అకౌంట్స్ గమనికలుThe Indian Wood Products Company Ltd.

Mar 31, 2025

n) Provisions and Contingent Liabilities and
Assets:

Contingent Liabilities are disclosed in respect of
possible obligations that arise from past events but their
existence will be confirmed by the occurrence or non¬
occurrence of one or more uncertain future events not
wholly within the control of the Company or where any
present obligation cannot be measured in terms of future
outflow of resources or where a reliable estimate of the
obligation cannot be made.

Provisions are recognized when the Company has a
present legal or constructive obligation as a result of
past events, it is probable that an outflow of resources
will be required to settle the obligation and the amount
can be reliably estimated. Provisions are not recognized
for future operating losses.

A contingent asset is disclosed, where an inflow of
economic benefits is probable. An entity shall not
recognize a contingent asset unless the recovery is
virtually certain.

o) Cash and Cash Equivalents:

For the purpose of presentation in the Statement of
Cash Flows, cash and cash equivalents includes cash
on hand, deposits held at call with financial institutions,
other short- term, highly liquid investments with original
maturities of three months or less that are readily
convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.

p) Impairment of Assets:

Assets are assessed by the Company at each reporting
period whether there is an indication of impairment that
the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by
which asset’s carrying amount exceeds its recoverable

amount. The recoverable amount is higher of an asset’s
fair value less cost of disposal and value in use.

q) Earnings Per Share:

Basic earnings per share: A basic earnings per share
is calculated by dividing:

i. the profit attributable to owners of the Company

ii. by the weighted average number of equity shares
outstanding during the financial year, adjusted for
bonus elements in equity shares issued during the
year .

Diluted earnings per share: Diluted earnings per
share adjusts the figures used in the determination of
basic earnings per share to take into account:

i. the after income tax effect of interest and other
financing costs associated with dilutive potential
equity shares, and

ii. the weighted average number of additional equity
shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares.

r) Segment Reporting:

The Company’s operating businesses are organized and
managed separately according to the nature of products
and services provided, with each segment representing
a strategic business unit that offers different products and
serves different markets. The analysis of geographical
segments is based on the areas in which the customers
of the Company are located.

Segment Accounting Policies:

The Company prepares its segment information in
conformity with the accounting policies that are adopted
for preparing and presenting the financial statements of
the Company as a whole.

s) Rounding off:

All amounts disclosed in the financial statement
and notes have been rounded off to the nearest Lakhs,
unless otherwise stated.

t) Critical Estimates and Judgements

The preparation of financial statements requires the
use of accounting estimates which, by definition, will
seldom equal the actual results. Management also
needs to exercise judgement in applying the Company’s
accounting policies. This note provides an overview of
the areas that involved a higher degree of judgement
or complexity, and of items which are more likely to be
materially adjusted due to estimates and assumptions
turning out to be different than those originally assessed.
Detailed information about each of these estimates
and judgements is included in relevant notes together
with information about the basis of calculation for each
affected line item in the financial statements.

The preparation of the financial statements in conformity
with GAAP requires the Management to make estimates
and assumptions that affect the reported balances
of assets and liabilities and disclosures relating to
contingent assets and liabilities as at the date of the
financial statements and reported amounts of income
and expenses during the period. These estimates
and associated assumptions are based on historical
experience and management’s best knowledge of
current events and actions the Company may take in
future.

Information about critical estimates and assumptions that
have a significant risk of causing material adjustment to
the carrying amounts of assets and liabilities are:

i. Impairment of financial assets (including trade
receivable)

ii. Estimation of defined benefit

iii. Estimation of current tax expenses and payable

iv. Estimation of provisions and contingencies

u) Leases

The Company assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets. The
Company recognises lease liabilities to make lease
payments and right-of-use assets representing the right
to use the underlying assets.

i) Right-of-use assets

The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities. The cost of right-
of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease
payments made at or before the commencement date
less any lease incentives received. Right-of-use assets
are depreciated on a straight-line basis over the lease
term.

If ownership of the leased asset transfers to the Company
at the end of the lease term or the cost reflects the
exercise of a purchase option, depreciation is calculated
using the estimated useful life of the asset. The right-of-
use assets are also subject to impairment.

ii) Lease liabilities

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease term.
The lease payments include fixed payments (including
in substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on
an index or a rate, and amounts expected to be paid
under residual value guarantees. The lease payments
also include the exercise price of a purchase option
reasonably certain to be exercised by the Company and
payments of penalties for terminating the lease, if the
lease term reflects the Company exercising the option to
terminate. Variable lease payments that do not depend
on an index or a rate are recognised as expenses
(unless they are incurred to produce inventories) in the
period in which the event or condition that triggers the
payment occurs.

In calculating the present value of lease payments,
the Company uses its incremental borrowing rate at
the lease commencement date because the interest
rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest
and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured if
there is a modification, a change in the lease term, a
change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate

used to determine such lease payments) or a change in
the assessment of an option to purchase the underlying
asset.

The Company’s lease liabilities are included in Interest¬
bearing loans and borrowings.

iii) Short-term leases and leases of low-value
assets

The Company applies the short-term lease recognition
exemption to its short-term leases of Land & building
(i.e., those leases that have a lease term of 12 months
or less from the commencement date and do not contain
a purchase option). It also applies the lease of low-
value assets recognition exemption to leases of office
equipment that are considered to be low value. Lease
payments on short-term leases and leases of low value
assets are recognized as expense on a straight-line
basis over the lease term.

Company as a lessor

Leases in which the Company does not transfer
substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases.
Rental income arising is accounted for on a straight-line
basis over the lease terms and is included in revenue in
the statement of profit or loss due to its operating nature.
Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of
the leased asset and recognized over the lease term on
the same.

(b) Terms and Rights attached to Equity Shares

The Company has only one class of Equity shares having a par value of Rs. 2/- per share. Each holder of
equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The
dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual
General Meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to
receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.

(d) Shares reserved for issue under options

As at 31st March 2025 the Company does not have any outstanding options.

(e) Information regarding issue of shares for the period of five years immediately preceding the date at
which the Balance Sheet is prepared:

i) The Company has not issued any shares without payment being received in cash

ii) The Company has not undertaken any buy-back of shares.

39 a) Working Capital facilities and ECLGS Loan are from Union Bank of India, DBS Bank India Ltd and Yes
Bank Ltd under Multiple Banking Arrangements (MBA) secured by charge of stocks of Raw material, Katha
and Cutch whether Raw or in process of manufacture and all articles manufactured there from, Stores,
Book debts, Plant & Machinery and certain other assets and mortgaged by deposit of title deeds of Land
at Bareilly measuring 91,600 square meter on pari - passu basis and have been guaranteed by Promoter
Director(s).

b) Fair Value Hierarchy

All Financial Assets & Financial Liabilities are carried at amortised cost except Current Investments and Foreign
Currency Forward Contracts, which have been fair valued using Level 1 & Level 2 Hierarchy respectively.

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

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable.

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.

The following table represents the fair value hierarchy of Financial Assets and Financial Liabilities measured at
Fair Value on a recurring basis :

46. Financial Risk Management Objectives and Policies

“The Company’s financial liabilities comprise loans, Trade and other payables. The main purpose of these
financial liabilities is to finance the Company’s operation. The Company’s principal financial assets include
Investments, loans, Trade and other receivables and cash and cash equivalents that derive directly from its
operations. The Company is exposed to market risk, credit risk and liquidity risk. The Company regularly assess
these risks, monitor, evaluate and deploy mitigation measures to manage the risks within risk appetite.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised
below:

a. Market Risk

Market risk is the risk that the fair value of future cash flows of a financial assets will fluctuate because of
changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other
price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include
loans and borrowing, investments ,trade receivables etc.

i. Interest Rate Risk and Sensitivity

The Company’s exposure to the risk of changes in market interest rates relates primarily to the long term
debt obligations with Floating rate of interest.

The following table demonstrates the sensitivity to a reasonably possible changes in interest rates on that
portion of loans and borrowings affected. With all other variables remaining constant, the company’s profit
before tax and equity before tax is affected through the impact on floating rate borrowings, as follows:

The assumed movement in basis points for interest rate sensitivity is based on the currently observable market
environment.

ii. Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because
of changes in foreign exchange rates.The Company’s exposure to the risk of changes in foreign exchange
rates relates primarily to the Company’s operating activities.Such foreign currency exposures are hedged
by the Company.

b. Credit Risk

Credit risk is the risk that the counter party will not meet its obligation under a financial instruments or
customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating
activities (primarily trade receivables).

The Company extends credit to customers in normal course of business. The Company considers factors
such as credit track record in the market and past dealings for extension of credit to customers. The Company
monitors the payment track record of the customers and Outstanding receivables are regularly monitored.

c. Liquidity Risk

Liquidity Risk is the risk that the company may not be able to meet its present and future cash and collateral
obligations without incurring unacceptable losses.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the
use of Bank loans, Credit purchases etc.

The table below provides undiscounted cash flows towards Financial Liability into relevant maturity based
on the remaining period at the balance sheet date to the contract maturity date.

47. Capital Management

For the purpose of the Company’s Capital Management, Capital includes issued equity capital, shares premium
and all other Equity Reserves attributable to the Equity holders of the Parent. The Primary objective of the
Company’s capital management is to maximise the Shareholder value.

The Company manages its capital structure and makes adjustments inlight of changes in economic conditions
and the requirements of the financial covenants.

51. The main Products of the Company i.e. Katha & Cutch along with its Raw Materials like Khair Wood, Katha
Lugdi, Cutch Lugdi, are covered under U. P. Forest Act and a transit fee has to be paid on movement of all these
items. Uttar Pradesh Government by its various amendments changed the transit fee from Rs. 38/- Per M.T to
Rs. 200/- Per Cubic Meter and subsequently 5% advolrum.

Honorable Supreme Court in its interim order dated 26/04/2016, directed the Uttar Pradesh Government to
collect transit fees @ 5% advolrum subject to final outcome of the case and also directed U. P Government to
keep the said amount in a separate account so that it can be paid back to the effected parties with interest @
9% Per Annum if final order is in favour of the parties.

Subsequently Honorable Supreme Court by its final order dated 15/09/2017 directed Uttar Pradesh Government
to collect transit fees @ Rs 38/- Per M.T only and refund the excess amount collected from parties along with
interest @ 9% per annum.

In view of the above, an excess amount of Rs. 1000.29 lakhs paid as transit fees to the Forest Department of
Uttar Pradesh is refundable with interest @ 9% per annum. The company has made necessary applications
which is under process and will be accounted for as and when the company will get the refund.

52. Contingent Liabilties and Commitments

a) Demand for sales tax and GST amounting to Rs. 165.05 lacs (Rs. 165.05 lacs) which are not acknowledged
as debts. Against the same company has paid under protest a total of Rs. 30.28 lacs (Rs. 30.28 lacs)
included in loans and Advances and TDR of Rs. 2.64 lacs (Rs. 2.64 lacs) are deposited with the sales tax
authorities.

b) Mandi Samitee demand on Katha amounting to Rs. 2.38 lacs (Rs. 2.38 Lacs) has been disputed by the
Company and stayed by Honorable High Court, Allahabad.

c) During the FY 2017 - 18, Commissioner of Customs, Nhava Sheva had passed an Ex-Partie Judgement
and raised a demand of Rs. 341.78 Lacs and imposed a penalty of Rs 341.78 Lacs against a Show Cause
Notice issued by the Additional Director General, Directorate of Revenue Intelligence, Kolkata in the year
2010. The said order passed by the Commissioner being contrary to law and against the principle of natural
justice, based on assumption and presumptions without any evidence on record and was not acceptable to
the Company, hence an appeal was preferred by the Company before CESTAT Nhava Sheva by producing
evidence of pre-deposit of Rs.40.00 lacs being 11.7% of duty demanded against the requirement of 7.5%
of the duty demanded while filing the appeal.Simultaneously, (2) two of the Whole Time Directors were also
made liable in the above said order on whom a penalty of Rs.15.00 lacs and Rs.10.00 lacs respectively
imposed. An appeal was also preferred on their behalf and a sum of Rs.1.90 lacs was deposited by the
Company and the amount is appearing in Loans & Advances account.Consequently, as per the legal
advice obtained, no provision is made at this stage. Final adjustment if any will be done as and when the
matter is crystalized.

d) During the year, the Company had received a revised order from the Income Tax Department under section
154/147 of the Income Tax Act, for the Assessment Year 2018 - 19. Wherein the Income Tax department
has reduced the tax demand from Rs. 1717.49 Lacs to Rs. 1017.17 Lacs. The reduction in the demand
was due to error in the computation of interest U/s 234B, which resulted in a excess levy of interrest in the
previous order. The appeal against the said order is still pending before the Commissioner of Income Tax(
Appeals).

53. Disclosure of Transactions with Struck Off Companies

The Company did not have any material transactions with companies struck off under Section 248 of the

Companies Act, 2013 or Section 560 of Companies Act, 1956 during the financial year.

54 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.

55. 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 on behalf of the ultimate beneficiaries.

56. No transactions to report against the following disclosure requirements as notified by MCA pursuant to
amended Schedule III:

(a) Crypto Currency or Virtual Currency

(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and Rules made
thereunder

(c) Registration of charges or satisfaction with Registrar of Companies

(d) Relating to borrowed funds:

i. Wilful defaulter

ii. Utilisation of borrowed funds & share premium

iii. Discrepancy in utilisation of borrowings

iv. Current maturity of long term borrowings.

58. For better presentation previous year’s figures have been regrouped / re-arranged wherever necessary.

In terms of our Report attached For and on behalf of Board of Directors of

For S K Agrawal and Co Chartered Accountants LLP The Indian Wood Products Co. Ltd.

Chartered Accountants

Firm Registration Number - 306033E/E300272 Krishna Kumar Mohta Bharat Mohta

Jugal Kishor Choudhury Chairman & MD WTD & CEO

Partner DIN: 00702306 DIN: 00392090

Membership No.: 009367

Raj Kumar Agarwal Anup Gupta

Place: Kolkata Chief Financial Officer Company Secretary

Date: May 29, 2025 M. No. - A36061

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Mar 31, 2024

n) Provisions and Contingent Liabilities and Assets:

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.

Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating losses.

A contingent asset is disclosed, where an inflow of economic benefits is probable. An entity shall not recognize a contingent asset unless the recovery is virtually certain.

o) Cash and Cash Equivalents:

For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short- term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

p) Impairment of Assets:

Assets are assessed by the Company at each reporting period whether there is an indication of impairment that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which asset’s carrying amount exceeds its recoverable

amount. The recoverable amount is higher of an asset’s fair value less cost of disposal and value in use.

q) Earnings Per Share:

Basic earnings per share: A basic earnings per share is calculated by dividing:

i. the profit attributable to owners of the Company

ii. by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year .

Diluted earnings per share: Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

i. the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

ii. the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

r) Segment Reporting:

The Company’s operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which the customers of the Company are located.

Segment Accounting Policies:

The Company prepares its segment information in conformity with the accounting policies that are adopted for preparing and presenting the financial statements of the Company as a whole.

s) Rounding of:

All amounts disclosed In the financial statement and notes have been rounded off to the nearest Lakhs, unless otherwise stated

t) Critical Estimates and Judgements

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

The preparation of the financial statements in conformity with GAAP requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. These estimates and associated assumptions are based on historical experience and management’s best knowledge of current events and actions the Company may take in future.

Information about critical estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities are:

i. Impairment of financial assets (including trade receivable)

ii. Estimation of defined benefit

iii. Estimation of current tax expenses and payable

iv. Estimation of provisions and contingencies

u) Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a lessee

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

i) Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised,

initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term.

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment

ii) Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate

used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

The Company’s lease liabilities are included in Interestbearing loans and borrowings

iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases of Land & building (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term.

Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same.

(b) Terms and Rights attached to Equity Shares

The Company has only one class of Equity shares having a par value of ? 2/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(d) Shares reserved for issue under options

As at 31st March 2024 the Company does not have any outstanding options.

(e) Information regarding issue of shares for the period of five years immediately preceding the date at which the Balance Sheet is prepared:

i) The Company has not issued any shares without payment being received in cash

ii) The Company has not undertaken any buy-back of shares.

(b) Defined Benefit Plan

Gratuity: The Company has a defined Gratuity Plan for its employees. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

The Scheme is funded with an insurance company in the form of qualifying insurance policy.

b) Fair Value Hierarchy

All Financial Assets & Financial Liabilities are carried at amortised cost except Current Investments and Foreign Currency Forward Contracts, which have been fair valued using Level 1 & Level 2 Hierarchy respectively Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

The following table represents the fair value hierarchy of Financial Assets and Financial Liabilities measured at Fair Value on a recurring basis :

46. Financial Risk Management Objectives and Policies

The Company’s financial liabilities comprise loans, Trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operation. The Company’s principal financial assets include Investments, loans , Trade and other receivables and cash and cash equivalents that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk. The Company regularly assess these risks, monitor, evaluate and deploy mitigation measures to manage the risks within risk appetite.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

a. Market Risk

Market risk is the risk that the fair value of future cash Lows of a financial assets will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowing, investments ,trade receivables etc.

i. Interest Rate Risk and Sensitivity

The Company’s exposure to the risk of changes in market interest rates relates primarily to the long term debt obligations with Floating rate of interest.

The following table demonstrates the sensitivity to a reasonably possible changes in interest rates on that portion of loans and borrowings affected. With all other variables remaining constant, the company’s profit before tax and equity before tax is affected through the impact on floating rate borrowings, as follows:

ii. Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash Lows of an exposure will fluctuate because of changes in foreign exchange rates.The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities.Such foreign currency exposures are hedged by the Company.

b. Credit Risk

Credit risk is the risk that the counter party will not meet its obligation under a financial instruments or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers and Outstanding receivables are regularly monitored.

c. Liquidity Risk

Liquidity Risk is the risk that the company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of Bank loans, Credit purchases etc.

The table below provides undiscounted cash flows towards Financial Liability into relevant maturity based on the remaining period at the balance sheet date to the contract maturity date.

47 Capital Management

For the purpose of the Company’s Capital Management, Capital includes issued equity capital, shares premium and all other Equity Reserves attributable to the Equity holders of the Parent. The Primary objective of the Company’s capital management is to maximise the Shareholder value.

The Company manages its capital structure and makes adjustments inlight of changes in economic conditions and the requirements of the financial covenants.

51 The main Products of the Company i.e. Katha & Cutch along with its Raw Materials like Khair Wood, Katha Lugdi, Cutch Lugdi, are covered under U. P. Forest Act and a transit fee has to be paid on movement of all these items. Uttar Pradesh Government by its various amendments changed the transit fee from Rs. 38/- Per M.T to Rs. 200/- Per Cubic Meter and subsequently 5% advolrum.

Honorable Supreme Court in its interim order dated 26/04/2016, directed the Uttar Pradesh Government to collect transit fees @ 5% advolrum subject to final outcome of the case and also directed U. R Government to keep the said amount in a separate account so that it can be paid back to the effected parties with interest @ 9% Rer Annum if final order is in favour of the parties.

Subsequently Honorable Supreme Court by its final order dated 15/09/2017 directed Uttar Pradesh Government to collect transit fees @ Rs 38/- Per M.T only and refund the excess amount collected from parties along with interest @ 9% per annum.

In view of the above, an excess amount of Rs. 1000.29 lakhs paid as transit fees to the Forest Department of Uttar Pradesh is refundable with interest @ 9% per annum. The company has made necessary applications which is under process and will be accounted for as and when the company will get the refund.

52. Contingent Liabilties and Commitments

a) Demand for sales tax and GST amounting to Rs. 165.05 lacs (Rs. 135.40 lacs) which are not acknowledged as debts. Against the same company has paid under protest a total of Rs. 30.28 lacs (Rs. 15.29 lacs) included in loans and Advances and TDR of Rs. 2.64 lacs (Rs. 2.64 lacs) are deposited with the sales tax authorities.

b) Mandi Samitee demand on Katha amounting to Rs. 2.38 lacs (Rs. 2.38 Lacs) has been disputed by the Company and stayed by Honorable High Court, Allahabad.

c) During the FY 2017 - 18, Commissioner of Customs, Nhava Sheva had passed an Ex-Partie Judgement and raised a demand of Rs. 341.78 Lacs and imposed a penalty of Rs 341.78 Lacs against a Show Cause Notice issued by the Additional Director General, Directorate of Revenue Intelligence, Kolkata in the year 2010. The said order passed by the Commissioner being contrary to law and against the principle of natural justice, based on assumption and presumptions without any evidence on record and was not acceptable to the Company, hence an appeal was preferred by the Company before CESTAT Nhava Sheva by producing evidence of pre-deposit of Rs.40.00 lacs being 11.7% of duty demanded against the requirement of 7.5% of the duty demanded while filing the appeal.Simultaneously, (2) two of the Whole Time Directors were also made liable in the above said order on whom a penalty of Rs.15.00 lacs and Rs.10.00 lacs respectively imposed. An appeal was also preferred on their behalf and a sum of Rs.1.90 las was deposited by the Company and the amount is appearing in Loans & Advances account.Consequently, as per the legal advice obtained, no provision is made at this stage. Final adjustment if any will be done as and when the matter is crystalized.

d) During the year, the Company received an order from the Income Tax Department under section 144B of the Income Tax Act, for the Assessment Year 2018 - 19 for a tax demand of Rs. 17,17,49,287/-. The Company believes that the said demand is not maintainable and has filed an appeal against the said order.

53. Disclosure of Transactions with Struck Of Companies

The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the financial year.

54 No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:

(a) Crypto Currency or Virtual Currency

(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and Rules made thereunder

(c) Registration of charges or satisfaction with Registrar of Companies

(d) Relating to borrowed funds:

i. Wilful defaulter

ii. Utilisation of borrowed funds & share premium

iii. Discrepancy in utilisation of borrowings

iv. Current maturity of long term borrowings

56 For better presentation previous year’s figures have been regrouped / re-arranged wherever necessary.

In terms of our Report attached For and on behalf of Board of Directors of

For S K Agrawal and Co Chartered Accountants LLP The Indian Wood Products Co. Ltd.

Chartered Accountants

Firm Registration Number - 306033E/E300272 Krishna Kumar Mohta Bharat Mohta

Jugal Kishor Choudhury Chairman & MD WTD & CEO

Partner DIN: 00702306 DIN: 00392090

Membership No.: 009367

Raj Kumar Agarwal Anup Gupta

Place: Kolkata Chief Financial Officer Company Secretary

Date: May 30, 2024 M. No. - A36061

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Mar 31, 2018

Notes to Account

40. Financial Risk Management Objectives and Policies

The Company''s financial liabilities comprise loans, Trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operation. The Company''s principal financial assets include Investments, Short term loans and advances, Trade and other receivables and cash and cash equivalents that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk. The Company regularly assess these risks, monitor, evaluate and deploy mitigation measures to manage the risks within risk appetite. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

a. Market Risk

Market risk is the risk that the fair value of future cash flows of a financial assets will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowing, investments ,trade payables,trade receivables etc.

b. Interest Rate Risk and Sensitivity

The Company''s exposure to the risk of changes in market interest rates relates primarily to the long term debt obligations with Floating rate of interest.

The following table demonstrates the sensitivity to a reasonably possible changes in interest rates on that portion of loans and borrowings affected. With all other variables remaining constant, the company''s profit before tax and equity before tax is affected through the impact on floating rate borrowings, as follows:

Particulars	Increase/ decrease in Basis points	Effect on Profit before tax	Effect on Pre tax Equity
31.03.2018	50	(3.14)	(3.14)
	-50	3.14	3.14
31.03.2017	50	3.14	3.14
	-50	(3.14)	(3.14)

The assumed movement in basis points for interest rate sensitivity is based on the currently observable market environment.

c. Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities.Such foreign currency exposures are hedged by the Company.

d. Credit Risk

Credit risk is the risk that the counter party will not meet its obligation under a financial instruments or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers and Outstanding receivables are regularly monitored.

e. Liquidity Risk

Liquidity Risk is the risk that the company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of Bank loans, Credit purchases etc.

The table below provides undiscounted cash flows towards Financial Liability into relevant maturity based on the remaining period at the balance sheet date to the contract maturity date.

As at 31st March''2018

Particulars	On Demand	Less than 1 year	1 to 5 years	More than 5 years	Total
Interest Bearing Loans (including Current maturities)	2,918.00	274.85	354.00	-	3,546.68
Trade Payables	-	3,217.79	-	-	3,217.79
Total	2,918.00	3,492.64	354.00	-	6,764.47

As at 31st March''2017

Particulars	On Demand	Less than 1 year	1 to 5 years	More than 5 years	Total
Interest Bearing Loans (including Current maturities)	2,664.13	245.99	440.98	-	3,351.10
Trade Payables	-	3,351.18	-	-	3,351.18
Total	2,664.13	3,597.17	440.98	-	6,702.28

41 Capital Management

For the purpose of the Company''s Capital Management, Capital includes issued equity capital, shares premium and all other Equity Reserves attributable to the Equity holders of the Parent. The Primary objective of the Company''s capital management is to maximise the Shareholder value.

The Company manages its capital structure and makes adjustments inlight of changes in economic conditions and the requirements of the financial covenants.

Particulars	31st March 2018	31st March 2017
Borrowings	748.00	850.88
Trade Payables	3,217.79	3,351.18
Short term Borrowings	3,067.55	3,502.47
Net Debt	7,033.35	7,704.52
Equity	33,248.35	31,561.21
Total Capital	33,248.35	31,561.21
Gearing Ratio	21.15%	24.41%

There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

42 First Time Adoption of Ind AS

These financial statements for the year ended 31 March 2018, are the first financial statements of the Company prepared in accordance with Ind AS.

Exemptions Applied:

Ind AS 101 allows certain exemptions from the retrospective application of certain requirements under Ind AS

a. Deemed Cost Ind AS 101 allows a first time adopter to continue with the carrying value for all its Property, Plant and Equipment and Intangible Assets as recognised in its previous GAAP financials on the date of transition. Accordingly, the Company has opted for this exemption and decided to carry its Property, Plant and equipment (except Land ) at carrying value as per Indian GAAP on the date of transition i.e. 1 April, 2016 after making necessary adjustments . Freehold Land is revalued as on 1 April, 2016.

The company has considered Fair Value for Property, i.e, Freehold measuring 2,10,222 sq. mt. situated at Bareily, India with impact of Rs. 28375.45 lakhs (net of deffered tax) in accoradance with stipulations of Ind AS 101 with the resultant impact being accounted for in the Reserves and Surplus.

b. Estimates The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions as described below that affect the reported amounts and the accompanying disclosures. The Company based its assumptions and estimates on parameters available when the financial statements were prepared.Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

- Cost of Defined Benefit Plan and the Present Value of the defined benefit obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future.

- Impairment of Trade receivables based on Expected Credit Model

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April, 2016, the date of transition to Ind AS and as of 31 March 2017

c. Classification and measurement of Financial Assets The Company has assessed the classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS in accordance with Ind AS 101.

d. The Company has adopted to measure investments in Joint Ventures and Associates at cost in accordance with Ind AS 27 and therefore has measured such investments in its separate opening Ind AS balance sheet at carrying amount as per Indian GAAP at the date of transition in accordance with Ind AS 101.

e. Proposed Dividend Under Indian GAAP, proposed dividend (including Dividend Distribution Tax) is recognized as a liability in the period to which it relates, irrespective of when it is declared. Under Ind AS, proposed dividend is recognized as a liability in the period in which it is declared by the company usually when approved by shareholders in a general meeting or paid.

43. The main Products of the Company i.e. Katha & Cutch along with its Raw Materials like Khair Wood, Katha Lugdi, Cutch Lugdi, are covered under U. P. Forest Act and a transit fee has to be paid on movement of all these items.. Uttar Pradesh Government by its various amendments changed the transit fee from Rs. 38/- Per M.T to Rs. 200/- Per Cubic Meter and Subsequently 5% advolrum.

Honorable Supreme Court in its interim order dated 26/04/2016, directed the Uttar Pradesh Government to collect transit fees @ 5% advolrum subject to final outcome of the case and also directed U. P. Government to keep the said amount in a separate account so that it can be paid back to the effected parties with interest @ 9% Per Annum if final order is in favour of the parties.

Subsequently Honorable Supreme Court by its final order dated 15/09/2017 directed Uttar Pradesh Government to collect transit fees @ Rs 38/- Per M.T only and refund the excess amount collected from parties along with interest @ 9% per annum.

In view of the above, an excess amount of Rs. 1000.29 lakhs paid as transit fees to the Forest Department of Uttar Pradesh is refundable with interest @ 9% per annum. The company has made necessary applications which is under process and will be accounted for as and when the company will get the refund.

44 Contingent Liabilties and Commitments

a) "Katha" the main product of the Company was brought within the Ambit of Central Excise Duty w.e.f. 1st March, 2011 under Chapter 14 of Central Excise Tariff. However, the Central Excise Authority issued Show Cause notices with the contention that Raw Katha produced by processing Gambler ( an excisable item) is also liable to duty. Hence a demand of Rs.35.95 crores was raised on the Company for the period up to March 2010 Rs.31.03 crores and from April 2010 to February,2011 Rs.4.92 cores. Against such orders in one of our appeal, the appellate authority not only accepted our ground of valuation of the product as per CAS4 but also reduce the demand of Rs. 11.93 crores to Rs. 2.48 crores. On the same ground total demand of Rs. 35.95 crores could get reduce to Rs. 11.62 crores. Consequently as per legal advice obtained, no provision was made till 2017 and was shown as contingent liability.

During the year vide order No.A/70281 - 70288/2018 EX (DB) dt.25.01.2018 and Order No. A/70819-70823/2018 EX (DB) Dt. 22.02.2018 CESTAT Appellate Tribunal passed final order in favour of the Company setting aside the impugned orders passed by Commissioner of Central Excise of Customs Meerut II demanding duty, penalties and interest thereon amounting to Rs.35.95 crores.

In view of the above, though the contingent liability now does not exist, but the department as may move to the higher court. Hence this note is continuing.

b) Katha manufactured by the Company commonly known as Indian Katha on which Company was paying central excise duty @ 5/6 % under Chapter Heading No. 14049050 was not acceptable to the Department and raised a demand of Rs.15.74 crores under chapter Heading No.32019090. This was shown as Contingent Liability till March,2017. Inspite of CESTAT, Allahabad''s order in favour of the Company as the Excise Authority Preferred S L P before Hon''ble Supreme Court. During the year Supreme Court rejected the Appeal vide its order dt. 28.07.2017. Accordingly the said Contingent Liability, hence forth, does not exist.

c) Demand for sales tax amounting to Rs. 148.48 lacs (Rs. 139.98 lacs) which are not acknowledged as debts. Against the same company has paid under protest a total of Rs. 27.32 lacs (Rs. 18.20 lacs) included in loans and Advances and TDR of Rs. 2.64 lacs (Rs. 2.64 lacs) are deposited with the sales tax authorities.

d) Mandi Samitee demand on Katha amounting to Rs. 2.38 lacs (Rs. 2.38 Lacs) has been disputed by the Company and stayed by Honorable High Court, Allahabad.

e) During the year, Commissioner of Customs, Nhava Sheva had passed an Ex-Party Judgement and raised a demand of Rs. 3,41,77,9367- together with a penalty of Rs 3,41,77,9367- against a Show Cause Notice issued by the Additional Director General, Directorate of Revenue Intelligence, Kolkata in the year 2010. The said order passed by the Commissioner being contrary to law and against the principle of natural justice, based on assumption and presumptions without any evidence on record and was not acceptable to the Company, hence an appeal was preferred by the Company before CESTAT Nhava Sheva by producing evidence of pre-deposit of Rs.40.00 lacs being 11.7% of duty demanded against the requirement of 7.5% of the duty demanded while filing the appeal.Simultaneously, (2) two of the Whole Time Directors were also made liable in the above said order on whom a penalty of Rs.15.00 lacs and Rs.10.00 lacs respectively imposed. An appeal was also preferred on their behalf and a sum of Rs.1.90 las was deposited by the Company and the amount is appearing in Loans & Advances account.Consequently, as per the legal advice obtained, no provision is made at this stage. Final adjustment if any will be done as and when the matter is crystalized.

45. For better presentation previous year''s figures have been regrouped 7 re-arranged wherever necessary.

	For and on behalf of Board of Directors of
For Agrawal Sanjay & Company Chartered Accountants	The Indian Wood Products Co. Ltd.
Firm Registration Number- 329088E	K.K. Damani	Bharat Mohta	R.P.Chetani
Radhakrishan Tondon	Executive Direct	ar WTD&CEO	Director
Partner	DIN:01385252	DIN: 00392090	DIN: 00392215

Membership No.: 060534
Place: Kolkata	R.K. Agarwal	Anup Gupta
Date: May 30, 2018	Chief Financial Officer	Company Secretary

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Mar 31, 2017

1. Segment Reporting

During the year Katha & Cutch are the only Reportable Segment and there being no other reportable segment AS-17 is not applicable.

2. Corporate Social Responsibility (CSR)

A CSR Committee has been formed by the Company as per the provision of Section 135 of the Companies Act, 2013. The details of expenditure being incurred during the year on CSR activities are -

a) Amount of Rs. 6.77 Lacs required to be spend by the Company during the year.

b) Revenue Expenditure incurred during the year towards Prime Minister’s Relief Fund and Swachh Ganga Abhiyan as part of CSR activities amounting to Rs. 4.00 Lacs.

c) Amount unspend Rs. 2.77 Lacs, will be utilised during the FY 2017 - 18 along with the CSR expenditure for current year.

3. Contingent Liabilties and Commitments

a) Katha, the main product of the Company “Katha” was brought within the Ambit of central Excise Duty, w.e.f. 1st March, 2011, under Chapter 14 of Central Excise Tariff by the department. For earlier years, the Central Excise authority issued Show cause notice demanding Rs. 35.95 crores (till March’2010 Rs. 31.03 crores and from April’2010 to February’2011 Rs. 4.92 crores). Their contention is that Raw Katha produced by processing Gambier (an excisable item) is also liable to duty. Since the department’s contention as well as their basis of valuation was not acceptable an appeal was preferred by the Company. Against our appeals the appellate authority not only accepted our ground of valuation of the products as per CAS 4 but also reduced the demand of Rs. 11.93 crores to Rs. 4.40 crores. Accordingly on the same ground total demand of Rs. 35.95 crores would get reduced to Rs. 11.62 crores

The Company’s contention was also accepted by CESTAT New Delhi vide their order dated 31st July’2012 and dated 8th February’2013 stayed the demand till disposal of the case with the observation that the appellant have prima face case in their favour. The stay was extended Vide Order dated 22nd December’2014 Further more till now the Company’s principal product KATHA which was considered under Chapter 14 of Central Excise Tariff by the department and liable to excise duty @ 6% (5% upto 16.03.2012). The department suddenly changed its’ stand and considered KATHA classifiable as tannin extract under Chapter 32 of Central Excise Tariff and raised an additional demand of Rs. 11.54 crores for the period from 1 st March’2011 to 30th June’2014. This change in the contention of the department is not acceptable to the Company and the Company preffered an appeal against the same which is also pending before tribunal. In a similar case at Kanpur Commissionerate adjucating authority as well as appellate authority have held that product manufactured out of Gambier, as is in our case, are classifiable as KATHA is covered under Chapter 14 of Central Excise Tariff.

The Company’s contention was in case of KATHA was also accepted by CESTAT, New Delhi and vide their Order dated 28th July’2014 and dated 27th November’2014 stayed the demand unconditionally and filnally the authority passed the order in Company’s favour vide order no. A/70009/2017-EX(DB) dated 04.01.2017 Consequently as per legal advice obtained departments action is not tenable based on the issues including classification, exemption, valuation, time bar and allowability of Cenvat Credit of CV duty amounting to Rs. 13.80 crores paid while importing Gambier, which is to be adjusted if there is any demands. Hence no provision is made at this stage. Final adjustment will be made only when the matter is crystallized .

b) Demand for Sales tax amounting to Rs. 139.98 lacs (Rs. 131.93 lacs) which are not acknowledged as debts. Against the same Company has paid under protest a total of Rs. 18.22 lacs (Rs. 10.06 lacs) included in Loans and Advances and TDR of Rs. 2.64 lacs (Rs. 2.48 lacs) are deposited with the Sales Tax authorities.

(c) Mandi Samitee demand on Katha amounting to Rs. 2.38 lacs (Rs. 2.38 lacs) has been disputed by the Company and stayed by Honourable High Court, Allahabad.

(d) Capital Commitment towards Joint Ventures a) M/s Agro and Spice Trading Pte Ltd, Singapore Rs. 324 Lacs (663 Lacs) b) PT Sumtra Resources International, Indonesia - Nil (49.75 Lacs)

4. For better presentation previous year’s figures have been regrouped / re-arranged wherever necessary and have been shown in brackets

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Mar 31, 2016

1. SEGMENT REPORTING

During the year Katha & Cutch are the only Reportable Segment and there being no other reportable segment AS-17 is not applicable.

2. CONTINGENT LIABILITIES AND COMMITMENTS

a) Katha, the main product of the Company “Katha” was brought within the Ambit of Central Excise duty w.e.f. 1st March, 2011 under Chapter 14 of Central Excise Tariff by the department. For earlier years, the Central Excise authority issued show cause notice demanding Rs. 35.95 crores (till, March, 2010 Rs. 31.03 crores and from April. 2010 to February, 2011 Rs. 4.92 crores). Their contention is that Raw Katha produced by processing Gambier (an excisable item) is also liable to duty. Since the department’s contention as well as their basis of valuation was not acceptable an appeal was preferred by the Company. Against our appeals the appellate authority not only accepted our ground of valuation of the products as per CAS4 but also reduced the demands of Rs. 11.93 crores to Rs. 4.40 crores. Accordingly on the same ground total demand of Rs. 35.95 crores would get reduced to Rs. 11.62 crores.

The Company’s contention was also accepted by CESTAT New Delhi vide their order dated 31st July, 2012 and dated 8th February, 2013 and stayed the demand till disposal of the case with the observation that the appellant have prima facie case in their favour. The stay was extended Vide Order dated 22nd December, 2014.

Further more till now the Company’s principal product KATHA which was considered under Chapter 14 of Central Excise Tariff by the department and liable to excise duty @6% (5% up to 16.03.2012). The department suddenly changed its’ stand and considered KATHA classifiable as tannin extract under Chapter 32 of Central Excise tariff and raised an additional demand of Rs. 11.54 crores for the period from 1st March, 2011 to 30th June, 2014. This change in the contention of the department is not acceptable to the Company and the Company preferred an appeal against the same which is also pending before tribunal. In a similar case at Kanpur Commissionerate adjucating authority as well as appellate authority have held that product manufactured out of Gambier, as is in our case, are classifiable as KATHA is covered under Chapter 14 of Central Excise Tariff.

The Company’s contention in case of KATHA was also accepted by CESTAT, New Delhi vide their order dated 28th July, 2014 and dated 27th November, 2014 stayed the demand unconditionally.

Consequently as per legal advice obtained departments action is not tenable based on issues including classification, exemption, valuation, time bar and allowability of cenvat credit of CV duty amounting to Rs. 13.80 crores paid while importing Gambier, which is to be adjusted if there is any demands. Hence no provision is made at this stage. Final adjustment will be made only when the matter is crystalized.

b) Demands for Sales Tax amounting to Rs. 131.82 lacs (Rs. 131.93 lacs) ) which are not acknowledged as debts. Against the same Company has paid under protest a total of Rs. 10.06 lacs (Rs. 10.17 lacs) included in Loans and Advances and TDR of Rs. 2.64 lacs (Rs. 2.48 lacs) are deposited with the Sales Tax authorities.

c) Mandi Samitee demand on Katha amounting to Rs. 2.38 lacs (Rs. 2.38 lacs) has been disputed by the Company and stayed by Honourable High Court Allahabad.

d) Capital Commitment towards Joint Ventures a) M/s. PT Sumatra Resources International, Indonesia Rs. 49.75 Lacs and M/s. Agro & Spice Trading Pte Ltd., Singapore Rs. 663 Lacs.

3. For better presentation previous year’s figures have been regrouped / rearranged wherever necessary and have been shown in brackets.