Notes forming part of the financial statement 1 Significant accounting policies A Basis of accounting and brparation of financial statements The financial statements have been brpared to comply in all material respects with the Accounting Standards notified by the Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been brpared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out B Use of estimates The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. C Fixed assets Fixed assets are stated at cost of acquisition inclusive of duties (net of CENVAT and other credits, wherever applicable), taxes, incidental expenses, erection / commissioning expenses and borrowing costs etc. up to the date the assets are ready for their intended use. D Debrciation Debrciation on Fixed Assets is provided on written down value method at the rates brscribed in Schedule XIV of the Companies Act, 1956 or at rates determined based on the useful life of the assets, whichever is higher. E Impairment of assets The carrying amount of assets is reviewed at each balance sheet date to determine if there is any indication of impairment thereof based on external / internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount, which rebrsents the greater of the net selling price1 of assets and their 'value in use'. The estimated future cash flows are discounted to their brsent value at appropriate rate arrived at after considering the brvailing interest rates and weighted average cost of capital. F Investments Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost, but provision for diminution in value is made to recognise a decline other than temporary in the value of such investments. G Inventories Inventories are stated at lower of cost and net realisable value.The cost of finished goods and stock-in-process Comprises raw materials.direct labour.other direct cost and related production overheads upto the relevant stage of completaion.Puchased finished goods are valued at cost of Purchase, H Revenue recognition Revenue (income) is recognised when no significant uncertainty as to determination/ realisation exists. Interest Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. I Employee Benefit Providend Fund Contribution towards provided fund for certain employee is made to the regulatory authorities, Where the company has no further obligation. Gratuity The Company does not provides for gratuity,a defined benefit plan (the Gratuity Plan) covering eligible employee in accordance with the Payments of Gratuity Act, 1972,which are admissible through Life-insurance Corporation (UC) and trust which is administered by the trustee. J Excise: Re Aqueous Solution Case I) Refund claim of Rs 66.29 lacs tranferred to Consumer Welfare Fund, Appeal filed is pending with CESTAT,Koikata. ii) Refund claim of Rs 19.11 lacs sanctioned and paid but department has filed appeal before tribunal,Order from CESTAT is pending. iii) Refund claim of Rs 53.56 lacs pending In Appeal before Tribunal,Koikata. Total Contingent Refund is approx Rs 119.85 lacs. K Earnings per share Earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders, by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earning per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of share outstanding during the period are adjusted for the effects of all diluted potential equity shares. L Taxation Tax expense comprises of current and deferred tax. Current income-tax are measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act,1961. Deferred tax is recognized on a prudent basis for timing differences, being difference between taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax asset is recognised on carry forward of unabsorbed debrciation and tax losses only if there is virtual certainty that such asset can be realised against future taxable income. Unrecognised deferred tax asset of earlier periods are re-assessed and recognised to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realised. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the period in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in gujdance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period. a) Disputed Income for Rs 2,50,82,624/- for assessment year 1996-97 for which the appeal is pending at Koikata High Court M Cash and cash equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. N Contingent liabilities Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed by way of notes to the accounts. Central Excise i) Due to dispute in classification and/or valuation of certain items of finished oods under the Central Excise & Salt Act, 1944, a demand of Rs 19.03 lacs(approx) has been confirmed by Central Excise Department Department has been requested to adjust the amount against refund claim pending with the department ii) Demand on duty Rs 182.68 lacs approx. confirmed by the commissioner C.E. on 10.10.2001, against show cause notice dated 12.12.1985. Appeal petitions filed in Tribunal,Koikata against the order which has been rejected and Appeal filed before the Guwahati High Court is pending. iii) Demand of duty Rs 20.65 lacs confirmed. Appeal and stay petition filed before the Tribunal Kolkata.Stay petition has been allowed,Appeal is pending Total Contingent liabilities on this account is approx Rs 250.49 lacs. Provident Fund Provident Fund Liabilities is being paid as per agreed stipulated term. Necessary applications were filed with concerned authorities to waive penal interes(s),penalties,damages & other charges on the liability of the company Sales Tax-Hosur,Tamilnadu Demand of Rs 345.69 lacs is outstanding against IFST Loan against which a stay has benn granted by the Madras High Court Sales Tax-west Bengal: The Sales Tax department has raised several ex-parte demands pertaining to WBST & CST on the Company along with interest and penalty for non submission of forms, way bills and old records from 1995-96 to 2005-06. The Principal Amount demanded is Rs1284.72 lacs and Interest Rs 986.64 lacs. Demands for the year 1995-96 and 1996-97 have been assessed and demands for Rs 874.77 lacs has been set aside leaving a total liability of Rs 1396.00 lacs against these demands which are pending before the Appellate & Revision Authorities. Even though the company is hopeful for favourable orders) in most of the cases, as per Hon'ble BIFR directions a contingent liability of Rs 1396.00 lacs is being taken on record. O In order to bring value to the company and help the company to overcome the crisis pursuant to It becoming sick, the promoter,Late Mr M.L.Periwal had decided to sell the 'National' brand for Plywood & laminates and other allied products to the company at a cost of Rs 674.10 lakhs arrived as per Independent report This justifies the sacrifices to be made by the promoter towards rehabilitation of the company through the Hon'ble BIFR. This sacrifice is part of the promoter contribution.The company proposes to issue share of the face value of Rs 10V- each at a brmium of Rs 5/- per share to acquire the brand at cost This issues of shares against the value of brand goodwiil shall be part of the scheme to be approved by the Hon'ble BIFR pending which the amount shall be kept as current liability in the° company as Advance against Brand. This will be distinguished from the other current liabilities and there will not be -any compromise on this liability as part of the proposed scheme. P The company has entered into a One Time Settlement{OTS) with its secured lenders. On account of the OTS entered into with all the secured lenders(Banks) the company has paid full and final sum of Rs 1246.78 Lacs in the brvious year. Interest on loans from Banks & Financial Institutions has been provided and paid in full in the Previous year. R. Provisions A Provision is recognized when the company has a brsent obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation m in respect of which reliable estimate can be made. Provisions ( (excluding retirerra d are determined based on best estimate required to settle the obligation at t ice date and adjusted to reflect the current best estimates. 2 To Make regular monthly Contribution to Varies Providend Funds which are in the nature of defined Contribution schemes and such paid/payable amount are charged against revenue. To administer through duly constituted and approved independents trusts, various gratuity and pension funds,which are in the nature of defined beneift/contribution schemes. To determine the liabilities towards such schemes as applicable by an independent acturial valuations as per the requirements of Accounting. 3 Micro, Small and Medium Enterprises There are Micro, Small & Medium Enterprises, to whom the Company owes dues, which are outstanding as at 31st March 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. 4 In the opinion of the Board of Directors, the Current Assets, Loans & Advances are approximately of the value stated in accounts, if realised in ordinary course of business, unless otherwise stated. The provision for all known liabilities is adequate and not in excess/short of the amount considered reasonable/necessary. 5 Balances of some of the Sundry creditors, Loans and advances incorporated in the books as per balances appearing in the relevant subsidiary records, are subject to confirmation from the respective parties and consequential adjustments arising from reconciliation, if any. The management however is of the view that there will be no material discrepancies in this regard. 6 Historically, the company's investment in unquoted shares has been done with a view to hold them for long term and thereby earn capital gains, since dividend payout on such investments has generally been nil. The aforesaid policy has been taken into consideration while computing the provision for income-tax as applicable 7 The financial statements for the year ended 31st March, 2014 had been brpared as per the then applicable revised Schedule VI to the Companies Act, 1956, Consequent to the notification under the Companies Act,1956, the financial statements for the year ended 31st March, 2015 are also brpared under revised Schedule VI. Accordingly, the brvious year figures have also been reclassified to conform to this year's 8 Figures in the bracket relate to brvious year. 9 Figures have been rounded off to nearest rupee As per our report of even date attached For JHUNJHUNWALA & CO Chartered Accountants Firm Reg no: 302169E CA. R K JHUNJHUNWALA Proprietor Membership No. 006604 Directors Place: Koikata Date: 30th July, 2015 |