MERINO GROUP - Merinoindia.com · MERINO GROUP Annual Report | open size A4 size CONQUERING NEWHEIGHTS ANNUAL REPORT MERINO INDUSTRIES LTD. 2015. 3 Merino Industries Ltd. (1926-2009)

1

0374-2330748 0374-2330748

MERINO INDUSTRIES LTD.CIN: U51909WB1965PLC026556Regd. O�ce: 5, Alexandra Court 60/1,Chowringhee Road, Kolkata 700020

033-22901214 033-22870314P: F: [email protected]:

MARKETING OFFICE70, KLJ Complex, 2nd Floor, Moti Nagar, New Delhi-110015

011-45557000, 25107617 011-45557050P: F: [email protected]:

REGISTERED OFFICE5, Alexandra Court, 60/1,Chowringhee Road, Kolkata-700020

033-22901214/1215 033-2287 0314 P: F: [email protected]:

FACTORY OFFICESHapur: Village-Achheja, PO-Hapur-245 101 Dist.–Hapur (U.P.)


Rohad: 44 KM. Stone, Delhi-Rohtak Road, Rohad, Distt. Jhajjar, Haryana-124501

01276-221000, 304900 01276-221050 P: F: [email protected]:

Hosur: Bagalur Road, Kalahasthipuram Village, Hosur Taluk, Distt. Krishnagiri, Tamil Nadu-635103.

04344-293545, 327765 04344-245307P: F:

BRANCH OFFICESAhmedabad: P: 079-30075775, 26589511,

079-26589511F: [email protected] E:

Bengaluru: P: F: 080-42418000 080-26941447 [email protected]:

Bhubaneswar: P: 0674-3255594, 2597795 0674-2597795F: [email protected]:

Chennai: P: 044-49303333, 49303300, 044-49303313F: [email protected]:

Coimbatore: P: 0422-2542841, 3299752 0422-4366723F: [email protected]:

New Delhi: P: 011-30515300, 25448011 011-30515301F: [email protected]:

Hyderabad: P: 040-24801202, 24801203, 040-24801103F: [email protected]:

Jaipur: P: 0141-2206159, 3290062 0141-4021067F: [email protected]:

Kochi: P: 0484-2398265, 2397972 0484-2397972F: [email protected]:

Mumbai: P: F: 022-67991970/71 022-67991973 [email protected]:

Nagpur: P: 0712-2436372, 2457123 0712-2420183F:

Pune: P: 020-24273249, 24273265 020-24271408F: [email protected]:

Tinsukia: P: 0374-2338975, 2340975 0374-2330748F:

www.merinoindia.com

0374-2330748

MERINO GROUP

Annual Report | open size A4 size

CONQUERINGNEWHEIGHTS

ANNUALREPORT

2015MERINO INDUSTRIES LTD.

3

Merino Industries Ltd.

(1926-2009)Shri Man Kumar Lohia

Founder Chairman and inspiration behind the Merino Group

MERINO INDUSTRIES LIMITED

4

5


Board of Directors

Executive ChairmanShri Champa Lal Lohia

Executive Vice-ChairmanShri Rup Chand Lohia

Managing DirectorShri Prakash Lohia

DirectorsMiss Ruchira Lohia – Whole-time Director Shri Prasan Lohia – Whole-time Director Shri Bikash Lohia – Whole-time Director Shri Madhusudan Lohia – Whole-time Director Shri Nripen Kumar Dugar – Whole-time Director Dr. Gautam Bhattacharjee – Independent Director Shri Amar Nath Roy – Independent Director

Audit CommitteeShri Amar Nath Roy – Chairman Dr. Gautam Bhattacharjee Shri Prasan Lohia

Stakeholders Relationship CommitteeShri Amar Nath Roy – Chairman Dr. Gautam Bhattacharjee Shri Prasan Lohia

Nomination and Remuneration CommitteeShri Amar Nath Roy – Chairman Dr. Gautam Bhattacharjee Shri Prasan Lohia

Corporate Social Responsibility CommitteeShri Champa Lal Lohia – Chairman Shri Prakash Lohia Shri Prasan Lohia Shri Amar Nath Roy

Chief Financial OfficerShri Asok Kumar Parui

Company SecretaryShri Sumantra Sinha

Registered Office5, Alexandra Court, 60/1, Chowringhee Road, Kolkata-700 020 Phone: 2290-1214, Fax: 91-33-2287-0314, E-mail: [email protected] Website: www.merinoindia.com CIN: U51909WB1965PLC026556

PlantsDelhi-Hapur Road, Vill. Achheja, P.O. Hapur-245 101 Dist. Hapur (U.P.)

Bagalur Road, Vill. Kalahasthipuram, Hosur - 635 103, Dist. Krishnagiri Tamil Nadu

BranchesAhmedabad, Bangalore, Bhubaneswar, Chandigarh, Chennai, Coimbatore, Delhi, Ernakulam, Hyderabad, Jaipur, Mumbai, Nagpur, Pune, Rohad, Tinsukia and Vijaywada

AuditorsSinghi & Co. Chartered Accountants

Cost AuditorsBhagat & Associates Cost Accountants

BanksAXIS Bank Limited Standard Chartered Bank Kotak Mahindra Bank Limited IDBI Bank Limited Punjab National Bank The Hongkong and Shanghai Banking Corporation Limited DBS Bank Limited CITI Bank N.A.

Registrars & Share Transfer AgentsC.B Management Services (P) Ltd. P-22, Bondel Road, Kolkata-700 019 Phone Nos.: (033) 4011 6700, 2280 6692 – 94 Fax: (033) 2287 0263; Email: [email protected]


6

Table of Contents

Chairman’s Message 5

Directors’ Report 7

Auditors’ Report 33

Balance Sheet 38

Statement of Profit & Loss 39

Cash Flow Statement 40

Notes to the Financial Statements 42

Ten Years at a glance 74

Financial Highlights 75

Annexture in Form AOC-1 relating to subsidiary company 77

Consolidated Financial Statements 79

Notice (Separate insert)

7

Dear fellow shareholders,

It gives me great pleasure to introduce our Annual Report for the financial year 2014-15. In addition to presenting our operational and financial performance, this report follows practice of embedding sustainability at the centre of everything we do.

I am feeling very delighted to announce that Merino has once again delivered a spirited performance across domestic & international markets. The outstanding results in all facets of the business can be attributed to the commitment, diligence and energy exuded by each and every individual across the organization. It’s a matter of great pride that Merino’s turnover at 90824.61 Lacs in 2014-15 is highest ever till date. This is a reflection of the Company’s focus on innovation, differentiation and its Brand

centric strategy. It is for this reason that Merino has emerged as a significant player amongst the leading laminate manufacturers and exporters.

We would not like to rest on our laurels. Instead, it is our objective to take the Company to the next level of growth. Over the next few years, we have plans to make significant investments in the expansion of business activities. These investments are important in our quest to deliver shareholder value at all times.

In many of our markets, the external environment continued to be very difficult in 2015 with unprecedented geopolitical challenges, currency volatility and suppressed consumer confidence. Despite these headwinds, our proven strategy and highly engaged work-force allowed us to maintain and reinforce our strong position across our markets. We made good progress with our cost leadership initiatives, stream-lining our production infrastructure and extending our reach and customer service while reducing cost. Our disciplined approach to working capital, allowed us to once again generate solid free cash flow.

While reinforcing the foundations of our business, operations is the key to our growth and expansion and equally important is our commitment to the large customer base that has propelled our journey this far. We have conducted several customers - oriented promotion campaigns to acquire new customers and retain the existing ones, consciously focusing on customer segmentation to better understand their needs and suitably enhance our offerings to meet their expectations. We have laid the foundations of a slew of initiatives across business segments and a collaborative effort among the businesses has proved extremely beneficial in reaping rich rewards.

On the product front, the company showcased several impressive new products at the Acetech Expo (Pan India) & Interzum Expo (Germany), with a lineup that included Postforming Compact Laminates & Hi-Gloss Panels, due to be launched in the coming months. Both the products have created high levels of excitement among the potential customers. Last year’s launched products Wall Claddings - Internal & External both are doing exceptionally well in the market.

Corporate Governance

Given the complex environment in which we operate and the mounting challenges that we face on a daily basis, promoting “Good Governance” is the key to our progress and maintaining the highest levels of ethical standards is fundamental to our long-term growth. As we continue to focus on proactive and preventive measures to encourage good governance, we also appreciate the significance of a robust internal control system, combined with a dynamic ERP platform.

Corporate Social Responsibility

Our CSR activities are of paramount importance to us and it is a source of great joy to be able to contribute to

Executive Chairman’s Message

7


8

the upliftment of society and the nation. Your Company’s social responsibility extends well beyond business and financial targets. Merino has implemented CSR programmes primarily in and around the rural areas adjoining work centres of your Company. These programmes are taken up under the key thrust areas identified by your company – Education targeted towards the underprivileged girl child including adult education, Yoga training & therapy, Ayurveda applications, Drinking water/Meal, Hygiene/Sanitation, Healthcare/Medical facility, Women empowerment and Environment protection.

The Group has extended financial assistance as grants to underprivileged children around the workplace. They are imparted education at Swami Vivekanand Arunoday Vidyalaya and provided with books, meals and to and fro transportation, free of cost.

Under the “Swami Vivekananda” Mid-day Meal Program more than 500 students at various schools are provided with nutritious and hygienic meals prepared at our ISO certified kitchens.

Under the Healthcare & Medical initiative we have established free dispensaries as well as provided mobile vans and doctors on service in addition to organising free health, eye and dental check-up camps. This initiative is supported by the Government of India and W.H.O. Elimination of Tuberculosis is the main objective of this initiative.

Under the Hygiene & Sanitation for all scheme Merino has constructed several toilet blocks and installed hand pumps at various places for drinking water.

Contributions to the exchequer

During the year, Merino and its promoters have contributed to the exchequer towards various taxes and duties, both direct and indirect, amounting to Rs. 31222 Lacs.

Challenges notwithstanding, today we are at a threshold where opportunities abound. Our vision to grow and expand our horizons, exploring all avenues to maximize business opportunities, has taken us beyond laminates into new lines of business and across geographies. Aggressive value creation through a diversified portfolio, coupled with an appetite for organic growth, will enable us to achieve our desired goals.

Although our priority will continue to be in the area of enhancing organizational capabilities to deliver enhanced performance our demographic profile makes it crucial for us to take our manpower up the learning curve faster. Learning and Development therefore, will be an area of greater focus in the times to come. Further, leveraging technology to complement talent is yet another path that we will continue to explore in the foreseeable future. The need of the hour is to push ourselves beyond our capabilities and explore opportunities where we can extend our contributions and expertise the enable the corporation to transcend all boundaries.

I thank you all for the faith reposed in us and assure you that we will continue our course on a growth trajectory, taking Merino to greater heights. I am confident that all the endeavors that we are pursuing will yield positive results and create lasting value to each and every stakeholder.

Jai Hind.

New Delhi, Champa Lal Lohia 13th May, 2015 Executive Chairman

9

DIRECTORS’ REPORTTO THE SHAREHOLDERS

Dear Shareholders,

Your directors are pleased to present their Fiftieth Annual Report on the business and operations of the company together with the Audited Statement of Accounts for the year ended 31st March, 2015.

FINANCIAL HIGHLIGHTS (STANDALONE AND CONSOLIDATED)

During the year under review, performance of your company is as under: (Rs. Lac)

Particulars Standalone performance Consolidated performance

Year ended 31st March

2015


2014


2015


2014

Total Revenue 64109.89 56394.19 92813.38 80945.27

Profit before taxation 6637.50 3525.57 11337.58 6472.46

Less: Tax Expense 2363.55 1330.63 4081.45 2386.43

Profit before Minority Interest – – 7256.13 4086.03

Less: Minority Interest – – 791.24 512.98

Profit after tax 4273.95 2194.94 6464.89 3573.05

Add: Balance brought forward from the previous year 8890.91 7081.58 14420.48 11399.96

Balance 13164.86 9276.52 20885.37 14973.01

Which the Directors have appropriated as under:

Interim Dividend 155.54 155.54 155.54 155.54

Dividend distribution tax on interim dividend 15.14 10.58 26.43 26.44

General Reserve 427.40 219.49 660.40 370.55

TOTAL 598.08 385.61 842.37 552.53

Balance Profit carried forward to the next year 12566.78 8890.91 20043.00 14420.48

ECONOMIC OVERVIEW

The Indian economy grew during the current fiscal with inflationary conditions showing welcome signs of lessening.

The Global demand for laminates and allied products rose in the backdrop of increased activities in the construction arena of developing countries and the subsequent path towards recovery following the earlier recessionary conditions, witnessed all round. The furniture industry focussed on product development and improved textured finishing with an eye towards aesthetics.

The Indian laminate market witnessed emerging players adding to the domestic competition which created constant pressure on this consumer goods segment coupled with the constant pressure of rising input costs. However, there were visible signs of growth as decorative laminates steadily penetrated a significant slice of the veneer segment, more so in the value added premium varieties.


10

STATE OF COMPANY’S AFFAIRS, SEGMENTWISE PERFORMANCE AND FUTURE OUTLOOK

In such a backdrop, your Company reported an impressive increase in Total Revenue by Rs. 7715.70 Lac as compared to that of the previous year. There was a substantial growth in profits during the year, the profit before tax indicating an increase by Rs. 3111.93 Lac as compared to previous year’s figures. The Company’s net profit after taxes stood at Rs. 4273.95 Lac as against Rs. 2194.94 Lac last year.

The Consolidated Total Revenue for Financial Year 2014-15 was placed at Rs. 92813.38 Lac with the previous year’s figures being Rs. 80945.27, registering a growth of about 15%. The consolidated profit before tax stood at Rs. 11337.58 Lac as against Rs. 6472.46 Lac, last year. The consolidated profit after tax and minority interest stood at Rs. 6464.89 Lac as compared with Rs. 3573.05 Lac, last year.

Your Company continued to operate primarily in four segments namely manufacturing of Laminates, Potato Flakes, Panel Products & Furniture and Formaldehyde while trading in similar and allied products including Acrylic solid surface. During the year under review revenue generated from the Manufacturing segment was Rs. 93266.80 Lac as against Rs. 82225.74 Lac and that of the trading segment was Rs. 3098.25 as against Rs. 3219.75 Lac, last year.

The Directors expect your Company would continue to register further improved results in the coming years.

DIVIDEND AND RESERVES

For the year under review, your Company declared and paid Interim Dividend at the rate of Rs. 1.50 per share duly approved at the Board meeting held on 8th August, 2014. In view of the same and to conserve liquidity, your Directors have not recommended any final dividend for the year.

The Company had transferred a sum of Rs. 427.40 Lac to the General Reserve during the year under review, as against Rs. 219.49 Lac in the previous year.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The unclaimed and unpaid dividend relating to the financial years 2006-2007 and 2007-2008 were due for transfer on 02.11.2014 and 04.12.2014 respectively, to the Investor Education and Protection Fund established by the Central Government, which was duly deposited by the Company on 30.10.2014 and 26.11.2014.

SHARE CAPITAL

The paid up equity share capital as at 31st March, 2015 stood at Rs. 1047.03 Lac. During the year under review the Company had neither issued any shares with differential voting rights nor has granted any stock options or sweat equity.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 (“the Act”) read with Rule 12 of the Companies (Management and Administration) Rules, 2014, in form no. MGT -9, for the Financial Year 2014-15 has been enclosed as Annexure 1.

NUMBER OF BOARD MEETINGS

During the Financial Year 2014-15 under review, four meetings of the Board of Directors of the Company were held (i.e. on 14.05.2014, 08.08.2014, 05.12.2014 and 17.03.2015).

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS BY COMPANY

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

As all transactions entered with Related Parties for the year under review were on Arm’s Length basis and in the ordinary course of business, the provisions of Section 188 of the Act therefore are not attracted. Thus, disclosure under Section 134(3)

11

(h) of the Act in form AOC-2 is not applicable.

Further, there were no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. Omnibus approval was obtained at Board level for such transactions of repetitive nature. Your Directors draw attention of the members to Note No. 35 to the financial statement which sets out related party disclosures.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were neither any material changes affecting the financial position of the Company occurring between the end of the financial year to which these financial statements relate and the date of this report, nor any significant or material orders were passed by regulators or authorities impacting the going concern status and the Company’s operations in future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to Conservation of Energy, Technology absorption, Foreign exchange Earnings and Outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 2 and is attached to this report.

DETAILS AND PERFORMANCE OF SUBSIDIARY

The Company has one subsidiary, Merino Panel Products Limited and during the year under review, its revenue from operations increased by Rs. 2903.41 Lac as compared to that of the previous year and the Profit before tax for the year increased to Rs. 4839.18 Lac as against Rs. 3079.39 Lac in the previous year. During the year, the F.O.B. value of its exports amounted to Rs. 12183.06 Lac. The Company’s share holding in the subsidiary’s equity continues to be 14,93,000 equity shares out of its total paid-up equity share capital consisting of 20,00,000 shares.

Pursuant to the provisions of Section 129(3) of the Act a statement containing salient features of the above said subsidiary company, in Form AOC-1 is attached to the Accounts. The separate audited financial statements in respect of the subsidiary company shall be kept open for inspection by the members of the company at the ensuing annual general meeting.

RISK MANAGEMENT POLICY

The Statement showing the details regarding the development and implementation of Risk Management Policy of the Company is furnished in Annexure 3 and is attached to this report. The risk management includes identifying types of risks, risk assessment, risk handling, governance and reporting.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Amar Nath Roy (DIN 00109280) and Dr. Gautam Bhattacharjee (DIN 00109269), Non-executive Directors were appointed as Independent Directors at the annual general meeting of the company held on 31.07.2014 pursuant to the provisions of the Act and the rules made thereunder to hold office up to the 52nd Annual General Meeting in the calendar year 2017.

Miss Ruchira Lohia (DIN 00127797) and Shri Prasan Lohia (DIN 00061111), Whole-time Directors retire at this Annual General Meeting and being eligible offer themselves for re-election.

The Board appointed Shri Asok Kumar Parui as Chief Financial Officer and Shri Sumantra Sinha as Company Secretary, both being Key Managerial Personnel, with effect from 02.05.2014.

ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS

The company has laid down internal financial controls which are working adequately and operating effectively. It has built up a control framework for ensuring efficient conduct of its business. It also ensures safeguard of assets, prevention and detection of frauds and errors and also ensures accuracy and completeness of the accounting records. The Company has developed an Entity Level Control framework for monitoring of overall control indicators for Merino Group.

Internal Financial controls are monitored continuously to ensure continuous Identification of control gaps and preparation of mitigation plan for the gaps.


12

DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

DECLARATION BY INDEPENDENT DIRECTORS

Shri Amar Nath Roy (DIN 00109280) and Dr. Gautam Bhattacharjee (DIN 00109269), the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Act so as to qualify themselves to be appointed as Independent Directors under the provisions of the Act and the relevant rules.

STATUTORY AUDITORS

M/s. Singhi & Company, Chartered Accountants (FRN 302049E), have been the statutory auditors of the Company since 2012-13, appointed at the Annual General Meeting (AGM) of the Company held on 29.09.2012. Based on the recommendations of the Audit Committee, the Board of Directors, has at its meeting held on 13.05.2015, proposed the appointment of M/s. Singhi & Company, being eligible for such re-appointment, as the statutory auditors of the Company for a period of five years to hold office from the conclusion of the 50th AGM till the conclusion of the 55th AGM of the company to be held in the year 2020 subject to ratification of their appointment at every AGM.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act and the rules framed thereunder, the company has appointed M/s. A. K. Labh & Co. a firm of Company Secretaries in Practice (CP No. 3238) to undertake the secretarial audit of the company. The secretarial audit report is included as Annexure 4 and forms an integral part of this report.

EXPLANATIONS TO AUDITORS’ REMARKS

There are no qualifications, reservations or adverse remarks made by the Statutory Auditors and the Practising Company Secretary in their respective reports, requiring explanations of the Board.

COST AUDIT

As per the requirement of Central Government and pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Board of Directors on the recommendation of Audit Committee had appointed M/s. Bhagat & Associates, Cost Accountants (Membership No. 16388) as Cost Auditor to audit the cost accounts of the Company for the financial year 2015-16. As required under the Act, a resolution seeking member’s approval for the remuneration payable to the Cost Auditor for the said period forms part of the Notice convening the Annual General Meeting.

The Cost Audit Report for the financial year 2013-14 was filed with the Ministry of Corporate Affairs on 07.09.2014.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has always strived towards the Group’s mission of social development while adopting an ethos of compassion with a view to elevating the quality of life and caring for the weaker sections of the society.

The Company has carried out CSR activities and spent the requisite amounts as required by law through group managed registered trusts, authorized to carry out such activities as stipulated vide the provisions of Section 135 read with Schedule VII to the Act and the group CSR policy. In addition, a sum of Rs. 335.04 Lac has been spent towards carrying on other aligned charitable activities of CSR nature including corpus donations aimed primarily at eradicating hunger, poverty extending help towards old age homes and to underprivileged persons.

The disclosure as per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is furnished in Annexure 5 and attached to this report.

13

AUDIT COMMITTEE

Your Company has an Audit Committee at the Board level with terms of reference specified by the Board and with the powers and the role that are in accordance with Section 177 of the Act read with Rule 6(ii) of the Companies (Meetings of Board and its Powers) Rules 2014.

The Committee comprises Shri Amar Nath Roy (DIN 00109280) and Dr. Gautam Bhattacharjee (DIN 00109269), Independent Directors, Shri Prasan Lohia (DIN 00061111), Whole-time Director. Shri Sumantra Sinha, Company Secretary acts as the Secretary to the Committee.

The Committee actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. During the year under review, there has been no instance of non-acceptance of any recommendations of the Committee by the Board of Directors.

NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors and Key Managerial Personnel of the Company which lays down criteria, evaluation for selection and appointment of the same.

Your Company has a Nomination and Remuneration Committee in accordance with section 178 of the Act read with Rule 6(ii) of the Companies (Meetings of Board and its Powers) Rules 2014. The Committee comprises Shri Amar Nath Roy (DIN 00109280) and Dr. Gautam Bhattacharjee (DIN 00109269), Independent Directors, Shri Prasan Lohia (DIN 00061111), Whole-time Director and Shri Sumantra Sinha, Company Secretary acts as the Secretary to the Committee.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Company has a Stakeholders Relationship Committee to oversee, monitor and approve transfer of securities and resolve grievances of the shareholders.

The Committee comprises Shri Amar Nath Roy (DIN 00109280) and Dr. Gautam Bhattacharjee (DIN 00109269), Independent Directors, Shri Prasan Lohia (DIN 00061111), Whole-time Director and Shri Sumantra Sinha, Company Secretary acts as the Secretary to the Committee.

No grievance was reported to the Committee during the year under review.

VIGIL MECHANISM

As per provisions of Section 177 of the Act and Rules framed thereunder the company has formulated and established a vigil mechanism to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases.

This policy is to establish the said mechanism for employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company’s code of conduct or ethics policy and is displayed on the Company’s website.

INTERNAL COMPLAINTS COMMITTEE

Pursuant to the stipulations as set out under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act and Rules, 2013 as notified by Government of India an Internal Complaints Committee of the Company was constituted on 08.08.2014 to inter-alia, prevent discrimination and sexual harassment against woman at the Company’s workplace, ensuring support to the victimized and termination of harassment and to recommend appropriate disciplinary action against the guilty party. During the year under review, no complaints were reported to the Committee.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to Remuneration and other details as required under Section 197 of the Act read with Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is furnished in Annexure 6 forming part of the Directors’ Report.


14

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Company will soon complete fifty fruitful years of its operations and the Directors are proud to state that the Merino brand has carved a niche for itself during this length of time and are thankful to all stakeholders who have contributed towards the growth and success of the Company.

The Directors wish to place on record their appreciation to the Company’s Shareholders, Business Associates, Bankers, Financial Institution and all Government Authorities for their co-operation and support while sincerely acknowledging the significant contributions made by all the employees of the Company.

For and on behalf of the Board of Directors

New Delhi Champa Lal Lohia 13th May, 2015 Executive Chairman

15

ANNEXURE - 1

ANNEXURE TO DIRECTORS’ REPORT

FORM NO. MGT-9 EXTRACT OF ANNUAL RETURN

as on the financial year ended on 31.03.2015 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies

(Management and Adminstration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN:- U51909WB1965PLC026556

ii) Registration Date 29.07.1965

iii) Name of the Company Merino Industries Limited

iv) Category / Sub-Category of the Company Company Limited by Shares / Indian Non-government Company

v) Address of the Registered Office 5, Alexandra Court, 60/1, Chowringhee Road, & Contact details Kolkata-700020, West Bengal Tel: 033-22901214, Fax: 033-22870314, E-mail: [email protected] Website: www.merinoindia.com

vi) Whether listed company No

vii) Name, Address and Contact details of C B Management Services (P) Limited, Registrar and Transfer Agent, if any P-22, Bondel Road, Kolkata- 700019, Tel : 033-2280-6692/93/94, 033-40116700/11/16/18/23/28; Fax : 91-033-40116739; E-mail : [email protected] CIN : U74140WB1994PTC062959

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl. Name and Description of main NIC Code of the % to total turnover No. products / services Product / service of the company

1 Decorative Laminates 4823-90-19 67.65

2 Furniture 94036000 17.58

3 Potato Flakes 1105-2000 12.02

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. Name and Address of CIN / GLN Holding/Subsidiary % of shares Applicable No. the Company /Associate held Section

1 Merino Panel Products Limited, 5, Alexandra Court, U20299WB1994PLC064386 Subsidiary 74.65 2(87) 60/1, Chowringhee Road, Kolkata-700020, West Bengal


16

IV. SHARE HOLDING PATTERN ( Equity Share Capital Breadkup as Percentage of Total Equity

(i) Category-wise Share Holding

Category of Shareholder No.of Shares held at the beginning No.of Shares held at the end % of the year (01.04.2014) of the year (31.03.2015) Change

Demat Physical Total % of Total Demat Physical Total % of Total during Shares Shares the year

(A) Promoter

1 Indian

(a) Individuals/ HUF 6176855 167510 6344365 61.18 6261955 171910 6433865 62.05 0.86

(b) Central Government

(c) State Government(s)

(d) Bodies Corporate 642900 2742800 3385700 32.65 642900 2742800 3385700 32.65 0.00

(e) Bank/Financial Institutions

(f) Any Other (specify)

Sub Total(A)(1) 6819755 2910310 9730065 93.83 6904855 2914710 9819565 94.70 0.86

2 Foreign

(a) NRIs-Individuals

(b) Other-Individuals

(c) Bodies Corporate

(d) Bank/Financial Institutions

(e) Any Other (specify)

Sub Total(A)(2) 0 0 0 0.00 0 0 0 0.00 0.00

Total Shareholding of 6819755 2910310 9730065 93.83 6904855 2914710 9819565 94.70 0.86 Promoter and Promoter Group (A)= (A)(1)+(A)(2)

(B) Public shareholding

1 Institutions

(a) Mutual Funds

(b) Bank/Financial Institutions

(c) Central Govt

(d) State Govt(s)

(e) Venture Capital Funds

17

(f) Insurance Companies

(g) Foreign Institutional Investors (FII)

(h) Foreign Venture Capital Funds

(i) Others (specify)

(ii) UTI

Sub-Total (B)(1) 0 0 0 0.00 0 0 0 0.00 0.00

2 Non-institutions

(a) Bodies Corporate

i) Indian 7600 9700 17300 0.17 7600 9700 17300 0.17 0.00

ii) Overseas

(b) Individuals

i) Individual 111687 430548 542235 5.23 114287 418448 532735 5.14 -0.09 shareholders holding nominal share capital up to Rs. 1 lakh

ii) Individual 80000 0 80000 0.77 0 0 0 0.00 -0.77 shareholders holding nominal share capital in excess of Rs. 1lakh.

(c) Others (specify)

Sub-Total (B)(2) 199287 440248 639535 6.17 121887 428148 550035 5.30 -0.86

(B) Total Public Shareholding 199287 440248 639535 6.17 121887 428148 550035 5.30 -0.86 (B)= (B)(1)+(B)(2)

TOTAL (A)+(B) 7019042 3350558 10369600 100.00 7026742 3342858 10369600 100.00 0.00

(C) Shares held by Custodians for GDRs & ADRs

Sub-Total (C) 0 0 0 0.00 0 0 0 0.00 0.00

GRAND TOTAL (A)+(B)+(C) 7019042 3350558 10369600 100.00 7026742 3342858 10369600 100.00 0.00


18

(ii) Shareholding of Promoters

Shareholding at the beginning Shareholding at the end of the year (01.04.2014) of the year (31.03.2015)

Sl Shareholder’s Name No of % of total % of shares No of % of total % of shares % change No. Shares shares of Pledged/ Shares shares of Pledged/ in share- Company encumbered Company encumbered holding to total to total during shares shares the year

1 Merino Exports Pvt Ltd 2422800 23.36 0.00 2422800 23.36 0.00 0.00

2 Merino Exports Private Limited 642900 6.20 0.00 642900 6.20 0.00 0.00

3 Bikash Lohia 634240 6.12 0.00 635940 6.13 0.00 0.01

4 Deepak Lohia 615189 5.93 0.00 615189 5.93 0.00 0.00

5 Prakash Lohia 560900 5.41 0.00 562200 5.42 0.00 0.01

6 Ruchira Lohia 506156 4.88 0.00 506556 4.89 0.00 0.00

7 Man Kumar Lohia 425200 4.10 0.00 425200 4.10 0.00 0.00

8 Champa Lal Lohia 368400 3.55 0.00 368400 3.55 0.00 0.00

9 Merino Services Limited 320000 3.09 0.00 320000 3.09 0.00 0.00

10 Neera Lohia 298750 2.88 0.00 298750 2.88 0.00 0.00

11 Vandana Lohia 298300 2.88 0.00 298300 2.88 0.00 0.00

12 Madhusudan Lohia 296435 2.86 0.00 296435 2.86 0.00 0.00

13 Meghna Lohia 264535 2.55 0.00 264535 2.55 0.00 0.00

14 Tara Devi Lohia 241100 2.33 0.00 241100 2.33 0.00 0.00

15 Manoj Lohia 214200 2.07 0.00 214200 2.07 0.00 0.00

16 Rup Chand Lohia 205100 1.98 0.00 205100 1.98 0.00 0.00

17 Abhiroop Lohia 200000 1.93 0.00 200000 1.93 0.00 0.00

18 Praveena Lohia 179800 1.73 0.00 179800 1.73 0.00 0.00

19 Prasan Lohia 167850 1.62 0.00 167850 1.62 0.00 0.00

20 Sita Devi Lohia 163400 1.58 0.00 163400 1.58 0.00 0.00

21 Usha Lohia (U/G Champa Lal Lohia) 160000 1.54 0.00 160000 1.54 0.00 0.00

22 Sheela Lohia 117500 1.13 0.00 117500 1.13 0.00 0.00

23 Sashi Lohia 100000 0.96 0.00 100000 0.96 0.00 0.00

24 Pragya Lohia 84500 0.81 0.00 84500 0.81 0.00 0.00

25 Nayantara Lohia 80000 0.77 0.00 80000 0.77 0.00 0.00

26 Uma Singi 80000 0.77 0.00 80000 0.77 0.00 0.00

19

27 Anuja Lohia 50000 0.48 0.00 50000 0.48 0.00 0.00

28 Madan Mohan Singi 25300 0.24 0.00 25300 0.24 0.00 0.00

29 Amarnath Roy 3000 0.03 0.00 3000 0.03 0.00 0.00

30 Govind Mundra 2200 0.02 0.00 2200 0.02 0.00 0.00

31 Bikash Lohia 800 0.01 0.00 1300 0.01 0.00 0.00

32 Nripen Kr Dugar 600 0.01 0.00 600 0.01 0.00 0.00

33 Prakash Lohia 400 0.00 0.00 800 0.01 0.00 0.00

34 Prasan Lohia 200 0.00 0.00 500 0.00 0.00 0.00

35 Ruchira Lohia 200 0.00 0.00 400 0.00 0.00 0.00

36 Madan Mohan Singhi 100 0.00 0.00 100 0.00 0.00 0.00

37 Prekshi Lohia 80000 0.77 0.00 80000 0.77 0.00 0.00

38 Bikash Lohia 0 0.00 0.00 2000 0.02 0.00 0.02

39 Prakash Lohia 0 0.00 0.00 1500 0.01 0.00 0.01

40 Prasan Lohia 0 0.00 0.00 1500 0.01 0.00 0.01

41 Ruchira Lohia 0 0.00 0.00 1000 0.01 0.00 0.01

(iii) Change in Promoter’s Shareholding (please specify if there is no change

Shareholding at Shareholding the beginning of Cumulative the year during the year (01.04.2014 ) (01.04.2014 to 31.03.2015 )

Sl. Folio no. Name Remarks Shareholding/ No.of % of No.of % of No. Transaction Shares total Shares total Date shares shares of the of the Com- Com- pany pany

1 0000027 Merino Exports Private Limited At the begining of the year 01-04-2014 2422800 23.36 2422800 23.36 At the end of the year 31-03-2015 2422800 23.36

2 IN30018312009696 Merino Exports Private Limited At the begining of the year 01-04-2014 642900 6.20 642900 6.20 At the end of the year 31-03-2015 642900 6.20

3 IN30069310060505 Bikash Lohia At the begining of the year 01-04-2014 634240 6.12 634240 6.12 Increase 11-07-2014 1300 0.01 635540 6.13 Increase 27-03-2015 400 0.00 635940 6.13 At the end of the year 31-03-2015 635940 6.13

4 IN30069310062548 Deepak Lohia At the begining of the year 01-04-2014 615189 5.93 615189 5.93 At the end of the year 31-03-2015 615189 5.93


20

5 IN30069310060850 Prakash Lohia At the begining of the year 01-04-2014 560900 5.41 560900 5.41 Increase 11-07-2014 800 0.01 561700 5.42 Increase 20-03-2015 500 0.00 562200 5.42 At the end of the year 31-03-2015 562200 5.42

6 IN30069310062556 Ruchira Lohia At the begining of the year 01-04-2014 506156 4.88 506156 4.88 Increase 11-07-2014 400 0.00 506556 4.89 At the end of the year 31-03-2015 506556 4.89

7 IN30069310060835 Man Kumar Lohia At the begining of the year 01-04-2014 425200 4.10 425200 4.10 At the end of the year 425200 4.10

8 IN30069310060843 Champa Lal Lohia At the begining of the year 01-04-2014 368400 3.55 368400 3.55 At the end of the year 31-03-2015 368400 3.55

9 0002505 Merino Services Limited At the begining of the year 01-04-2014 320000 3.09 320000 3.09 At the end of the year 31-03-2015 320000 3.09

10 IN30069310062515 Neera Lohia At the begining of the year 01-04-2014 298750 2.88 298750 2.88 At the end of the year 31-03-2015 298750 2.88

11 IN30069310061217 Vandana Lohia At the begining of the year 01-04-2014 298300 2.88 298300 2.88 At the end of the year 31-03-2015 298300 2.88

12 IN30069310062523 Madhusudan Lohia At the begining of the year 01-04-2014 296435 2.86 296435 2.86 At the end of the year 31-03-2015 296435 2.86

13 IN30069310060010 Meghna Lohia At the begining of the year 01-04-2014 264535 2.55 264535 2.55 At the end of the year 31-03-2015 264535 2.55

14 IN30069310062530 Tara Devi Lohia At the begining of the year 01-04-2014 241100 2.33 241100 2.33 At the end of the year 31-03-2015 241100 2.33

15 IN30069310060491 Manoj Lohia At the begining of the year 01-04-2014 214200 2.07 214200 2.07 At the end of the year 31-03-2015 214200 2.07

16 IN30069310060827 Rup Chand Lohia At the begining of the year 01-04-2014 205100 1.98 205100 1.98 At the end of the year 31-03-2015 205100 1.98

17 IN30069310166502 Abhiroop Lohia At the begining of the year 01-04-2014 200000 1.93 200000 1.93 At the end of the year 31-03-2015 200000 1.93

18 IN30069310057655 Praveena Lohia At the begining of the year 01-04-2014 179800 1.73 179800 1.73 At the end of the year 31-03-2015 179800 1.73

19 IN30069310014062 Prasan Lohia At the begining of the year 01-04-2014 167850 1.62 167850 1.62 Increase 11-07-2014 1200 0.01 169050 1.63 Increase 20-03-2015 300 0.00 169350 1.63 Increase 27-03-2015 200 0.00 169550 1.64 At the end of the year 31-03-2015 169550 1.64

20 IN30069310061209 Sita Devi Lohia At the begining of the year 01-04-2014 163400 1.58 163400 1.58 At the end of the year 31-03-2015 163400 1.58

21 0000014 Usha Lohia (U/G Champa Lal Lohia) At the begining of the year 01-04-2014 160000 1.54 160000 1.54 At the end of the year 31-03-2015 160000 1.54

22 IN30069310063021 Sheela Lohia At the begining of the year 01-04-2014 117500 1.13 117500 1.13 At the end of the year 31-03-2015 117500 1.13

23 IN30069310062564 Sashi Lohia At the begining of the year 01-04-2014 100000 0.96 100000 0.96 At the end of the year 31-03-2015 100000 0.96

24 IN30069310166480 Pragya Lohia At the begining of the year 01-04-2014 84500 0.81 84500 0.81 At the end of the year 31-03-2015 84500 0.81

25 IN30069310062572 Nayantara Lohia At the begining of the year 01-04-2014 80000 0.77 80000 0.77 At the end of the year 31-03-2015 80000 0.77

21

26 IN30069310063039 Uma Singi At the begining of the year 01-04-2014 80000 0.77 80000 0.77 At the end of the year 31-03-2015 80000 0.77

27 IN30069310166498 Anuja Lohia At the begining of the year 01-04-2014 50000 0.48 50000 0.48 At the end of the year 31-03-2015 50000 0.48

28 IN30048411132994 Madan Mohan Singi At the begining of the year 01-04-2014 25300 0.24 25300 0.24 At the end of the year 31-03-2015 25300 0.24

29 0001097 Amarnath Roy At the begining of the year 01-04-2014 3000 0.03 3000 0.03 At the end of the year 31-03-2015 3000 0.03

30 0001631 Govind Mundra At the begining of the year 01-04-2014 2200 0.02 2200 0.02 At the end of the year 31-03-2015 2200 0.02

31 0002763 Bikash Lohia At the begining of the year 01-04-2014 800 0.01 800 0.01 Increase 04-07-2014 500 0.00 1300 0.01 Decrease 04-07-2014 1300 0.01 0 0.00 At the end of the year 31-03-2015 0 0.00

32 0000018 Nripen Kr Dugar At the begining of the year 01-04-2014 600 0.01 600 0.01 At the end of the year 31-03-2015 600 0.01

33 0002762 Prakash Lohia At the begining of the year 01-04-2014 400 0.00 400 0.00 Increase 04-07-2014 400 0.00 800 0.01 Decrease 04-07-2014 800 0.01 0 0.00 At the end of the year 31-03-2015 0 0.00

34 0002761 Prasan Lohia At the begining of the year 01-04-2014 200 0.00 200 0.00 Increase 04-07-2014 300 0.00 500 0.00 Decrease 04-07-2014 500 0.00 0 0.00 At the end of the year 31-03-2015 0 0.00

35 0002764 Ruchira Lohia At the begining of the year 01-04-2014 200 0.00 200 0.00 Increase 04-07-2014 200 0.00 400 0.00 Decrease 04-07-2014 400 0.00 0 0.00 At the end of the year 31-03-2015 0 0.00

36 0002432 Madan Mohan Singhi At the begining of the year 01-04-2014 100 0.00 100 0.00 At the end of the year 31-03-2015 100 0.00

37 IN30069310168984 Prekshi Lohia At the begining of the year 01-04-2014 80000 0.77 80000 0.77 At the end of the year 31-03-2015 80000 0.77

38 0002777 Bikash Lohia At the begining of the year 01-04-2014 0 0.00 0 0.00 Increase 30-09-2014 1200 0.01 1200 0.01 Increase 13-03-2015 800 0.01 2000 0.02 At the end of the year 31-03-2015 2000 0.02

39 0002778 Prakash Lohia At the begining of the year 01-04-2014 0 0.00 0 0.00 Increase 17-10-2014 1000 0.01 1000 0.01 Increase 13-03-2015 500 0.00 1500 0.01 At the end of the year 31-03-2015 1500 0.01

40 0002779 Prasan Lohia At the begining of the year 01-04-2014 0 0.00 0 0.00 Increase 17-10-2014 1000 0.01 1000 0.01 Increase 13-03-2015 500 0.00 1500 0.01 At the end of the year 31-03-2015 1500 0.01

41 0002776 Ruchira Lohia At the begining of the year 01-04-2014 0 0.00 0 0.00 Increase 30-09-2014 800 0.01 800 0.01 Increase 13-03-2015 200 0.00 1000 0.01 At the end of the year 31-03-2015 1000 0.01


22

(iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRS)

Shareholding at Cumulative the beginning of Shareholding the year during the year (01.04.2014) (01.04.2014 to 31.03.2015

Sl. Folio no. Name - For each of Remarks Shareholding/ No. of % of No.of % of No. the Top 10 Shareholders Transaction Shares total Shares total Date shares shares of the of the Com- Com- pany pany

1 1204920000049869 Sundeep Navinchandra Ghael At the begining of the year 01-04-2014 8000 0.08 8000 0.08 At the end of the year 31-03-2015 8000 0.08

2 0001010 Sanjay Kumar Jain At the begining of the year 01-04-2014 6400 0.06 6400 0.06 At the end of the year 31-03-2015 6400 0.06

3 1203480000029188 Sushila Lakhotia At the begining of the year 01-04-2014 5000 0.05 5000 0.05 At the end of the year 31-03-2015 5000 0.05

4 0000067 Carefine Woodworks Pvt Ltd At the begining of the year 01-04-2014 4000 0.04 4000 0.04 At the end of the year 31-03-2015 4000 0.04

5 IN30011810022923 Kostub Investment Limited At the begining of the year 01-04-2014 4000 0.04 4000 0.04 At the end of the year 31-03-2015 4000 0.04

6 IN30051312185596 Shashi Karan Sharma At the begining of the year 01-04-2014 4000 0.04 4000 0.04 At the end of the year 31-03-2015 4000 0.04

7 IN30051312188598 Bikram Kumar Sharma At the begining of the year 01-04-2014 4000 0.04 4000 0.04 At the end of the year 31-03-2015 4000 0.04

8 IN30264610092287 Sajjan Bhajanka At the begining of the year 01-04-2014 4000 0.04 4000 0.04 At the end of the year 31-03-2015 4000 0.04

9 IN30084510253737 Jayesh Sanmukhlal Ghael At the begining of the year 01-04-2014 3200 0.03 3200 0.03 At the end of the year 31-03-2015 3200 0.03

10 0000857 Hemang P Mehta At the begining of the year 01-04-2014 2900 0.03 2900 0.03 At the end of the year 31-03-2015 2900 0.03

(v) Shareholding Pattern of Directors and Key Managerial Personnel

Shareholding at Shareholding the beginning of Cumulative the year during the year (01.04.2014 ) (01.04.2014 to 31.03.2015 )

Sl. Folio no. Name - For each of Remarks Shareholding/ No.of % of No.of % of No. the Directors and KMP Transaction Shares total Shares total Date shares shares of the of the Com- Com- pany pany

1 IN30069310060843 Champa Lal Lohia At the begining of the year 01-04-2014 368400 3.55 368400 3.55 At the end of the year 31-03-2015 368400 3.55

2 IN30069310060850 Prakash Lohia At the begining of the year 01-04-2014 560900 5.41 560900 5.41 Increase 11-07-2014 800 0.01 561700 5.42 Increase 20-03-2015 500 0.00 562200 5.42 At the end of the year 31-03-2015 562200 5.42

3 0002762 Prakash Lohia At the begining of the year 31-03-2014 400 0.00 400 0.00 Increase 30-04-2014 400 0.00 800 0.01 At the end of the year 31-03-2015 800 0.01

23

4 0002778 Prakash Lohia At the begining of the year 01-04-2014 0 0.00 0 0.00 Increase 29-09-2014 1000 0.01 1000 0.01 Increase 17-03-2015 500 0.00 1500 0.01 At the end of the year 31-03-2015 1500 0.01

5 0000018 Nripen Kumar Dugar At the begining of the year 01-04-2014 600 0.01 600 0.01 At the end of the year 31-03-2015 600 0.01

6 0001097 Amar Nath Roy At the begining of the year 01-04-2014 3000 0.03 3000 0.03 At the end of the year 31-03-2015 3000 0.03

7 IN30069310062556 Ruchira Lohia At the begining of the year 31-03-2014 506156 4.88 506156 4.88 Increase 11-07-2014 400 0.00 506556 4.89 At the end of the year 31-03-2015 506556 4.89

8 0002764 Ruchira Lohia At the begining of the year 01-04-2014 200 0.00 200 0.00 Increase 30-04-2014 200 0.00 400 0.00 At the end of the year 31-03-2015 400 0.00

9 0002776 Ruchira Lohia At the begining of the year 01-04-2014 0 0.00 0 0.00 Increase 29-09-2014 800 0.01 800 0.01 Increase 17-03-2015 200 0.01 1000 0.01 At the end of the year 31-03-2015 1000 0.01

10 IN30069310060827 Rup Chand Lohia At the begining of the year 01-04-2014 205100 1.98 205100 1.98 At the end of the year 31-03-2015 205100 1.98

11 IN30069310014062 Prasan Lohia At the begining of the year 01-04-2014 167850 1.62 167850 1.62 Increase 11-07-2014 1200 0.01 169050 1.63 Increase 20-03-2015 300 0.00 169350 1.63 Increase 27-03-2015 150 0.00 169550 1.64 At the end of the year 31-03-2015 169550 1.64

12 0002761 Prasan Lohia At the begining of the year 01-04-2014 200 0.00 200 0.00 Increase 30-04-2014 300 0.00 500 0.01 At the end of the year 31-03-2015 500 0.01

13 0002779 Prasan Lohia At the begining of the year 01-04-2014 0 0.00 0 0.00 Increase 29-09-2014 1000 0.01 1000 0.01 Increase 17-03-2015 500 0.01 1500 0.01 At the end of the year 31-03-2015 1500 0.01

14 IN30069310060505 Bikash Lohia At the begining of the year 01-04-2014 634240 6.12 634240 6.12 Increase 11-07-2014 1300 0.01 635540 6.13 Increase 27-03-2015 400 0.00 635940 6.13 At the end of the year 31-03-2015 635940 6.13

15 0002763 Bikash Lohia At the begining of the year 01-04-2014 800 0.01 800 0.01 Increase 04-07-2014 500 0.00 1300 0.01 Decrease 04-07-2014 1300 0.01 0 0.00 At the end of the year 31-03-2015 0 0.00

16 0002777 Bikash Lohia At the begining of the year 01-04-2014 0 0.00 0 0.00 Increase 30-09-2014 1200 0.01 1200 0.01 Increase 13-03-2015 800 0.01 2000 0.02 At the end of the year 31-03-2015 2000 0.02

17 IN30069310062523 Madhusudan Lohia At the begining of the year 01-04-2014 296435 2.86 296435 2.86 At the end of the year 31-03-2015 296435 2.86


24

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment (Rs. In lacs)

Secured Loans Unsecured Loans Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount 9,046.18 5,445.07 - 14,491.25

ii) Interest due but not paid - - - -

iii) Interest accrued but not due 28.92 154.37 - 183.29

Total (i+ii+iii) 9,075.10 5,599.44 - 14,674.54

Change in Indebtedness during the financial year

· Addition 2,519.36 - - 2,519.36

· (Reduction) - -506.88 - -506.88

Net Change 2,519.36 -506.88 - 2,012.48

Indebtedness at the end of the financial year

i) Principal Amount 11,551.80 4,883.01 - 16,434.81

ii) Interest due but not paid - - - -

iii) Interest accrued but not due 42.66 209.55 - 252.21

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (Rs.)

Particulars of Remuneration Executive Executive Managing Whole-time Directors Total Chairman Vice-Chairman Director Amount

Shri Shri Shri Shri Shri Miss Shri Shri Champalal Rup Chand Prakash Prasan Bikash Ruchira Madhusudan Nripen Lohia Lohia Lohia Lohia Lohia Lohia Lohia Kumar Dugar

1 Gross salary

(a) Salary as per provisions 7104000.00 4056000.00 6228000.00 5076000.00 5076000.00 5076000.00 4980000.00 2771424.00 40367424.00 contained in section 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) 100000.00 100000.00 100000.00 100000.00 100000.00 100000.00 100000.00 0 700000.00 Income-tax Act, 1961

(c) Profits in lieu of salary 0 0 0 0 0 0 0 0 0 under section 17(3) Income- tax Act, 1961

2 Stock Option 0 0 0 0 0 0 0 0 0

3 Sweat Equity 0 0 0 0 0 0 0 0 0

4 Commission

– as % of profit 0 0 0 0 0 0 0 0 0

– others, specify… 0 0 0 0 0 0 0 0 0

5 Others, please specify

P.F. 852480.00 486720.00 747360.00 609120.00 609120.00 609120.00 597600.00 16500.00 4528020.00

GRATUITY – – – 57046.00 52663.00 57046.00 36143.00 73655.00 276553.00

LEAVE – – – 30494.00 32648.00 30494.00 39042.00 20018.00 152696.00

Total (A) 8056480.00 4642720.00 7075360.00 5872660.00 5870431.00 5872660.00 5752785.00 2881597.00 46024693.00 Ceiling as per the Act

25

B. Remuneration to other directors: (Rs.)

Particulars of Remuneration Name of Directors Total Amount 1 Independent Directors Shri Amar Nath Roy Dr. Gautam Bhattacharjee

• Feeforattendingboard/committeemeetings 25000 22500

• Commission

•Others,pleasespecify

Total (1) 25000 22500 47500 2 Other Non-Executive Directors

• Feeforattendingboard/committeemeetings

•Commission

•Others,pleasespecify

Total (2) – – – Total (B)=(1+2) 25000 22500 47500 Total Managerial Remuneration Overall Ceiling as per the Act

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD (Rs.)

Particulars of Remuneration Key Managerial Personnel Company Secretary CFO Total Shri Sumantra Sinha Shri Asok Kumar Parui 1 Gross salary 511108.00 1461804.00 1972912.00

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

2 Stock Option

3 Sweat Equity

4 Commission

– as % of profit

– others, specify…

5 Others, please specify

GRATUITY 10915.00 110625.00 121540.00

LEAVE 1048.00 6066.00 7114.00

P.F. 29710.00 88920.00 118630.00

Exgratia 8400.00 8400.00 16800.00

Total 561181.00 1675815.00 2236996.00

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Type Section of the Brief Details of Penalty/Punishment Authority Appeal made, if any Companies Act Description /Compounding fees imposed [RD/NCLT/COURT] (give Details) A. Company NIL NIL NIL NIL NIL

Penalty

Punishment

Compounding

B. Directors NIL NIL NIL NIL NIL

Penalty

Punishment

Compounding

C. Other Officers In Default NIL NIL NIL NIL NIL

Penalty

Punishment

Compounding


26

ANNEXURE – 2


The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 forming part of the Directors’ Report for the year ended 31st March, 2015

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

A. Conservation of energy:

(i) The steps taken or impact on conservation of energy

a) 3.0 MW Turbine installed to save unit cost and electricity in comparison to DG and SEB.

b) Energy Efficient operation of closed loop heating.

(ii) The steps taken by the company for utilizing alternate sources of energy

a) 100 KWP Solar Plant to be proposed for New Furniture plant at Achheja estimated cost being Rs. 65.00 Lac

b) Vam Chiller 103 TR, 160 TR and 262 TR for Process and Comfort cooling total investment being approximately Rs. 200.00 Lac.

(iii) The capital investment on energy conservation equipments

a) By installing solar power plant, there has been reduction in diesel and saving of 1.20 Lac Units per year.

b) By installing new 3.0 MW Turbine saving auxiliary power 8.0 Lac KWH per year (Electrical Units) and also providing power to Achheja Plant. No usage of DG Power.

c) By using 103TR /160TR/262TR Vam chiller, there will be savings of 17 Lac unit/year based on their use.

B. Technology absorption:

(i) The efforts made towards technology absorption

a) Development of high gloss coating on LPL and HPL panel

b) Developments of improved Uni color laminate

c) Development of exterior grade compact panel by introducing new technology of UV coating system

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution

a) Introduction of new value added laminates in market as per customer requirement

b) Solution to customers for wall cladding

c) Conservation of power

d) Product quality and process improvement

e) New aesthetic look of LPL and HPL panel

f) Production of exterior panel of any design

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

a) The details of Technology imported : Nil

b) The year of import : N.A.

c) Whether the technology been fully absorbed? : N.A.

d) If not fully absorbed, areas where this : N.A. has not taken place, reasons thereof and,

(iv) The expenditure incurred on Research and Development

(a) Specific areas in which R & D carried out by the Company:

Research and Development works cover the areas of replacement carried out by the Company of costly and

27

hazardous chemicals, introduction of new design, production of high value items, process improvement, reduction in energy costs, maintenance and betterment of product quality etc. Our laboratory has been equipped to perform all the major tests required for raw materials and finished goods as per national and international standards.

(b) Benefits derived as a result of above R & D:

In spite of competition, the company could sustain and even increase its sales in the market, both domestic and overseas by developing different value added products.

(c) Future plan of action:

a) CE certification for HPL.

b) Modification of Effluent Treatment Plant.

c) Modification of power distribution system.

d) Isolation of raw material, wet and FG area of potato flakes plant.

e) Upgrading formaldehyde plant with potential capacity increase.

f) Establishment of environment testing lab.

g) Replacement of conventional compressor driven AC system by VAM based environment friendly AC system utilizing waste heat.

(d) Expenditure on R & D:

Research and development expenditure is not identified separately. However, the recurring expenses are booked as revenue expenses under proper heads of expenditure.

C. Foreign Exchange Earnings and Outgo

(i) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans:

Operating in the global markets through agents while linking directly with overseas buyers, was continued during the year. Keeping pace with market demands, the Company was able to sustain its position. Introduction of new patterns and designs of laminates to enhance market share was a step towards its innovative focus.

(ii) Total foreign exchange used and earned (2014-2015) (Rs. Lac)

Earnings:

Foreign Exchange earned (F.O.B. Value of exports) 14491.43

Outgo:

CIF Value of Imports

a) Raw materials 17584.01

b) Components and Spare Parts (including Stores) 131.76

c) Capital Goods 427.83

Expenditure in foreign currency

a) Commission 43.62

b) Travelling 10.67

c) Professional fees 126.92

d) Export Promotion 30.44

e) Royalty / Fees and Subscription 70.70

f) Interest 91.71

g) Others 1896.477

h) Foreign branch office expenses 197.60


28

ANNEXURE 3


Statement showing the details regarding the development and implementation of Risk Management Policy of the Company

Risk Management Framework

Objective of Risk Management Framework:

The objectives of Risk management framework at Merino Group are to:

• Betterunderstandourriskprofile;

• Understandandbettermanagetheuncertaintieswhichimpactourperformance;

• Contributetosafeguardingcompanyvalueandinterestofvariousstakeholders;

• Ensurethatsoundbusinessopportunitiesareidentifiedandpursuedwithoutexposingthebusinesstoanunacceptablelevel of risk; and

• Improvecompliancewithgoodcorporategovernanceguidelinesandpracticesaswellaslaws&regulations.

Overview of Risk Framework in Merino Group:

The Risk Management Framework at Merino Group comprises essentially of the following 2 elements:

• RiskManagementprocessthathelpsidentify,prioritise,manage&mitigaterisksintheCompany;

• RiskManagementstructurei.e.therolesandresponsibilitiesforimplementingtheriskmanagementprogramme.Belowis a diagrammatic representation of the Risk Management Framework.

29

Risk Management Governance Structure:

Risk Classification

The risk universe has been divided into the following four broad categories:

• Strategic Risks are associated with the primary long-term goals, objectives and direction of the business. These risks may arise from the actions of other participants in the marketplace and/or the opportunities ventured and decisions made by the business or by external shareholders

• Operation Risks are associated with the on-going, day-to-day operations of the business. These include risks connected with the business processes implemented/deployed to meet the objectives.

• Financial Risks are related specifically to the processes, techniques and instruments utilised to manage the finance of the organisation. These also include uncertainties that may have a financial impact on the company.

• Compliance Risks are risks that arise due to the company’s inability to comply with the applicable laws, regulations and contractual terms and conditions. It includes legal risk which may arise due to uncertainty in application/interpretation of contract, laws and regulation.


30

ANNEXURE - 4

ANNEXURE TO DIRECTORS’ REPORT SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31.03.2015

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To The Members, Merino Industries Limited 5, Alexandra Court, 60/1, Chowringhee Road, Kolkata – 700 020 West Bengal

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Merino Industries Limited having its Registered Office at 5, Alexandra Court, 60/1, Chowringhee Road, Kolkata – 700 020, West Bengal (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended 31.03.2015 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended 31.03.2015 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

(iii) Foreign Exchange Management Act, 1999 and the rules and regulation made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

We further report that, having regard to the compliance system prevailing in the Company and on examination of the relevant documents and records in pursuance thereof, on test-check basis, the Company has complied with the following laws applicable specifically to the Company:

Food Safety And Standards Act, 2006

to the extent of their applicability to the Company during the financial year ended 31.03.2015 and our examination and reporting is based on the documents, records and files as produced and shown to and the information and explanations as provided to us by the Company and its management and to the best of our judgment and understanding of the applicability of the different enactments upon the Company. Further, to the best of our knowledge and understanding there are adequate systems and processes in the Company commensurate with its size and operation to monitor and ensure compliances with applicable laws including general laws, labour laws, competition law, environments laws, etc.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. as mentioned above.

The shares of the Company are not listed and hence during the period under review, provisions of the following regulations/

31

guidelines were not applicable to the Company :

(i) The Securities Contracts (Regulation) Act, 1956 and the rules made there under;

(ii) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 2011;

(iii) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulation ,1992;

(iv) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(v) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

(vi) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;

(vii) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

During the period under review, provisions of the following regulations/guidelines/standards were not applicable to the Company :

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

We further report that :

(a) The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

(b) Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

(c) Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.

(d) There are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

For A. K. LABH & Co. Company Secretaries

CS A. K. LABH Place : Kolkata Practising Company Secretary Dated : 13.05.2015 FCS – 4848 / CP No.-3238


32

ANNEXURE-5

ANNEXURE TO DIRECTORS’ REPORT CORPORATE SOCIAL RESPONSIBILITY (CSR)

[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]

1. A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

The Company’s CSR Policy is to serve the cause for creating a healthy and enlightened life for the needy while fulfilling the responsibility of conservation of scarce natural resources. As a concerned corporate citizen, it is felt as a duty to give back some support to the weaker sections of society through sustained projects. The focus was on programs to promote Education targeted towards the underprivileged girl child including adult education, Healthcare & Medical initiatives and distribution of Mid-day Meal to students.

A web link of the same projecting the CSR policy, projects or programs is http//www.merinoindia.com

2. The Composition of the CSR Committee:

Name Designation Category

Shri Champa Lal Lohia Executive Chairman Promoter –Executive (Chairman of the Committee)

Shri Prakash Lohia Managing Director Promoter –Executive

Shri Prasan Lohia Whole-time Director Promoter – Executive

Shri Amar Nath Roy Director Independent* – Non Executive

The Company Secretary acts as the Secretary to the Committee.

3. Average net profit of the company for last three financial years: Rs. 2811.28 Lac

4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): Rs. 56.23Lac

5. Details of CSR spend during the financial year:

(a) Total amount to be spent for the financial year: Rs. 57.00 Lac

(b) Amount unspent, if any: Nil

33

(c) Manner in which the amount spent during the financial year is detailed below.

(1) (2) (3) (4) (5) (Rs. Lac) (6) (Rs. Lac) (7) (Rs. Lac) (8) (Rs. Lac)S.

NoCSR project or activity identified

Sector in Which the Project is covered

Projects or programs (1) Local area or other (2) Specify the State and district where projects or programs was undertaken

Amount outlay (budget) project or programs wise

Amount spent on the projects or programs Sub – heads: (1) Direct expenditure on projects or programs (2) Overheads

Cumulative expenditure upto to the reporting period

Amount spent : Direct or through implementing agency*

1 Mid-day meal programme in schools

Promoting education

1. Local Area 2. State: Uttar Pradesh, District Hapur

6.81 6.81 6.81 6.81

2 Assistance to schools

Promoting education

1. Local area and other 2. State: Uttar Pradesh & West Bengal, District Jhajjar and Kolkata

23.39 23.39 23.39 23.39

3 Free Health check up

Preventive Health care

1. Local area and other 2. State: Uttar Pradesh & West Bengal, District Jhajjar and Kolkata

22.67 22.67 22.67 22.67

4 Construction of toilet blocks etc.

Sanitation 1. Local area 2. State: Uttar Pradesh, District Hapur

4.13 4.13 4.13 4.13

TOTAL 57.00 57.00 57.00 57.00

* Amounts indicated above spent directly and through Sri Hara Kasturi Memorial Trust and Sri Hara Kasturi Trust (implementing agencies) which are group managed registered trusts authorised to carry out activities as stipulated vide the provisions of the Act and the group CSR policy.

6. In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report. - NA

7. Responsibility statement: The Responsibility statement of the CSR Committee is reproduced below:

‘The implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.’

Prakash Lohia Champa Lal Lohia Managing Director Chairman, CSR Committee

13.05.2015


34

ANNEXURE-6


Disclosures pertaining to Remuneration and other details as required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 forming part of the Directors’ Report for the year ended 31st March, 2015

A. Employed throughout the year and in receipt of remuneration which in the aggregate was not less than Rs.60,00,000/- per annum

Name Age (in

years)

Designation/Nature of

duties

Gross Remune-

ration (Rs.)

Qualifica-tions

Experience (Years)

Date of Commencement of Employment

% of Share

holding

Previous Employment/Position held

Shri Champa Lal Lohia

81 Executive Chairman- Policy Decision making and new projects.

80,56,480 B. Com. 59 01.05.1985 3.55 First employment

Shri Prakash Lohia

63 Managing Director –Management of the business and affairs of the Company as a whole

70,75,360 B. Tech. (Chem) – IIT

Delhi M.E.P (IIM-

Ahmedabad)

38 01.05.1985 5.42 First employment

Shri Rohit Kaul

46 General Manager-Marketing (South America & Canada)

95,73,215* B.E. (Mechanical)

22 01.03.2010 Nil Greenply Industries Limited - Vice President

B. Employed for a part of the year and in receipt of remuneration which in the aggregate was not less than Rs.60,00,000/- per annum : None

Note: 1. Gross Remuneration comprises Salary, Gratuity, Leave Encashment and Company’s contribution to Provident Fund.

2. The appointments are contractual. Other terms and conditions are as per Company’s Rules.

3. Shri Prakash Lohia is a relative of Shri Madhusudan Lohia, Whole-time Director. Shri Champalal Lohia is a relative of Shri Rup Chand Lohia, Executive Vice-Chairman and Shri Bikash Lohia, Whole-time Director.

4. Including reimbursement for cost of services from subsidiary Company.

For and on behalf of the Board of Directors

New Delhi Champa Lal Lohia 13th May, 2015 Executive Chairman

35

INDEPENDENT AUDITOR’S REPORT To the Members of Merino Industries Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Merino Industries Limited (“the Company”), which

comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year

then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013

(“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the

financial position, financial performance and cash flows of the Company in accordance with the accounting principles

generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7

of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in

accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds

and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that

are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were

operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and

presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due

to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required

to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those

Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the

financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and

fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting

and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting

policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating

the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion

on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone


36

financial statements give the information required by the Act in the manner so required and give a true and fair view in

conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st

March, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”), issued by the Central Government of India

in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in

paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our Knowledge and belief

were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears

from our examination of those books and proper returns adequate for the purpose of our audit have been received

from branches/depots not visited by us.

c. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in

agreement with the books of account and with the returns received from other branches/depots not visited by us.

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified

under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the written representations received from the directors as on 31st March, 2015 and taken on

record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being

appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the

Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to

the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements

– Refer Note No. 20 (a) to the Financial Statements;

ii. The Company did not have any material foreseeable losses on long-term contracts including derivative

contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education &

Protection Fund by the company.

For SINGHI & CO.

Chartered Accountants

Firm Registration No. 302049E

B. L. Choraria

Place: Kolkata Partner

Date: 13th May, 2015 Membership No. 22973

37

Annexure referred to in paragraph 1 of our report of even date on the other legal and regulatory requirements

Re: Merino Industries Limited

(i) a. The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

b. As informed to us, the company has a phased programme of physical verification of its fixed assets, which in our opinion, is reasonable having regard to the size of the company and the nature of its fixed assets. Management has physically verified certain fixed assets during the year and as informed to us, no material discrepancies were noticed as compared to books of accounts.

(ii) a. As explained to us, inventories (except stock lying with third parties and in-transit) were physically verified during the year by the management. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification, wherever done.

(iii) The Company has not granted loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, the requirements of clauses (iii) (a) to (b) of the paragraph 3 of the order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in internal control system.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of directives issued by the Reserve Bank of India and hence provisions of Sections 73 to 76 or any other relevant provisions of the Act and rules framed thereunder with regard to the deposits accepted from the public are not applicable to the company.

(vi) The company is required to maintain cost records pursuant to the rules made by the central government for the maintenance of cost records under sub-section (1) of section 148 of the Act; we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

(vii) a. According to the records of the Company, the Company is generally regular in depositing material undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, sales-tax, service tax, wealth tax, custom duty, excise duty, income tax, cess and other statutory dues applicable to it with the appropriate authorities. There were no material undisputed outstanding statutory dues as at the year-end for a period of more than six months from the date they became payable.


38

b. According to the information and explanation given to us and records of the Company, there are no dues outstanding of sales tax, income tax, service tax, custom duty, wealth tax, excise duty and cess on account of any dispute, other than the following:

NATURE OF DUES Amount Involved Amount paid Forum where the Period (Rs in Lacs) under Protest dispute is pending (Rs in Lacs)

Sales Tax excluding 34.78 – Supreme Court of India 1997-98 penalty and interest

19.85 – High Court 1998-99

42.99 43.00 Additional Commissioner 2010-11

31.90 1.45 High Court 2001-02 to 2002-03

2.44 2.10 Tribunal 2004-05

92.17 80.85 Additional Commissioner 2009-10 to 2010-11

6.08 6.08 Deputy Commissioner 2008-09 Appeal II

13.39 9.30 CTO 2009-10 to 2012-13

0.84 0.84 CTO 2013-14

1.94 1.94 CTO 2009-10 to 2010-11

4.10 4.10 DCCT 2009-10

20.72 – High Court 2014-15

Central Sales tax excluding 10.51 – High Court 1997-98 to 1998-99 penalty and interest

38.34 17.59 Additional Commissioner 2007-08 & 2009-10

718.46 718.50 Tribunal Bench 2010-11

Custom Duty excluding 14.32 5.00 CESTAT 2002-03 penalty and interest

1.45 – Assistant Commissioner 2012-13

Excise duty excluding 9.91 3.00 High Court 1994-95,1996-97 penalty and interest

662.02 – Commissioner 2007-08 to 2013-14

242.00 – Additional Commissioner 1988-89 to 2012-13

Excise duty including penalty 1386.02 187.99 CESTAT 1992-93 to 2010-11

44.48 5.55 Assistant Commissioner 1994-95 to 2013-14

39


Service Tax excluding 4.54 – Assistant Commissioner 2005-06 penalty and interest

Service Tax including penalty 19.40 0.36 CESTAT 2004-05 to 2009-10

Income Tax including Penalty 5.27 4.72 Commissioner of 2009-10 Income Tax

Income Tax excluding 365.93 – Deputy Commissioner A.Y 2012-13 Penalty and Interest of Income Tax

c. During the year unclaimed dividend amounting to Rs. 4.03 Lacs has been transferred to Investor Education and Protection Fund within the due date in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

(viii) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash loss in the current year or in the immediately preceding financial year.

(ix) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions and banks. We have been informed that the Company has not issued any debenture during the year.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institution, the terms and conditions whereof are prejudicial to the interest of the company;

(xi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed during the year by the Company were, prima facie, applied by the Company for the purpose for which loans were obtained.

(xii) Based on our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For SINGHI & CO.

Chartered Accountants

Firm Registration No. 302049E

B. L. Choraria

Place: Kolkata Partner

Date: 13th May, 2015 Membership No. 22973


40

Note 31st March, 2015 31st March, 2014 NoI. EQUITY AND LIABILITIES (1) SHAREHOLDERS’ FUNDS (a) Share Capital 3 1047.03 1047.03 (b) Reserves and Surplus 4 17038.27 12983.45

18085.30 14030.48

(2) NON-CURRENT LIABILITIES (a) Long-term Borrowings 5 2116.00 2741.09 (b) Deferred Tax Liabilities (net) 6 1121.67 838.32 (c) Other Long-term Liabilities 7 422.93 19.10

3660.60 3598.51

(3) CURRENT LIABILITIES (a) Short-term Borrowings 8 12948.25 10606.44 (b) Trade Payables 9 5420.69 5841.78 (c) Other Current Liabilities 10 3907.30 3045.63 (d) Short-term Provisions 11 721.91 509.48

22998.15 20003.33

TOTAL 44744.05 37632.32

II. ASSETS (1) NON-CURRENT ASSETS (a) Fixed Assets

(i) Tangible Assets 12A 14865.50 12886.86 (ii) Intangible Assets 12B 34.07 55.21 (iii) Capital Work-in-Progress 1021.21 94.70

15920.78 13036.77

(b) Non-current Investments 13 152.82 152.82

(c) Long-term Loans and Advances 14 982.14 785.63

17055.74 13975.22

(2) CURRENT ASSETS (a) Inventories 15 16377.48 12106.23 (b) Trade Receivables 16 8553.62 9147.70 (c) Cash and Bank Balances 17 1366.28 961.50 (d) Short-term Loans and Advances 18 1162.72 1173.93 (e) Other Current Assets 19 228.21 267.74

27688.31 23657.10

TOTAL 44744.05 37632.32

BALANCE SHEET AS AT 31ST MARCH, 2015 (Figure in Rs. lacs, unless otherwise stated)

This is the Balance Sheet referred to in our report of The Notes numbered 1 to 42 are an integral part of the even date. financial statements.

For SINGHI & CO. For and on behalf of Board of Directors Chartered Accountants Firm Registration Number : 302049E

B. L. Choraria A. K. Parui Sumantra Sinha Prasan Lohia Prakash Lohia Partner Chief Financial Secretary Director Managing Director Membership Number : 022973 Officer

Place: Kolkata Place : Kolkata Place: New Delhi Date: 13th May, 2015 Date: 13th May, 2015 Date: 13th May, 2015

41

Note 2014-15 2013-14 No

Revenue from operations (Net) 22 62621.90 55898.59

Other Income 23 1487.99 495.60

Total Revenue 64109.89 56394.19

Expenses

Cost of Materials Consumed 24 31866.83 30084.92

Purchases of Stock-in-Trade 37 4667.28 3290.74

Changes in inventories of finished goods, work-in-progress and Stock-in-Trade 25 (2777.89) (970.73)

Employee Benefits Expense 26 6082.57 5282.12

Finance Costs 27 1515.11 1477.79

Depreciation and Amortisation Expense 28 1605.20 1458.24

Other Expenses 29 14513.29 12245.54

Total Expenses 57472.39 52868.62

Profit before tax 6637.50 3525.57

Tax Expense:

Current Tax 2080.19 1234.61

Deferred Tax 283.36 96.02

2363.55 1330.63

Profit for the year 4273.95 2194.94

Earnings per equity share 30 [Nominal Value per share: Rs 10/- (2013-14: Rs 10/-)]

On profit after tax

Basic and Diluted 41.22 21.17

This is the Statement of Profit and Loss referred to in our The Notes numbered 1 to 42 are an integral part of the report of even date. financial statements.

For SINGHI & CO. For and on behalf of Board of Directors Chartered Accountants Firm Registration Number : 302049E



STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2015 (Figure in Rs. lacs, unless otherwise stated)


42

2014-15 2013-14

A. Cash Flow from Operating Activities :

Net Profit Before Tax 6637.50 3525.57

Adjustments for :

Depreciation and amortisation 1605.20 1458.24

Bad Debts written off 138.49 67.21

Provision for Doubtful Debts 61.52 55.16

Unrealised gain on foreign currency translation (Net) (98.85) (113.45)

Finance Costs 1515.11 1477.79

Loss on Sale / Disposal of Tangible Assets 48.86 35.43

Profit on Sale of Tangible Assets (114.81) (6.47)

Interest Income (24.62) (11.97)

Liabilities / Provisions no longer required written back (55.24) (14.03)

Dividend Income (66.54) (93.64)

3009.12 2854.27

Operating Profit before Working Capital Changes 9646.62 6379.84

Adjustments for :

Trade and Other Receivables (173.63) (2765.02)

Inventories (4271.25) (1288.79)

Trade and Other Payables 584.77 (3860.11) 1751.70 (2302.11)

Cash Generated from Operations 5786.51 4077.73

Net Direct Taxes Paid (1939.08) (908.38)

Net Cash from Operating Activities 3847.43 3169.35

B. Cash Flow from Investing Activities :

Purchase of Tangible Assets (4892.00) (1514.95)

Purchase of Intangible Assets (6.45) (5.72)

Proceeds from sale of Tangible Assets 488.97 10.99

Demand Loan to Body Corporate – (60.00)

Realisation of Demand Loan to Body Corporate – 60.00

Interest Received 16.34 10.78

Dividend Received 66.54 93.64

Net Cash used in Investing Activities (4326.60) (1405.26)

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015 (Figure in Rs. lacs, unless otherwise stated)

43

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015 (Contd.)(Figure in Rs. lacs, unless otherwise stated)

2014-15 2013-14

C. Cash Flow from Financing Activities :

Proceeds from Long-Term Borrowings 600.00 1367.09

Repayment of Long Term Borrowings (978.15) (849.67)

Proceeds from Short-Term Loans from Banks 3000.00 2500.00

Repayment of Short-Term Loans from Banks (2500.00) (3000.00)

Proceeds from Demand Loan from Body Corporates 1913.30 5764.05

Repayment of Demand Loan from Body Corporates (1625.36) (4847.91)

Increase / (Decrease) in Cash Credit/Working Capital facilities (net) 1548.49 (1191.03)

Interest paid (1400.48) (1340.76)

Dividend paid (157.40) (155.92)

Dividend Distribution Tax paid (15.14) (10.58)

Net Cash from Financing Activities 385.26 (1764.73)

Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) (93.91) (0.64)

Cash and Cash Equivalents (opening) 927.01 927.65

Cash and Cash Equivalents (closing) 833.10 (93.91) 927.01 (0.64)

(a) The above Cash Flow Statement has been prepared under the Indirect Method as set out in the Accounting Standard -3 on Cash Flow Statements.

(b) Cash and Cash Equivalents comprise (Refer note 17): 31st March, 2015 31st March, 2014

Cash on hand [including stamps in hand Rs.0.59 (31st March, 2014 - Rs. 0.21 )] 13.41 15.43

Foreign Currency on hand 3.40 1.70

Cheques and Drafts on hand 80.93 71.59

Remittances in transit 70.81 81.17

Bank Balances:

On Current Accounts 645.77 568.11

On Cash Credit Accounts 18.78 189.01

833.10 927.01

(c) Also refer Note 42.

This is the Cash Flow Statement referred to in our The Notes referred to above form an integral part report of even date. of the Cash Flow Statement.

For Singhi & Co. For and on behalf of Board of Directors Chartered Accountants Firm Registration Number : 302049E




44

NOTES TO THE FINANCIAL STATEMENTS

1. General Information

Merino Industries Limited (“the Company”) is a public limited company domiciled in India, and incorporated under

the provisions of the Indian Companies Act, 1956. The Company is a multiproduct and multi location company.

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting

principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material

respects with the Accounting Standards as prescribed under section 133 of the Companies Act, 2013 (the ‘Act’) read

with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act, to the extent notified.

The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting

policies applied by the Company are consistent with those used in the previous year.

2.2 Tangible Assets and Depreciation

(a) Tangible Assets are stated at cost except in case of certain items of Land, Buildings and Plant and Machinery

which are stated on the basis of revaluation (with corresponding credit to the Revaluation Reserve Account),

being inclusive of resultant write-ups, net of accumulated depreciation and net accumulated impairment losses,

if any. Cost of tangible assets includes purchase price and directly attributable costs of bringing the assets to its

working condition for the intended use.

(b) Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future

benefits from the existing assets beyond its previously assessed standard of performance.

(c) Capital work in progress is stated at cost and inclusive of pre-operative expenses, project development expenses,

etc.

(d) Depreciation on revalued assets other than Land is calculated on their respective revalued amounts on remaining

useful life as per Schedule II as notified under the Act. (Also refer Note 12A.)

(e) In respect of tangible assets, depreciation has been charged over useful lives on Straight Line Method (SLM) as

prescribed in Schedule II as notified under the Act.

2.3 Intangible Assets and Amortisation

Intangible Assets are stated at acquisition cost, net of accumulated amortisation and net accumulated impairment

losses, if any.

Intangible Assets are amortised on a straight line basis over a period of five years from the date of capitalisation as

prescribed in Accounting Standard 26 (Intangible Assets).

2.4 Impairment Loss

An impairment loss, if any, is recognised whenever the carrying amount of the fixed assets (tangible or intangible)

exceeds the recoverable amount i.e. the higher of the assets net selling price and value in use.

2.5 Borrowing Costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying

45

NOTES TO THE FINANCIAL STATEMENTSassets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale,

are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised as expenses in Statement of Profit and Loss in the period in which they are

incurred.

2.6 Investments

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which

such investments are made, are classified as current investments. All other investments are classified as long-term

investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are

carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value

of the investments, such reduction being determined and made for each investment individually.

2.7 Inventories

Inventories are stated at lower of cost and estimated net realisable value. Cost is determined on moving weighted

average basis in case of raw materials, stores and spares and stock-in-trade and generally on annual weighted average

basis in other cases. The cost of finished goods and work in progress comprises raw materials, direct labour, other

direct costs and related production overheads. Net realisable value is the estimated selling price in the ordinary

course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

2.8 Foreign Currency Transactions

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Monetary

items denominated in foreign currency are restated at the exchange rates prevailing on the Balance Sheet date.

Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate at the

date of the transaction. Exchange differences arising on settlement of transactions and / or restatement are dealt with

in the Statement of Profit and Loss.

Generally the Company enters into forward exchange contracts etc. to hedge its risk associated with foreign currency

fluctuations relating to the underlying transactions and firm commitments. In respect of Forward Exchange contracts

with underlying transactions, the premium or discount arising at the inception of such contract is amortised as

expense / income over life of the contract.

Other Derivative contracts outstanding at the Balance Sheet date are marked to market and resulting loss, if any,

is provided for in the financial statements. Any profit or losses arising on cancellation of derivative instruments are

recognised as income or expenses for the period.

Exchange differences are recognised in the Statement of Profit and Loss.

2.9 Revenue Recognition

Sale of goods

Sales are recognised when the substantial risks and rewards of ownership in the goods are transferred to the buyers

as per the terms of the contract and are recognised net of trade discounts / allowances, sales return and sales taxes /

value added taxes but including excise duties.


46


Sale of services

Sales are recognised upon the rendering of services and are recognised net of service tax.

Other items are recognised on accrual basis.

2.10 Other Income

Interest: Interest income is generally recognised on a time proportion basis taking into account the amount outstanding

and the rate applicable when there is a reasonable certainty to realisation.

Dividend: Dividend income is recognised when the right to receive dividend is established.


2.11 Employee Benefits

(a) Short-term Employee Benefits :

The undiscounted amount of short-term Employee Benefits (i.e. benefits payable within one year) are recognised

in the period in which employee renders the service.

(b) Post Employment Benefit Plan:

Provident Fund: Contribution towards provident fund is made to the regulatory authorities, where the Company

has no further obligations. Such benefits are classified as defined contribution schemes as the Company does not

carry any further obligations, apart from the contributions made on a monthly basis.

Gratuity: The Company provides gratuity, a defined benefit plan (the ‘Gratuity Plan’) covering eligible employees

in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to

vested employees at retirement, death, incapacitation or termination of employment, of an amount based on

respective employee’s salary and the tenure of employment. The Company’s liability is actuarially determined

on the basis of year end actuarial valuation (using the Projected Unit Credit Method) and funded. Actuarial

losses / gains are recognised in the Statement of Profit and Loss in the year in which they arise.

(c) Other Long-term Employment Benefits (unfunded):

Other long term employee benefits are actuarially determined (using the Projected Unit Credit method) at the

end of each year. Actuarial losses / gains are recognised in the Statement of Profit and Loss in the year in which

they arise.

2.12 Taxation

Current tax in respect of taxable income is provided for the year based on applicable tax rates and laws. Deferred

tax is recognised subject to the consideration of prudence in respect of deferred tax assets, on timing differences,

being the difference between taxable income and accounting income that originate in one period and are capable of

being reversed in one or more subsequent periods and is measured using tax rates and laws that have been enacted

or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to

re-assess realisation.

47


Current tax assets and current tax liabilities are offset where there is a legally enforceable right to set off the recognised

amount, and there is an intention to settle the assets and the liabilities on a net basis. Deferred tax assets and deferred

tax liabilities are offset when there is a legally enforceable right to set off assets and liabilities representing current

tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same

governing taxation laws.

2.13 Government Grants

Grants related to specific fixed assets are deducted from gross value of related assets. Other grants of capital nature are

credited to Capital Reserve. Grant related to revenue are recognised in the Statement of Profit and Loss on a systematic

basis to match them with their related costs.

2.14 Lease

Leases in which a significant portion of the risk and rewards of ownership is retained by the lessor are classified as

operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss.

2.15 Cash and Cash Equivalents

In the Cash Flow Statement, cash and cash equivalents include cash on hand, demand deposits with banks, other

short-term highly liquid investments, if any, with original maturities of three months or less.

2.16 Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders

by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining

the Company’s earnings per share are the net profit/(loss) for the period. The weighted average number of equity

shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other

than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a

corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for

the period attributable to equity shareholders and the weighted average number of equity shares outstanding during

the period are adjusted for the effects of all dilutive potential equity shares.

2.17 Provisions and Contingent Liabilities

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, if it is probable that

an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable

estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to

settle the present obligation at the Balance Sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events,

the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future

events not wholly within the control of the Company or a present obligation that arises from past events where it is

either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot

be made.


48

31st March, 2015 31st March, 2014

3. SHARE CAPITAL AUTHORISED

1,70,00,000 (31st March, 2014:1,70,00,000)

Equity Shares of Rs. 10/- each 1700.00 1700.00

ISSUED

1,05,66,100 (31st March, 2014:1,05,66,100)

Equity Shares of Rs 10/- each 1056.61 1056.61

SUBSCRIBED AND PAID-UP

1,03,69,600 (31st March, 2014:1,03,69,600)

Equity Shares of Rs 10/- each fully paid up 1036.96 1036.96

Add : Forfeited Equity Shares :

Amount paid-up on 1,96,500

(31st March, 2014 : 1,96,500) Equity Shares 10.07 10.07

1047.03 1047.03

(a) Rights, preference and restrictions attached to shares issued

The Company has only one class of equity shares having a par value of Rs 10/- each. Each equity shareholder is entitled

to one vote per share held.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual

general meeting except in the case of interim dividend. In the event of liquidation, the equity shareholders are eligible

to receive the remaining assets of the Company after distribution of all preferential amounts, in the proportion to their

shareholdings.

(b) Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company

SN. Name of the shareholders As at 31st March, 2015 As at 31st March, 2014

No. of shares % held No. of shares % held

1 Merino Exports Private Limited 30,65,700 29.56 30,65,700 29.56

2 Mr Bikash Lohia 6,37,940 6.15 6,33,840 6.11

3 Mr Prakash Lohia 5,63,700 5.44 5,60,500 5.41

4 Mr Deepak Lohia 6,15,189 5.93 6,15,189 5.93

48,82,529 47.08 48,75,229 47.01

NOTES TO THE FINANCIAL STATEMENTS(Figure in Rs. lacs, unless otherwise stated)

49

31st March, 2015 31st March, 20144. RESERVES AND SURPLUS Capital Reserve 1.46 1.46 Revaluation Reserve (Refer Note 12A) Balance as at the beginning of the year 490.50 494.29 Less: Adjustment for additional depreciation charge on revalued tangible assets transferred to Statement of Profit and Loss 48.45 3.79 Balance as at the end of the year 442.05 490.50

Securities Premium Reserve 87.48 87.48 General Reserve [Refer (a) below] Balance as at the beginning of the year 3513.10 3293.61 Add: Transferred from surplus in Statement of Profit and Loss 427.40 219.49 Balance as at the end of the year 3940.50 3513.10 Surplus in Statement of Profit and Loss Balance as at the beginning of the year 8890.91 7081.58 Add: Profit for the year 4273.95 2194.94 Amount available for appropriation 13164.86 9276.52 Less : Appropriations: Interim dividend on Equity Shares for the year 155.54 155.54 Dividend distribution tax on interim dividend on Equity Shares 15.14 10.58 Transfer to General Reserve 427.40 219.49 Total appropriations 598.08 385.61 12566.78 8890.91 17038.27 12983.45(a) Represents a free reserve.5. LONG-TERM BORROWINGS Secured Term Loans From Banks: Indian Rupee Loans [Refer (a) and (b) overleaf] 1899.54 1464.57 Foreign Currency Loan [Refer (c) overleaf] 1094.10 1571.07 From Others: Indian Rupee Loans [Refer (d) overleaf] 492.92 849.17 3486.56 3884.81 Less : Current maturities (payable within 1 year) From Banks: Indian Rupee Loans [Refer (a) and (b) overleaf] 456.64 145.03 Foreign Currency Loan [Refer (c) overleaf] 547.05 523.69 From Others: Indian Rupee Loans [Refer (d) overleaf] 366.87 475.00 1370.56 1143.72 2116.00 2741.09

(a ) Vehicle Loans are secured by way of hypothecation of the related assets. These are repayable in maximum sixty equal monthly instalments, repayment period thereof varying from July, 2012 ending in September, 2018, bearing interest rate varying from 8.19% p.a to 10.11% p.a.



50

(b) Repayment terms and nature of securities given for Indian Rupee Loans from Banks

Bank 31st March, 2015 31st March, 2014 Nature of Securities Repayment Terms

The Hong 660.00 480.00 Kong and Sanghai Banking Corporation Limited

The Hong 400.00 – Kong and Sanghai Banking Corporation Limited

DBS Bank 800.00 800.00 Limited

1860.00 1280.00

(c) Repayment terms and nature of securities given for Foreign Currency Term Loan from bank:


Standard 1094.10 1571.07 Chartered Bank Limited

1094.10 1571.07


First pari passu charge on the entire fixed assets of the Company, both present and future (excluding assets which are exclusively charged to other lenders) and second pari passu charge on the entire current assets of the Company, both present and future.

Repayable in twenty equal quarterly instalments with no moratorium period. Interest is payable monthly @ 10.50 % p.a. The balance amount of the loan of Rs.480 and Rs.180 are repayable in sixteen equal quarterly instalments of Rs.30 each and eighteen quarterly instalments of Rs.10 each respectively. Last instalment is due on 11th August, 2019.


Repayable in twenty equal quarterly instalments with no moratorium period. Interest is payable monthly @ 9.90% p.a. The balance amount of the loan of Rs. 400 is repayable in twenty equal quarterly instalments of Rs.20 each. Last instalment is due on 26th February, 2020.


First and exclusive charge on the assets purchased out of this loan.

Repayable in sixteen equal quarterly instalments with moratorium period of one year. Interest is payable monthly @ 10.55 % p.a. The balance amount of the loan of Rs.800 is repayable in sixteen equal quarterly instalments of Rs.50 each. Last instalment is due on 16th December, 2018.

Repayable in sixteen equal quarterly instalments starting from the end of fifteen months from the date of first disbursement. Interest is payable in every three months at USD LIBOR plus three hundred fifty basis points per annum. The balance amount of the loan of USD 1.75 million is repayable in eight equal quarterly instalments of USD 0.218 million each subject to the foreign exchange fluctuation on payment dates. Last instalment is due on 2nd March, 2017.

51

d) Repayment terms and nature of securities given for Indian Rupee Term Loans

Bank/Others 31st March, 2015 31st March, 2014 Nature of Securities Repayment Terms

EXPORT- 125.00 312.50 IMPORT Bank of India

EXPORT 351.05 519.80 IMPORT Bank of India

Uttar 16.87 16.87 Pradesh Financial Corporation

492.92 849.17

(e) Outstanding balances of loans as indicated in (a), (b), (c ) and (d) above are inclusive of current maturities of such loans as disclosed in Note 10.



Repayable in sixteen equal quarterly instalments commencing after one year from the date of first disbursement. Interest is payable monthly @ LTMR plus 2% p.a with annual reset. The balance amount of the loan of Rs.125 is repayable in two equal quarterly instalments of Rs.62.50 each. Last instalment is due on 1st July, 2015.


Repayable in sixteen equal quarterly instalments commencing after one year from the date of first disbursement. Interest is payable monthly @ LTMR plus 2% p.a with annual reset. The balance amount of the loan of Rs.351.05 is repayable in seven quarterly instalments (six quarterly instalments of Rs.56.25 and last instalment of Rs.13.55). Last instalment is due on 1st October, 2016.

Second pari passu charge on the entire fixed assets of the Company, both present and future.

Bullet repayment after seven years from the date of disbursement. No interest is payable on this loan. The balance amount of loan of Rs.16.87 is due for payment on 5th February, 2016.


52



6. DEFERRED TAX LIABILITY (NET) Deferred Tax Liabilities Difference between written down value of block of assets as per 1200.70 891.94 income tax laws and book written down value of the fixed assets

1200.70 891.94

Deferred Tax Assets Disallowance allowable for tax purpose on payment 79.03 53.62

79.03 53.62

1121.67 838.32

7. OTHER LONG-TERM LIABILITIES Deposits from Customers and Suppliers 134.50 19.10

Liabilities under litigation 288.43 –

422.93 19.10

8. SHORT - TERM BORROWINGS Secured (Refer (a) below) Working Capital Loan

From Banks: Overdraft / Cash Credit 1680.05 790.22

Overdraft against fixed deposit (b) 499.95 –

Working Capital Demand Loan 1300.00 2020.00

Rupee Packing Credit Loan 3240.00 1159.70

Foreign Currency Buyer’s Credit Loan 1345.24 1191.45

8065.24 5161.37

Unsecured Working Capital Loan

From Banks: Working Capital Demand Loan – 450.00

Rupee Packing Credit Loan – 900.00

Short-Term Loan

From Banks: Indian Rupee Loan 3000.00 2500.00

Loans from related parties

From Body Corporate: Indian Rupee Loan 1883.01 1595.07

4883.01 5445.07

12948.25 10606.44

(a) Working Capital Loans are secured by way of

i) Primary Security : Hypothecation of the entire current assets of the Company on pari passu basis, both present and future.

ii) Collateral Security: Second Charge on the entire fixed assets of the Company except assets charged exclusively to Banks, both present and future, on pari passu basis, with other consortium members.

(b) Secured by fixed deposit under lien equivalent to 100% of the exposure.

53


9. TRADE PAYABLES

Acceptances 2518.76 3249.22

Others (Refer Note 34) 2901.93 2592.56

5420.69 5841.78

(a) The Company has a process of sending confirmations of balances to trade payables through electronic or post media once in a year. Discrepancies, if any, found on receipt of confirmations shall be accounted for as and when the confirmations are received.

10. OTHER CURRENT LIABILITIES

Current maturities of long-term debt (Refer Note 5) 1370.56 1143.72

Interest accrued but not due on borrowings 252.21 183.29

Unpaid dividends [Refer (a) below] 15.49 17.35

Other payables

Advances from customers 381.37 328.33

Statutory dues (including Provident Fund, 550.10 423.01 Tax Deducted at Source, etc.)

Liability for purchases of capital assets 231.60 96.90

Employee benefits payable 367.67 313.19

Premium on forward and other derivative contracts 7.06 9.88

Other payables 731.24 529.96

3907.30 3045.63

(a) There is no amount due and outstanding to be credited to Investor Education and Protection Fund under Sub-section 5 of Section 124 of the Act as at year end.

11. SHORT - TERM PROVISIONS

Provision for employee benefits 116.28 90.67

Other provisions:

Provision for income tax [net of advance tax Rs.1586.58, 605.63 418.81

(31st March, 2014: Rs 908.37)]

721.91 509.48



54

PARTICULARS

GROSS BLOCK AT COST / VALUATION DEPRECIATION AND AMORTISATION NET BLOCK

As at 31st March, 2014

Additions during the

year

Sales / Adjustment during the

year



For the year

Sales / adjustment during the

year




Land :

Leasehold [Refer (a) below]

370.20 – 320.22 49.98 4.01 0.56 – 4.57 45.41 366.19

Freehold 2599.78 763.71 37.81 3325.68 – – – – 3325.68 2599.78

Buildings :

On Leasehold land 87.44 – – 87.44 55.24 32.20 – 87.44 – 32.20

On Freehold land 2731.54 832.87 – 3564.41 1147.88 163.90 1311.78 2252.63 1583.66

Roads 104.54 98.72 – 203.26 28.05 18.13 – 46.18 157.08 76.49

Plant and Machinery 14726.42 2028.74 340.97 16414.19 7216.93 1161.29 287.31 8090.91 8323.28 7509.49

Furniture and Fittings 301.80 21.10 8.15 314.75 182.93 24.88 7.34 200.47 114.28 118.87

Office Equipment 251.54 38.07 11.74 277.87 139.72 65.52 10.15 195.09 82.78 111.82

Computer and data processing units

396.50 121.26 57.33 460.43 285.78 76.20 54.59 307.39 153.04 110.72

Laboratory equipment 48.19 1.13 0.30 49.02 20.78 6.12 0.10 26.80 22.22 27.41

Electrical Instalation and Equipment

354.47 26.52 5.72 375.27 237.17 24.67 5.08 256.76 118.51 117.30

Vehicles 574.71 95.60 58.82 611.49 341.78 52.59 53.47 340.90 270.59 232.93

Total 22547.13 4027.72 841.06 25733.79 9660.27 1626.06 418.04 10868.29 14865.50 12886.86

31st March, 2013 20960.89 1813.52 227.28 22547.13 8413.75 1434.00 187.48 9660.27 12886.86


12A. TANGIBLE ASSETS

(a) Leasehold land of Rs. 320.22 has been converted into free hold land in terms of Conveyance Deed executed between the Company and Delhi Development Authority. Balance Rs. 49.98 (31st March, 2014 : Rs. 49.98) being leasehold land acquired on 31st October, 2006 under a lease of 90 years with a renewal option, which is being amortised over the period of lease.

(b) Based on the valuation report submitted by the valuers appointed for the purpose, certain items of the Company’s tangible assets (viz. Freehold and Leasehold Land, Buildings on Freehold and Leasehold Land and Plant and Machinery) were revalued on 31st March, 1995 after considering the following factors:-

– Then estimated current market value pertaining to Leasehold and Freehold Land and Buildings thereon.

– Value of Plant and Machinery based on their the then cost of replacement.

– Adjustments for the then condition, the standard of maintenance, depreciation upto valuation date etc.

The resultant revaluation surplus of Rs. 904.78 arising from the aforesaid revaluation was transferred to Revaluation Reserve as reflected in the Company’s annual accounts for 1994-95.

Depreciation on revalued assets as calculated in the manner indicated in Note 2.2 above includes an additional charge of Rs.48.45 (2013-14: Rs.3.79 ) and an amount equivalent to additional charge has been transferred to the Statement of Profit and Loss from Revaluation Reserve; such transfer according to an authoritative professional view being acceptable for the purpose of Company’s annual accounts.

55

PARTICULARS

GROSS BLOCK AT COST AMORTISATION NET BLOCK



year


year



For the year


year




Computer Software (Acquired items)

232.29 6.45 – 238.74 177.08 27.59 – 204.67 34.07 55.21

Total 232.29 6.45 – 238.74 177.08 27.59 – 204.67 34.07 55.21

31st March, 2014 229.14 5.72 2.57 232.29 151.47 28.03 2.42 177.08 55.21


12B. INTANGIBLE ASSETS


13. NON CURRENT INVESTMENTS

(valued at cost less provision for other than temporary diminution)

Long Term - Other than Trade Investments

Investment in Equity Instruments of Subsidiary Company (Fully paid up)

– Unquoted

Merino Panel Products Limited 14,93,000 (31st March, 2014:14,93,000) equity shares of Rs 10 each fully paid up 149.30 149.30

Investment in Equity Instruments of Other Companies (Fully paid up)

– Unquoted

Merino Services Limited 6,000 (31st March, 2014: 6,000) equity shares of Rs 10 each fully paid up 2.07 2.07

Merino Exports Private Limited 6,000 (31st March, 2014: 6,000) equity shares of Rs 10 each fully paid up 0.60 0.60

Merinoply and Chemicals Limited 5.19 5.19 82,003 (31st March, 2014: 82,003) equity shares of Rs 10 each fully paid up Less: Provision for diminution in book value of investments 5.19 – 5.19 –

Quoted

Bank of Baroda 5,000 (31st March, 2014: 1,000 equity shares of Rs.10 each) equity shares of Rs 2 each fully paid up 0.85 0.85

152.82 152.82

(a) Aggregate amount of quoted investments 0.85 0.85

(b) Aggregate amount of unquoted investments 151.97 151.97

(c) Aggregate provision for diminution in value of investments 5.19 5.19

(d) Aggregate market value of quoted investments 8.17 7.21


56



14. LONG - TERM LOANS AND ADVANCES

Unsecured, considered good unless stated otherwise

Capital Advances 273.59 201.12

Security Deposits [Refer (a) below] 181.76 200.37

Other loans and advances

Loan to employees 71.36 53.39

Advance with statutory authorities against disputed dues 288.43 129.11

Receivables relating to forward contracts 167.00 201.64

982.14 785.63

(a) Includes Rs 50.40 (31st March, 2014: Rs 50.40 ) to a related party (Refer Note 35), being a partnership firm in which some of directors of the Company are partners.

15. INVENTORIES

(Refer Note 2.7)

Raw materials [includes materials-in-transit Rs.1115.41 (31st March, 2014: Rs.1424.32 )] 8583.25 7163.61

Work-in-progress [Refer (a) below] 406.32 334.86

Stock-in-trade (i.e. Traded Goods) [Refer (b) below] 1766.53 537.67

Finished goods [Refer (c) below] [includes materials-in-transit Rs.0.46 (31st March, 2014: Nil )] 4689.95 3212.39

Stores and spares [includes materials-in-transit Rs.28.84 (31st March, 2014: Rs.19.42)] 931.43 857.70

16377.48 12106.23

(a) Details of work-in-progress

Decorative Laminates 296.67 192.32

Other panel products 44.94 95.64

Potato Flakes and Ready Mix 6.05 7.02

Furniture 58.66 39.88

406.32 334.86

(b) Details of stock-in-trade :

Acrylic Solid Surface and Adhesive 1652.15 526.35

Plywood 10.76 11.32

Potato 103.62 –

1766.53 537.67

57



(c) Details of finished goods :

Decorative laminates 3203.93 2378.52

Other Panel Products 170.99 73.09


Formaldehyde 11.31 28.33


Potato Seeds 633.76 351.33

Others 39.64 29.79

4689.95 3212.39

16. TRADE RECEIVABLES

Outstanding for a period exceeding six months from the date they are due for payment:

Unsecured - Considered good 502.78 447.22

Unsecured - Considered doubtful 116.22 59.52 (including dues under litigation)

619.00 506.74

Less : Provision for doubtful debts 116.22 59.52

502.78 447.22

Other debts:

Secured - Considered good 118.04 12.00

Unsecured - Considered good [Refer (a) below] 7932.80 8688.48

Unsecured - Considered doubtful – 7.57 8050.84 8708.05

Less : Provision for doubtful debts – 7.57

8050.84 8700.48

8553.62 9147.70

(a) Includes Rs.96.54 (31st March, 2014: Rs 215.72 ) receivable from a related party (Refer Note 35), being a subsidiary company.

The Company has a process of obtaining confirmations from sundry debtors directly to auditors. Confirmations have been received except for few cases. Discrepancies, if any, found on receipt of confirmations shall be accounted for as and when the confirmation is received.


58



17. CASH AND BANK BALANCES Cash and Cash Equivalents Cash on hand [including stamps on hand Rs.0.59 (31st March, 2014 - Rs. 0.21 )] 13.41 15.43


Cheques and Drafts on hand 80.93 71.59


Bank Balances:



833.10 927.01

Other Bank Balances Margin Money Deposit 17.59 17.04

On Unpaid Dividend Accounts [Refer (a) below] 15.59 17.45

Deposits with original maturity for more than 3 months but less than 12 months (earmarked for overdraft against fixed deposit) 500.00 –

533.18 34.49

1366.28 961.50

(a) Earmarked for payment of unclaimed dividends.

18. SHORT - TERM LOANS AND ADVANCES Unsecured, considered good unless stated otherwise

Security Deposits 13.51 15.65

Advances recoverable in cash or in kind 68.78 51.81


Advances to suppliers 119.68 104.42

Prepaid expenses 120.59 102.31

Loans to employees 51.63 48.86

Advance against Retirement Benefits 34.12 92.86

Balances with statutory/government authorities 754.41 758.02

1162.72 1173.93

19. OTHER CURRENT ASSETS Unsecured, considered good unless stated otherwise

Export Incentive Receivable 26.37 65.89

Insurance claim receivable 9.55 28.38

Interest accrued on deposits 10.73 2.45

Others (Refer Note 35) 181.56 171.02

228.21 267.74

59



20. CONTINGENT LIABILITIES

(a) Claims against the Company not acknowledged as debt

Disputed Tax and Duty (Net of Deposits)

Demand for Sales Tax (Deposit under protest Rs.221.88; 31st March, 2014 Rs.64.26) 152.76 186.97

Demand for Excise, Custom Duty, Service tax (Deposit under protest Rs.201.90; 31st March, 2014 Rs.196.35) 2182.24 1609.53

Demand for Income Tax (Deposit under protest Rs. 4.72; 31st March, 2014 Rs. 4.72) 366.48 0.55

Others 97.69 32.64

(b) Guarantees

Bank Guarantees [includes Rs. 663.85 (31st March, 2014 Rs.Nil) issued to Sales Tax Authority] 796.95 83.46

(c) First loss default guarantee to Standard Chartered Bank for Channel Financing Facility 64.53 150.02

(d) First loss default guarantee to IDBI Bank Limited for Channel Financing Facility 12.42 –

(e) In respect of the contingent liabilities mentioned in Note 20(a) above, pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any. In respect of matter mentioned in Note 20(b) above, the cash outflows, if any, could generally occur during the validity period of the respective guarantees. The Company does not expect any reimbursement in respect of the above contingent liabilities.

21. COMMITMENTS

(a) Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 1226.67 1007.10 (Net of advance)

(b) Other Commitments

The Company has imported Capital Goods under the Export Promotion Capital Goods Scheme of the Government of India at concessional rates of duty as an undertaking to fulfill quantified export within five years. Certificate for fulfillment of Rs. 1428.75 (31st March, 2014 - Rs.1298.21) is yet to be received.

642.37 649.17

Obligation against Advance Licenses 561.38 828.61

Outstanding Letters of Credit for materials yet to be received 771.27 1068.95


60

2014-15 2013-14

22. REVENUE FROM OPERATIONS

(i) Sale of products [Refer (a) below]

Domestic sales 51393.98 46679.24

Export sales 15033.66 12761.41

66427.64 59440.65

(ii) Sale of services

Income from job works 62.40 69.98

(iii) Other operating revenues

Export incentives 188.68 168.05

Scrap sales 383.43 293.62

572.11 461.67

Revenue from operations (Gross) 67062.15 59972.30

Less: Excise duty 4440.25 4073.71

Revenue from operations (Net) 62621.90 55898.59

(a) Particulars in respect of sales of products :

Manufactured



Furniture 8099.85 8041.96



Potato / Potato Seeds 392.79 294.18

Others 921.78 679.03

62297.31 56385.48

Traded



Chemicals 129.13 99.99

Paper 560.04 449.16



Potato Flakes 130.10 –

Furniture 27.68 –

4130.33 3055.17

66427.64 59440.65


61

2014-15 2013-14

23. OTHER INCOME (i) Interest Income

– On bank and other deposits 9.85 2.01

– On loans to others 14.77 9.96

(ii) Dividend income from long term investments 66.54 93.64 (Includes Rs.66.44, Previous Year Rs.93.31 from Subsidiary Company)

(iii) Claims from insurance companies [Refer (a) below] 84.31 68.46

(iv) Provision/Liabilities no longer required written back 55.24 14.03

(v) Profit on sale of tangible assets 114.81 6.47

(vi) Recovery of Bad Debts 27.00 82.56

(vii) Discount Received 236.93 160.86

(viii) Net gain on foreign currency transactions and translations 816.51 –

(ix) Miscellaneous Income 62.03 57.61

1487.99 495.60

(a) Due to the uncertainties in realisation, insurance claims are accounted for on settlement / realisation basis.

24. COST OF MATERIALS CONSUMED Raw Materials Consumed [Refer (a) & (b) below] Opening Stock 7163.61 7071.59

Purchase and Incidental expenses 34086.81 30823.56

41250.42 37895.15

Less: Cost of raw materials sold 800.34 646.62

40450.08 37248.53

Less: Closing Stock 8583.25 7163.61

31866.83 30084.92

(a) Particulars of cost of materials consumed :

Paper 14365.99 12982.11

Chemicals including formaldehyde 9894.03 9602.49

Panel products and hardware 3944.82 4123.03

Potato 3278.85 3096.59

Others 383.14 280.70

31866.83 30084.92

(b) Value of Imported and Indigenous raw materials consumed : 2014 - 2015 2013 - 2014

Value % Value %

Imported 19810.39 62.17 18450.90 61.33

Indigenous 12056.44 37.83 11634.02 38.67

31866.83 100.00 30084.92 100.00



62


2014-15 2013-14

25. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE

Opening Stock

Work-in-progress 334.86 368.26

Finished Goods 3212.39 2739.29

Stock-in-Trade 537.66 6.63

4084.91 3114.18

Less: Closing Stock

Work-in-progress 406.32 334.86

Finished Goods 4689.95 3212.39

Stock-in-Trade 1766.53 537.66

6862.80 4084.91

(2777.89) (970.73)

26. EMPLOYEE BENEFITS EXPENSES

Salaries, Wages, Bonus etc. [includes Rs.Nil (Previous Year 0.74) relating to previous year] 5443.48 4784.20

Contribution to Provident and Other Funds [Refer (a) below] 512.76 388.10

Workmen and Staff Welfare 126.33 109.82

6082.57 5282.12

(a) Gratuity

The Company operates a gratuity plan through the “LIC Gratuity Fund”, a group gratuity scheme from Life Insurance Corporation of India. Every employee is entitled to a benefit equivalent to fifteen days’ salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service. (Also refer Note 2.11)

I. Reconciliation of opening and closing balances of the present value of the Defined Benefit Obligation

(a) Present Value of Obligation at the beginning of the year 489.07 416.42

(b) Current Service Cost 64.85 53.01

(c) Interest Cost 38.06 34.67

(d) Actuarial Loss / (Gain) 44.46 25.27

(e) (Benefits Paid) (26.62) (40.30)

(f) Present Value of Obligation at the end of the year 609.82 489.07

63


2014-15 2013-14

II. Reconciliation of opening and closing balances of the fair value of Plan Assets

(a) Fair Value of Plan Assets at the beginning of the year 581.93 490.73

(b) Expected Return on Plan Assets 52.37 42.62

(c) Actuarial Gain/(Loss) 1.26 1.68

(d) Contributions by employer 35.00 87.20

(e) (Benefits Paid) (26.62) (40.30)

(f) Fair Value of Plan Assets as at the end of the year 643.94 581.93

III. Reconciliation of the present value of Defined Benefit Obligation in ‘I’ above and the fair value of Plan Assets in ‘II’ above

(a) Present Value of Obligation as at the end of the year 609.82 489.07

(b) Fair Value of Plan Assets as at the end of the year 643.94 581.93

(c) Assets recognised in the Balance Sheet 34.12 92.86

IV. Expense charged to the Statement of Profit and Loss (a) Current Service Cost 64.85 53.01

(b) Interest Cost 38.06 34.67

(c) (Expected Return on Plan Assets) (52.37) (42.62)

(d) Actuarial (Gain)/Loss 43.20 23.59

(e) Total expense charged to the Statement of Profit and Loss 93.74 68.65 (included under Contribution to Provident and Other Funds)

V. Amount recognised in current year and previous four years 2014-15 2013-14 2012-13 2011-12 2010-11

(a) Present Value of Obligation as at the end of the year 609.82 489.07 416.42 344.34 290.65

(b) Fair Value of Plan Assets as at the end of the year 643.94 581.93 490.73 418.83 368.86

(c) Assets recognised in the Balance Sheet 34.12 92.86 74.71 74.49 78.21

(d) Experience (Gain) /Loss adjustment on plan obligation 3.50 15.71 17.18 4.34 24.75

(e) Experience Gain/(Loss) adjustment on plan assets (0.20) 1.64 7.87 7.83 4.65

2014-15 2013-14

VI. Category of Plan Assets Fund with Life Insurance Corporation of India 643.94 581.93

VII. Actual Return on Plan Assets 53.63 47.92

VIII. Principal Actuarial Assumptions 31st March, 2015 31st March, 2014

(a) Discount Rate (per annum) 8.00% 8.75%

(b) Expected Rate of Return on Plan Assets (per annum) 9.00% 8.75%

(c) Salary Escalation 6.00% 6.00%

(d) Inflation Rate 6.00% 6.00%

(e) Method used Projected Unit Projected Unit Credit Method Credit Method

(f) Remaining life of employees (in years) 18 19

The estimate of future salary increases, considered in actuarial valuation, takes into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The expected rate of return on plan assets is determined after taking historical results of the return on the Plan Assets.


64


2014-15 2013-14

27. FINANCE COSTS

Interest expense 1306.13 1229.22

Interest on shortfall in payment of advance tax 45.71 35.89

Other borrowing costs 149.92 184.29

Applicable net loss on foreign currency transactions and translation 13.35 28.39

1515.11 1477.79

28. DEPRECIATION AND AMORTISATION EXPENSES

Depreciation and Amortisation on Tangible Assets 1563.88 1434.00

Write off of carrying value of certain fixed asssets (Refer (a) below] 62.18 –

Amortisation of Intangible assets 27.59 28.03

1653.65 1462.03

Less : Transfer from revaluation of fixed assets 48.45 3.79

1605.20 1458.24

(a) In respect of assets acquired prior to 1st April, 2014 and whose remaining useful life was nil as on 31st March, 2014, the entire carrying value thereof has been charged to the Statement of Profit and Loss.

29. OTHER EXPENSES

Consumption of Stores and Spare Parts [Refer (c) below] 1391.07 1479.00

Power and Fuel 2748.37 2758.78

Rent 949.21 624.07

Rates and Taxes 527.60 141.94

Repairs to :

Buildings 152.22 45.96

Plant and Machinery 304.80 225.35

Others 327.75 408.23

Net loss on foreign currency transactions and translations – 146.83

Legal and Professional Charges [includes Rs.Nil (Previous Year Rs.4.21) relating to previous year] 506.71 352.77

Vehicle Upkeep 272.51 288.70

Carriage Outward [includes Rs.Nil (Previous Year Rs.6.87) relating to previous year] 2080.28 1810.18

Packing and Forwarding 1153.78 886.77

Insurance Charges 141.56 124.07

Commission Charges [includes Rs.1.03 (Previous Year Rs. Nil) relating to previous year] 374.45 319.76

Printing and Stationery 58.61 54.91

Postage and Courier 61.59 48.43

Advertisement, Publicity and Sales Promotion 1080.84 722.29

65

29. OTHER EXPENSES (contd.) 2014-15 2013-14

Travel Expenses [includes Rs.Nil (Previous Year Rs.0.50) relating to previous year] 586.60 553.64

Communication Expenses [includes Rs.Nil (Previous Year Rs.0.17) relating to previous year] 138.63 132.80

Excise Duty [refer (a) below] 17.75 44.92

Bad Debts / Advances Written Off 138.49 67.21

Provision for Bad and Doubtful Debts 61.52 55.16

Payments to the Auditors [Refer (b) below] 16.86 10.38

Bank Charges and Commission 113.03 104.56

Royalty 70.70 178.67

CSR Expenditure (Refer note 41) 57.00 –


Miscellaneous Expenses 1132.50 624.73

14513.29 12245.54

(a) Represents excise duty related to the difference between the closing stock and opening stock

(b) Amount paid / payable to the auditors

As Statutory Auditors @:

Statutory Audit Fees 9.00 9.00

Tax Audit Fees (includes Rs.2.75 (Previous Year Rs. Nil) relating to previous year) 5.50 –

Other matters (Certification) 0.45 0.10

Reimbursement of Expenses 0.61 0.53

15.56 9.63

@ Excluding Service Tax Rs.1.92 (2013-14 : Rs.1.19)

As Cost Auditors :

Audit Fees 0.45 0.40

Other matters (includes Rs.0.40 (Previous Year Rs. Nil) relating to previous year) 0.80 0.30


1.30 0.75

(c) Value of Imported and Indigenous Stores, Spares and Components consumed :

2014 - 2015 2013 - 2014

Value % Value %

Imported 106.42 7.65 76.68 5.18

Indigenous 1284.65 92.35 1402.32 94.82

1391.07 100.00 1479.00 100.00

Profit / loss on sale of Stores and Components remains adjusted in the respective head.



66

2014-15 2013-14

30. Earnings Per Equity Share:

(i) Number of Equity shares outstanding during the year 1,03,69,600 1,03,69,600

(ii) Face value of each equity share (Rs.) 10.00 10.00

(iii) Profit after Tax and Extraordinary Item (Rs.) 4273.95 2194.94

(iv) Basic and Dilutive Earning per Equity Share on Profit after Tax

[(iii)/(i)] - (Rs) 41.22 21.17

31. Expenditure in Foreign Currency :

Commission 43.62 39.06

Travelling 10.67 3.59

Professional fees 126.92 28.72

Export Promotion 30.44 12.10

Royalty / Fees and Subscription 70.70 179.45

Interest 91.71 165.88

Others 1896.47 407.00

Foreign Branch Office Expenses 197.60 167.36

32. Earnings in Foreign Exchange :

Exports calculated on F.O.B basis 14491.43 12263.83

33. C.I.F value of Imports :

Raw Materials 17584.01 16183.79

Components and Spare Parts (including stores) 131.76 140.54

Capital Goods 427.83 160.96

34. The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act’). The disclosures pursuant to the said MSMED Act are as follows:


Principal amount due to suppliers registered under the MSMED Act and remaining unpaid as at year end 0.33 4.86

Interest due to suppliers registered under the MSMED Act and remaining unpaid as at year end 0.01 0.16

Principal amounts paid to suppliers registered under the MSMED Act, beyond the appointed day during the year 7.54 5.00

Interest paid, other than under Section 16 of MSMED Act, to suppliers registered under the MSMED Act, beyond the appointed day during the year – –


67



Interest paid, under Section 16 of MSMED Act, to suppliers registered under the MSMED Act, beyond the appointed day during the year – –

Interest due and payable towards suppliers registered under MSMED Act, for payments already made 0.04 0.16

Further interest remaining due and payable for earlier years – –

The above information regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company

35 Information in accordance with Accounting Standard - 18 on ‘ Related Party Disclosures ‘ :

i) Related Parties : SN Name Relationship a) Where Control exists : Merino Panel Products Limited Subsidiary Company

b) Key Management Personnel(KMP) Mr. Champa Lal Lohia Executive Chairman

Mr. Rup Chand Lohia Executive Vice Chairman

Mr Prakash Lohia Managing Director

Mr Prasan Lohia Whole-time Director

Ms. Ruchira Lohia Whole-time Director

Mr Nripen Dugar Whole-time Director

Mr Bikash Lohia Whole-time Director

Mr Madhusudan Lohia Whole-time Director

Mr Asok Kumar Parui Chief Financial Officer

Mr Sumantra Sinha Company Secretary

c) Relatives of KMP Relationship Relatives of KMP Relationship Mrs. Tara Devi Lohia Wife of Mr Champa Lal Lohia Mrs. Neera Lohia Wife of Mr Prakash Lohia

Mr. Deepak Lohia Son of Mr Champa Lal Lohia Mrs. Sheela Lohia Mother of Ms. Ruchira Lohia

Ms. Usha Lohia Daughter of Mr Champa Lal Lohia Mrs. Praveena Lohia Wife of Mr Rup Chand Lohia

Mrs. Nayantara Agarwal Daughter of Mr Champa Lal Lohia Mrs. Meghna Lohia Wife of Mr Prasan Lohia

Mrs. Asha Mundhra Daughter of Mr Champa Lal Lohia Mr.Manoj Lohia Son of Mr Rup Chand Lohia

Late Man Kumar Lohia Father of Mr Prakash Lohia Mr.Abhiroop Lohia Son of Mr Prasan Lohia

Mrs. Sita Devi Lohia Mother of Mr Prakash Lohia Ms. Anuja Lohia (minor) Daughter of Mr Prasan Lohia

Mrs. Uma Singhi Sister of Mr Prakash Lohia Mrs. Sashi Lohia Wife of Mr Bikash Lohia

Mrs. Kiran Maheswari Sister of Mr Prakash Lohia

d) Entities over which Key Management Personnel together with their relatives have significant influence :

Merino Exports Private Limited

Merino Services Ltd.

Kasturi Bai Gopi Babu Cold Storage Private Limited

Sri Harakasturi Memorial Trust

Man Kumar Lohia and Brothers

Usha Agro Farm

Anupriya Marketing Limited

Sri Hara Kasturi Trust

Sri Man Kumar Lohia Memorial Trust


68


ii) Particulars of transactions during the year ended 31 March, 2015

Particulars Subsidiary Key Relatives of Entities over which Key Total Company Management Key Management Personnel Personnel Management together with their Personnel relatives have significant influence

Sale of products / materials / 2289.89 – – 590.47 2880.36 services (2172.72) – – (717.94) (2890.66)

Sale of Tangible and 75.57 – – – 75.57 Intangible Assets – – – (0.35) (0.35)

Purchase of Tangible and 19.64 – – – 19.64 Intangible Assets (8.12) – – (4.77) (12.89)

Purchase of goods / materials / 1925.92 – – 273.88 2199.80 services (2832.76) – – (329.96) (3162.72)

Royalty on trade mark received 0.56 – – 0.28 0.84 (0.56) – – (0.28) (0.84)

Rent, other charges and 16.06 - 11.73 837.56 865.35 reimbursement paid (3.77) - (9.95) (497.57) (511.29)

Rent, other charges and 224.90 - - 3.07 227.97 reimbursement received (231.40) - - (12.70) (244.10)

Commission paid on sales - - - 20.28 20.28 - - - (21.99) (21.99)

Dividend paid / payable - 41.17 47.88 50.78 139.83 - (41.08) (47.88) (50.78) (139.74)

Dividend received / receivable 66.44 - - - 66.44 (93.31) - - - (93.31)

Interest paid on loans - - - 226.82 226.82 (16.57) - - (154.34) (170.91)

Interest received on loans - - - - - (0.02) - - - (0.02)

Donation paid - - - 385.41 385.41 - - - (44.12) (44.12)

Loans taken - - - 1913.30 1913.30 (3934.10) - - (1829.95) (5764.05)

Loans repaid - - - 1764.27 1764.27 (3934.10) - - (959.85) (4893.95)

Loan granted - - - - - (60.00) - - - (60.00)

Loan refunded - - - - - (60.00) - - - (60.00)

Salary / benefits to Key - 22.37 - - 22.37 Managerial Personnel - (15.14) - - (15.14)

Directors’ Remuneration - 460.25 - - 460.25 - (449.47) - - (449.47)

Rental Deposit Paid - - - - - - - - (22.68) (22.68)

69

ii) Balance outstanding at the year end

Particulars Subsidiary Key Relatives of Entities over which Key Total Company Management Key Management Personnel Personnel Management together with their Personnel relatives have significant influence

Trade receivables 96.54 - - 0.48 97.02 (215.72) - - (152.13) (367.85)

Loans and Advances / 181.56 - - 50.40 231.96 Other Current Assets (171.02) - - (51.67) (222.69)

Trade and other payables - - - 539.34 539.34 - - (3.19) (234.16) (237.35)

Unsecured Loans - - - 1883.01 1883.01 - - - (1595.07) (1595.07)

Interest accrued but not due - - - 204.14 204.14 - - - (138.91) (138.91)

Investment in Shares 149.30 - - 2.67 151.97 (Other than trade) (149.30) - - (2.67) (151.97) (Net of diminution)

Figures in bracket relate to previous year.


iii) Details of transactions with Key Management Personnel [included under column “Key Management Personnel” in (ii) above]

Nature of Transactions Name of Key Management 2014-15 2013-14 Personnel 1) Directors’ Remuneration Shri Champa Lal Lohia 80.56 80.56

Shri Rup Chand Lohia 46.43 46.43

Shri Prakash Lohia 70.75 70.75

Shri Prasan Lohia 58.73 57.94

Ms. Ruchira Lohia 58.73 57.94

Shri Bikash Lohia 58.70 57.90

Shri Madhusudan Lohia 57.53 56.79

Shri Nripen Dugar 28.82 21.16

2) Dividend paid / payable Shri Champa Lal Lohia 5.53 5.53








3) Salary to Key Managerial Personnel Sri A K Parui (Chief Financial Officer) 16.76 15.14

Sri Sumantra Sinha (Company Seretary) 5.61 –


70

iv) Details of transactions with relatives of Key Management Personnel [included under column “Relatives of Key Management Personnel” in (ii)]

Nature of Transactions Relatives of Key Management 2014-15 2013-14 Personnel

1) Dividend paid / payable Mrs. Tara Devi Lohia 3.62 3.62

Mr. Deepak Lohia 9.23 9.23

Ms. Usha Lohia 2.40 2.40

Mrs. Nayantara Agarwal 1.20 1.20

Mrs. Asha Mundhra 0.03 0.03

Late Man Kumar Lohia 6.38 6.38

Mrs. Sita Devi Lohia 2.45 2.45

Mrs. Uma Singhi 1.20 1.20

Mrs. Neera Lohia 4.48 4.48

Mrs. Sheela Lohia 1.76 1.76

Mrs. Praveena Lohia 2.70 2.70

Mrs. Meghna Lohia 3.97 3.97

Mr.Manoj Lohia 3.21 3.21

Mr.Abhiroop Lohia 3.00 3.00

Ms. Anuja Lohia (minor) 0.75 0.75

Mrs. Sashi Lohia 1.50 1.50

2) Land rent paid / payable Mr. Deepak Lohia 2.36 2.36



Mrs. Kiran Maheswari 2.50 1.47


3) Balance outstanding at the year Mrs. Kiran Maheswari – 1.47

Mrs. Uma Singhi – 1.72


71

v) Details of transactions with Entities over which Key Management Personnel together with relatives have significant influence [ included under column “Entities over which Key Management Personnel together with relatives have significant influence “ in (ii) above]

Nature of Transaction Name of Entities 2014-15 2013-14

Sale of Products / Stores / Services Merino Services Limited 582.30 716.58

Sri Hara Kasturi Trust 1.91 –

Sri Harakasturi Memorial Trust 3.35 –

Kasturi Bai Gopi Babu Cold Storage Pvt Limited 2.78 1.36

Merino Exports Private Limited 0.13 –

Sale of tangible assets Merino Services Limited – 0.35

Purchase of Goods/Services Merino Services Limited 266.90 323.72

Usha Agro Farm 4.48 5.05


Royalty on trade mark received Merino Services Limited 0.28 0.28

Purchase of tangible Assets Merino Services Limited – 3.02

Usha Agro Farm – 1.75

Rent, other charges and Merino Exports Pvt Ltd 80.45 87.93

reimbursement paid Mankumar Lohia and Brothers 77.84 103.28




Merino Services Limited 90.41 2.63

Rent, other charges and Kasturi Bai Gopi Babu Cold Storage Pvt Limited 0.19 0.50

reimbursement received Sri Harakasturi Memorial Trust 0.69 –


Commission paid on sales Anupriya Marketing Limited 20.28 21.99

Dividends paid / payable Merino Exports Pvt Ltd 45.98 45.98


Interest Paid on loans Merino Exports Pvt Ltd 226.82 154.34

Donation Paid Sri Harakasturi Memorial Trust * 59.21 44.12

Sri Hara Kasturi Trust ** 26.20 –

Sri Man Kumar Lohia Memorial Trust 300.00 –

Loan Taken Merino Exports Pvt Ltd 1913.30 1829.95

Loan Repaid Merino Exports Pvt Ltd 1764.27 959.85

Rental Deposit Paid Man Kumar Lohia and Brothers – 22.68


* Includes Rs.30.80 (Previous year Rs.Nil) for CSR Activities (Also refer Note 41). ** For CSR activities (Also refer Note 41).


72


36 Information in accordance with Accounting Standard - 17 on ‘ Segment Reporting’

a) The Company has identified three reportable business segments : -

i) Laminates:

- Comprises manufacturing and selling of Decorative Laminates, Chemicals (primarily meant for captive consumption), Adhesive and trading of Papers and Chemicals.

ii) Panel Products and Furniture :

- Comprises manufacturing and selling of Furnitures, Panel Boards, Plywoods and related products.

iii) Potato Flakes :

- Potato Flakes comprises manufacturing and sale of Potato Flakes and Ready Mix.

b) Others represent all un- allocable items not included in segments.

c) Geographical segments considered for disclosure are:

– Sales within India

– Sales outside India

v) Balance outstanding at the year end


Trade receivables Merino Services Limited – 152.13


Loans and Advances /Other Merino Services Limited – 1.27

current assets Mankumar Lohia and Brothers 50.40 50.40

Trade and other payables Merino Exports Pvt Ltd – 8.21

Merino Services Limited 49.49 –

Mankumar Lohia and Brothers 0.77 0.97

Kasturi Bai Gopi Babu Cold Storage Pvt Ltd 488.70 224.98

Usha Agro Farm 0.38 –

Unsecured Loans Merino Exports Pvt Ltd 1883.01 1595.07

Interest accrued and due Merino Exports Pvt Ltd 204.14 138.91

Investment in Shares Merino Services Limited 2.07 2.07

(Other than trade) Merino Exports Pvt Ltd 0.60 0.60

Merinoply and Chemicals Ltd Rs. 5.19

Less: Diminution in book value Rs.5.19 – –

73


Primary Segment Information (Business Segment) Laminates Panel Potato Others Eliminations Total Products and Flakes (Un allocated) Furniture Revenue-External ( net sales and 43371.56 11270.56 7712.12 1755.65

other income) (36748.70) (11508.09) (7338.68) (798.72)

Inter- Segment sales 2825.95 – – –

(2653.64) – – –

Total Revenue (net sales 46197.51 11270.56 7712.12 1755.65 (2825.95) 64109.89

and other income) (39402.34) (11508.09) (7338.68) (798.72) (-2653.64) (56394.19

Profit ( + ) / Loss ( - ) before tax +8252.70 +1385.82 +3.55 -3004.57 +6637.50

(+4365.02) (+1628.02) (-206.96) (-2260.51) (+3525.57)

Depreciation and Amortisation 952.99 240.94 357.84 53.43 1,605.20

(931.04) (132.96) (364.97) (29.27) (1458.24)

Non Cash expenses other than 54.61 126.68 18.69 0.03 200.01

Depreciation and Amortisation (53.49) (61.26) (5.03) (2.59) (122.37)

Assets 24077.22 7,021.65 7671.47 5973.71 44744.05

(20651.31) (5853.79) (6581.66) (4545.56) (37632.32)

Liabilities (Excluding 5476.12 1205.71 822.92 19154.00 26658.75

Shareholders’ funds) (4642.76) (1240.76) (675.03) (17043.29) (23601.84

Capital Expenditure 3279.81 1077.48 355.64 – 4712.93

(1113.65) (158.21) (224.22) – (1496.08)

Secondary Segment Information (Geographical Segments) Segment Revenue Carrying Amount of Segment Capital (External) Segment Assets Expenditure Within India 47320.58 34570.76 4712.93

(42834.06) (30196.65) (1495.30)

Outside India 15033.66 2099.79 * –

(12761.41) (2893.20)* (0.78)

* represents Trade Receivables and Fixed Assets. Figures in brackets relate to previous year.

37. PURCHASES OF STOCK-IN-TRADE 31st March, 2015 31st March, 2014



Furniture [includes Installation Expenses Rs.48.86 (Previous Year : Rs.114.89)] 77.29 118.25

Chemicals 100.36 77.90

Paper 415.94 344.18




4667.28 3290.74


74


38. LEASES

Operating Lease

As a lessee:

The Company has entered into cancellable operating leases and transactions for leasing of accommodation for office spaces, godown etc. The tenure of leases generally varies between 1 and 3 years. Terms of the lease include operating term for renewal, increase in rent in future periods and term of cancellation. Related lease rental aggregating Rs. 397.99 (31st March, 2014 : Rs.356.82) has been debited to the Statement of Profit and Loss.

As a lessor:

The Company has given a machinery on operating lease to Merino Panel Products Limited, subsidiary company for a period of five years with both the parties having an option to renew the agreement on such terms and conditions as may be mutually agreed thereon.


Gross carrying amount as on Balance Sheet date 10.24 10.20

Accumulated depreciation amount as on Balance Sheet date 1.80 1.09

Net carrying amount as on Balance Sheet date 8.44 9.11

Depreciation recognised in Statement of Profit and Loss 0.71 0.48

Rental income credited to the Statement of Profit and Loss (included under Other Income) 1.20 1.20

The Company has given one or more godown spaces on operating lease and the tenure of leases generally varies between 1 and 5 years. Terms of the lease include operating term for renewal, increase in rent in future periods and term of cancellation. Related lease rental income aggregating Rs.6.44 (31st March, 2014 : Rs.7.81) has been credited to the Statement of Profit and Loss.

39. DIVIDEND

During the year, the Board of Directors has declared interim dividend of Rs.1.50/- (2013-14 : Rs.1.50/-) per Equity Share amounting to Rs.155.54 (2013-14 ; Rs.155.54).

40. HEDGING CONTRACTS

The Company uses foreign exchange forward contracts, currency swaps to hedge its exposure to movements in foreign exchange rates. The Company does not use the foreign exchange forward contracts for trading or speculation purposes.

The Company has identified certain derivative contracts entered into to hedge foreign currency risk of firm commitments and highly probable forecast transactions as hedge instruments that qualify as effective cash flow hedges.

a) Derivative instruments outstanding:

i) Forward exchange contracts:

Details 31st March, 2015 31st March, 2014

Purchase Sale Purchase Sale

Foreign currency value (USD in lacs) – 42.25 2.31 20.90

ii) Principal swap contracts:

Principal amount (USD in lacs) outstanding 12.50 – 18.75 –

75


For Singhi & Co. For and on behalf of Board of Directors Chartered Accountants Firm Registration Number : 302049EB. L. Choraria A. K. Parui Sumantra Sinha Prasan Lohia Prakash Lohia Partner Chief Financial Secretary Director Managing Director Membership Number : 022973 Officer


b) Un-hedged foreign currency exposures:


Loan liabilities and payables:

(USD in lacs) 53.75 61.99

(EUR in lacs) 10.79 12.98

(AUD in lacs) 0.11 0.11

(YEN in lacs) 197.61 175.42

(SGD in lacs) 0.23 –

Receivables:

(USD in lacs) 32.18 35.89

(GBP in lacs) 0.73 0.63

(EUR in lacs) – 0.03

41. ‘CSR’ EXPENDITURE

The Company undertook Corporate Social Responsibility (‘CSR’) programme and activities through two Group Trusts (Shree Hara Kasturi Memorial Trust and Sri Hara Kasturi Trust) registered under the Income Tax Act.

2014-15 2013-14

(a) Gross Amount required to be spent by the company during the year 57.00 –

(b) Amount Spent by the Company through these trusts:

Construction / acquisition of any assets 12.07 –

On purpose other than above 44.93 –

(c) Yet to be spent in cash – –

42. PREVIOUS YEAR’S FIGURES

The previous year’s figures have also been reclassified and regrouped to conform to this year’s classification and grouping.


76

TEN YEARS AT A GLANCEOPERATING RESULTS FOR TEN YEARS AT A GLANCE ( Rs. lacs )

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Gross income 16655.75 21543.34 27394.53 31522.85 35499.27 41073.52 44718.85 51108.91 60467.90 68550.14

Gross expenditure 15012.98 19810.76 24218.50 29063.34 29901.95 37133.90 40449.17 45524.11 54190.59 58942.25

Interest 391.34 529.92 849.74 1230.57 856.61 916.09 1176.24 1399.33 1293.50 1365.19

Operating profit 1251.43 1202.66 2326.29 1228.94 4740.71 3023.53 3093.44 4185.47 4983.81 8242.70

Depreciation 444.94 569.82 761.46 852.80 921.15 977.80 1091.92 1360.55 1458.24 1605.20

Profit before tax and extraordinary item

806.49 632.84 1564.83 376.14 3819.56 2045.73 2001.52 2824.92 3525.57 6637.50

Extraordinary Item – – – – 1741.36 (1521.19) – – – –

Tax - Current tax 275.00 95.00 371.84 250.00 625.00 1133.27 621.20 715.00 1234.61 2080.19

- Fringe Benefit Tax 24.00 28.69 29.00 41.50 5.76 3.44 (9.30) – – –

- Deferred Tax Charge / (Credit)

9.43 84.51 113.49 (58.62) 1.26 50.89 (38.72) 113.80 96.02 283.36

Profit after tax 498.06 424.64 1050.50 143.26 1446.18 2379.32 1428.34 1996.12 2194.94 4273.95

Dividend (including tax) 236.48 181.98 303.30 – 492.22 155.54 228.32 155.54 166.12 170.68

Retained Profits 261.58 242.66 747.20 143.26 953.96 2223.78 1200.02 1840.58 2028.82 4103.27

Earnings per share (Rs.) 4.80 4.10 10.13 1.38 13.95 22.94 13.77 19.25 21.17 41.22

YEAR-END FINANCIAL POSITION FOR TEN YEARS AT A GLANCE ( Rs. lacs)

31.06.2006 31.03.2007 31.03.2008 31.03.2009 31.03.2010 31.03.2011 31.03.2012 31.03.2013 31.03.2014 31.03.2015

SOURCES OF FUNDS

Share capital 1047.03 1047.03 1047.03 1047.03 1047.03 1047.03 1047.03 1047.03 1047.03 1047.03

Reserves and surplus 3609.14 3838.71 4631.34 4759.04 5707.54 7926.40 9121.95 10958.42 12983.45 17038.27

Shareholder’s fund 4656.17 4885.74 5678.37 5806.07 6754.57 8973.43 10168.98 12005.45 14030.48 18085.30

Long term loan 1584.31 1124.86 2622.49 2923.28 1971.82 714.71 2881.22 2309.14 2741.09 2116.00

Bank borrowings 3704.65 6629.86 7889.15 8967.38 6959.70 8875.23 8867.04 7732.26 6511.37 8065.24

Short term loan – 483.73 401.09 1706.50 2332.38 1899.97 3077.63 3678.93 4095.07 4883.01

Loan funds 5288.96 8238.45 10912.73 13597.16 11263.90 11489.91 14825.89 13720.33 13347.53 15064.25

Deferred tax liability (net) 446.22 530.73 673.69 615.07 616.33 667.22 628.50 742.30 838.32 1121.67

Funds available 10391.35 13654.92 17264.79 20018.30 18634.80 21130.56 25623.37 26468.08 28216.33 34271.22

APPLICATION OF FUNDS

Fixed assets 7593.04 9871.43 11150.69 12835.74 14698.84 16448.72 19592.96 21726.63 22874.12 26993.74

Depreciation 2559.46 3120.88 3809.55 4628.24 5321.74 6263.14 7350.71 8565.22 9837.35 11072.96

Fixed asstes ( net ) 5033.58 6750.55 7341.14 8207.50 9377.10 10185.58 12242.25 13161.41 13036.77 15920.78

Investments 152.92 152.92 152.92 152.92 152.82 152.82 152.82 152.82 152.82 152.82

Net current assets 5204.85 6751.45 9770.73 11657.88 9104.88 10792.16 13228.30 13153.85 15026.74 18197.62

Funds employed 10391.35 13654.92 17264.79 20018.30 18634.80 21130.56 25623.37 26468.08 28216.33 34271.22

77

FINANCIAL HIGHLIGHTSMerino Industries Limited

68,550

0

10000

20000

30000

40000

50000

60000

70000

80000

ìn

Lac

s

Gross Income6,638

0

1000

2000

3000

4000

5000

6000

7000

ìn

Lac

s

Profit Before Tax

36% 45% 43% 41%

35%38% 38%

39%

42%

40%

25% 16%18%

17%

25%

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2010-11 2011-12 2012-13 2013-14 2014-15

ìn

Lac

s

Distribution of Value Added

Employee Exchequer Shareholders -

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

ìn

Lac

s

Group Contribution to Exchequer (Gross)FY 2014-15

171

0

100

200

300

400

500

600

ìn

Lac

s

Dividend Payout (Including Tax)18%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Return on Total Asset

income tax excise duty custom duty vat/st/ot


78

Merino Industries Limited

18,085

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

ìn

Lac

s

Shareholder's Fund

26,994

0

5000

10000

15000

20000

25000

30000

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

ìn

Lac

s

Fixed Assets

34,271

0

5000

10000

15000

20000

25000

30000

35000

40000

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

ìn

Lac

s

Funds Employed

79

AnnexureForm AOC-I

(Pursuant to first proviso to sub-section (3) of section 129 of the Act read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures.

Part “A”: Subsidiaries (Information in respect of each subsidiary to be presented with amounts in Rs. In lacs)

1. Sl. No.

2. Name of the subsidiary Merino Panel Products Limited

3. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period Not different

4. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. Not Applicable

5. Share capital 200.00

6. Reserves & surplus 11447.50

7. Total assets 17391.03

8. Total Liabilities 5743.53

9. Investments 0

10. Turnover (Net) 32616.06

11. Profit before taxation 4839.18

12. Provision for taxation 1717.90

13. Profit after taxation 3121.28

14. Proposed Dividend Nil

15. % of shareholding 74.65

Notes: The following information shall be furnished at the end of the statement:

1. Names of subsidiaries which are yet to commence operations NIL

2. Names of subsidiaries which have been liquidated or sold during the year NIL

3. An interim dividend of Rs. 89.00 Lac paid during the year


80

Part “B”: Associates and Joint Ventures Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

Name of Associates/Joint Ventures Name 1 Name 2 Name 3

1. Latest audited Balance Sheet Date N.A. N.A. N.A.

2. Shares of Associate/Joint Ventures held by the N.A. N.A. N.A.

company on the year end N.A. N.A. N.A.

No. N.A. N.A. N.A.

Amount of Investment in Associates/Joint Venture N.A. N.A. N.A.

Extend of Holding % N.A. N.A. N.A.

3. Description of how there is significant influence N.A. N.A. N.A.

4. Reason why the associate/joint venture is not consolidated N.A. N.A. N.A.

5. Networth attributable to Shareholding as per latest audited Balance Sheet N.A. N.A. N.A.

6. Profit / Loss for the year N.A. N.A. N.A.

i. Considered in Consolidation N.A. N.A. N.A.

ii. Not Considered in Consolidation N.A. N.A. N.A.

1. Names of associates or joint ventures which are yet to commence operations.

2. Names of associates or joint ventures which have been liquidated or sold during the year.

Note : This Form is to be certified in the same manner in which the Balance Sheet is to be certified

81

CONSOLIDATED INDEPENDENT AUDITOR’S REPORT To the Members of Merino Industries Limited

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Merino Industries Limited (“the Holding Company”), and its subsidiary (the Holding Company and its subsidiary together referred to as “the group”), comprising of the Consolidated Balance Sheet as at 31st March, 2015, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).

Management’s Responsibility for the Consolidated Financial Statements

The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of presentation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Holding Company has an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.


82

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31st March, 2015, and their consolidated profit and their consolidated cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, based on the comments in the auditor’s reports of the Holding company and subsidiary company, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report, to the extent applicable, that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the consolidated financial statements.

b. In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports.

c. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.

d. In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2015 taken on record by the Board of Directors of the Holding Company and the subsidiary company, none of the directors of the group is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the group – Refer Note 21 (a) to the Consolidated Financial Statements;

ii. The Group did not have any material foreseeable losses on long-term contracts including derivative contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education & Protection Fund by the Holding company and its subsidiary company.

For SINGHI & CO. Chartered Accountants Firm Registration No. 302049E

B.L. Choraria Place: Kolkata Partner Date: 13th May, 2015 Membership No. 22973

83

Annexure referred to in paragraph 1 of our report of even date on the other legal and regulatory requirements

Re: Merino Industries Limited

(i) a. The Group is maintaining proper records showing full particulars, including quantitative details and situation of

fixed assets.

b. As informed to us, the Group has a phased programme of physical verification of its fixed assets, which in our

opinion is reasonable having regard to the size of the Group and the nature of their fixed assets. Management has

physically verified certain fixed assets during the year as per the phased programme as mentioned above and as

informed to us, no material discrepancies were noticed as compared to books of accounts.

(ii) a. As explained to us, inventories (except stock lying with third parties and in-transit) were physically verified during

the year by the management. In respect of inventory lying with third parties, these have substantially been confirmed

by them. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification

of inventory followed by the management are reasonable and adequate in relation to the size of the Group and the

nature of their business.

c. In our opinion and according to the information and explanations given to us, the Group is maintaining proper

records of inventory and no material discrepancies were noticed on physical verification, wherever done.

(iii) The Group has not granted loans secured or unsecured to companies, firms or other parties covered in the register

maintained under section 189 of the Act. Accordingly, the requirements of clauses (iii) (a) to (b) of the paragraph 3 of

the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control

system commensurate with the size of the Group and the nature of their business, for the purchase of inventory and

fixed assets and for the sale of goods and services. During the course of our audit, no major weakness in internal control

system has been noticed.

(v) In our opinion and according to the information and explanations given to us, the Group has not accepted any deposits

from the public within the meaning of directives issued by the Reserve Bank of India and hence provisions of Sections

73 to 76 or any other relevant provisions of the Act and rules framed thereunder with regard to the deposits accepted

from the public are not applicable to the Group.

(vi) The Group is required to maintain cost records pursuant to the rules made by the central government for the maintenance

of cost records under sub-section (1) of section 148 of the Act; we are of the opinion that prima facie the prescribed

accounts and records have been made and maintained. We have not, however, made a detailed examination of the

records with a view to determining whether they are accurate or complete.

(vii) a. According to the records of the Group, the Group is generally regular in depositing material undisputed statutory

dues including provident fund, investor education and protection fund, employees’ state insurance, sales-tax,

service tax, wealth tax, custom duty, excise duty, income tax, cess and other statutory dues applicable to it with the

appropriate authorities. There was no material undisputed outstanding statutory dues as at the year-end for a period

of more than six months from the date they became payable.


84

b. According to the information and explanation given to us and records of the Group, there are no dues outstanding of sales tax, income tax, service tax, custom duty, wealth tax, excise duty and cess on account of any dispute, other than the following:


Sales Tax excluding 34.78 – Supreme Court of India 1997-98 penalty and interest

19.85 – High Court 1998-99

42.99 43.00 Additional Commissioner 2010-11

31.90 1.45 High Court 2001-02 to 2002-03

2.44 2.10 Tribunal 2004-05

92.17 80.85 Additional Commissioner 2009-10 to 2010-11

6.08 6.08 Deputy Commissioner 2008-09 Appeal II

13.39 9.30 CTO 2009-10 to 2012-13

0.84 0.84 CTO 2013-14

1.94 1.94 CTO 2009-10 to 2010-11

4.10 4.10 DCCT 2009-10

20.72 – High Court 2014-15

Haryana Value Added Tax Act, 5.30 – High Court 2000-2003 2003

Central Sales tax excluding 10.51 – High Court 1997-98 to 1998-99 penalty and interest

38.34 17.59 Additional Commissioner 2007-08 & 2009-10

718.46 718.50 Tribunal Bench 2010-11

Custom Duty excluding 14.32 5.00 CESTAT 2002-03 penalty and interest

1.45 – Assistant Commissioner 2012-13

Excise duty excluding 9.91 3.00 High Court 1994-95,1996-97 penalty and interest

662.02 – Commissioner 2007-08 to 2013-14

242.00 – Additional Commissioner 1988-89 to 2012-13

Excise duty including penalty 1386.02 187.99 CESTAT 1992-93 to 2010-11

44.48 5.55 Assistant Commissioner 1994-95 to 2013-14

562.19 23.64 Appellate Tribunal 2009-10 to 2013-14

85


Service Tax excluding 4.54 – Assistant Commissioner 2005-06 penalty and interest

Service Tax including penalty 19.40 0.36 CESTAT 2004-05 to 2009-10

Income Tax including Penalty 5.27 4.72 Commissioner of 2009-10 Income Tax

Income Tax excluding 365.93 – Deputy Commissioner A.Y 2012-13 Penalty and Interest of Income Tax

480.79 – Income Tax Appellate 2002-03 Tribunal

1.50 – CIT Appeals 2006-07

265.00 – CIT Appeals 2011-12

Local Area Act, 2012 25.28 – Supreme Court, Industry 2013-2014 to (Entry Tax) vs. Govt. of Bengal 2014-2015

c. During the year unclaimed dividend amounting to Rs. 4.03 Lacs has been transferred to Investor Education and Protection Fund within the due date in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

(viii) The Group has no accumulated losses at the end of the financial year and it has not incurred any cash loss in the current year or in the immediately preceding financial year.

(ix) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Group has not defaulted in repayment of dues to financial institutions and banks. We have been informed that the Group has not issued any debenture during the year.

(x) According to the information and explanations given to us, the group has not given any guarantee for loans taken by others from bank or financial institution, the terms and conditions whereof are prejudicial to the interest of the group;

(xi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed during the year by the Group were, prima facie, applied by the Group for the purpose for which loans were obtained.

(xii) Based on our examination of the books and records of the Group, carried out in accordance with the generally accepted auditing practice in India and according to the information and explanations given to us, no fraud on or by the Group has been noticed or reported during the year.

For SINGHI & CO. Chartered Accountants Firm Registration No. 302049E

B.L. Choraria Place: Kolkata Partner Date: 13th May, 2015 Membership No. 22973


86

Note 31st March, 2015 31st March, 2014 NoI. EQUITY AND LIABILITIES (1) SHAREHOLDERS’ FUNDS (a) Share Capital 3 1047.04 1047.04 (b) Reserves and Surplus 4 25471.97 19237.50 26519.01 20284.54 (2) MINORITY INTEREST 12 2952.64 2187.79 (3) NON-CURRENT LIABILITIES (a) Long-term Borrowings 5 2181.61 2991.46 (b) Deferred Tax Liabilities (net) 6 1486.46 1246.75 (c) Other Long-term Liabilities 7 446.56 19.10 4114.63 4257.31 (4) CURRENT LIABILITIES (a) Short-term Borrowings 8 14730.22 12989.85 (b) Trade Payables 9 7222.04 8001.38 (c) Other Current Liabilities 10 4848.41 4004.63 (d) Short-term Provisions 11 1189.99 698.90 27990.66 25694.76 TOTAL 61576.94 52424.40II. ASSETS (1) NON-CURRENT ASSETS (a) Fixed Assets (i) Tangible Assets 13A 19716.79 17492.53 (ii) Intangible Assets 13B 73.67 98.90 (iii) Capital Work-in-Progress 1044.68 104.57 20835.14 17696.00 (b) Non-current Investments 14 3.52 3.52 (c) Long-term Loans and Advances 15 1098.39 891.93 21937.05 18591.45 (2) CURRENT ASSETS (a) Inventories 16 22073.29 17209.10 (b) Trade Receivables 17 14221.75 13842.23 (c) Cash and Bank Balances 18 1845.32 1200.47 (d) Short-term Loans and Advances 19 1438.63 1465.13 (e) Other Current Assets 20 60.90 116.02 39639.89 33832.95 TOTAL 61576.94 52424.40

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2015 (Figure in Rs. lacs, unless otherwise stated)

This is the Consolidated Balance Sheet referred The Notes numbered 1 to 41 are an integral part of the to in our report of even date. Consolidated financial statements.


B. L. Choraria A.K.Parui Sumantra Sinha Prasan Lohia Prakash Lohia Partner Chief Financial Secretary Director Managing Director Membership Number : 022973 Officer

Place : Kolkata Place : Kolkata Place : New Delhi Date : 13th May, 2015 Date : 13th May, 2015 Date : 13th May, 2015

87

Note 2014-15 2013-14 No

Revenue from operations (Net) 23 90824.61 80454.48

Other Income 24 1988.77 490.79

Total Revenue 92813.38 80945.27

Expenses

Cost of Materials Consumed 25 48070.67 44473.17

Purchases of Stock-in-Trade 35 3921.53 4390.19

Changes in inventories of finished goods, work-in-progress and Stock-in-Trade 26 (3128.68) (2467.91)

Employee Benefits Expense 27 8549.05 7365.33

Finance Costs 28 1736.83 1798.40

Depreciation and Amortisation Expense 29 2382.91 2041.61

Other Expenses 30 19943.49 16872.02

Total Expenses 81475.80 74472.81

Profit before tax 11337.58 6472.46

Tax Expense:

Current Tax 3829.68 2291.90

Short / (Excess) provision of current tax in respect of earlier years made / written back 12.05 (24.72)

Deferred Tax 239.72 119.25

4081.45 2386.43

Profit for the year before Minority Interest 7256.13 4086.03

Minority Interest 791.24 512.98

Profit for the year 6464.89 3573.05

Earnings per equity share 31 [Nominal Value per share: Rs 10/- (2013-14: Rs 10/-)]

On profit after tax

Basic and Diluted 62.34 34.46

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2015 (Figure in Rs. lacs, unless otherwise stated)

This is the Consolidated Statement of Profit and Loss The Notes numbered 1 to 41 are an integral part of the referred to in our report of even date. Consolidated financial statements.





88

2014-15 2013-14

A. Cash Flow From Operating Activities :

Net Profit Before Tax 11337.58 6472.46

Adjustments for :

Depreciation and amortisation 2382.91 2041.61

Bad Debts and advances written off 164.08 122.39

Provision for Doubtful Debts 71.65 55.16

Unrealised gain on foreign currency translations (Net) (147.10) (130.09)

Finance Cost 1736.83 1798.40


Profit on Sale of Tangible Assets (61.29) (18.90)

Interest Income (29.07) (15.27)

Liabilities / Provision no longer required written back (82.24) (19.86)

Dividend Income (0.10) (0.33)

4095.01 3881.05

Operating Profit before Working Capital Changes 15432.59 10353.51

Adjustments for :

Trade and Other Receivables (1120.70) (1338.87)

Inventories (4864.19) (3326.53)

Trade and Other Payables 449.66 (5535.23) 1025.88 (3639.52)

Cash Generated From Operations 9897.36 6713.99

Net Direct Taxes Paid (3465.65) (2134.02)

Net Cash from Operating Activities 6431.71 4579.97

B. Cash Flow From Investing Activities :

Purchase of Tangible Assets (5940.05) (2068.01)

Purchase of Intangible Assets (16.70) (15.59)

Proceeds from sale of Tangible Assets 442.01 74.92

Interest Received 20.71 14.28

Dividend Received 0.10 0.33

Net Cash used in Investing Activities (5493.93) (1994.07)

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015 (Figure in Rs. lacs, unless otherwise stated)

89

This is the Consolidated Cash Flow Statement The Notes referred to above form an integral part of the referred to in our report of even date. Consolidated Cash Flow Statement.




2014-15 2013-14

C. Cash Flow From Financing Activities : Proceeds from Long-Term Borrowings 697.22 1481.89

Repayment of Long Term Borrowings (1416.52) (1115.46)

Proceeds from Short-Term Loans from Banks 3000.00 2500.00

Repayment of Short-Term Loans from Banks (2500.00) (3000.00)

Proceeds from Demand Loan from Body Corporates 1913.30 1829.95

Repayment of Demand Loan from Body Corporates (1625.36) (913.81)

Increase/ (Decrease) in Cash Credit/Working Capital facilities (net) 939.62 (1580.57)

Interest paid (1589.66) (1640.95)

Dividend paid (179.96) (187.61)

Dividend Distribution Tax paid (30.26) (31.82)

Net Cash from Financing Activities (791.62) (2658.38)

Net Increase / (Decrease) in Cash and Cash Equivalents ( A+B+C) 146.16 (72.48)

Cash and Cash Equivalents (opening) 1165.98 1238.46

Cash and Cash Equivalents (closing) 1312.14 146.16 1165.98 (72.48)

(a) The above Cash Flow Statement has been prepared under the Indirect Method as set out in the Accounting Standard -3 on Cash Flow Statements.

(b) Cash and Cash Equivalents comprise (Refer note 18): 31st March, 2015 31st March, 2014

Cash on hand [including stamps in hand Rs.0.59 (31st March, 2014 - Rs. 0.21)] 21.37 24.24


Cheques, Drafts on hand 80.93 71.59


Bank Balances:

On Current Account 1108.64 979.34

On Cash Credit Account 25.99 7.44

Other Bank Balances

Fixed Deposit 1.00 0.50

1312.14 1165.98

(c) Also refer Note 41.

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015 (Contd.)(Figure in Rs. lacs, unless otherwise stated)


90

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. General Information

The Consolidated Financial Statements represent consolidation of accounts of Merino Industries Limited, the Parent Company, is a public limited company and Merino Panel Products Limited, its Subsidiary (together referred to as “The Group”). Both the companies are incorporated In India under the provisions of the Companies Act, 1956. The company is a multi product and multi location company. The Consolidated Financial Statements are prepared in conformity with Accounting Standards -21 “Consolidated Financial Statement” issued by The Institute of Chartered Accountants of India as set out below:

(i) The financial statements of the Parent Company and its subsidiary have been combined on a line by line basis by adding together the book values of the like items of assets, liabilities, income and expenses, after eliminating intra-group balances and intra-group transactions and any unrealised profits / losses included therein, if any.

(ii) The consolidated Financial Statements are prepared by adopting uniform policies for like tranasactions and other events in similar circumtances and are presented to the extent required and possible, in the same manner as the Parent Company’s separte financial statements.

(iii) Minority’s interest in net profit of Subsidiary for the year is identified and adjsuted against the income of the group in order to arrive at the net income attributable to Shareholders of the parent Company.

(iv) Minority’s interest in net assets of Subsidiary is identified and presented in the Consolidated Balance Sheet separte from liabilities and the equity of the Parent’s Shareholders.

(v) The excess/shortfall of cost to the Company of its investments in the subsidiary company, over the net assets at the time of acquisition in the subsidiaries as on the date of investment is recognised in the financial statements as goodwill/capital reserve as the case may be.

(vi) The financial statements of the group entities used for the purpose of consolidation are drawn up to the same reporting date as that of the parent Company.

(vii) The Proportion of Parent Company’s share ownership in Subsidiry is 74.65%

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards as prescribed under section 133 of the Companies Act, 2013 (the ‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act, to the extent notified. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies applied by the Company are consistent with those used in the previous year.

2.2 Tangible Assets and Depreciation

(a) Tangible Assets are stated at cost except in case of certain items of Land, Buildings and Plant and Machinery which are stated on the basis of revaluation (with corresponding credit to the Revaluation Reserve Account), being inclusive of resultant write-ups, net of accumulated depreciation and net accumulated impairment losses, if any. Cost of tangible assets includes purchase price and directly attributable costs of bringing the assets to its working condition for the intended use.

(b) Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing assets beyond its previously assessed standard of performance.

(c ) Capital work in progress is stated at cost and inclusive of pre-operative expenses, project development expenses, etc.

91


(d) Depreciation on revalued assets other than Land is calculated on their respective revalued amounts on remaining useful life as per Schedule II as notified under the Act. (Also refer Note 13A.)

(e) In respect of tangible assets, depreciation has been charged over useful lives on Straight Line Method (SLM) as prescribed in Schedule II as notified under the Act.

2.3 Intangible Assets and Amortisation

Intangible Assets are stated at acquisition cost, net of accumulated amortisation and net accumulated impairment losses, if any.

Intangible Assets are amortised on a straight line basis over a period of five years from the date of capitalisation as prescribed in Accounting Standard 26 (Intangible Assets).

2.4 Impairment Loss

An impairment loss, if any, is recognised whenever the carrying amount of the fixed assets (tangible or intangible) exceeds the recoverable amount i.e. the higher of the assets net selling price and value in use.

2.5 Borrowing Costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised as expenses in Statement of Profit and Loss in the period in which they are incurred.

2.6 Investments

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.

2.7 Inventories

Inventories are stated at lower of cost and estimated net realisable value. Cost is determined on moving weighted average basis in case of raw materials, stores and spares and stock-in-trade and generally on annual weighted average basis in other cases. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

2.8 Foreign Currency Transactions

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currency are restated at the exchange rates prevailing on the Balance Sheet date. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate at the date of the transaction. Exchange differences arising on settlement of transactions and / or restatement are dealt with in the Statement of Profit and Loss.

The Group enters into forward exchange contracts etc. to hedge its risk associated with foreign currency fluctuations relating to the underlying transactions and firm commitments. In respect of Forward Exchange contracts with underlying transactions, the premium or discount arising at the inception of such contract is amortised as expense / income over life of the contract.


92


Other Derivative contracts outstanding at the Balance Sheet date are marked to market and resulting loss, if any, is provided for in the financial statements. Any profit or losses arising on cancellation of derivative instruments are recognised as income or expenses for the period.

Exchange differences are recognised in the Statement of Profit and Loss.

2.9 Revenue Recognition

Sale of goods

Sales are recognised when the substantial risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract and are recognised net of trade discounts/allowances, sales return and sales taxes/value added taxes but including excise duties.

Sale of services

Sales are recognised upon the rendering of services and are recognised net of service tax.


2.10 Other Income

Interest: Interest income is generally recognised on a time proportion basis taking into account the amount outstanding and the rate applicable when there is a reasonable certainty to realisation.

Dividend: Dividend income is recognised when the right to receive dividend is established.


2.11 Employee Benefits

(a) Short-term Employee Benefits :

The undiscounted amount of short-term Employee Benefits (i.e. benefits payable within one year) are recognised in the period in which employee renders the service.

(b) Post Employment Benefit Plan:

Provident Fund: Contribution towards provident fund is made to the regulatory authorities, where the Group has no further obligations. Such benefits are classified as defined contribution schemes as the Group does not carry any further obligations, apart from the contributions made on a monthly basis.

Gratuity: The Group provides gratuity, a defined benefit plan (the ‘Gratuity Plan’) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on respective employee’s salary and the tenure of employment. The Group’s liability is actuarially determined on the basis of year end Actuarial valuation (using the Projected Unit Credit method) and funded. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise.

Contribution to Central Government administered Employees’ State Insurance Scheme for eligible employees is recognised as charge in Statement of Profit and Loss in the year in which they arise.

(c) Other Long-term Employment Benefits (unfunded):

Other long term employee benefits are actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise.

93


2.12 Taxation

Current tax in respect of taxable income is provided for the year based on applicable tax rates and laws. Deferred tax is recognised subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of being reversed in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to re-assess realisation.

Current tax assets and current tax liabilities are offset where there is a legally enforceable right to set off the recognised amount, and there is an intention to settle the assets and the liabilities on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legal enforceable right to set off assets and liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.

2.13 Government Grants

Grants related to specific fixed assets are deducted from gross value of related assets. Other grants of capital nature are credited to Capital Reserve. Grant related to revenue are recognised in the Statement of Profit and Loss on a systematic basis to match them with their related costs.

2.14 Lease

Leases in which a significant portion of the risk and rewards of ownership is retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss.

2.15 Cash and Cash Equivalents

In the Cash Flow Statement, cash and cash equivalents include cash on hand, demand deposits with banks, other short-term highly liquid investments, if any, with original maturities of three months or less.

2.16 Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company’s earnings per share are the net profit/(loss) for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

2.17 Provisions and Contingent Liabilities

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.


94


3. SHARE CAPITAL

AUTHORISED

1,70,00,000 (31st March, 2014:1,70,00,000)

Equity Shares of Rs. 10/- each 1700.00 1700.00

ISSUED

1,05,66,100 (31st March, 2014:1,05,66,100)

Equity Shares of Rs 10/- each 1056.61 1056.61

SUBSCRIBED AND PAID-UP

1,03,69,600 (31st March, 2014:1,03,69,600)

Equity Shares of Rs 10/- each fully paid up 1036.96 1036.96

Add : Forfeited Equity Shares :

Amount paid-up on 1,96,500 (31st March,

2014 : 1,96,500) Equity Shares 10.08 10.08

1047.04 1047.04

(a) Rights, preference and restrictions attached to shares issued

The Company has only one class of equity shares having a par value of Rs 10/- each. Each equity shareholder is entitled

to one vote per share held.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual

general meeting except in the case of interim dividend. In the event of liquidation, the equity shareholders are eligible

to receive the remaining assets of the Company after distribution of all preferential amounts, in the proportion to their

shareholdings.

(b) Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company

SN. Name of the shareholders As at 31st March, 2015 As at 31st March, 2014

No. of shares % held No. of shares % held

1 Merino Exports Private Limited 30,65,700 29.56 30,65,700 29.56

2 Mr Bikash Lohia 6,37,940 6.15 6,33,840 6.11

3 Mr Prakash Lohia 5,63,700 5.43 5,60,500 5.41

4 Mr Deepak Lohia 6,15,189 5.93 6,15,189 5.93

48,82,529 47.07 48,75,229 47.01

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Figure in Rs. lacs, unless otherwise stated)

95



4. RESERVES AND SURPLUS

Capital Reserve 1.46 1.46

Revaluation Reserve (Refer Note 13A)

Balance as at the beginning of the year 490.50 494.29

Less: Adjustment for additional depreciation charge on revalued tangible assets transferred to Statement of Profit and Loss 48.45 3.79

Balance as at the end of the year 442.05 490.50

Securities Premium Reserve 311.43 311.43

General Reserve [Refer (a) below]


Add: Transferred from surplus in Statement of Profit and Loss 660.40 370.55

Balance as at the end of the year 4674.03 4013.63

Surplus in Statement of Profit and Loss


Add: Profit for the year 6464.89 3573.05

Amount available for appropriation 20885.37 14973.01

Less : Appropriations:

Interim dividend on Equity Shares for the year 155.54 155.54

Dividend distribution tax on interim dividend on Equity Shares 26.43 26.44

Transfer to General Reserve 660.40 370.55

Total appropriations 842.37 552.53

20043.00 14420.48

25471.97 19237.50

(a) Represents a free reserve.

5. LONG-TERM BORROWINGS


Non Current Current Non Current Current Portion Maturities Portion Maturities

Term Loans (Secured)

From Banks:

Indian Rupee Loans [Refer (a) and (b) below / overleaf] 1508.50 536.82 1502.68 381.59

Foreign Curreny Loan [Refer (c) overleaf] 547.05 547.05 1114.60 523.69

From Others:

Indian Rupee Loans [Refer (d) overleaf] 126.06 366.87 374.18 475.00

2181.61 1450.74 2991.46 1380.28

(a ) Vehicle Loans are secured by way of hypothecation of the related assets. These are repayable in maximum sixty equal monthly instalments,repayment period thereof varying from December, 2011 ending in September, 2018, bearing interest rate varying from 8.19% p.a to 11.91% p.a.


96

(b) Repayment terms and nature of securities given for Indian Rupee Loans from Banks


The Hong 500.00 480.00 Kong and Sanghai Banking Corporation Limited

The Hong 320.00 – Kong and Sanghai Banking Corporation Limited

DBS Bank 600.00 800.00 Limited

Axis Bank – 102.14 Limited

1420.00 1382.14

(Figure in Rs. lacs, unless otherwise stated)


Repayable in twenty equal quarterly instalments with no moratorium period. Interest is payable monthly @ 10.50 % p.a. The balance amount of the loan of Rs.480 and Rs.180 are repayable in sixteen equal quarterly instalments of Rs.30 each and eighteen quarterly instalments of Rs.10 each respectively. Last instalment is due on 11th August, 2019.


Repayable in twenty equal quarterly instalments with no moratorium period. Interest is payable monthly @ 9.90% p.a. The balance amount of the loan of Rs.400 is repayable in twenty equal quarterly instalments of Rs.20 each. Last instalment is due on 26th February, 2020.


First charge on all fixed assets, 2nd pari-passu charge on current assets of the Company with other working capital bankers, both present and future.

Repayable in sixteen equal quarterly instalments with moratorium period of one year. Interest is payable monthly @ 10.55 % p.a. The balance amount of the loan of Rs.800 is repayable in sixteen equal quarterly instalments of Rs.50 each. Last instalment is due on 16th December, 2018.

Repayable in twenty equal quarterly instalments commencing after three months from the date of 1st disbursement. Interest is payable monthly @ Base Rate plus 3% p.a. The first quaterly instalment was due on 29.11.2011 and last quaterly instalment falls due on 31.12.2015. The balance amount of the loan as on 1st April, 2014 of Rs.252.14 was repayable in seven quarterly instalments (six quarterly instalments of Rs.37.50 and last instalment of Rs.27.14). The loan stands repaid in full during the year.


97

(c) Repayment terms and nature of securities given for Foreign Currency Term Loan from bank:


Standard 547.05 1047.38 Chartered Bank Limited

Indusind Bank Limited – 67.22

547.05 1114.60(d) Repayment terms and nature of securities given for Indian Rupee Term Loans:

EXPORT- – 62.50 IMPORT Bank of India

EXPORT- IMPORT Bank of India 126.06 294.81

Uttar Pradesh – 16.87 Financial Corporation 126.06 374.18

(e) Outstanding balances of loans as indicated in (a), (b), (c ) and (d) above are exclusive of current maturities of such loans as disclosed in Note 10.


First and exclusive charge on the assets purchased out of this loan.

Repayable in sixteen equal quarterly instalments starting from the end of fifteen months from the date of first disbursement. Interest is payable on every three months at USD LIBOR plus three hundred fifty basis points per annum. The balance amount of the loan of USD 1.75 million is repayable in eight equal quarterly instalments of USD 0.218 million each subject to the foreign exchange fluctuation on payment dates. Last instalment is due on 2nd March, 2017.

First charge on all fixed assets, 2nd pari-passu charge on current assets of the Company with other working capital bankers, both present and future.

Repayable in eighteen equal quarterly instalments commencing after six months from the date of 1st disbursement. Interest is payable monthly @ rate of 13% p.a. The first quaterly instalment was due on 04.03.2013 and last quaterly instalment falls due on 31.12.2017.The balance amount of the loan as on 1st April, 2014 of Rs.91.67 was repayable in fifteen quarterly instalments of Rs.6.11. The loan stands repaid in full during the year.

First pari passu charge on the entire fixed assets of the Company, both present and future (excluding assets which are exclusively charged to other lenders) and second pari passu charge on the entire current assets of the Company, both present and future.First pari passu charge on the entire fixed assets of the Company, both present and future (excluding assets which are exclusively charged to other lenders) and second pari passu charge on the entire current assets of the Company, both present and future.Second pari passu charge on the entire fixed assets of the Company, both present and future.

Repayable in sixteen equal quarterly instalments commencing after one year from the date of first disbursement. Interest is payable monthly @ LTMR plus 2% p.a with annual reset. The balance amount of the loan of Rs.125 is repayable in two equal quarterly instalments of Rs.62.50 each. Last instalment is due on 1st July, 2015.Repayable in sixteen equal quarterly instalments commencing after one year from the date of first disbursement. Interest is payable monthly @ LTMR plus 2% p.a with annual reset. The balance amount of the loan of Rs.351.05 is repayable in seven quarterly instalments (six quarterly instalments of Rs.56.25 and last instalment of Rs.13.55). Last instalment is due on 1st October, 2016.Bullet repayment after seven years from the date of disbursement. No interest is payable on this loan. Loan is due for payment on 5th February, 2016.



98


6. DEFERRED TAX LIABILITY (NET) Deferred Tax Liabilities Difference between written down value of block of assets as per 1550.01 1310.30 income tax laws and book written down value of the fixed assets

1550.01 1310.30

Deferred Tax Assets Disallowance allowable for tax purpose on payment 63.55 63.55

63.55 63.55

1486.46 1246.75

7. OTHER LONG-TERM LIABILITIES Deposits from Customers and Suppliers 134.50 19.10

Liabilities under litigation 312.06 –

446.56 19.10

8. SHORT - TERM BORROWINGS Secured (Refer (a) below) Working Capital Loan

From Banks: Overdraft / Cash Credit 2199.56 1201.23

Overdraft against fixed deposit (b) 499.95 –

Working Capital Demand Loan 1300.00 2650.00

Rupee Packing Credit Loan 3440.00 1398.24

Foreign Currency Buyer’s Credit Loan 2407.70 1795.31

9847.21 7044.78

Unsecured Working Capital Loan

From Banks: Working Capital Demand Loan – 950.00

Rupee Packing Credit Loan – 900.00

Short-Term Loan

From Banks: Indian Rupee Loan 3000.00 2500.00

Loans from related parties

From Body Corporate: Indian Rupee Loan 1883.01 1595.07

4883.01 5945.07

14730.22 12989.85

(a) Working Capital Loans are secured by way of

i) Primary Security : Hypothecation of the entire current assets of the Company on pari passu basis, both present and future.

ii) Collateral Security: Second Charge on the entire fixed assets of the Company except assets charged exclusively to Banks, both present and future, on pari passu basis, with other consortium members.

(b) Secured by fixed deposit only under lien equivalent to 100% of the exposure.


99



9. TRADE PAYABLES Acceptances 3420.60 4803.08 Others (Refer Note 32) 3801.44 3198.30 7222.04 8001.38 (a) The Company has a process of sending confirmations of

balances to trade payables through electronic or postal media once in a year. Discrepancies, if any, found on receipt of confirmations shall be accounted for as and when the confirmations are received.

10. OTHER CURRENT LIABILITIES Current maturities of long-term debt (Refer Note 5) 1450.74 1380.28 Interest accrued but not due on borrowings 255.82 187.64 Unpaid dividends [Refer (a) below] 15.49 17.35 Other payables Advances from customers 612.64 662.66 Statutory dues (including Provident Fund, Tax Deducted at Source, etc.) 819.24 622.04 Liability for purchases of capital assets 253.02 136.69 Employee benefits payable 568.96 451.45 Premium on forward and other derivative contracts 8.07 15.70 Other payables 864.43 530.82 4848.41 4004.63 (a) There is no amount due and outstanding to be credited

to Investor Education and Protection Fund under Sub-section 5 of Section 124 of the Act, as at year end.

11. SHORT - TERM PROVISIONS Provision for employee benefits 155.89 119.87 Other provisions: Provision for income tax [net of advance tax Rs. 2941.17 ; 1034.10 579.03 (31st March, 2014: Rs 1836.85)] 1189.99 698.9012. MINORITY INTEREST Share Capital 50.70 50.70 Securities Premium 76.05 76.05 Balance in General Reserve 249.09 169.97 Balance in PL Account : Opening Balance 1891.07 1466.46 Add : Profit for the current year 791.24 512.98 Less : Dividend 22.56 31.69 Dividend Distribution Tax 3.83 5.38 Amount transfered to General Reserve 79.12 51.30 2576.80 1891.07 2952.64 2187.79


100

PARTICULARS

GROSS BLOCK AT COST / VALUATION DEPRECIATION AND AMORTISATION NET BLOCKAs at 31st

March, 2014


year

Sales / Adjustment during the

year



For the year


year




Land :Leasehold [Refer (a) below]

393.65 – 320.22 73.43 22.72 0.96 – 23.68 49.75 370.93

Freehold 2986.76 763.71 37.81 3712.66 – – – – 3712.66 2986.76Buildings : On Leasehold land 1190.18 122.00 15.80 1296.38 416.10 71.88 8.38 479.60 816.78 774.08 On Freehold land 2770.68 832.87 – 3603.55 1151.54 165.00 – 1316.54 2287.01 1619.14Roads 189.77 98.72 – 288.49 41.21 56.46 – 97.67 190.82 148.56Plant and Machinery 20703.06 2707.57 358.56 23052.07 10571.65 1609.84 304.04 11877.45 11174.62 10131.41Furniture and Fittings 380.99 28.30 10.91 398.38 217.25 34.01 9.90 241.36 157.02 163.74Office Equipment 363.33 50.69 13.91 400.11 166.53 114.00 12.06 268.47 131.64 196.80Computer and data processing units

707.54 234.63 100.40 841.77 447.53 151.20 97.66 501.07 340.70 260.01

Laboratory equipment 56.86 1.13 0.90 57.09 28.85 6.24 0.70 34.39 22.70 28.01Electrical Instalation and Equipment

737.60 29.93 7.54 759.99 432.08 69.06 6.90 494.24 265.75 305.52

Vehicles 968.24 184.20 116.43 1036.01 460.67 110.78 102.78 468.67 567.34 507.57Total 31448.66 5053.75 982.48 35519.93 13956.13 2389.43 542.42 15803.14 19716.79 17492.53

31st March, 2014 29363.50 2505.67 420.51 31448.66 12268.67 2004.16 316.70 13956.13 17492.53

PARTICULARS

GROSS BLOCK AT COST AMORTISATION NET BLOCKAs at 31st

March, 2014


year

Sales during the

year



For the year


year




Computer Software (Acquired items)

372.79 16.70 – 389.49 273.89 41.93 – 315.82 73.67 98.90

Total 372.79 16.70 – 389.49 273.89 41.93 – 315.82 73.67 98.90

31st March, 2014 359.77 15.59 2.57 372.79 235.07 41.24 2.42 273.89 98.90


13A. TANGIBLE ASSETS

13B. INTANGIBLE ASSETS

(a) Leasehold land of Rs.320.22 has been converted into free hold land in terms of Conveyance Deed executed between the Group and Delhi development Authority. Rs.49.98 (31st March, 2014 : Rs.49.98) being leasehold land acquired on 31st October, 2006 under a lease of 90 years with a renewal option ,which is being amortised over the period of lease. Rs.23.45 (31st March, 2014 : Rs.23.45) being leasehold land acquired on 13th December, 1994 under a lease of 30 years with a renewal option ,which is being amortised over the period of lease.

(b) Based on the valuation report submitted by the valuers appointed for the purpose, certain items of the Group’s tangible assets (viz. Freehold and Leasehold Land, Buildings on Freehold and Leasehold Land and Plant and Machinery) were revalued on 31st March, 1995 after considering the following factors:-

– Then estimated current market value pertaining to Leasehold and Freehold Land and Buildings thereon. – Value of Plant and Machinery based on their the then cost of replacement. – Adjustments for the then condition, the standard of maintenance, depreciation upto valuation date etc. The resultant revaluation surplus of Rs. 904.78 arising from the aforesaid revaluation was transferred to Revaluation

Reserve as reflected in the Group’s annual accounts for 1994-95. Depreciation on revalued assets as calculated in the manner indicated in Note 2.2 above includes an additional charge

of Rs.48.45 (2013-14: Rs.3.79 ) and an amount equivalent to additional charge has been transferred to the Statement of Profit and Loss from Revaluation Reserve; such transfer according to an authoritative professional view being acceptable for the purpose of Group’s annual accounts.


101

31st March, 2015 31st March, 201414. NON CURRENT INVESTMENTS (valued at cost less provision for other than temporary diminution) Long Term - Other than Trade Investments Investment in Equity Instruments of Other Companies (Fully paid up) – Unquoted Merino Services Limited 6,000 (31st March, 2014: 6,000) equity shares of Rs 10 each fully paid up 2.07 2.07 Merino Exports Private Limited 6,000 (31st March, 2014: 6,000) equity shares of Rs 10 each fully paid up 0.60 0.60 Merinoply and Chemicals Limited 5.19 5.19 82,003 (31st March, 2014: 82,003) equity shares of Rs 10 each fully paid up Less: Provision for diminution in book value of investments 5.19 – 5.19 – – Quoted Bank of Baroda 5,000 (31st March, 2014: 1,000 equity shares of Rs.10 each) equity shares of Rs 2 each fully paid up 0.85 0.85 3.52 3.52

(a) Aggregate amount of quoted investments 0.85 0.85 (b) Aggregate amount of unquoted investments 2.67 2.67 (c) Aggregate provision for diminution in value of investments 5.19 5.19 (d) Aggregate market value of quoted investments 8.17 7.21

15. LONG - TERM LOANS AND ADVANCES Unsecured, considered good unless stated otherwise Capital Advances 285.30 221.60 Security Deposits [Refer (a) below] 262.68 285.57 Other loans and advances Loan to employees 71.35 54.01 Deposits with statutory authorities against disputed dues 312.06 129.11 Receivables relating to forward contracts 167.00 201.64 1098.39 891.93a) Includes Rs 75.60 (31st March, 2014: Rs 75.60 ) to a related

party (Refer Note 33), being a partnership firm in which some of directors of the Group are partners.

16. INVENTORIES (Refer Note 2.7) Raw materials [includes materials-in-transit Rs.1335.62 (31st March, 2014: Rs.2192.47 )] 11753.24 10131.30 Work-in-progress [Refer (a) below] 440.01 418.45 Stock-in-trade [Refer (b) below] [includes materials-in-transit Rs.2.79 (31st March, 2014: Nil )] 2212.90 968.85 Finished goods [Refer (c) below] [includes materials-in-transit Rs.0.46 (31st March, 2014: 22.70 )] 6485.93 4622.86 Stores and spares [includes materials-in-transit Rs.35.79 (31st March, 2014: Rs.32.90)] 1181.21 1067.64 22073.29 17209.10



102


16. INVENTORIES (Contd.) 31st March, 2015 31st March, 2014

(a) Details of work-in-progress


Other panel products 51.25 95.64



440.01 418.45

(b) Details of stock-in-trade :


Plywood 10.76 11.31

Potato 103.62 -

Others 2.46 3.74

2212.90 968.85

(c) Details of finished goods :






Potato Seeds 633.76 351.33

Others 28.88 3.86

6485.93 4622.86

17. TRADE RECEIVABLES Outstanding for a period exceeding six months from the date they are due for payment:


Unsecured - Considered doubtful (including dues under litigation) 126.36 59.52

629.14 592.84

Less : Provision for doubtful debts 126.36 59.52

502.78 533.32

Other debts:

Secured - Considered good 118.04 12.00


Unsecured - Considered doubtful – 7.57 13718.97 13316.48

Less : Provision for doubtful debts – 7.57

13718.97 13308.91

14221.75 13842.23

(a) The Company has a process of sending confirmations of balances to Trade Receivables through electronic or postal media once in a year. Discrepancies, if any, found on receipt of confirmations shall be accounted for as and when the confirmation are received.

103


18. CASH AND BANK BALANCES Cash and Cash Equivalents Cash on hand [including stamps in hand Rs.0.59 (31st March, 2014 - Rs. 0.21 )] 21.37 24.24


Cheques, Drafts on hand 80.93 71.59


Bank Balances:



1311.14 1165.48

Other Bank Balances

Margin Money Deposit 17.59 17.04

On Unpaid Dividend Accounts [Refer (a) below] 15.59 17.45

Deposits with original maturity for more than 3 months but less 500.00 – than 12 months (earmarked for overdraft against fixed deposit)

Fixed Deposit [Refer (b) below] 1.00 0.50

534.18 34.99

1845.32 1200.47

(a) Earmarked for payment of unclaimed dividend.

(b) Represents fixed deposit pledged with Custom & Excise authority.

19. SHORT - TERM LOANS AND ADVANCES Unsecured, considered good unless stated otherwise

Security Deposits 20.16 24.40

Advances recoverable in cash or kind 73.94 54.37


Advances to suppliers 211.95 182.81

Prepaid expenses 173.93 151.45

Loans to employees 66.44 61.14

Advance against Retirement Benefits 15.22 93.21

Balances with statutory/government authorities 876.99 897.75

1438.63 1465.13

20. OTHER CURRENT ASSETS Unsecured, considered good unless stated otherwise

Export Incentive Receivables 39.90 84.66

Insurance claim receivables 9.55 28.38

Interest accrued on deposits 11.00 2.64

Others 0.45 0.34

60.90 116.02



104



21. CONTINGENT LIABILITIES

(a) Claims against the Group not acknowledged as debt

Disputed Tax and Duty (Net of Deposits)

Demand for Sales Tax (Deposit under protest Rs.221.88; 31st March, 2014 Rs.64.26) 158.06 192.27

Demand for Excise, Custom Duty, Service tax (Deposit under protest Rs.225.54; 31st March, 2014 Rs.196.35) 2720.79 1609.53

Demand for Income Tax (Deposit under protest Rs.4.72; 31st March, 2014 Rs.4.72)) 1113.75 482.84

Others 97.69 32.64

(b) Guarantees

Bank Guarantees [includes Rs.663.85 (31st March, 2014 Rs.Nil) issued to Sales Tax Authority] 846.95 83.46

Corporate Guarantee given by the Group to secure the financial assistance /accommodation extended to Merino Services Limited. – 850.00

(c) First loss default gurantee to Standard Chartered Bank for Channel Financing 64.53 150.02

(d ) First loss default gurantee to IDBI Bank Limited for Channel Financing 15.74 –

(e) In respect of the contingent liabilities mentioned in Note 21(a) above, pending resolution of the respective proceedings, it is not practicable for the Group to estimate the timings of cash outflows, if any. In respect of matter mentioned in Note 21(b) above, the cash outflows, if any, could generally occur during the validity period of the respective guarantees. The Group does not expect any reimbursements in respect of the above contingent liabilities.


22. COMMITMENTS

(a) Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 1369.55 1061.95

(Net of advance)

(b) Other Commitments

The Group has imported Capital Goods under the Export Promotion Capital Goods Scheme of the Government of India at concessional rates of duty as an undertaking to fulfill quantified export within five years. Certificate for fulfillment of Rs. 1566.76 (31st March, 2014 - Rs.1446.39) yet to be

received. 893.99 757.82

Obligation against Advance Lisences 1508.43 2133.65

Outstanding Letters of Credit for materials yet to be received 1440.49 1679.03

105

2014-15 2013-14

23. REVENUE FROM OPERATIONS

(i) Sale of products [Refer (a) below]

Domestic sales 68984.46 62867.12

Export sales 27380.59 22578.37

96365.05 85445.49

(ii) Sale of services

Income from job works – 0.82

(iii) Other operating revenues

Export incentives 276.52 203.89

Scrap sales 554.43 457.71

830.95 661.60

Revenue from operations (Gross) 97196.00 86107.91

Less: Excise duty 6371.39 5653.43

Revenue from operations (Net) 90824.61 80454.48

(a) Particulars in respect of sales of products :

Manufactured



Furniture 8079.01 8048.93




Others 431.56 145.57

93266.80 82225.74

Traded



Chemicals 296.17 231.54

Paper 62.09 5.40




Furniture 27.68 –

3098.25 3219.75

96365.05 85445.49



106


2014-15 2013-1424. OTHER INCOME (i) Interest Income On bank and other deposits 12.90 4.10 On loans to others 16.17 11.17 (ii) Dividend income from long term investments 0.10 0.33 (iii) Claims from insurance companies [Refer (a) below] 96.25 126.49 (iv) Provision/Liabilities no longer required written back 82.24 19.86 (v) Profit on sale of tangible assets 61.29 18.90 (vi) Recovery of Bad Debts 33.13 97.24 (vii) Discount Received 236.93 160.83 (viii) Net gain from foreign currency transactions and translations 1394.60 – (ix) Miscellaneous Income 55.16 51.87 1988.77 490.79 (a) Due to the uncertainties in realisation, insurance claims are accounted for on settlement / realisation basis. 25. COST OF MATERIALS CONSUMED Raw Materials Consumed [Refer (a) below] Opening Stock 10131.27 9500.54 Purchase and Incidental expenses 51035.18 46489.35 61166.45 55989.89 Less: Cost of raw materials sold 1342.54 1385.42 59823.91 54604.47 Less: Closing Stock 11753.24 10131.30 48070.67 44473.17 (a) Particulars of cost of materials consumed : Paper 23623.13 20915.35 Chemicals including formaldehyde 15606.27 14740.60 Panel products and hardware 4537.01 4702.75 Potato 3278.27 3096.59 Others 1025.99 1017.88 48070.67 44473.17 26. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE Opening Stock Work-in-progress 418.45 421.36 Finished Goods 4622.86 3120.89 Stock-in-Trade 968.85 – 6010.16 3542.25 Less: Closing Stock Work-in-progress 440.01 418.45 Finished Goods 6485.93 4622.86 Stock-in-Trade 2212.90 968.85 9138.84 6010.16 (3128.68) (2467.91)

107

2014-15 2013-14

27. EMPLOYEE BENEFITS EXPENSE

Salaries, Wages, Bonus etc. [includes Rs.Nil (Previous Year 0.74) relating to previous year] 7638.82 6653.27

Contribution to Provident and Other Funds [Refer (a) below] 694.08 529.91

Workmen and Staff Welfare 216.15 182.15

8549.05 7365.33

(a) Gratuity

The Group operates a gratuity plan through the “LIC Gratuity Fund”, a group gratuity scheme from Life Insurance Corporation of India. Every employee is entitled to a benefit equivalent to fifteen days’ salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Group or retirement, whichever is earlier. The benefits vest after five years of continuous service. (Also refer Note 2.11)

2014-15 2013-14

I. Reconciliation of opening and closing balances of the present value of the Defined Benefit Obligation

(a) Present Value of Obligation at the beginning of the year 585.41 493.16

(b) Current Service Cost 92.72 73.39

(c) Interest Cost 45.24 41.06

(d) Actuarial Loss / (Gain) 59.26 25.49

(e) (Benefits Paid) (39.91) (47.69)

(f) Present Value of Obligation at the end of the year 742.72 585.41

II. Reconciliation of opening and closing balances of the fair value of Plan Assets

(a) Fair Value of Plan Assets at the beginning of the year 678.62 569.51

(b) Expected Return on Plan Assets 61.07 49.51

(c) Actuarial Gain/(Loss) 2.32 2.76

(d) Contributions by employer 55.84 104.53

(e) (Benefits Paid) (39.91) (47.69)

(f) Fair Value of Plan Assets as at the end of the year 757.94 678.62

III. Reconciliation of the present value of Defined Benefit Obligation in ‘I’ above and the fair value of Plan Assets in ‘II’ above

(a) Present Value of Obligation as at the end of the year 742.72 585.41

(b) Fair Value of Plan Assets as at the end of the year 757.94 678.62

(c) Assets recognised in the Balance Sheet 15.22 93.21



108


2014-15 2013-14

IV. Expense charged to the Statement of Profit and Loss

(a) Current Service Cost 92.72 73.39

(b) Interest Cost 45.24 41.06

(c) (Expected Return on Plan Assets) (61.07) (49.51)

(d) Actuarial (Gain)/Loss 56.94 22.73

(e) Total expense charged to the Statement of 133.83 87.67 Profit and Loss (included under Contribution to Provident and Other Funds)

2014-15 2013-14 2012-13 2011-12 2010-11

V. Amount recognised in current year and previous four years

(a) Present Value of Obligation as at the end of the year 742.72 585.41 493.16 403.61 336.04

(b) Fair Value of Plan Assets as at the end of the year 757.94 678.62 569.51 491.98 433.05

(c) Assets recognised in the Balance Sheet 15.22 93.21 76.75 88.37 97.01

(d) Experience (Gain) /Loss adjustment on plan obligation 5.21 13.62 23.68 6.46 28.19

(e) Experience Gain/(Loss) adjustment on plan assets 0.62 2.13 6.52 6.20 5.96

2014-15 2013-14

VI. Category of Plan Assets

Fund with Life Insurance Corporation of India 757.95 678.62

VII. Actual Return on Plan Assets 63.40 55.89

VIII. Principal Actuarial Assumptions 31st March, 2015 31st March, 2014

(a) Discount Rate (per annum) 8.00% 8.75%

(b) Expected Rate of Return on Plan Assets (per annum) 9.00% 8.75%

(c) Salary Escalation 6.00% 6.00%

(d) Inflation Rate 6.00% 6.00%

(e) Method used Projected Unit Projected Unit Credit Method Credit Method

(f) Remaining life of employees (in years) 22 22

The estimate of future salary increases, considered in actuarial valuation, takes into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The expected rate of return on plan assets is determined after taking historical results of the return on the Plan Assets.

109

2014-15 2013-14

28. FINANCE COSTS

Interest expenses 1425.43 1459.68

Interest on shortfall in payment of advance tax 78.99 61.63

Other borrowing costs 219.06 248.70

Applicable net loss on foreign currency transactions and translation 13.35 28.39

1736.83 1798.40

29. DEPRECIATION AND AMORTISATION EXPENSES

Depreciation and Amortisation on Tangible Assets 2252.45 2004.16

Write off of carrying value of certain fixed asssets (Refer (a) below] 136.98 -

Amortisation of Intangible assets 41.93 41.24

2431.36 2045.40

Less : Transfer from revaluation of fixed assets 48.45 3.79

2382.91 2041.61

(a) In respect of assets acquired prior to 1st April, 2014 and whose remaining useful life was nil as on 31st March, 2014, the entire carrying value thereof has been charged to the Statement of Profit and Loss.

30. OTHER EXPENSES

Consumption of Stores and Spare Parts 1960.66 1915.79

Power and Fuel 4150.09 4029.50

Rent 1074.15 724.95

Rates and Taxes 526.07 196.04

Repairs to :

Building 173.81 77.57

Plant and Machinery 483.42 343.45

Others 356.34 421.90

Net loss from foreign currency transactions and translations – 230.39

Legal and Professional Charges [includes Rs.Nil (Previous Year Rs.4.21) relating to previous year] 631.18 456.95

Vehicle Upkeep 427.27 434.75

Carriage Outward [includes Rs.Nil (Previous Year Rs.6.87) relating to previous year] 2725.67 2393.04

Packing and Forwarding 1578.38 1264.40

Insurance Charges 231.09 183.66

Commission Charges [includes Rs.1.03 (Previous Year Rs. Nil) relating to previous year] 599.58 575.56

Printing and Stationery 75.43 77.10



110


30. OTHER EXPENSES (Contd.) 2014-15 2013-14

Postage and Courier 72.04 65.20

Advertisment, Publicity and Sales Promotion 1584.27 1066.17

Travel Expenses [includes Rs.Nil (Previous Year Rs.0.50) relating to previous year] 724.24 664.47

Communication Expenses [includes Rs.Nil (Previous Year Rs.0.17) relating to previous year] 170.29 164.29

Excise Duty [refer (a) below] 41.96 129.32

Bad Debts and advances written off 164.08 122.39

Provision for Bad and Doubtful Debts 71.65 55.16

Payments to the Auditors [Refer (b) below] 31.20 18.36

Bank Charges and Commission 153.56 154.37

Royalty 70.70 178.67

Corporate Social Responsibility Expense (Refer Note 39) 99.00 –

Loss on Sale/Disposal of Tangible Assets 59.34 47.94

Miscellaneous Expenses 1708.02 880.63

19943.49 16872.02

(a) Represents excise duty related to the difference between the closing stock and opening stock

(b) Amount paid / payable to the auditors

As Statutory Auditors @ :

Statutory Audit Fees 16.00 16.00

Tax Audit Fees (includes Rs.5.50 lac (Previous Year Rs. Nil) relating to previous year) 11.00 –

Other matters (Certification) 0.90 0.10


28.90 17.11

@ Excluding Service Tax Rs.3.55 (2013-14 : Rs.2.11)

As Cost Auditors :

Audit Fees 1.45 0.90 Other matters 0.80 0.30


2.30 1.25

31. EARNINGS PER EQUITY SHARE:

(i) Number of Equity shares outstanding during the year 1,03,69,600 1,03,69,600

(ii) Face value of each equity share (Rs.) 10.00 10.00

(iii) Profit after Tax and Extraordinery Item (Rs.) 6464.89 3573.05

(iv) Basic and Dilutive Earning per Equity Share on Profit after Tax [(iii)/(i)] - (Rs) 62.34 34.46

111

31st March, 2015 31st March, 201432 The Group has certain dues to suppliers registered under

Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act’). The disclosures pursuant to the said MSMED Act are as follows:

Principal amount due to suppliers registered under the MSMED Act and remaining unpaid as at year end 0.33 4.86 Interest due to suppliers registered under the MSMED Act and remaining unpaid as at year end 0.01 0.16 Principal amounts paid to suppliers registered under the MSMED Act, beyond the appointed day during the year 7.54 5.00 Interest paid, other than under Section 16 of MSMED Act, to suppliers registered under the MSMED Act, beyond the appointed day during the year – – Interest paid, under Section 16 of MSMED Act, to suppliers registered under the MSMED Act, beyond the appointed day during the year – – Interest due and payable towards suppliers registered under MSMED Act, for payments already made 0.04 0.16 Further interest remaining due and payable for earlier years – – The above information regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

33 Information in accordance with Accounting Standard - 18 on ‘ Related Party Disclosures :

i) Related Parties :

a) Key Management Personnel (KMP) Mr. Champa Lal Lohia Executive Chairman Mr Nripen Dugar Whole-time Director Mr. Rup Chand Lohia Executive Vice Chairman Mr Bikash Lohia Whole-time Director Mr Prakash Lohia Managing Director Mr Madhusudan Lohia Whole-time Director Mr Prasan Lohia Whole-time Director Mr Asok Kumar Parui Chief Financial Officer Ms. Ruchira Lohia Whole-time Director Mr Sumantra Sinha Company Secretary

b) Relatives of KMP Relationship Relatives of KMP Relationship Mrs. Tara Devi Lohia Wife of Mr Champa Lal Lohia Mrs. Neera Lohia Wife of Mr Prakash Lohia Mr. Deepak Lohia Son of Mr Champa Lal Lohia Mrs. Sheela Lohia Mother of Ms. Ruchira Lohia Ms. Usha Lohia Daughter of Mr Champa Lal Lohia Mrs. Praveena Lohia Wife of Mr Rup Chand Lohia Mrs. Nayantara Agarwal Daughter of Mr Champa Lal Lohia Mrs. Meghna Lohia Wife of Mr Prasan Lohia Mrs. Asha Mundhra Daughter of Mr Champa Lal Lohia Mr.Manoj Lohia Son of Mr Rup Chand Lohia Late Man Kumar Lohia Father of Mr Prakash Lohia Mr.Abhiroop Lohia Son of Mr Prasan Lohia Mrs. Sita Devi Lohia Mother of Mr Prakash Lohia Ms. Anuja Lohia (minor) Daughter of Mr Prasan Lohia Mrs. Uma Singhi Sister of Mr Prakash Lohia Mrs. Sashi Lohia Wife of Mr Bikash Lohia Mrs. Kiran Maheswari Sister of Mr Prakash Lohia

c) Entities over which Key Management Personnel together with their relatives have significant influence : Merino Exports Private Limited Usha Agro Farm Merino Services Ltd. Anupriya Marketing Limited Kasturi Bai Gopi Babu Cold Storage Private Limited Sri Hara Kasturi Trust Sri Harakasturi Memorial Trust Sri Man Kumar Lohia Memorial Trust Man Kumar Lohia and Brothers Sri Prem Chand Lohia Memorial Trust



112

ii) Particulars of transactions during the year ended 31 March, 2015

Particulars Key Relatives of Entities over which Key Total Management Key Management Personnel Personnel Management together with their relatives Personnel have significant influence

Sale of products / materials / – – 590.55 590.55 services – – (1000.63) (1000.63)

Sale of Tangible and – – – – Intangible Assets – – (0.35) (0.35)

Purchase of Tangible and – – – – Intangible Assets – – (17.00) (17.00)

Purchase of goods / – – 371.30 371.30 materials / services – – (1856.55) (1856.55)

Royalty on trade mark – – 0.28 0.28 received – – (0.28) (0.28)

Rent, other charges and – 11.73 919.28 931.01 reimbursement paid – (9.95) (572.87) (582.82)

Rent, other charges and – – 3.55 3.55 reimbursement received – – (13.65) (13.65)

Commission paid on sales – – 200.06 200.06 – – (216.15) (216.15)

Dividend paid / payable 41.68 48.11 72.59 168.38 (41.82) (48.20) (81.41) (171.43)

Interest paid on loans – – 226.82 226.82 – – (154.34) (154.34)

Donation paid – – 630.16 630.16 – – (73.72) (73.72)

Loans taken – – 1913.30 1913.30 – – (1829.95) (1829.95)

Loans repaid – – 1764.27 1764.27 – – (959.85) (959.85)

Salary / benefits to Key 22.37 – – 22.37 Managerial Personnel (15.14) – – (15.14)

Directors’ Remuneration 460.25 117.34 – 577.59 (449.47) (115.76) – (565.23)

Security Deposit on Rent – – – – – – (34.02) (34.02)


113

ii) Balance outstanding at the year end

Particulars Key Relatives of Entities over which Key Total Management Key Management Personnel Personnel Management together with their relatives Personnel have significant influence

Trade receivables – – 25.68 25.68 – – (177.33) (177.33)

Loans and Advances / – – 50.40 50.40 Other Current Assets – – (51.67) (51.67)

Trade and other payables – – 594.99 594.99 – (3.19) (263.42) (266.61)

Unsecured Loans – – 1883.01 1883.01 – – (1595.07) (1595.07)

Interest accrued but not due – – 204.14 204.14 – – (138.91) (138.91)

Investment in Shares (Other – – 2.67 2.67 than trade) (Net of diminution) – – (2.67) (2.67)

Corporate Guarantee given – – – – – – (850.00) (850.00)

Figures in brackets relate to previous year.

iii) Details of transactions with Key Management Personnel [included under column “Key Management Personnel” in (ii) above]

Nature of Transactions Name of Key Management 2014-15 2013-14 Personnel

1) Directors’ Remuneration Shri Champa Lal Lohia 80.56 80.56








2) Dividend paid / payable Shri Champa Lal Lohia 5.57 5.59








3) Salary to Key Managerial Personnel Sri A K Parui(Chief Financial Officer) 16.76 15.14

Sri Sumantra Sinha (Company Seretary) 5.61 –



114

iv) Details of transactions with relatives of Key Management Personnel [included under column “Relatives of Key Management Personnel” in (ii)]

Nature of Transactions Relatives of Key Management 2014-15 2013-14 Personnel

1) Dividend paid / payable Mrs. Tara Devi Lohia 3.62 3.62

Mr. Deepak Lohia 9.34 9.37

Ms. Usha Lohia 2.40 2.40



Late Man Kumar Lohia 6.42 6.44

Mrs. Sita Devi Lohia 2.45 2.45


Mrs. Neera Lohia 4.48 4.48

Mrs. Sheela Lohia 1.76 1.76

Mrs. Praveena Lohia 2.70 2.70

Mrs. Meghna Lohia 3.97 3.97

Mr.Manoj Lohia 3.29 3.33

Mr.Abhiroop Lohia 3.00 3.00

Ms. Anuja Lohia (minor) 0.75 0.75

Mrs. Sashi Lohia 1.50 1.50

2) Directors’ Remuneration Sri Manoj Lohia 58.69 57.89

Sri Deepak Lohia 58.65 57.87

3) Land rent paid / payable Mr. Deepak Lohia 2.36 2.36



Mrs. Kiran Maheswari 2.50 1.47


4) Balance outstanding at the year Mrs. Kiran Maheswari – 1.47

end Trade Payables Mrs. Uma Singhi – 1.72



115

v) Details of transactions with Entities over which Key Management Personnel together with relatives have significant influence [ included under column “Entities over which Key Management Personnel together with relatives have significant influence “ in (ii) above]


Sale of Products / Stores / Services Merino Services Limited 582.38 999.27

Sri Hara Kasturi Trust 1.91 –



Merino Exports Private Limited 0.13 –

Sale of tangible assets Merino Services Limited – 0.35

Purchase of Goods/Services Merino Services Limited 359.99 1,832.08




Royalty on trade mark received Merino Services Limited 0.28 0.28

Purchase of tangible Assets Merino Services Limited – 15.25

Usha Agro Farm – 1.75

Rent and other charges paid Merino Exports Pvt Ltd 128.76 131.12






Rent and other charges received Kasturi Bai Gopi Babu Cold Storage Pvt Limited 0.19 0.50



Commission paid on sales Anupriya Marketing Limited 200.06 216.15

Dividends paid / payable Merino Exports Pvt Ltd 67.79 76.61


Interest Paid on loans Merino Exports Pvt Ltd 226.82 154.34

Donation Paid Sri Harakasturi Memorial Trust* 102.01 73.72

Sri Prem Chand Lohia Memorial Trust 200.00 –

Sri Hara Kasturi Trust** 26.20 –

Sri Man Kumar Lohia Memorial Trust 301.95 –

Loan Taken Merino Exports Pvt Ltd 1913.30 1829.95

Loan Repaid Merino Exports Pvt Ltd 1764.27 959.85

Security Deposit on Rent Man Kumar Lohia and Brothers – 34.02

* Includes Rs. 72.80 (Previous Year Nil) for CSR Activities (Also refer Note 39) ** For CSR Activities (Also refer Note 39)




116

v) Balance outstanding at the year end


Trade receivables Merino Services Limited – 152.13

Man Kumar Lohia and Brothers 25.20 25.20


Loans and Advances /Other Merino Services Limited – 1.27

current assets Mankumar Lohia and Brothers 50.40 50.40

Trade and other payables Merino Exports Pvt Ltd – 9.54



Anupriya Marketing Ltd. 28.64 23.03

Kasturi Bai Gopi Babu Cold Storage Pvt Ltd 488.70 224.98

Usha Agro Farm 0.38 –

Unsecured Loans Merino Exports Pvt Ltd 1883.01 1595.07

Interest accrued and due Merino Exports Pvt Ltd 204.14 138.91

Corporate Guarantee given Merino Services Limited – 850.00

Investment in Shares (other than trade) Merino Services Limited 2.07 2.07

Merino Exports Pvt Ltd 0.60 0.60

Merinoply and Chemicals Ltd Rs.5.19

Less: Diminution in book value Rs.5.19 – –


34 Information in accordance with Accounting Standard - 17 on ‘ Segment Reporting’

a) The Group has identified three reportable business segments : -

i) Laminates:

– Comprises manufacturing and selling of Decorative Laminates, Chemicals (primarily meant for captive consumption), Adhesive and trading of Papers and Chemicals.

ii) Panel Products and Furniture :

– Comprises manufacturing and selling of Furnitures, Panel Boards, Plywoods and related products.

iii) Potato Flakes :

– Potato Flakes comprises manufacturing and sale of Potato Flakes and Ready Mix.

b) Others represent all un- allocable items not included in segments.

c) Geographical segments considered for disclosure are :

– Sales within India

– Sales outside India


117


Primary Segment Information (Business Segment)

Laminates Panel Potato Others Eliminations Total Products and Flakes (Un allocated) Furniture

Revenue-External (net sales and 68963.93 13871.45 7701.00 2277.00 92813.38 other income) (57926.98) (13694.10) (7335.48) (1988.71) (80945.27)

Inter-Segment sales 3061.42 – – – 3061.42 (2774.04) – – – (2774.04)

Total Revenue (net sales and 72025.35 13871.45 7701.00 2277.00 -3061.42 92813.38 other income) (60701.02) (13694.10) (7335.48) (1988.71) (-2774.04) (80945.27)

Profit ( + ) / Loss ( - ) before tax +13468.22 +1706.13 -7.57 -3829.20 +11337.58 (+7562.68) (+1884.57) (-210.16) (-2764.63) (+6472.46)

Depreciation and Amortisation 1688.05 282.46 357.84 54.56 2382.91 (1470.64) (176.14) (364.97) (29.86) (2041.61)

Non Cash expenses other than 90.32 126.69 18.69 0.03 235.73 Depreciation and Amortisation (108.67) (61.26) (5.03) (2.59) (177.55)

Assets 38329.47 8372.84 7671.47 7203.16 61576.94 (33242.99) (7162.31) (6581.66) (5437.44) (52424.40)

Liabilities (Excluding 8572.14 1321.37 822.92 21388.86 32105.29 Shareholders’ funds) (7550.78) (1349.68) (675.03) (20376.58) (29952.07)

Capital Expenditure 4400.37 1077.48 355.64 – 5833.49 (1798.29) (158.21) (224.22) – (2180.72)

Secondary Segment Information (Geographical Segments)

Segment Revenue Carrying Amount of Segment Capital (External) Segment Assets Expenditure

Within India 63155.77 50325.40 5833.49 (56378.19) (42328.36) (2179.94)

Outside India 27380.61 4048.38* – (22578.37) (4658.60)* (0.78)* represents Trade Receivables and Fixed Assets. Figures in brackets represent previous year’s figures.

35. PURCHASES OF STOCK-IN-TRADE 31st March, 2015 31st March, 2014 Decorative Laminates 359.46 1031.69


Furniture [includes Installation Expenses Rs.48.86 (Previous Year : Rs.114.89)] 87.09 150.19

Chemicals 113.71 467.88

Paper 351.79 292.01




3921.53 4390.19



118

36. LEASES

Operating Lease

As a lessee:

The Group has entered into cancellable operating leases and transactions for leasing of accommodation for office spaces, godown etc. The tenure of leases generally varies between 1 and 3 years. Terms of the lease include operating term for renewal, increase in rent in future periods and for cancellation. Related lease rental aggregating Rs.520.59 (31st March, 2014 : Rs.462.04) has been debited to the Statement of Profit and Loss.

As a lessor:

The Group has given godown spaces on operating leases and the tenure of leases generally varies between 1 and 5 years. Terms of the lease include operating term for renewal, increase in rent in future periods and term of cancellation. Related lease rental income aggregating Rs.6.44 (31st March, 2014 : Rs.7.91) has been credited to the Statement of Profit and Loss.

37. DIVIDEND

During the year, the Board has declared interim dividend of Rs.1.50/- (2013-14 : Rs.1.50/-) per Equity Share amounting to Rs.155.54 (2013-14 ; Rs.155.54).

38. Hedging Contracts

The Group uses foreign exchange forward contracts, currency swaps to hedge its exposure to movements in foreign exchange rates. The Group does not use the foreign exchange forward contracts for trading or speculation purposes.

The Group has identified certain derivative contracts entered into to hedge foreign currency risk of firm commitments and highly probable forecast transactions as hedge instruments that qualify as effective cash flow hedges.

a) Derivative instruments outstanding:

i) Forward exchange contracts:


Purchase Sale Purchase Sale

Foreign currency value (USD in lacs 5.00 66.00 2.81 31.30

ii) Principal swap contracts:

Principal amount (USD in lacs) outstanding 12.50 – 18.75 –

b) Un-hedged foreign currency exposures as on March 31, 2015:


Loan liabilities and payables:

(USD in lacs) 70.95 82.26

(EUR in lacs) 17.27 20.95

(AUD in lacs) 0.11 0.11

(YEN in lacs) 304.23 254.30

(SGD in lacs) 0.23 –

Receivables:

(USD in lacs) 51.24 53.77

(GBP in lacs) 2.58 5.11

(EUR in lacs) 0.35 0.03



119





39. ‘CSR’ EXPENDITURE

The Group undertook Corporate Social Responsibility (‘CSR’) programme and activities through two Group Trusts (Shree Hara Kasturi Memorial Trust and Sri Hara Kasturi Trust) registered under the Income Tax Act.

2014-15 2013-14

(a) Gross Amount required to be spent by the Group during the year 99.00 –

(b) Amount Spent by the Group through these trusts:

Construction / acquisition of any assets 12.07 –

On purpose other than above 86.93 –

(c) Yet to be spent in cash – –

40. Company considered in the Consolidated Financial Statements is :

Name of the Company Country of Incorporation Holding As on 31-03-2015 Financial Year end on

Merino Panel Products Limited India 74.65% 31-03-2015

Name of the Entity Net Asset, i.e., total Share In Net Profit or Loss Asset Minus total Liabilities

% on Amount % on Amount Consolidated Consolidated Net Profit Net Profit

Merino Panel Product Limited 43.92% 11647.50 48.28% 3121.28

Minority Interest 11.13% 2952.64 7.93% 512.98

41. PREVIOUS YEAR’S FIGURES

The previous year’s figures have also been reclassified and regrouped to confirm to this year’s classification and grouping.



120

Note:

121

Note:


122

Note:


124

0374-2330748 0374-2330748

MERINO INDUSTRIES LTD.CIN: U51909WB1965PLC026556Regd. O�ce: 5, Alexandra Court 60/1,Chowringhee Road, Kolkata 700020

033-22901214 033-22870314P: F: [email protected]:

MARKETING OFFICE70, KLJ Complex, 2nd Floor, Moti Nagar, New Delhi-110015


REGISTERED OFFICE5, Alexandra Court, 60/1,Chowringhee Road, Kolkata-700020

033-22901214/1215 033-2287 0314 P: F: [email protected]:

FACTORY OFFICESHapur: Village-Achheja, PO-Hapur-245 101 Dist.–Hapur (U.P.)


Rohad: 44 KM. Stone, Delhi-Rohtak Road, Rohad, Distt. Jhajjar, Haryana-124501

01276-221000, 304900 01276-221050 P: F: [email protected]:

Hosur: Bagalur Road, Kalahasthipuram Village, Hosur Taluk, Distt. Krishnagiri, Tamil Nadu-635103.

04344-293545, 327765 04344-245307P: F:

BRANCH OFFICESAhmedabad: P: 079-30075775, 26589511,

079-26589511F: [email protected] E:

Bengaluru: P: F: 080-42418000 080-26941447 [email protected]:

Bhubaneswar: P: 0674-3255594, 2597795 0674-2597795F: [email protected]:

Chennai: P: 044-49303333, 49303300, 044-49303313F: [email protected]:

Coimbatore: P: 0422-2542841, 3299752 0422-4366723F: [email protected]:

New Delhi: P: 011-30515300, 25448011 011-30515301F: [email protected]:

Hyderabad: P: 040-24801202, 24801203, 040-24801103F: [email protected]:

Jaipur: P: 0141-2206159, 3290062 0141-4021067F: [email protected]:

Kochi: P: 0484-2398265, 2397972 0484-2397972F: [email protected]:

Mumbai: P: F: 022-67991970/71 022-67991973 [email protected]:

Nagpur: P: 0712-2436372, 2457123 0712-2420183F:

Pune: P: 020-24273249, 24273265 020-24271408F: [email protected]:

Tinsukia: P: 0374-2338975, 2340975 0374-2330748F:

www.merinoindia.com

0374-2330748

MERINO GROUP

Annual Report | open size A4 size

CONQUERINGNEWHEIGHTS

ANNUALREPORT

2015MERINO INDUSTRIES LTD.

Documents

MERINO GROUP - Merinoindia.com · MERINO GROUP Annual Report | open size A4 size CONQUERING NEWHEIGHTS ANNUAL REPORT MERINO INDUSTRIES LTD. 2015. 3 Merino Industries Ltd. (1926-2009)