Notes to Accounts of National Plywood Industries Ltd.

Mar 31, 2018

NOTES FORMING PART OF THE FINANCIAL STATEMENT

FOR THE YEAR ENDED 31ST MARCH, 2018 24 Payment to auditor

(Amount in Rs)

Particulars	For the year ended 31st March 2018	For the year ended 31st March 2017
Statutory audit	35,000	35,000
Total	35,000	35,000

25 Disclosures of related party transactions (as identified & certified by the Management):

(i) As per Accounting Standard-18-'' Related Party Disclosures'' issued by the Institute of Chartered Accountants of India have been complied with.

(ii) Key Management
(a) Piyush Periwal	Chairman & Managing Director
(b) Vinod Kumar Sharma	Director
(c) N.G.Paul Director
(d) Abhijit Sarkar	Director

26 Earning per share (EPS)

Particulars		For the year ended 31st March 2018	For the year ended 31st March 2017
Profit after tax	Rs.	43,59,268	23,06,991
Weighted average number of eguity shares outstanding during the year	Nos.	58,53,750	58,53,750
Nominal value of equity per share	Rs.	10	10
Basic earning per share (EPS)	Rs.	0.74	0.39

27 To make regular monthly contribution to various Provident 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 benefit/contribution schemes. To determine the liabilities towards such schemes as applicable by an independent actuarial valuations as per the requirements of accounting.

28 Micro, Small and Medium Enterprises

There are Micro, Small & Medium Enterprises, to whom the Company owes dues, which are outstanding as at 31st March 2018. 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.

29 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

30 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.

31 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

32 The financial statements for the year ended 31st March, 2017 had been prepared as per the then applicable revised Companies Act, 2013. Consequent to the notification under the Companies Act, 2013, the financial statements for the year ended 31st March, 2018 are also prepared under revised Schedule. Accordingly, the previous year figures have also been reclassified to conform to this year''s notifications.

33 Goods and Service Tax

Effective 1st July, 2017, sales are recorded net of GST whereas earlier sales were recorded gross of Excise duty which formed part of expenses. Hence, revenue from operations for the year ended 31st March, 2018 are not comparable with corresponding figures from the previous year.

34 Figures in the brackets relate to previous year.

35 Figures have been rounded off to nearest rupee.

As per our Report of even date
For JHUNJHUNWALA & Co.
Chartered Accountants
Firm Reg no: 3021 69E
CA. R K JHUNJHUNWALA	PIYUSH PERIWAL
Proprietor	Chairman & Managing Director
Membership No. 006604
Place: Kolkata	ABHIJIT SARKAR
Date: 30th May, 2018	Independent Director

---

Mar 31, 2014

1 Previous year figures are in the brackets.

To make regular monthly Contribution to Various 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 benefit/contribution schemes. To determine the liabilities towards such schemes as applicable by an independent acturial valuations as per the requirements of Accounting.

2 Micro, Small and Medium Enterprises

There are Micro, Small & Medium enterprises, to whom the Company owes dues, which are outstanding as at 31st March 2014. 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.

3 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.

4 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.

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.

5 The financial statements for the year ended 31st March, 2014 had been prepared 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, 2014 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year''s notifications.

6 Figures in the bracket relate to previous year.

7 Figures have been rounded off to nearest rupee.

---

Mar 31, 2013

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 goods 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 of duty of Rs. 182.68 lacs aprox. confirmed by the commissioner C.E. on 10.10.2001, against show cause notice dated 12.12.1985. Appeal petitions filed in Tribunal, Kolkata against the order which is pending, hence subjudice.

iii) Demand of duty of Rs. 20.65 lacs confirmed. Appeal and stay petition filed before the Tribunal Kolkata are pending. Total Contingent liabilities on this account is approx Rs. 232.00 lacs.

Provident Fund

Provident Fund Liabilities is being paid as per agreed stipulated term. Necessary applications were filed with concerned authorities to waive penal interest(s), penalities, damages & other charges on the liability of the company as on 31.03.2013.

Sales Tax-Hosur. Tamilnadu:

Demand of Rs. 345.69 lacs is outstanding against IFST Loan against which a stay has been 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 Rs. 1284.72 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 order(s) in most of the cases, as per Hon''ble BIFR directions a contingent liability of Rs. 1396.00 lacs is being taken on record.

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 sacrifice is part of the promoter contribution. The company proposes to issue share of the face value of Rs. 10/- each premium of Rs. 5/- per share to acquire the brand at cost. This issues of shares against the value of brand goodwill 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 Advances 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.

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 previous year.

Interest on loans from Banks & Financial Institutions has been provided for a sum of Rs. 85,19,212/- as on 31.03.13. Some Banks and Financial institutions are yet to finalise the waiver on Interest and the respective amount to be paid accordingly in the future.

Provisions

A provision is recognised when the company has a present, obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits)are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

Disclosure of related party transactions (as identified & certified by the management):

As per Accounting Standard-18 . ''Related Party Disclosures'' issued by the Institute of Chartered Accountants of India, the names of the related parties are given below :

To make regular monthly Contribution to Various 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 benefit/contribution schemes. To determine the liabilities towards such schemes as applicable by an independent acturial valuations as per the requirements of Accounting.

Micro, Small and Medium Enterprises

There are Micro, Small & Medium enterprises, to whom the Company owes dues, which are outstanding as at 31st March 2013. 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.

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.

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.

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.

The financial statements for the year ended 31st March, 2013 had been prepared as per the then applicable pre-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, 2013 are prepare under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year''s notifications.

Figures in the bracket relate to previous year.

Figures have been rounded off to nearest rupee.

---

Mar 31, 2011

1) Disputed Income for Rs. 3,08,80,872/- for assessment year 1996-97 for which the appeal is pending at Kolkata High Court.

2) Interest on loans from Bank & Financial Institutions has not been provided for as the Company is registered with the Hon'ble BIFR and a Draft Rehabilitation Scheme (DRS) has been submitted in consultation with the Operating Agency (SASF-IDBI) to the Hon'ble BIFR on 07.10.2010.

3) Physical stock has not been taken of Store/ Finished Stock & Fixed Assets as factories located in Assam & Kolkata were closed. The loss, if any, will be accounted for on physical verification after re- opening of factory. However, depletion in the value of raw materials due to efflux of time during the closure period has been written off as consumption.

4) The Company has entered in to 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 a sum of Rs. 1043.00 Lacs as on 31.3.2011. Balance principal Amount of Rs. 204.00 Lacs remains unpaid towards the OTS.

5) 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 at 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. 10/- each at a premium of Rs. 51- per share to acquire the brand at cost. This issue of shares against the value of brand goodwill 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.

6. Wages includes Rs. 87,88,908/- paid to the Staff & Labours of Kalyani Unit as full and final payment of their dues up to 2002 (being the closure of the Unit).

7. The quantum of dues to small scale and ancillary industrial undertakings being not readily ascertainable in the absence of relevent documents / information, could not be identified and disclosed separately in the accounts. Steps have been initiated to collect the necessary particulars for disclosure of the required information in the coming year.

8. Balance of certain debtors, advances, creditors and loans from Financial institutions and Banks are subject to confirmation and consequential reconciliation / adjustments etc.

9. Previous year's figures are regrouped and rearranged wherever necessary.

10. Figures have been rounded off to the nearest rupee.

---

Mar 31, 2010

1) Contingent Liability not provided for in respect of :

i) Due to dispute in classification and/or valuation of certain items of finished goods under the Central Excise & Salt Act, 1944, a demand of Rs. 90.05 lacs (approx) for the period 25.07.1989 to 17.03.1993 has been raised by Central Excise Department after the Supreme Court Judgement on 20.09.1995. Matter has been settled under K.V.S Scheme in terms of the order of Honble Guwahati High Court.

ii) Demand of 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 petition filed in Guwahati High Court against the order which is pending, hence subjudice.

iii) Demand of duty Rs. 20.65 lacs confirmed and penalty equivalent to duty was also imposed by the commissioner C.E. on 21.08.2002. Appeal and stay petition filed before the Tribunal Kolkata was allowed by way of remand.

iv) Commissioner of Sales Tax, West Bengal has raised several ex-parte demands of the company along with interest and penalty for non submission of forms, way bills and old record from 1996 to 2005-06. All these demands are pending before the Appellate and Revision Authorities. Company is hopeful that in most of the cases they will be successful in appeal/revision and the liability will be reduced substantially.

v) Principal and Interest of Provident Fund relating to the Kalyani Unit and Kolkata H.O. have been cleared. A sum of Rs. 5,42,142/- towards pending Principal relevant to Hosur Unit, is being cleared in equal monthly instalments from April, 2010 to be completed by February, 2011. Interest u/s. 7Q on A/c. of Tinsukia, Margherita & Hosur Units amounting to Rs. 12,64,598/- are also being cleared in equal monthly installments from April, 2010 to be completed within March, 2012. Necessary applications were field with concerned authorities to waive penal interest(s), penalties, damages & other charges on the liability of the Company as on 31/03/2010.

2) Disputed Income for Rs. 3,08,80,872/- for assessment year 1996-97 for which the appeal is pending at Kolkata High Court.

3) Interest on loans from Bank & Financial Institutions has not been provided for as the Companys registered with the Honble BIFR and the Draft Rehabilitation Scheme (DRS) has been submitted in consultation with the Operating Agency (SASF-IDBI) to the Honble BIFR on 31.05.2007.

4) Physical stock has not been taken of Store/ Finished Stock & Fixed Assets as factories located in Assam & Kolkata were closed. The loss, if any, will be accounted for on physical verification after re- opening of factory. However, depletion in the value of raw materials due to efflux of time during the closure period has been written off as consumption.

5) The Company has entered in to a One Time Settlement (OTS) with its secured lenders and have already received sanction letters from SASF-(IDBI) Standard Chartered Bank - (SCB) for ICICI Bank and State Bank of Mysore. Formal sanctions is awaited from State Bank of India. On account of the OTS entered into with all the secured lenders (Banks) the company has paid a sum of Rs. 727.00 lakh as on 31.3.2010. On payment of the balance amount the interest and principal waived would be written off appropriately.

6) The Compnay has made settlement with the unsecured creditors with two options. a) A one time settlement of all outstanding of the creditor. b) Deferred payment scheme of the principal outstandig as per records of the company. This scheme would be completed in five years from 31st March 2008. As sum of Rs. 37,15,901/- was repaid to various creditors as per above settlement. The company has written off a sum of Rs. 56,55,889/- from the liabilities of the Comapny, which are oustanding at Bangalore & factory situated at Hosur.

---

Mar 31, 2009

1) Contingent Liability not provided for in respect of :

i) Due to dispute in classification and/or valuation of certain items of finished goods under the Central Excise & Salt Act, 1944, a demand of Rs. 90.05 lacs (approx) for the period 25.07.1989 to 17.03.1993 has been raised by Central Excise Department after the Supreme Court Judgement on 20.09.1995. Matter has been settled under KV.S Scheme in terms of the order of Honble Guwahati High Court.

ii) Demand of 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 petition filed in Guwahati High Court against the order which is pending, hence subjudice.

iii) Demand of duty Rs. 20.65 lacs confirmed and penalty equivalent to duty was also imposed by the commissioner C.E. on 21.082002. Appeal and stay petition filed before the Tribunal Kolkata was allowed by way of remand.

2) Disputed Income for Rs. 3,08,80,872/- for assessment year 1996-97 for which the appeal is pending at Kolkata High Court.

3)Interest on loans from Bank & Financ ial Institutions has not been provided for as the Companys registered with the Honble BIFR and the Draft Rehabilitation Scheme (DRS) has been submitted in consultation with the Operating Agency (SASF-IDBI) to the Honble BIFR on 31.05.2007.

4) Physical stock has not been taken of Store/ Finished Stock & Fixed Assets as factories located in Assam & Kolkata were closed. The loss, if any, will be accounted for on physical verification after re-opening of the factory. However, depletion in the value of raw materials due to efflux of time during the closure period has been written off as consumption.

5) The Company has entered in to a One Time Settlement (OTS) with its secured lenders and have already received sanction letters from SASF-(IDBI) and Standard Chartered Bank - (SCB) for ICICI Bank. Formal sanctions are awaited from State Bank of Mysore and State Bank of India. On account of the OTS entered into with all the secured lenders (Banks) the company has paid a sum of Rs. 475.00 lakh as on 31.3.2009. On payment of the balance ar * the interest and principal waived would be written off appropriately.

6) The Compnay has made settlement with the unsecured creditors with two options, a) A one time settlement of all outstanding of the creditor, b) Deferred payment scheme of the principal outstandig as per records of the company. This scheme would be completed in five years from 31st March 2008. As sum of Rs. 18,35,608/-was repaid to various creditors as per above settlement The company has written off a sum of Rs. 1,33,43,898/-from the liabilities of the Comapny, which are oustanding at various Branches & at factories situated atTlnsukia & Margherita.

7) The balance of unpaid dividend account of Rs. 114694.45 relating to the year 1994-95 & 1995-96 is under reconciliation. It will be transferred to the credit to Central Government as per the provisions of the Companies Act, 1956.

8) In order to bring value to the company and help the company to overcome the crisis pursuant to it becoming sick, the promoter, Mr M.L. Periwal has 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 at as per Independent report. This justifies the sacrifices to be made by the promoter towards rehabilitation of the company through the Honble BIFR. This sacrif.es is part of the promotor contribution. The company proposes to issue share of the face value of Rs. 10/ - each premium of Rs. 5/- per share to acquire to brand at cost This issue of shares against the value of brand goodwill 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.

9) The quantum of dues to small scale and ancillary industrial undertakings being not readily ascertainable in the absence of relevant documentsflnformation, could not be identified and disclosed separately in the accounts. Steps have been initiated to collect the necessary particulars for disclosure of the required information in the coming year.

10) Balance of certain debtors, advances, creditors and loans from Financial Institutions and Banks are subject to confirmation and consequential reconciliations/ adjustments etc.

11) Previous years figures are regrouped and rearranged wherever necessary.

12) Figures have been rounded off to the nearest rupee.