Contingent Liabilities are disclosed in respect ofpossible obligations that arise from past events but theirexistence will be confirmed by the occurrence or non¬occurrence of one or more uncertain future events notwholly within the control of the Company or where anypresent obligation cannot be measured in terms of futureoutflow of resources or where a reliable estimate of theobligation cannot be made.
Provisions are recognized when the Company has apresent legal or constructive obligation as a result ofpast events, it is probable that an outflow of resourceswill be required to settle the obligation and the amountcan be reliably estimated. Provisions are not recognizedfor future operating losses.
A contingent asset is disclosed, where an inflow ofeconomic benefits is probable. An entity shall notrecognize a contingent asset unless the recovery isvirtually certain.
For the purpose of presentation in the Statement ofCash Flows, cash and cash equivalents includes cashon hand, deposits held at call with financial institutions,other short- term, highly liquid investments with originalmaturities of three months or less that are readilyconvertible to known amounts of cash and which aresubject to an insignificant risk of changes in value.
Assets are assessed by the Company at each reportingperiod whether there is an indication of impairment thatthe carrying amount may not be recoverable.
An impairment loss is recognised for the amount bywhich asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is higher of an asset’sfair value less cost of disposal and value in use.
Basic earnings per share: A basic earnings per shareis calculated by dividing:
i. the profit attributable to owners of the Company
ii. by the weighted average number of equity sharesoutstanding during the financial year, adjusted forbonus elements in equity shares issued during theyear .
Diluted earnings per share: Diluted earnings pershare adjusts the figures used in the determination ofbasic earnings per share to take into account:
i. the after income tax effect of interest and otherfinancing costs associated with dilutive potentialequity shares, and
ii. the weighted average number of additional equityshares that would have been outstanding assumingthe conversion of all dilutive potential equity shares.
The Company’s operating businesses are organized andmanaged separately according to the nature of productsand services provided, with each segment representinga strategic business unit that offers different products andserves different markets. The analysis of geographicalsegments is based on the areas in which the customersof the Company are located.
The Company prepares its segment information inconformity with the accounting policies that are adoptedfor preparing and presenting the financial statements ofthe Company as a whole.
All amounts disclosed in the financial statementand notes have been rounded off to the nearest Lakhs,unless otherwise stated.
The preparation of financial statements requires theuse of accounting estimates which, by definition, willseldom equal the actual results. Management alsoneeds to exercise judgement in applying the Company’saccounting policies. This note provides an overview ofthe areas that involved a higher degree of judgementor complexity, and of items which are more likely to bematerially adjusted due to estimates and assumptionsturning out to be different than those originally assessed.Detailed information about each of these estimatesand judgements is included in relevant notes togetherwith information about the basis of calculation for eachaffected line item in the financial statements.
The preparation of the financial statements in conformitywith GAAP requires the Management to make estimatesand assumptions that affect the reported balancesof assets and liabilities and disclosures relating tocontingent assets and liabilities as at the date of thefinancial statements and reported amounts of incomeand expenses during the period. These estimatesand associated assumptions are based on historicalexperience and management’s best knowledge ofcurrent events and actions the Company may take infuture.
Information about critical estimates and assumptions thathave a significant risk of causing material adjustment tothe carrying amounts of assets and liabilities are:
i. Impairment of financial assets (including tradereceivable)
ii. Estimation of defined benefit
iii. Estimation of current tax expenses and payable
iv. Estimation of provisions and contingencies
The Company assesses at contract inception whether acontract is, or contains, a lease. That is, if the contractconveys the right to control the use of an identified assetfor a period of time in exchange for consideration.
The Company applies a single recognition andmeasurement approach for all leases, except forshort-term leases and leases of low-value assets. TheCompany recognises lease liabilities to make leasepayments and right-of-use assets representing the rightto use the underlying assets.
The Company recognises right-of-use assets at thecommencement date of the lease (i.e., the date theunderlying asset is available for use). Right-of-useassets are measured at cost, less any accumulateddepreciation and impairment losses, and adjusted forany remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilitiesrecognised, initial direct costs incurred, and leasepayments made at or before the commencement dateless any lease incentives received. Right-of-use assetsare depreciated on a straight-line basis over the leaseterm.
If ownership of the leased asset transfers to the Companyat the end of the lease term or the cost reflects theexercise of a purchase option, depreciation is calculatedusing the estimated useful life of the asset. The right-of-use assets are also subject to impairment.
At the commencement date of the lease, the Companyrecognises lease liabilities measured at the presentvalue of lease payments to be made over the lease term.The lease payments include fixed payments (includingin substance fixed payments) less any lease incentivesreceivable, variable lease payments that depend onan index or a rate, and amounts expected to be paidunder residual value guarantees. The lease paymentsalso include the exercise price of a purchase optionreasonably certain to be exercised by the Company andpayments of penalties for terminating the lease, if thelease term reflects the Company exercising the option toterminate. Variable lease payments that do not dependon an index or a rate are recognised as expenses(unless they are incurred to produce inventories) in theperiod in which the event or condition that triggers thepayment occurs.
In calculating the present value of lease payments,the Company uses its incremental borrowing rate atthe lease commencement date because the interestrate implicit in the lease is not readily determinable.After the commencement date, the amount of leaseliabilities is increased to reflect the accretion of interestand reduced for the lease payments made. In addition,the carrying amount of lease liabilities is remeasured ifthere is a modification, a change in the lease term, achange in the lease payments (e.g., changes to futurepayments resulting from a change in an index or rate
used to determine such lease payments) or a change inthe assessment of an option to purchase the underlyingasset.
The Company’s lease liabilities are included in Interest¬bearing loans and borrowings.
The Company applies the short-term lease recognitionexemption to its short-term leases of Land & building(i.e., those leases that have a lease term of 12 monthsor less from the commencement date and do not containa purchase option). It also applies the lease of low-value assets recognition exemption to leases of officeequipment that are considered to be low value. Leasepayments on short-term leases and leases of low valueassets are recognized as expense on a straight-linebasis over the lease term.
Leases in which the Company does not transfersubstantially all the risks and rewards incidental toownership of an asset are classified as operating leases.Rental income arising is accounted for on a straight-linebasis over the lease terms and is included in revenue inthe statement of profit or loss due to its operating nature.Initial direct costs incurred in negotiating and arrangingan operating lease are added to the carrying amount ofthe leased asset and recognized over the lease term onthe same.
The Company has only one class of Equity shares having a par value of Rs. 2/- per share. Each holder ofequity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. Thedividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing AnnualGeneral Meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled toreceive remaining assets of the Company after distribution of all preferential amounts. The distribution will be inproportion to the number of equity shares held by the shareholders.
As at 31st March 2025 the Company does not have any outstanding options.
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 YesBank Ltd under Multiple Banking Arrangements (MBA) secured by charge of stocks of Raw material, Kathaand 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 Landat Bareilly measuring 91,600 square meter on pari - passu basis and have been guaranteed by PromoterDirector(s).
All Financial Assets & Financial Liabilities are carried at amortised cost except Current Investments and ForeignCurrency 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 measurementis directly or indirectly observable.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurementis unobservable.
The following table represents the fair value hierarchy of Financial Assets and Financial Liabilities measured atFair Value on a recurring basis :
“The Company’s financial liabilities comprise loans, Trade and other payables. The main purpose of thesefinancial liabilities is to finance the Company’s operation. The Company’s principal financial assets includeInvestments, loans, Trade and other receivables and cash and cash equivalents that derive directly from itsoperations. The Company is exposed to market risk, credit risk and liquidity risk. The Company regularly assessthese 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 summarisedbelow:
Market risk is the risk that the fair value of future cash flows of a financial assets will fluctuate because ofchanges in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and otherprice risk, such as equity price risk and commodity risk. Financial instruments affected by market risk includeloans 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 termdebt obligations with Floating rate of interest.
The following table demonstrates the sensitivity to a reasonably possible changes in interest rates on thatportion of loans and borrowings affected. With all other variables remaining constant, the company’s profitbefore 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 marketenvironment.
ii. Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate becauseof changes in foreign exchange rates.The Company’s exposure to the risk of changes in foreign exchangerates relates primarily to the Company’s operating activities.Such foreign currency exposures are hedgedby the Company.
Credit risk is the risk that the counter party will not meet its obligation under a financial instruments orcustomer contract, leading to a financial loss. The Company is exposed to credit risk from its operatingactivities (primarily trade receivables).
The Company extends credit to customers in normal course of business. The Company considers factorssuch as credit track record in the market and past dealings for extension of credit to customers. The Companymonitors 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 collateralobligations without incurring unacceptable losses.
The Company’s objective is to maintain a balance between continuity of funding and flexibility through theuse of Bank loans, Credit purchases etc.
The table below provides undiscounted cash flows towards Financial Liability into relevant maturity basedon the remaining period at the balance sheet date to the contract maturity date.
For the purpose of the Company’s Capital Management, Capital includes issued equity capital, shares premiumand all other Equity Reserves attributable to the Equity holders of the Parent. The Primary objective of theCompany’s capital management is to maximise the Shareholder value.
The Company manages its capital structure and makes adjustments inlight of changes in economic conditionsand 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, KathaLugdi, Cutch Lugdi, are covered under U. P. Forest Act and a transit fee has to be paid on movement of all theseitems. Uttar Pradesh Government by its various amendments changed the transit fee from Rs. 38/- Per M.T toRs. 200/- Per Cubic Meter and subsequently 5% advolrum.
Honorable Supreme Court in its interim order dated 26/04/2016, directed the Uttar Pradesh Government tocollect transit fees @ 5% advolrum subject to final outcome of the case and also directed U. P Government tokeep 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 Governmentto collect transit fees @ Rs 38/- Per M.T only and refund the excess amount collected from parties along withinterest @ 9% per annum.
In view of the above, an excess amount of Rs. 1000.29 lakhs paid as transit fees to the Forest Department ofUttar Pradesh is refundable with interest @ 9% per annum. The company has made necessary applicationswhich is under process and will be accounted for as and when the company will get the refund.
a) Demand for sales tax and GST amounting to Rs. 165.05 lacs (Rs. 165.05 lacs) which are not acknowledgedas 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 taxauthorities.
b) Mandi Samitee demand on Katha amounting to Rs. 2.38 lacs (Rs. 2.38 Lacs) has been disputed by theCompany and stayed by Honorable High Court, Allahabad.
c) During the FY 2017 - 18, Commissioner of Customs, Nhava Sheva had passed an Ex-Partie Judgementand raised a demand of Rs. 341.78 Lacs and imposed a penalty of Rs 341.78 Lacs against a Show CauseNotice issued by the Additional Director General, Directorate of Revenue Intelligence, Kolkata in the year2010. The said order passed by the Commissioner being contrary to law and against the principle of naturaljustice, based on assumption and presumptions without any evidence on record and was not acceptable tothe Company, hence an appeal was preferred by the Company before CESTAT Nhava Sheva by producingevidence 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 alsomade liable in the above said order on whom a penalty of Rs.15.00 lacs and Rs.10.00 lacs respectivelyimposed. An appeal was also preferred on their behalf and a sum of Rs.1.90 lacs was deposited by theCompany and the amount is appearing in Loans & Advances account.Consequently, as per the legaladvice obtained, no provision is made at this stage. Final adjustment if any will be done as and when thematter is crystalized.
d) During the year, the Company had received a revised order from the Income Tax Department under section154/147 of the Income Tax Act, for the Assessment Year 2018 - 19. Wherein the Income Tax departmenthas reduced the tax demand from Rs. 1717.49 Lacs to Rs. 1017.17 Lacs. The reduction in the demandwas due to error in the computation of interest U/s 234B, which resulted in a excess levy of interrest in theprevious order. The appeal against the said order is still pending before the Commissioner of Income Tax(Appeals).
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 oron 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), includingforeign 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 onbehalf of the company (ultimate beneficiaries) or
(a) Crypto Currency or Virtual Currency
(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and Rules madethereunder
(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