs and Executive Director of Rs. 79.63 lacs as per Schedule XIII of the Companies Act, 1956 subject to approval of members in the AGM to be held on 31.07.2012 and Central government in respect of the former.

1.9 Previous year's figures have been regrouped and reclassified wherever necessary.


Mar 31, 2011

(1) Contingent liabilities not provided for in respect of :

(a) Bank Guarantees outstanding : Rs. 3599.66 lacs (Rs. 1958.10 lacs).

(b) Letters of Credit outstanding : Rs. 2685.24 lacs (Rs. 4144.43 lacs).

(c) Corporate Guarantees given by the Company to the Banks & Institution : Rs.12067.54 lacs (Rs. 12132.42 lacs).

(d) Demand raised by the Income Tax department and Sales Tax department disputed by the Company : Rs. 5518.65 lacs (Rs. 6322.69 lacs) and Rs. 30.66 lacs (Rs. 30.66 lacs) respectively.

(e) Various demands of employees pending for adjudication : amounts not ascertainable.

(f) Claims against the Company, not acknowledged as debts : Rs. 2100 lacs

(2) (a) The Income tax assessments of the Company have been completed upto Assessment Year 2008-09.

(b) The Total demand outstanding as on 31.03.2011 on account of income tax dues for various assessment years is Rs.5518.65 lacs (Rs. 6322.69 lacs). The Company and the Income Tax Department are in appeal before the Appellate authorities for various assessment years. Since most of the issues raised in these years are already covered by the decisions of Honble Income Tax Appellate Tribunal and CIT(A) in Companys favour, the Company is of the opinion that the demands are likely to be either deleted or substantially reduced in appeal before appellate authorities and in view of this, the Company has decided to adjust the short/excess provision, if any, after the appeals are disposed off.

(c) The Company and the Income Tax Department are in appeal before the High Court of Bombay on various grounds decided by the Income Tax Appellate Tribunal. The Company has therefore not recorded adjustment of Taxes in the books.

(3) Estimated amount of contracts remaining to be executed on Capital account and not provided for Rs.1,520.36 lacs (Rs. 3,806.22 lacs).

(6) Disclosure pertaining to Micro, Small and Medium Enterprises Development Act, 2006 (as per information available with the Company) :

Principal amount due outstanding as at 31st March, 2011 is Rs.68.92 Lacs and interest paid or payable is Rs.NIL.

(7) The Company has been advised that its activity of investing surplus funds in Shares / Mutual Funds does not constitute trading activities, as such the details of purchases, opening and closing stocks and turnover in respect of aforesaid activities are not required to be furnished.

(8) The Company used to adjust the foreign currency exchange rate differences on amounts borrowed for acquisition of fixed assets, to the carrying cost of fixed assets in compliance with Schedule VI to the Companies Act, 1956 as per legal advice, which was at variance to the treatment prescribed as per Accounting Standard 11.

The Ministry of Corporate Affairs, G.O.I. vide Notification No.G.S.R. 225 (E) dated 31st March 2009, notified the Companies (Accounting Standards) Amendment Rules, 2009 (the said Rules) wherein option is given for adding or deducting the exchange rate variation from the cost of depreciable capital assets in respect of long term foreign currency loans upto 31.03.2011. The Company has, therefore, opted for adjusting the foreign currency exchange rate difference to the carrying cost of fixed assets as per the said Rules and the exchange loss of Rs. 942.90 lacs has been included in the Fixed Assets / Capital work in progress (exchange gain of Rs. 546.77 lacs reduced from capital work in progress in the previous year), due to which the depreciation for the current financial year is increased by Rs. 48.84 lacs (last year depreciation lowered by Rs.3.94 lacs).

(9) The Company had paid an amount of Rs. 362.22 lacs towards the invocation of Bank Guarantee given to a Bank on behalf of Speciality Coatings and Laminations Ltd (SPCL). The Company has also to recover Rs. 24.91 lacs against supplies made to SPCL. The Company is hopeful of recovering the said amount out of disposal of the assets of SPCL and hence, no provision has been made in the books of accounts.

(10) As per the Accounting Standard on Related Party Disclosures (AS 18), issued by the Institute of Chartered Accountants of India, the related parties of the Company are as follows:

A] Associate Company 1) Fort Gloster Industries Ltd., Kolkata (FGI)

2) Rama Newsprint & Papers Limited (RNPL)

B] Key Management Personnel 1) Shri.S.K.Bangur

Chairman & Managing Director

2) Shri.K.L.Chandak Executive Director

(14) Provision for Income Tax has been made in accordance with Section 115JB of Income Tax Act,1961.However, Management expects that it would be in a position to pay normal tax within the period specified under the Income Tax Act,1961 and hence MAT credit has been recognised.

(15) The year end shortfall, as there may be, pertaining to certain sundry debtors, loans and advances is not currently ascertainable and accordingly not provided for.

(16) As per Accounting Standard 15 "Employee Benefits", the disclosures of Employee benefits as defined in the Accounting Standard are given below :

Defined Contribution Plan

The Companys Provident Fund is exempted under section 17 of Employees Provident Fund Act, 1952. Conditions for grant of exemptions stipulates that the employer shall make good deficiency, if any, in the interest rate declared by the trust vis-à-vis statutory rate.

Defined Benefit Plan

The employees gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises 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 obligation for leave encashment is recognised in the same manner as gratuity.

(17) Previous years figures have been regrouped and reclassified wherever necessary and disclosed within brackets.


Mar 31, 2010

(1) Contingent liabilities not provided for in respect of:

(a) Bank Guarantees outstanding: Rs. 1958.10 lacs (Rs. 2194.81 lacs).

(b) Letters of Credit outstanding: Rs. 4144.43 lacs (Rs. 9532.23 lacs).

(c) Corporate Guarantees given by the Company to the Banks & Institution: Rs.12132.42 lacs (Rs.13415.47 lacs).

(d) Demand raised by the Income Tax department and Sales Tax department disputed by the Company: Rs. 6322.69 lacs (Rs.2798.17 lacs) and Rs. 30.66 lacs (Rs. 30.66 lacs) respectively.

(e) Various demands of employees pending for adjudication: amounts not ascertainable

(2) a) The Income tax assessments of the Company have been completed upto Assessment Year 2007-08.

b) The Total demand outstanding as on 31.03.2010 on account of income tax dues for various assessment years is Rs.6322.69 lacs (Rs. 2798.17 lacs). These dues will get substantially reduced once the order giving effect is passed by the Income Tax Department. The Company and the Income Tax Department are in appeal before the Appellate authorities for various assessment years. Since most of the issues raised in these years are already covered by the decisions of Honble Income Tax Appellate Tribunal in Companys favour, the Company is of the opinion that the demands are likely to be either deleted or substantially reduced in appeal before appellate authorities and in view of this, the Company has decided to adjust the shorty excess provision, if any, after the appeals are disposed off.

(3) Estimated amount of contracts remaining to be executed on Capital account and not provided for Rs. 3806.22 lacs (Rs.32016.16 lacs).

(4) Disclosure pertaining to Micro, Small and Medium Enterprises Development Act, 2006 (as per information available with the Company): Principal amount due outstanding as at 31st March, 2010 is Rs.72.44 Lacs and interest paid or payable is Rs.NIL.

(5) The Company has been advised that its activity of investing surplus funds in Shares / Mutual Funds does not constitute trading activities, as such the details of purchases, opening and closing stocks and turnover in respect of aforesaid activities are not required to be furnished.

(6) The Company used to adjust the foreign currency exchange rate differences on amounts borrowed for acquisition of fixed assets, to the carrying cost of fixed assets in compliance with Schedule VI to the Companies Act, 1956 as per legal advice, which was at variance to the treatment prescribed as per Accounting Standard 11.

The Ministry of Corporate Affairs, G.O.I, vide Notification No.G.S.R. 225 (E) dated 31st March 2009, notified the Companies (Accounting Standards) Amendment Rules, 2009 (the said Rules) wherein option is given for adding or deducting the exchange rate variation from the cost of depreciable capital assets in respect of long term foreign currency loans upto 31.03.2011. The Company has, therefore, opted for adjusting the foreign currency exchange rate difference to the carrying cost of fixed assets as per the said Rules and the exchange gain of Rs. 546.77 lacs has been reduced from the Fixed Assets / Capital work in progress (exchange loss of Rs. 3417.88 lacs included in capital work in progress in the previous year), due to which the depreciation for the current financial year is lower by Rs. 3.94 lacs.

(7) As per the Accounting Standard on Related Party Disclosures (AS 18), issued by the Institute of Chartered Accountants of India, the related parties of the Company are as follows:

A] Associate Company

1) Fort Gloster Industries Ltd., Kolkata (FGI)

2) Rama Newsprint & Papers Limited (RNPL)

B] Key Management Personnel

1) Shri.S.K.Bangur

Chairman & Managing Director

2) Shri.K.L.Chandak Executive Director

The following transactions were carried out with related parties during the year in the ordinary course of business.

(8) Provision for Income Tax has been made in accordance with Section 115JB of Income Tax Act,1961.However, management expects that it would be in a position to pay normal tax within the period specified under the Income Tax Act,1961 and hence MAT credit has been recognised.

(9) The year end shortfall, as there may be, pertaining to certain sundry debtors, loans and advances is not currently ascertainable and accordingly not provided for.

(10) Previous years figures have been regrouped and reclassified wherever necessary and disclosed within brackets.

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