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Notes to Accounts of Emami Paper Mills Ltd.

Mar 31, 2014

1. Terms / rights attached to shares

i) Equity shares : The Company has only one class of equity shares having a par value of Rs 2/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pay dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

ii) Preference shares : During the year ended 31st March, 2014 the Company issued 22,50,000 (20,00,000) cumulative redeemable non-convertible preference shares (CRNPS) of Rs 100 each fully paid up at a premium of Rs 300 per share. CRNPSs carry cumulative dividend @8% p.a.

The Company declares and pay dividends in indian rupees on pro-rata basis from the date of allotment. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Holders of CRNPS have voting rights on matters pertaining to CRNPS.

In the event of liquidation of the company before redemption of CRNPS, the holders of CRNPS will have priority over equity shares in the repayment of capital. The CRNPS is redeemable on the expiry of 12 years from the date of issue at a premium

2. Nature of Security :

(i) Term loans of Rs 43,719.09 Lacs (Rs 34,214.32 Lacs) are secured by deposit of title deeds in respect of present and future immovable properties and hypothecation of present and future movable fixed assets on a pari-passu basis and second charge on current assets on pari-passu basis.

(ii) Term loans of Rs 214.34 Lacs (Rs 1,674.77 Lacs) are supported by personal guarantee of some of the promoters and second / subservient charge on all movable assets of the company ranking pari-passu.

Terms of repayment of term loans :

(i) ICICI ECB USD 0.96 million equivalent to Rs 574.04 Lacs (USD 4.79 million equivalent to Rs 2,601.40 Lacs) carries interest @ 6 M Libor 1.70% p.a. is repayable in the quarter ended 30th June, 2014.

(ii) ICICI ECB USD 2.06 million equivalent to Rs 1,235.44 Lacs (USD 4.81 million equivalent to Rs 2,612.71 Lacs) carries interest @ 6 M Libor 1.00% p.a. is repayable in 3 quarterly installments upto December, 2014.

(iii) Allahabad Bank ECB USD 8.70 million equivalent to Rs 5,211.30 Lacs (Nil) carries interest @ 6 M Libor 4.50% p.a. is repayable in 20 quarterly installments commencing from June, 2016.

(iv) Exim Bank ECB USD 0.72 million equivalent to Rs 432.15 Lacs (Nil) carries interest @ 6 M Libor 4.75% p.a. is repayable in 28 quarterly installments commencing from June, 2016.

(v) Axis Bank ECB USD 4.50 million equivalent to Rs 2,695.50 Lacs (Nil) carries interest @ 6 M Libor 4.65% p.a. is repayable in 20 quarterly installments commencing from October, 2016.

(vi) IDBI Bank ECB USD 4.00 million equivalent to Rs 2,396 Lacs (Nil) carries interest @ 6 M Libor 5.00% p.a. is repayable in 24 equal quarterly installments commencing from April, 2017.

(vii) SBI FCNR (B) USD 11.43 million equivalent to Rs 6,845.37 Lacs (USD 16.41 million equivalent to Rs 8,911.37 Lacs) carries interest @ 6 M Libor applicable Spread p.a. is repayable in 5 quarterly installments upto June, 2015.

(viii) Indusind Bank FCNR (B) USD 0.36 million equivalent to Rs 214.34 Lacs (USD 1.79 million equivalent to Rs 971.33 Lacs) carries interest @ Libor 5.00 % p.a. is repayable in the quarter ended 30th June, 2014.

(ix) SBI FCNR (B) USD 12.97 million equivalent to Rs 7,771.29 Lacs (Rs 7,000.00 Lacs) carries interest @ 6 M Libor applicable spread p.a. is repayable in 20 quarterly installments starting from June, 2015.

(x) SBH Rupee Term loan amounting to Rs 4,999.71 Lacs (Rs 4,999.71 Lacs) carries interest @ SBH Base Rate 3% p.a. is repayable in 12 quarterly installments commencing from June, 2014. The company has entered into principal only swap for this loan in USD, value of which as on 31.03.2014 is Rs 5,590.82 Lacs.

(xi) ICICI Rupee Term loan amounting to Rs 6,000 Lacs (Rs 6,000 Lacs) carries interest @ ICICI Bank base rate applicable spread p.a. is repayable in 20 quarterly installments commencing from December, 2014. The company has entered into principal only swap for this loan in USD, value of which as on 31.03.2014 is Rs 6,753.32 Lacs.

(xii) ICICI Rupee Term loan amounting to Rs 4,000 Lacs (Nil) carries interest @ ICICI Bank base rate applicable spread p.a. is repayable in 20 quarterly installments commencing from September, 2015. The Company has entered into principal only swap for this loan in USD, value of which as on 31.03.2014 is Rs 4,213.86 Lacs.

* The amount repayable within next 12 month for the above loans has been classified as "Current maturities" in Note No. 2.9.

3.

CONTINGENT LIABILITIES AND COMMITMENTS

a) Contingent liabilities not provided for in respect of :

i) Outstanding guarantees and letters of credit furnished by the bankers on behalf of the Company amounting to Rs 937.78 Lacs (Rs 664.44 Lacs) is secured by hypothecation of current assets, as specified in Note 2.7 and that amounting to Rs 13,807.42 Lacs (Nil) is secured by deposit of title deeds of immovable properties and hypothecation of movable fixed assets, as specified in Note 2.3.

ii) Sales tax / VAT / entry tax / central excise duties / service tax / ESI contribution and other taxes under appeal / review (net of advances) - Rs 1,658.43 Lacs (Rs 1,300.55 Lacs).

iii) Bonds / undertakings given under EPCG scheme to custom authority - Rs 1,228.42 Lacs (Rs 851.93 Lacs).

iv) Withdrawal of incentive tariff of electricity by NESCO (net of advance) - Rs 46.26 Lacs (Rs 46.26 Lacs).

4. Capital and other commitments :

Estimated amounts of capital contracts remaining to be executed and not provided for (net of advances) Rs 25,537.71 Lacs (Rs 11,238.78 Lacs).

The Company has entered into operating lease agreements for office space, godowns, and guest house. The total charge to statement of profit and loss for the year on account of operating lease is Rs 31.31 Lacs (Rs 28.41 Lacs). Lease rental are charged on the basis of agreed terms. No significant restrictions have been imposed by the lessor on the leases. The leases can be renewed after completion of the lease term by mutually discussing the renewal terms with the lessor.

Note 5.

Previous year''s figures have been reclassified/re-grouped/re-arranged wherever necessary.


Mar 31, 2013

NOTE 1.1 CONTINGENT LIABILITIES AND COMMITMENTS

a) contingent liabilities not provided for in respect of:

i) Outstanding guarantees and letters of credit furnished by the bankers on behalf of the Company secured by hypothecation of current assets, as specified in Note 2.7 - Rs. 664.44 lacs (Rs. 563.74 lacs).

ii) Sales tax / VAT / entry tax / central excise duties / service tax / ESI contribution and other taxes under appeal / review (net of advances) - Rs. 1,144.45 lacs (Rs. 675.77 lacs).

iii) Bonds / undertakings given under EPCG scheme to custom authority - Rs. 851.93 lacs (Rs. 841.66 lacs)

iv) Withdrawal of incentive tariff of electricity by NESCO (net of advance) - Rs. 46.26 lacs (Rs. 46.26 lacs)

b) capital and other commitments:

Estimated amounts of capital contracts remaining to be executed and not provided for (net of advances) Rs. 1 1,238.78 lacs (Rs. 555.89 lacs).

NOTE 1.2 DEFERRAL/CAPITALIZATION OF EXCHANGE DIFFERENCES

The Company has exercised the option permitted by Accounting Standard Amendment Rule, 2009 under the transitional provisions contained in Para 46 of Accounting Standard (AS) 11 (vide GOI Notification No.GSR 225(E) dated the 31st March 2009 as amended by Notification No. GSR 378(E) dated 11th May, 2011 and GSR 913 (E) dated 29th December, 2011). A sum of Rs. 2,015.88 lacs (Rs. 3789.43 lacs) being the exchange loss for the year arising on reporting of Long-Term Foreign Currency Monetary Items has been added to the cost of depreciable capital asset as at the 31st March 2013. The net increase of Rs. 6,855.04 lacs (after adjusting net loss of Rs. 4,839.16 lacs up to Financial Year 2011-12) in the carrying amount of the depreciable capital asset(s) would be depreciated over the balance of the life of the assets.

NOTE 1.3 ENTRY TAX

Against the order of Hon''ble Orissa High Court W P (C) No. 6515 of 2006 dated 18.02.2008 holding that State of Orissa has no jurisdiction to impose entry tax on goods imported from outside and are not manufactured within the state, the State of Orissa has filed a SLP before the Hon''ble Supreme Court which has passed an interim order dated 03.02.2010 directing the company to deposit 1/3rd of the amount of entry tax on such purchases pending disposal of the SLP. In pursuance of the aforesaid order, the company has deposited a sum of Rs. 78.05 lacs (Rs. 55.48 lacs) against the entry tax of Rs. 234.15 lacs (Rs. 166.44 lacs) for the financial years 2008-09 to 2012-13.

NOTE 1.4

Miscellaneous expenses include Rs. 70.37 lacs (Rs. 70.68 lacs) for corporate social responsibility.

NOTE 1.5

There are no outstanding or delayed payments to the Micro, Small and Medium Enterprises and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the Micro, Small and Medium Enterprises Developments Act, 2006 are not required.

NOTE 1.6 RELATED PARTY DISCLOSURES

a. Key management personnel

Shri R.S. Goenka *

Shri R.S. Agarwal *

Shri P.S. Patwari

Shri Manish Goenka

Shri R.C.Mall**

Shri A. V. Agarwal

b. Relatives of key management personnel

Shri Shyam Patwari

c. Enterprises over which persons described in (a) above are able to exercise significant influence

Emami Limited

Emami Biotech Limited (up to 10.07.2012)

Emami Cement Limited

Emami Foundation

Oriental Sales Agencies (India) Private Limited

Suntrack Commerce Private Limited

Sneha Enclave Private limited

Sneha Gardens Private limited

Emami Estates Private limited

Bhanu Vyapaar Private Limited

Auto Hi-Tech Private Limited

* Resigned from the Board w.e.f. 13th August,2012

** Resigned from the Board w.e.f. 23th April,2012

NOTE 1.7

The Company''s business activity falls within primary business segment of "Manufacture of paper" and "Real estate business" as per AS-17 "Segment reporting", notified in the Companies (Accounting standard) Rules, 2006. The operating income and segment results includes Rs 900 lacs from Real estate business. Other revenue and segment assets and liabilities are exclusively related to manufacture of paper business.

NOTE 1.8

Amount due and outstanding to be credited to Investor education and protection fund - Nil (PY Nil).

NOTE 1.9

Exchange differences on the principal amount of the foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost as mandated by paragraph 4(e) of Accounting Standard - 16 have been disclosed under Notes "Finance cost." Such exchange differences on principal amount of foreign borrowing are not interest on the foreign borrowing.

NOTE 1.10

The Company has entered into operating lease agreements for office space, godowns, and guest house. The total charge to statement of profit and loss for the year on account of operating lease is Rs. 28.41 Lacs (Rs. 28.41 Lacs).

Lease rental are charged on the basis of agreed terms. No significant restrictions have been imposed by the lessor on the leases. The leases can be renewed after completion of the lease term by mutually discussing the renewal terms with the lessor.

NOTE 1.11

Previous year''s figures have been reclassified/ regrouped / rearranged wherever necessary.


Mar 31, 2012

1.1 General

The financial statements are prepared under the historical cost convention on the accrual basis of ac- counting and in accordance with Accounting principles generally accepted in India and comply with the Accounting Standards notified by the Central Government of India and relevant provisions of the Companies Act, 1956.

All the assets & liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act 1956.

a) Terms / rights attached to equity shares

The company has only one class of equity shares having a par value of Rs.2/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pay dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature of Security :

(i) Term loans of Rs.20,524.15 Lac (Rs.20,825.26 Lac) are secured by deposit of title deeds in respect of present and future immovable properties and hypothecation of present and future movable fixed assets on a pari pasu basis. Term loans from banks are also secured by second charge on current assets on pari pasu basis.

(ii) Term Loans of Rs.1,603.95 Lac (Nil) are supported by personal guarantee of some of directors and second / subservient charge on all movable assets on a pari pasu basis.

Terms of Repayment of Term Loans :

(i) ECB $ 23 Million from ICICI Bank Ltd (Rs.4388.40 Lacs) is repayable in 9 quarterly instalments

(ii) ECB $ 16.50 Million from ICICI Bank Ltd (Rs.3847.80 Lacs) is repayable in 11 quarterly instalments

(iii) ECB $ 10 Million ( Rs.1908 Lacs) from State Bank of India is repayable in 6 quarterly instalments

(iv) ECB $ 4.50 Million (Rs.2289.60 Lacs) from DBS Bank repayable in 2 annual instalments

(v) FCNR (B) $ 21 million from State Bank of India (Rs.10,046.28 Lacs) is repayable in 13 quarterly instalments

(vi) FCNR (B) $ 7.878 Million from State Bank of India (Rs.1460.47 Lacs) is repayable in 5 quarterly instalments

(vii) Rupee Term Loan from SBH (Rs.5000 Lacs) Repayable in 12 quarterly instalments with 2 years moratorium.

(viii) Loan from Indusind Bank (Rs.1638.57 Lacs) is repayable in 9 quarterly instalments.

(ix) Loan from Axis Bank (Rs.1889.28 Lacs) is repayable in 19 monthly instalments.

The amount repayable within next 12 months for above loans has been classified as "current maturities" in Note No.2.9.

Nature of Security :

Working Capital facilities from banks are secured by hypothecation of present and future stock of materials, stock- in-process, finished goods, stores and spares, book debts, outstanding money, claims receivable and further secured by way of second charge on all immovable and movable properties / fixed assets both present and future on a pari passu basis.

2.1 Contingent liabilities and commitments

(a) Contingent liabilities not provided for in respect of:

(i) Outstanding guarantees and letters of credit furnished by the bankers on behalf of the Company secured by hypothecation of current assets, as specified in note 2.7 - Rs.563.74 lacs (Rs.2512.60 lacs).

(ii) Sales tax / VAT / Entry Tax / Central Excise duties / Service tax / ESI Contribution and other taxes under appeal / review (net of advances) - Rs.675.77 lacs (Rs.46.87 lacs).

(iii) Bonds / Undertakings given under EPCG scheme to Custom Authority - Rs.841.66 lacs (Rs.578.74 lacs)

(iv) Withdrawal of incentive tariff of electricity by NESCO (net of advance) - Rs.46.26 lacs (Rs.46.26 lacs)

(b) Capital and other commitments

Estimated amounts of capital contracts remaining to be executed and not provided for (net of advances) Rs.555.89 lacs (Rs.3122.80 lacs).

2.2 Deferral / capitalization of exchange differences

The Company has exercised the option permitted by Accounting Standard Amendment Rule, 2009 under the transitional provisions contained in Para 46 of Accounting Standard (AS) 11 (vide GOI Notification No.GSR 225(E) dated the 31st March 2009 as amended by Notification No. GSR 378(E) dated 11th May, 2011 and GSR 913 (E) dated 29th December, 2011). A sum of Rs.4863.10 lacs being the exchange loss for the year arising on reporting of Long-Term Foreign Currency Monetary Items has been added to the cost of depreciable capital asset as at the 31st March 2012. The net increase of Rs.5912.82 lacs (after adjusting net loss of Rs.1049.72 lacs up to Financial Year 2010-11) in the carrying amount of the depreciable capital asset(s) would be depreciated over the balance of the life of the assets.

2.3 Entry Tax : Against the order of Hon'ble Orissa High Court W P (C) No. 6515 of 2006 dated 18.02.2008 holding that State of Orissa has no jurisdiction to impose entry tax on goods imported from outside and are not manufactured within the state, the State of Orissa has filed a SLP before the Hon'ble Supreme Court which has passed an interim order dated 03.02.2010 directing the company to deposit 1/3rd of the amount of entry tax on such purchases pending disposal of the SLP. In pursuance of the afore- said order, the company has deposited a sum of Rs.55.48 lacs (Rs.23.68 lacs) against the entry tax of Rs.166.44 lacs (Rs.71.04 lacs) for the financial year 2008-09 to 2011-12.

2.4 The payment of remuneration to Shri R.S. Goenka, Executive Chairman and Shri P.S. Patwari, Executive Director for the financial year 2011-12 is subject to the approval of the Central Government.

2.5 There are no outstanding or delayed payments to the Micro, Small and Medium Enterprises and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the Micro, Small and Medium Enterprises Developments Act, 2006 are not required.

2.6 Related party disclosures

a. Key Management Personnel

Shri R.S. Goenka

Shri R.S. Agarwal

Shri P.S. Patwari

Shri Manish Goenka

Shri R.C. Mall

Shri A. V. Agarwal

b. Relatives of Key Management Personnel

Shri Shyam Patwari

c. Enterprise over which persons described in (a) above are able to exercise signifi- cant influence

Emami Limited

Emami Biotech Limited

Emami Cement Limited

Emami Foundation

Oriental Sales Agencies (India) Private Limited

Suntrack Commerce Private Limited

2.7 As the Company's business activity falls within a single primary business segment which is "Manufacture of Paper" and the Company primarily operates in India, the disclosure requirements of AS-17 "Segment Reporting", notified in the Companies (Accounting Standard) Rules, 2006 are not applicable.

2.8 Amount due and outstanding to be credited to Investor Education and Protection Fund - Nil (PY Nil).

2.9 Sales are net of commission to selling agents other than sole selling agents Rs.527.49 Lacs (Rs.486.53 Lacs).

2.10 Exchange Differences on the principal amount of the foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost as mandated by paragraph 4(e) of Accounting Standard- 16 have been disclosed under Notes "Finance Cost." Such Exchange differences on principal amount of foreign borrowing are not interest on the foreign borrowing.

2.11 Previous year's figures have been reclassified / regrouped / rearranged wherever necessary.


Mar 31, 2011

1. Estimated amounts of capital contracts remaining to be executed and not provided for (net of advances) Rs.3,122.80 lacs (Rs. 235.38 lacs).

2. Contingent liabilities not provided for in respect of:

a) Outstanding guarantees and letters of credit furnished by the bankers on behalf of the Company secured by hypothecation of current assets, as specified in note 6 hereunder - Rs. 2,512.60 lacs (Rs. 345.14 lacs).

b) Sales tax under appeal (net of advances) - Rs.44.68 lacs (Rs. 270.03 lacs)

c) Central Excise duties under appeal (net of Advances) - Rs. 1.97 lacs (Rs. 0.96 lacs).

d) ESI Contribution under appeal - Rs 0.22 lacs (Rs. 0.22 lacs)

e) Bonds / Undertakings given under EPCG scheme to Custom Authority -Rs. 578.74 lacs (Rs. 2,190.42 lacs)

3. Loans and Advances include inter corporate deposits of Rs. 282.72 lacs (Rs. 1,085.72 lacs)

4. Term loans from banks and external commercial borrowings are secured by deposit of title deeds in respect of present and future immovable properties and hypothecation of present and future movable fixed assets on a pari passu basis. Term loans from banks and external commercial borrowings are also secured by way of second charge on current assets on pari passu basis. Working capital facilities from banks are secured by hypothecation of present and future stock of materials, stock-in- process, finished goods, stores and spares, book debts, outstanding money, claims receivable and further secured by way of second charge on all immovable and movable properties / fixed assets both present and future on a pari passu basis. Unsecured oans from banks are secured by personal guarantee of some of the Directors of the company and residual charge on Current Assets of the company.

5. Land, buildings and plant & machinery of the Gulmohar Unit and Paper Machine-1 of Balasore unit were revalued as on 01.04.98 and 01.04.99 respectively by independent approved valuers appointed for the purpose. The revaluation has resulted in increase in value of such assets by Rs. 3,097.20 lacs. Due to the said revaluation, there is an additional charge of depreciation of Rs. 66.02 Lacs (Rs. 76.32 Lacs) for the year and an equivalent amount has been withdrawn from revaluation reserve and credited to Profit & Loss Account. The net book value of such revaluation made till date stands at Rs. 778.67 lacs (Rs. 844.69 lacs).

6. Sales are net of commission to selling agents other than sole selling agent Rs.486.53 lacs (Rs. 605.46 lacs)

7. Interest includes Interest on Term loans Rs. 1,940.22 lacs (Rs. 2,658.58 lacs) & Net of Interest received Rs. 582.48 lacs (Rs. 1,236.58 lacs).

There are no outstanding or delayed payments to the Micro, Small and Medium Enterprises, and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the Micro, Small and Medium Enterprises Developments Act, 2006 are not required

Against the order of Honble Orissa High Court W P (C) No. 6515 of 2006 dated 18.02.2008 holding that State of Orissa has no jurisdiction to impose entry tax on goods imported from outside and are not manufactured within the state, the State of Orissa has filed a SLP before the Honble Supreme Court which has passed an interim order dated 03.02.2010 directing the company to deposit 1/3rd of the amount of entry tax on such purchases pending disposal of the SLP. In pursuance of the aforesaid order, the company has deposited a sum of Rs.23.68 lacs (Rs.15.18 lacs) against the entry tax of Rs. 71.04 lacs (Rs. 45.55 lacs) for the financial year 2008-09 to 2010-11

8. There is no amount due and outstanding to be credited to investor education and protection fund

9. Fixed Deposits with banks include fixed deposits pledged as security Rs.144.30 lacs (Rs. 213.92 lacs)

The Company has exercised the option permitted by Accounting Standard Amendment Rule, 2009 under the transitiona provisions contained in Para 46 of Accounting Standard (AS) 11 (vide GOI Notification No.GSR 225(E) dated the 31st March, 2009). A sum of Rs. 23.64 lacs being the exchange gain for the year arising on reporting of Long-Term Foreign Currency Monetary Items has been deducted from the cost of depreciable capital asset as at the 31st March, 2011. The net increase of Rs. 1,049.72 lacs (after adjusting net loss of Rs. 1,073.36 lacs upto Financial Year 2009-10) in the carrying amount of the depreciable capital asset(s) would be depreciated over the balance of the life of the assets

10. Term Loans repayable within one year Rs. 5,855.71 lacs (Rs. 6,224.64 lacs)

TDS on interest income on short term deposits and ICDs - Rs. 57.46 lacs (Rs. 124.85 lacs)

i) Licensed capacity not applicable in terms of Govt. of Indias Notification i) Installed Capacities are certified by the Management. i) Generation of electricity is for internal consumption

11. Related Party Transactions

Related parties with whom transactions have taken place during the year are given below:

a. Key Management Personnel

Sri R.S. Agarwal Sri R.S. Goenka Sri P.S. Patwari Sri Aditya Agarwal Sri Manish Goenka

b. Relatives of Key Management Personnel

Miss Puja Patwari

c. Enterprise over which persons described in (a) above are able to exercise significant influence

Emami Limited Emami Biotech Limited Emami Cement Limited Emami Foundation

12. Previous years figures have been regrouped / rearranged wherever necessary.


Mar 31, 2010

1. Estimated amounts of capital contracts remaining to be executed and not provided for (net of advances) Rs 235.38 lacs (Rs. 199.18 lacs).

2. Contingent liabilities not provided for in respect of:

a) Outstanding guarantees and letters of credit furnished by the bankers on behalf of the Company secured by hypothecation of current assets, as specified in note 6 hereunder - Rs 345.14 lacs (Rs. 2633.13 lacs).

b) Sales tax under appeal (net of advances) - Rs. 270.03 lacs (Rs. 265.62 lacs).

c) Central Excise duties under appeal (net of Advances) - Rs. 0.96 lacs (Rs. 0.96 lacs).

d) ESI Contribution under appeal - Rs 0.22 lacs (Rs. 0.22 lacs).

e) Bonds / Undertakings given under EPCG scheme to Custom Authority - Rs. 2190.42 lacs (Rs.2190.42 lacs).

3. Loans and Advances include inter corporate deposits of Rs. 1085.72 lacs (Rs. 3616.72 lacs).

4. Term loans from banks and external commercial borrowings are secured by deposit of title deeds in respect of present and future immovable properties and hypothecation of present and future movable fixed assets on a pari passu basis. Term loans from banks and external commercial borrowings are also secured by way of second charge on current assets on pari passu basis. Working capital facilities from banks are secured by hypothecation of present and future stock of materials, stock-in-process, finished goods, stores and spares, book debts, outstanding money, claims receivable and further secured by way of second charge on all immovable and movable properties/fixed assets both present and future on a pari passu basis. Unsecured loans from banks are secured by personal guarantee of some of the Directors of the company and residual charge on Current Assets of the company.

5. Land, buildings and plant & machinery of the Gulmohar Unit and Paper Machine-1 of Balasore unit were revalued as on 01.04.98 and 01.04.99 respectively by independent approved valuers appointed for the purpose. The revaluation has resulted in increase in value of such assets by Rs. 3097.20 lacs. Due to the said revaluation, there is an additional charge of depreciation of Rs 76.32 Lacs (Rs. 89.77 Lacs) for the year and an equivalent amount has been withdrawn from revaluation reserve and credited to Profit & Loss Account. The net book value of such revaluation made till date stands at Rs 844.69 lacs (Rs. 921.04 lacs).

6. Miscellaneous Expenses include payment to the Auditors including Rs. 1.81 lacs (Rs. 1.24 lacs) to Branch Auditors.

i) As Audit Fees Rs. 4.90 lacs (Rs. 4.90 lacs)

ii) As Tax Audit Fees Rs. 0.55 lacs (Rs. 0.55 lacs)

iii) For Certification : Rs. 6.20 lacs (Rs. 1.40 lacs)

iv) Out of pocket expenses : Rs. 0.28 lacs (Rs. 0.25 lacs)

7. Sales are net of commission to selling agents other than sole selling agent Rs.605.46 lacs (Rs. 443.75 lacs).

8. Interest includes Interest on Term loans Rs. 2658.58 lacs ( Rs.367.85 lacs) & Net of Interest received Rs. 1236.58 lacs (Rs.680.42 lacs).

9. There is no outstanding or delayed payments to the Micro, Small and Medium Enterprises, and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the Micro, Small and Medium Enterprises Developments Act, 2006 are not required.

10. Against the order of Honble Orissa High Court W P (C) No. 6515 of 2006 dated 1 8.02.2008 holding that State of Orissa has no jurisdiction to impose entry tax on goods imported from outside and are not manufactured within the state, the State of Orissa has filed a SLP before the Honble Supreme Court which has passed an interim order dated 03.02.2010 directing the company to deposit 1 /3rd of the amount of entry tax on such purchases pending disposal of the SLP. In pursuance of the aforesaid order, the company has deposited a sum of Rs. 15.1 8 lacs against the entry tax of Rs.45.55 lacs for the financial year 2008-09 and 2009-10.

11. There is no amount due and outstanding to be credited to investor education and protection fund.

12. Fixed Deposits with banks include fixed deposits pledged as security Rs 213.92 lacs (Rs. 260.07 lacs).

13. The Company has exercised the option permitted by Accounting Standard Amendment Rule, 2009 under the transitional provisions contained in Para 46 of Accounting Standard (AS) 11 (vide GOI Notification No.GSR 225(E) dated the 31st March 2009). A sum of Rs 2681.38 lacs being the exchange gain for the year arising on reporting of Long-Term Foreign Currency Monetary Items has been deducted from the cost of depreciable capital asset as at the 31st March 2010. The net increase of Rs. 1073.36 lacs (after adjusting net loss of Rs. 3754.74 lacs upto Financial Year 2008-09) in the carrying amount of the depreciable capital asset(s) would be depreciated over the balance of the life of the assets.

14. TDS on interest income on short term deposits and ICDs - Rs. 124.85 lacs (Rs. 153.46 lacs).

15. Information pursuant to the provisions of paragraph 3, 4C & 4D of Part II of Schedule VI of the Companies Act, 1956.

16. Related Party Transactions

Related parties with whom transactions have taken place during the year are given below:

a. Key Management Personnel

Sri R.S.Agarwal

Sri R. S. Goenka

Sri P. S. Patwari

Sri RC Mall (upto 31.10.2009)

Sri Aditya Agarwal

Sri Manish Goenka

b. Relatives of Key Management Personnel

Miss Puja Patwari.

c. Enterprise over which persons described in (a) above are able to exercise significant influence

Emami Limited Emami Biotech Limited Emami Cement Limited

17. Previous years figures have been regrouped / rearranged wherever necessary.

 
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