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Notes to Accounts of International Paper APPM Ltd.

Mar 31, 2016

I. Rights, preferences and restrictions attached to the equity shares

The Company has only one class of issued, subscribed and paid up equity shares having a face value of Rs.10 each per share. Each holder of equity shares is entitled to one vote per share. The dividend (other than interim dividend) proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the 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 number of equity shares held by the shareholders.

Notes

1. The Company has availed unsecured term loans from banks aggregating Rs.22,000.00 lakhs (March 31, 2015 - Rs.30,657 lakhs) outstanding at the year end Rs.22,000 lakhs (March 31, 2015 Rs.16,124 lakhs). Letter of comfort has been provided to the banks by International Paper Company, USA, the ultimate holding company. The interest rates are ranging from 9% - 11%. These term loans are repayable as under:

a. Term Loan I: Rs.15,000 lakhs (March 31, 2015 - Rs.Nil) is payable in 6 equal quarterly instalments commencing at the end of 21st month.

b. Term Loan II: Rs.7,000 lakhs (March 31, 2015 - Rs.Nil) is payable after completing moratorium of 18 months and is repayable in 10 equal quarterly instalment''s commencing at the end of 21st month.

c. Term Loan III: Rs.Nil (March 31, 2015 - Rs.6,825 lakhs) has a tenor of 18 months, which is renewable automatically for a successive period of 18 months.

d. Term Loan IV: Rs.Nil (March 31, 2015 - Rs.10,000 lakhs) is payable in 3 unequal quarterly instalments at the end of 24th month from the date of the loan.

e. Term Loan V: Rs.Nil (March 31, 2015 - Rs.4,832 lakhs) is payable in 8 quarterly instalments after completion of 12 months from the date of the loan.

f. Term Loan VI: Rs.Nil (March 31, 2015 - Rs.9,000 lakhs) has a tenor of 18 months, which is renewable automatically for a successive period of 18 months, subject to consent of both the parties.

2. Deferred payment liabilities represent sales tax deferral loan availed by the Company, from the Government of Andhra Pradesh and is repayable after a period of 14 years from the end of the financial year of its availment. These are interest free loans. An amount of Rs.252.28 lakhs (March 31, 2015 - Rs.340.02 lakhs) is due within next twelve months and is included under the head Rs.Current maturities of long-term debts. disclosed under Note 7B - Other current liabilities.

3. a. Unsecured loan availed from International Paper (India) Private Limited at interest rate of 7.9% aggregating Rs.3,600 lakhs during the year and outstanding as at the year end Rs.3,400 lakhs is repayable by December 31, 2017.

b. The Company has availed unsecured foreign currency loan from International Paper Investments (Luxembourg) S.a r.l. at interest rate of 6 month Libor plus 250 basis points repayable in six half-yearly instalments commencing from June 30, 2015. Out of USD 8 Million (equivalent Rs.5,300.80 lakhs) [March 31, 2015 - USD 12 Million (equivalent Rs.7,500.60 lakhs)] outstanding, Rs.2,650.40 lakhs is repayable within next one year and is included under the head ''Current maturities of long-term debts'' disclosed under Note 7B - Other current liabilities.

4. Secured loans from banks repayable on demand represent working capital demand loans/cash credit facilities/buyers credit/ Export packing credit loan from certain banks, at interest rates ranging from 5.90% to 10.40% during the year. These are secured by hypothecation of current assets of the Company.

5. Unsecured loans from bank repayable on demand represent working capital demand loans/cash credit facilities/buyers credit from certain banks, at interest rates ranging from 7.98% to 9.50% during the year.

b. Compensated absences

The key assumptions, as provided by an independent actuary, used in the computation of compensated absences are referred in Sl. No. (a) (vi) above.

B. Defined contribution plan

a. Superannuation

The Company recognized Rs.29.67 lakhs (Previous year - Rs.31.72 lakhs) as an expense towards contribution of superannuation in the Statement of Profit and Loss during the year.

b. Provident Fund

The Company contributed Rs.416.06 lakhs (Previous year - Rs.383.69 lakhs) to the Provident Fund Trust maintained by the Company and Rs.110.91 lakhs (Previous year - Rs.106.96 lakhs) to Regional Provident Fund Commissioner, which was recognized as an expense during the year.

1. Segment information

The Company is in the business of manufacture and sale of pulp, paper and paperboard. Considering the core activities of the Company, the management is of the view that manufacture and sale of pulp, paper and paperboards is a single reportable business segment and hence information relating to primary segment is not required to be disclosed.

2. Leases

The Company''s significant leasing arrangements are in respect of operating leases for premises (Offices, godowns etc.) ranging from 3 years to 20 years. The aggregate lease rentals payable are charged as ''Rent'' under Note 23.

3. a. Change in accounting policy

Effective April 1, 2015, the Company has with retrospective effect changed its method of providing depreciation on Buildings and Electrical Installations (forming part of Plant and equipment) at Rajahmundry Plant from the ''Written Down Value'' method to the ''Straight Line'' method, as per the useful lives specified in Schedule II of the Companies Act, 2013. Management believes that this change will result in more appropriate presentation and will give a systematic basis of depreciation charge. Accordingly, the Company has reversed the depreciation charged till March 31, 2015 amounting to Rs.2,361.32 lakhs in the Statement of Profit and Loss as per the requirements of Accounting Standard (AS) 6 - Depreciation Accounting and this has been disclosed as Exceptional item [Refer Note 42 (a)].

Had the Company continued to use the earlier method of depreciation, the profit after tax for the current year would have been lower by Rs.1,705 lakhs.

b. Component accounting of fixed assets

In accordance with the requirements of component accounting of fixed assets as per Schedule II to the Companies Act, 2013, the Company has identified and accounted for the components of fixed assets during the current year. Consequently, the depreciation on such components amounting to Rs.1,250.97 lakhs has been charged in the Statement of Profit and Loss.

c. In the previous year, the Company had with effect from April 1, 2014, revised the estimated useful life of certain assets to align them with those specified in Schedule II and in accordance with the transitional provisions of Schedule II adjusted an amount of Rs.139.77 lakhs (net of deferred tax of Rs.71.97 lakhs) in respect of those assets where the remaining life on April 1, 2014 was Nil.

4. The Company''s wholly owned subsidiary, IP India Foundation, carries out Corporate Social Responsibility activities.

The same is not considered for the purpose of consolidation, as the objective of control over this entity is not to obtain economic benefits from its activities.

5. Exceptional items

a. Change in accounting policy in respect of method of providing depreciation for certain assets resulting in reversal of depreciation amounting to Rs.2,361.32 lakhs [Refer Note 38(a)].

b. The Company has revised its estimate based on internal assessment and fresh legal opinion obtained, in respect of provision created in earlier years for a disputed matter and reversed Rs.540.83 lakhs during the current year.

c. A provision amounting to Rs.202.11 lakhs had been created in earlier years in the books due to an adverse order issued by CESTAT, Bangalore, in connection with the tax position adopted by the Company, treating gunny pulp as unconventional raw material used in the manufacture of Kraft paper at the Company''s Kadiyam unit. The Company''s position was upheld by the Hon''ble Supreme Court on July 21, 2015. Based on the Hon''ble Supreme Court''s Judgement, the aforesaid provision has been reversed during the current year.

d. The Asst. Commissioner granted interest on delayed refund of excise duty paid on cash discounts vide order Nos. 30 and 31 dated July 31, 2015. The resultant income of Rs.166.39 lakhs has been accounted during the current year.

e. During the previous year, the Company based on internal assessment reversed the provision of Rs.112.92 lakhs relating to minimum royalty which was made in earlier years, consequent to the Hon''ble Supreme Court''s Order on March 17, 2015 remanding the disputed matter to the Government of Andhra Pradesh by setting aside the Order passed by the Hon''ble High Court of Andhra Pradesh.

6. Disclosure as per Regulation 34(3) and 53(f) of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015:

Loans and advances in the nature of loans given to subsidiaries, associates, firms/companies in which directors are interested Nil (March 31, 2015: Nil).

7. The Board of Directors of the Company at their meeting held on April 22, 2016 approved, subject to the approval of the Members, stock exchanges, Hon''ble High Court of Andhra Pradesh and Telangana or National Company Law Tribunal and other statutory authorities, a Scheme of Arrangement amongst the Company and its Members under the provisions of Sections 391 to 394 of the Companies Act, 1956, to transfer on the Appointed Date, the entire amount of Rs.28,876.29 lakhs lying in the General Reserve to the Profit & Loss Account of the Company.

As per the Scheme, the Appointed Date is the close of the business hours of March 31, 2016, or such other date as may be fixed by the High Court.

The Company is in the process of obtaining the necessary approvals as aforesaid, pending which, no adjustments as envisaged by the Scheme have been made in these accounts.

8. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosures.


Mar 31, 2015

1. Corporate Information

International Paper APPM Limited (''IP APPM''/''the Company'') is an integrated pulp and paper manufacturer. IP APPM was incorporated on June 29, 1964 in pursuance of an agreement dated May 13, 1964 between Government of Andhra Pradesh (GOAP) and Mr. G.D. Somani. By an agreement dated February 10, 1966, Mr. G.D. Somani transferred all his rights, powers and authorities contained in the agreement dated May 13, 1964 in favour of The West Coast Paper Mills Limited (WCPM). By an agreement dated April 16, 1981, WCPM assigned to Digvijay Investments Limited (DIL) all its rights and obligations under the agreement dated February 10, 1966.

Consequent upon disinvestment of its entire shareholding in favour of DIL in December, 2003, GOAP and DIL agreed by an agreement dated December 12, 2003 that all subsisting rights and obligations of GOAP and DIL arising out of the above agreements dated February 10, 1966 and April 16, 1981 stand terminated with effect from December 18, 2003. In October 2011, IP Holding Asia Singapore Pte. Limited has acquired controlling stake of 75% of paid up share capital in the Company from the then promoters and public shareholders. Pursuant to such acquisition, IP Holding Asia Singapore Pte. Limited became the Holding Company of International Paper APPM Limited (formerly The Andhra Pradesh Paper Mills Limited) and International Paper Company, USA, being the ultimate holding company.

The Company owns and operates two manufacturing units located in the State of Andhra Pradesh, India, one at Rajahmundry and the other at Kadiyam in East Godavari District.

2. Contingent liabilities and commitments

As at As at (In Rs. Lakhs) March 31, March 31 2015 , 2014

Contingent liabilities (to the extent not provided for)

i. Matters under litigation

a. Pending decisions on various appeals made by the Company and by the Department

- Income tax matters 133.14 120.44

- Excise matters 7,709.55 7,539.16

- Sales tax matters 357.52 372.95

- Other matters 357.65 330.24

b. Vacant land tax 470.72 435.85

c. Electricity duty

(Levy of electricity duty towards consumption of energy generated by captive power unit) 4,983.22 4,154.72

d. Demand raised by Eastern Power Distribution Corporation of Andhra Pradesh Limited for surplus power supplied by APGPCL disputed by the Company. The appeal filed by APTRANSCO is pending before A.P High Court in which other companies similarly placed are made respondents. 87.66 87.66

ii. Guarantees and Letters of Credit

a. Guarantees issued by banks 1,838.09 1,651.81

b. Letters of credit outstanding 731.42 446.51

Commitments

Estimated amount of contracts remaining to be executed on

capital account and not provided for (Net of advances) 739.03 1,134.34

Export Commitment under the Export Promotion

Capital Goods (EPCG) Scheme 26,567.16 42,107.96

3. Related party transactions

a. List of related parties and relationships:

i. Ultimate holding company

International Paper Company, USA

ii. Holding company

IP Holding Asia Singapore Pte. Limited

iii. Subsidiary company IP India Foundation

iv. Fellow subsidiaries where transactions exist

International Paper (India) Private Limited

International Paper Inc. TN USA

International Paper procurement (Shanghai) Limited

International Paper Investment (Shanghai) Limited

International Paper USA

IP Singapore Holding Pte. Limited

International Paper Nordic Sales Company

International Paper Investments (Luxembourg) S.a.r.l.

v. Entity where the Company is in a position to exercise control

The Employee''s Provident Fund of The Andhra Pradesh Paper Mills Limite

vi. Key Management Personnel

Name of the person Relationship Status

Mr. W. Michael Amick Jr. Executive Chairman From August 23, 2012 to October 31, 2014

Mr. Rampraveen Managing Director From March 2, 2012 Swaminathan & CEO to October 31, 2014

Chairman & From November 1,2014 Managing Director

vii. Non-Executive/Independent Directors

Name of the person Relationship Status

Mr. Praveen P Kadle Director

Mr. Michael Baymiller Director Till November 30, 2014

Mr. Kenneth P Huelskamp Director Till July 13, 2014

Mr. Thomas G. Kadien Director

Mr. M.S. Ramachandran Director

Ms. Ranjana Kumar Director

Mr. M.K. Sharma Director Till January 22, 2015

Mr. Adhiraj Sarin Director

Mr. Milind Sarwate Director

Ms. Shiela Pallerne Director Vinczeller

Ms. Jayashree Satagopan Director From July 22, 2014

Mr. W. Michael Amick Jr. Director From November 1,2014 to January 18, 2015

4. During the year, pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from April 1, 2014, the Company revised the estimated useful life of its fixed assets to align the useful life with those specified in Schedule II.

Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and has adjusted an amount of Rs. 139.77 lakhs (net of deferred tax of Rs. 71.97 lakhs) against the Opening Reserves.

The depreciation expense in the Statement of Profit & Loss is lower by Rs. 1,663.35 lakhs consequent to the change in the useful life of the assets.

5. During the previous year, the Company has incorporated a subsidiary, IP India Foundation for its Corporate Social Responsibility activities. The same is not considered for consolidation, as the objective of control over this entity is not to obtain economic benefits from its activities.

6. Exceptional item During the year 2005, the Company had made a provision of `112.92 lakhs, relating to Minimum Royalty demand for the years 1988 and 1989 raised by the Government of Andhra Pradesh. Upon receipt of unfavourable orders from the Hon''ble High Court of Andhra Pradesh, the Company made an appeal to the Hon''ble Supreme Court and submitted additional documents which were not considered by the earlier authorities. The Hon''ble Supreme Court, has passed an Order on March 17, 2015 remanding the matter to the Government of Andhra Pradesh setting aside the Order passed by the Hon''ble High Court of Andhra Pradesh. Consequently, based on internal assessment, the Company has reversed the provision of `112.92 lakhs during the year.

7. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/ disclosures.


Mar 31, 2014

1. Contingent liabilities and commitments

As at As at March 31, 2014 March 31, 2013

Contingent liabilities (to the extent not provided for)

i. Guarantees and Letters of Credit Guarantees issued by banks 1,651.81 765.84

Letters of credit outstanding 446.51 445.62

ii. Claims against the Company not acknowledged as debts Pending decisions on various appeals made by the Company and by the Department

Income tax matters 120.44 121.50

Excise matters 7,539.16 7,687.59

Sales tax matters 372.95 373.81

Other matters 330.24 226.24

Vacant land tax 435.85 400.98

Electricity duty 4,154.72 3,912.75

(Levy of electricity duty towards consumption of energy generated by captive power unit)

Demand raised by Eastern Power Distribution Corporation of Andhra Pradesh Limited for surplus power supplied by APGPCL disputed by the Company. An amount of Rs.76.98 paid under protest (March 31, 2013: Rs.76.98) has been grouped under loans and advances. The appeal filed by APTRANSCO is pending before A.P. High Court in which other companies similarly placed are made respondents. 87.66 87.66

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) 1,134.34 3,998.27

Export Commitment under the Export Promotion

Capital Goods (EPCG) Scheme 42,107.96 35,197.75

2. Segment information

The Company is in the business of manufacture and sale of pulp, paper and paper board. Considering the core activities of the Company, the management is of the view that manufacture and sale of pulp, paper and paper boards is a single reportable business segment and hence information relating to primary segment is not required to be disclosed.

iii. Subsidiary company

IP India Foundation

iv. Fellow subsidiaries where transactions exist

International Paper (India) Private Limited

International Paper Inc., TN USA

International Paper Procurement (Shanghai) Limited

International Paper Investment (Shanghai) Limited

International Paper USA, Memphis

IP Singapore Holding PTE Limited

International Paper Nordic Sales Company

v. Entity where the Company is in a position to exercise control

The Employee''s Provident Fund of The Andhra Pradesh Paper Mills Limited

vi. Key Management Personnel

Name of the person Relationship Status

Mr. W. Michael Amick Jr. Executive Chairman From August 23, 2012

Mr. Rampraveen Swaminathan Managing Director & CEO From March 2, 2012

Mr. P.K. Suri Director (Operations) Up to July 13, 2012

Mr. Paul Brown Chairman & CEO From October 15, 2011 to

March 1, 2012

Executive Chairman From March 2, 2012 to

July 13, 2012

vii. Non-Executive/Independent Directors

Name of the person Relationship Status

Mr. Praveen P. Kadle Director From January 25, 2012

Mr. Michael Baymiller Director From July 13, 2012

Mr. Kenneth P. Huelskamp Director From July 13, 2012

Mr. Thomas G. Kadien Director From October 14, 2011

Mr. M.S. Ramachandran Director From December 6, 2011

Ms. Ranjana Kumar Director From December 6, 2011

Mr. M.K. Sharma Director From December 6, 2011

Mr. Adhiraj Sarin Director From December 6, 2011

Mr. Milind Sarwate Director From December 6, 2011

Ms. Shiela Pallerne Vinczeller Director From March 31, 2014

Mr. Brett A. Mosely Director From October 14, 2011 to February 28, 2014

Mr. Shreeyash Bangur Director From October 14, 2011 to July 12, 2012

3. During the period ended December 31, 2011, the Company paid Rs.415.99 towards managerial remuneration to the erstwhile Directors, which was in excess of the maximum limits specified in Schedule XIII to the Companies Act, 1956. The excess remuneration amounted to Rs.194.64. The Members at the Annual General Meeting held on March 22, 2012 approved the waiver of recovery of excess remuneration paid to the Directors, subject to Central Government''s approval. The requisite application was made to the Central Government on April 17, 2012 and the Company received Government''s approval towards waiver of recovery of excess remuneration paid to erstwhile Managing Director and Executive Directors. However, the Ministry of Corporate Affairs (MCA) has rejected the application made by the Company for the waiver of recovery of excess remuneration of Rs.70.07 paid to a Promoter Director. The Company has obtained legal advice in respect of the same and made a representation to the MCA to reconsider the said rejection.

4. During the 15 months period ended March 31, 2013, the Company based on its internal assessment of certain disputed matters relating to prior years and based on the legal opinion obtained on such matters, made a provision of Rs.1,619.32, being Rs.1,561.31 towards interest and Rs.58.01 towards taxes. The same was disclosed under exceptional items.

5. Disclosure as per Clause 32 of the Listing Agreement:

- Maximum balance outstanding during the year Rs.Nil (March 31, 2013: Rs.Nil)

- Balance as at March 31, 2014 Rs.Nil (March 31, 2013: Rs.Nil)

6. The name of the Company has been changed from ''The Andhra Pradesh Paper Mills Limited'' to ''International Paper APPM Limited'' with effect from December 16, 2013.

7. During the year, the Company has incorporated a subsidiary, IP India Foundation for its Corporate Social Responsibility activities. The same is not considered for consolidation, as the objective of control over this entity is not to obtain economic benefits from its activities.

8. The Board of Directors approved the extension of the financial period 2013 of the Company by a period of three months i.e. 15 months period ended March 31, 2013. Hence, the figures for the current year are not comparable with those of the previous period.

9. Previous period''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosures.


Mar 31, 2013

1. Corporate Information

The Andhra Pradesh Paper Mills Limited ("APPM"/"the Company") is an integrated pulp and paper manufacturer. APPM was incorporated on June 29, 1964 in pursuance of an agreement dated May 13, 1964 between Government of Andhra Pradesh (GoAP) and Mr. G.D. Somani. By an agreement dated February 10, 1966, Mr. G .D Somani transferred all his rights, powers and authorities contained in the Agreement dated May 13, 1964 in favour of The West Coast Paper Mills Limited (WCPM). By an agreement dated April 16, 1981, WCPM assigned to Digvijay Investments Limited (DIL) all its rights and obligations under the agreement dated February 10, 1966.

Consequent upon disinvestment of its entire shareholding in favour of DIL in December, 2003, GoAP and DIL agreed by an agreement dated December 12, 2003 that all subsisting rights and obligations of GoAP and DIL arising out of the above agreements dated February 10, 1966 and April 16, 1981 stand terminated with effect from December 18, 2003. In October 2011, IP Holding Asia Singapore Pte. Limited has acquired controlling stake of 75% of paid up share capital in the Company from the then promoters and public shareholders. Pursuant to such acquisition, IP Holding Asia Singapore Pte Limited, became the holding company of The Andhra Pradesh Paper Mills Limited and International Paper Company, USA, being the ultimate holding company.

The Company owns and operates two manufacturing units located in the State of Andhra Pradesh, India, one at Rajahmundry and the other at Kadiyam in East Godavari District.

2. Segment information

The Company is in the business of manufacture and sale of pulp, paper and paperboard. Considering the core activities of the Company, management is of the view that manufacture and sale of pulp, paper and paperboards is a single reportable business segment and hence information relating to primary segment is not required to be disclosed.

3. Related party transactions

a. List of related parties and relationships:

i. Ultimate holding company

International Paper Company, USA

ii. Holding company

IP Holding Asia Singapore Pte. Limited, Singapore

iii. Entity where principal shareholders have control

Samay Books Limited (up to October 14, 2011)

The Peria Karamalai Tea & Produce Company Limited (up to October 14, 2011)

iv. Fellow subsidiaries where transactions exists

IP Paper (India) Private Limited

International Paper Inc. TN USA

International Paper Procurement (Shanghai) Limited

MB Commercial Company Limited (up to October 14, 2011)

Swadeshi Commercial Company Limited (up to October 14, 2011)

v. Entity where the Company is in a position to exercise control

The Employees Provident Fund of APPM Limited

4. Leases

The Company''s significant leasing arrangements are in respect of operating leases for premises (Office, godowns, etc.) ranging from 3 years to 20 years. The aggregate lease rentals payable are charged as ''Rent'' under Note 23.

5. The amount due to Micro and Small Enterprises as defined in the ''The Micro, Small and Medium Enterprises Act, 2006'' has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises as at March 31, 2013 are as under:

6. During the previous period ended December 31, 2011, the Company carried out an internal technical assessment based on its global standards and methodologies whereby assets with a book value of Rs.3,112.02 have been identified as unsuitable for future use and accordingly was debited to Statement of Profit and Loss for the 9 month period ended December 31, 2011. The same has been disclosed under Note 23 - Other Expenses.

7. During the previous period ended December 31, 2011, the Company accrued Rs.415.99 towards managerial remuneration to the erstwhile three promoter Directors, a Managing Director & CEO and a Director (Operations), which was in excess of the maximum limits specified in Schedule XIII to the Companies Act, 1956. The excess remuneration amounted to Rs.194.64. The shareholders at the AGM held on March 22, 2012 approved the remuneration payable to such Directors, through a special resolution, subject to the Central Government approval. The requisite application was made to the Central Government on April 17, 2012 and as of date; the Company received approval for Rs.52.81 towards remuneration paid to three Directors. The management is confident of obtaining the Central Government approval for the remaining two Directors for the balance amount of Rs.141.83.

8. During the period ended March 31, 2013, the Company based on its internal assessment of certain disputed matters relating to prior years and on the legal opinion obtained on such matters, made a provision of Rs.1,619.32 in the books, being Rs.1,561.31 towards interest and Rs.58.01 towards taxes. The same is disclosed under exceptional items.

9. The Company entered into an arrangement with a fellow subsidiary, pursuant to which professional services were rendered. The Company made an application on July 3, 2012 to the Regional Director, Ministry of Corporate Affairs for approval and pending such approval, the Company recognized and accounted a provision of Rs.1,400 in the books during the quarter/twelve month period ended December 31, 2012. Subsequently, the Company had withdrawn the application on February 6, 2013 and consequently, the provision was reversed in the books.

10. The Board of Directors approved the change of the current financial year between January 1, 2012 and December 31, 2012 to March 31, 2013 for a period of 15 months. Pursuant to such change, the Company has closed its accounts for 15 month period ended March 31, 2013 and the previous period figures are for 9 month period ended December 31, 2011. Hence the same are not comparable.

11. Disclosure as per Clause 32 of the Listing Agreement:

- Maximum balance outstanding during the period Rs.Nil (December 31, 2011 - Rs.Nil)

- Balance as at March 31, 2013 Rs.Nil (December 31, 2011 - Rs.Nil)

12. Comparative figures

Previous period''s figures have been regrouped/reclassified wherever necessary to correspond with the current period''s classification/disclosures.


Mar 31, 2010

2009-10 2008-09 1. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances & Letters of Credit opened) 1692.81 2803.65 2. Contingent Liabilities a. Unexpired Bank Guarantees and Letters of Credit 1007.70 791.03 b. Corporate guarantee given to Forest Department of State Government of Andhra Pradesh (against which Rs.100 lakhs deposited as per court orders) 1472.09 1472.09 c. Claims against the Company not acknowledged as debts 438.27 184.44 d. Demands raised by EPDC of AP Ltd. for surplus power supplied by APGPCL disputed by the Company. An amount of Rs.76.98 Lakhs paid under protest, (Previous Year - Rs.72.47 lakhs) is grouped under Loans & Advances. The appeal filed by APTRANSCO is pending before Honble High Court of Andhra Pradesh in which other companies similarly placed are made respondents.87.66 81.27 e. Demands of statutory authorities disputed by the Company in appeals with higher authorities in respect of: i. Income Tax 107.07 239.43 ii. Central Excise & Service Tax 3435.82 1536.34 iii. Sales Tax 347.04 234.94 iv. Vacant Land Tax 228.31 210.88

As against above demands, an amount of Rs.404.87 lakhs (Previous Year - Rs.706.10 lakhs) paid under protest is included in Loans & Advances.

3. 70,18,242 Equity Shares of Rs.10 each at a premium of Rs.40 per Share offered to the shareholders on rights basis were allotted on 30th March 2010. In terms of Letter of Offer dated 22nd February, 2010, 70,18,242 Detachable Warrants were also alloted on the same day which will be converted into equivalent number of Equity Shares of Rs.10 each on payment of warrant exercise price of Rs.50 per Warrant at any time before the expiry of 18 months from the date of allotment i.e. 30th September 2011. A sum of Rs.28,07,29,680 collected on account of premium at Rs.40 per Share on 70,18,242 equity shares of Rs.10 each allotted on rights basis on 30th March, 2010 has been credited to Share Premium Account. Expenses of Rs.49.87 lakhs related to the rights issue have been adjusted against the Share Premium Account.

4. As the aggregate market value of investments in the employees gratuity fund as on 31st March, 2010 is more than the actuarially ascertained gratuity liability, no contribution has been made for the year.

5. Diminution in value of investment held in UTI Service Industries Fund is of Rs.107.46 Lakhs, against which provision made in earlier year of Rs.60 Lakhs which in the opinion of the management is considered adequate.

6. Employee benefits

Defined benefit plans

7. The Company operates mainly in one business segment of paper and paper boards of different varieties. As the sale of surplus power is less than 10% of the total turnover, the same is not considered as a reportable segment. There is no reportable geographical segment.

8. Related Party Transactions

Related parties in terms of AS-18 issued by the Institute of Chartered Accountants of India a. Promoters

i. Individuals

Shri L.N. Bangur Smt. Alka Bangur Ms. Sheetal Bangur Shri Shreeyash Bangur Shri Yogesh Bangur Ms. Surbhi Bangur

ii. Bodies Corporate

Digvijay Investments Limited

Amalgamated Development Limited

Apurva Export Private Limited

MB Commercial Company Limited

Maharaja Shree Umaid Mills Limited1

Mugneeram Ramcoowar Bangur Charitable & Religious Company

Placid Limited

Shree Krishna Agency Limited

The General Investment Company Limited

The Kishore Trading Company Limited

The Peria Karamalai Tea & Produce Company Limited1

The Swadeshi Commercial Company Limited

Samay Books Limited

No transactions made during the year

b. Key Management Personnel

Shri M.K. Tara, Managing Director Ms. Sheetal Bangur, Director (Commercial) Shri Shreeyash Bangur, Director (Corporate) Shri P.K. Suri, Director (Operations)

9. The Company has been recognising Deferred Tax Liability at the effective rate applicable for the respective years. The applicablity or otherwise of the effective rate instead of the standard rate is a matter of reference in a writ petition pending before the Honble Calcutta High Court and the matter will be reviewed on disposal of the writ petition. The uncovered notional liability in this regard, if any, in the opinion of the management gets reversed in the next few years.

10. According to internal technical assessment, there is no material impairment in the carrying cost of cash generating units of the Company in terms of Accounting Standard 28 (AS-28) issued by the Institute of Chartered Accountants of India.

11. Provision for income tax has been made in accordance with Section 115JB of the Income Tax Act,1961. Based on projections of future profits, management expects that it would be in a position to pay normal tax within the period specified under the Income Tax Act, 1961.

Licensed capacity not applicable in terms of Government of Indias Notification. Installed capacities are as certified by the Managing Director.

1 Represents Finished Production of Paper and Paper Board. Production of Pulp is not separately ascertained as pulp plant is an integral part of paper and paper board plant. Includes pulp production of 24,705 MT (Previous Year - 31,609 MT) meant for external sales.

12. The Board of Directors have recommended a dividend of Re.1.00 per share of Rs.10 each for the year.

13. Previous years figures have been regrouped wherever necessary.

 
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