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Notes to Accounts of JK Paper Ltd.

Mar 31, 2015

1. Estimated amount of (i) contracts remaining to be executed on capital account (Net of Advances) Rs. 5.12 Crore (Previous year Rs. 27.19 Crore), (ii) Investment Rs. 2.41 Crore (Previous year Rs. 5.40 Crore) and, (iii) Export commitments against import of capital goods under EPCG scheme Rs. 747.52 Crore (Previous year Rs. 864.90 Crore).

2. Contingent liabilities in respect of claims not acknowledged and not provided for, are as follows:

Rs. in Crore (10 million)

31st March, 2015 31st March,20I4

a) Excise duty liability in respect of matters in appeals 14.31 12.69

b) Sales tax liability in respect of matters in appeals 0.72 2.82

c) Other Matters 11.36 9.99

In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

3. In respect of levy of Octroi pertaining to Unit - CPM by Songadh Group Gram Panchayat, the Company has paid Rs. 1.25 Crore till 31st March 1997 under protest and also created a liability for the similar amount. As the matter is still pending in the court of law, the necessary adjustment, if any, would be made after its disposal.

4. The Company has only one business segment i.e. Paper and Boards and geographical reportable segment i.e. Operations mainly within India, hence Segment Reporting as defined in Accounting Standard (AS - 17) is not required.

5. a) Land, Roads, Buildings and Pulp Mill Plant & Machinery of Unit - CPM were revalued as on 30.09.1976.

The revaluation in respect of these assets (other than Land and Roads) were updated and Plant & Machinery of Paper Machine 1 & 11 and Railway Sidings were revalued as on 31.03.1994 based on current replacement cost by the approved valuers appointed for the purpose. As a result, the book value of such assets has been increased by Rs. 42.27 Crore, which has been transferred to Revaluation Reserve during the year ended 31.03.1994.

b) The Assets of Rs. 157.84 Crore held for sale, disclosed under the heading of "Other Current Assets" consists of Old Pulp Mill, Recovery Island, Power Block (Coal Fired Boilers & TG Sets) and Old Lime Klin Plant based on lower of Written down value and estimated Net Realisable Value. The Management is actively pursuing for disposal of these assets.

6. Pursuant to the Scheme of Arrangement sanctioned by the Hon'ble High Court of Gujarat under section 391 to 394 of the Companies Act 1956, which has become effective on 10th April 2015, Lime Kiln Undertaking of the JK Enviro-Tech Limited has been transferred and vested in the Company as a going concern on slump sale basis with effect from appointed date i.e. 1st April 2013.

The accounts for the year have been prepared by giving the effect of the above scheme. As per the Scheme, the assets of the Lime Kiln Undertaking have been recorded at its purchase cost to JK Paper Limited and apportioned based on independent expert advice.

d) With effect from Appointed date and up to and including the Effective date:

i) JK Enviro-Tech Limited carried on the business activities of the Lime Kiln undertaking w.e.f. from Is1 April 2013 till 10th April 2015 for and behalf of the JK Paper Limited,

ii) All profits or income that accrued to JK Enviro-Tech Limited and all taxes thereof or losses arising or incurred by it with respect to Lime Kiln Undertaking has been, for all purposes including accounting and Tax, treated as the profits, taxes or losses as the case may be, of JK Paper Limited.

iii) Pursuant to above, profit of Rs. 2.02 Crore (net of deferred tax of Rs. 0.90 Crore) of Lime Kiln Undertaking related to Financial Year 2013-14 has been added to the General Reserve.

# includes Rs. 24.58 Crore. disclosed as held for sale, under the heading of "Other Current Assets "

e) As a result of the above, there is diminution in value of the investments made in the shares of JK Enviro-Tech Limited. As per the Scheme, Loss arising as a result of the diminution has been charged to the statement of profit and loss of the Company and an amount equivalent to the aforementioned diminution in value of the investments, i.e., Rs. 5.04 Crore has been transferred from the securities premium reserve to the statement of profit and loss.

7. a) Long Term Loans and Advances includes concessional loan of Rs.I8.98 Crore (previous year Rs. 18.98 crore) and Short Term Loans and Advances includes Rs. 2.00 Crore (Previous year Rs. 2.00 Crore) to JK Paper Employees' Welfare Trust, a shareholder of the Company. Loan to employees of Rs. 0.37 Crore (Previous year Rs. 0.40 Crore) in the ordinary course of business and as per service rules of the Company.

b) Long Term Loans and Advances includes loan of Rs. 36.50 Crore (previous year Rs. 2.50 crore) and Short Term Loans and Advances includes loan of Rs. 1.00 Crore (Previous year Rs. 1.25 Crore) to Housing Subsidiaries for general corporate purpose,

c) Advances recoverable in cash or in kind or for value to be received under " Short Term Loan and Advances" in Note No, 19 .includes Rs, 4,73 Crore ( Previous Year Rs. 7.77 Crore) payments made for various development projects being undertaken by the Company including in Vietnam and Myanmar, The same will be adjusted once these projects are finalised.

8. a) Sales include export incentives of Rs. 6.38 Crore (Previous year Rs. 3.14 Crore).

b) Discount includes Trade Discount Rs 63.42 Crore (Previous year Rs. 55.05 Crore).

b) Defined Benefit Plans -

Gratuity Expense Rs. (-) 1.74 Crore (Previous year Rs. 1.39 Crore) has been recognized in "Salaries, Wages, Bonus and Gratuity etc." under Note 25.

Amount recognized as an expense and included in Note 25 & Note 47 below, Item "Contribution to Provident and Other Funds" Rs. 7.21 Crore (Previous year Rs. 7.35 Crore).

c) Defined Contribution Plans -

Amount recognized as an expense and included in Note 25 Item "Contribution to Provident and Other Funds" Rs. 1.21 Crore (Previous year Rs. [.12 Crore) for Superannuation Fund.

d) Other Long-Term Benefits -

Amount recognized as an expense and included in Note 25 Item "Salaries, Wages, Allowances etc." Rs. [.98 Crore (Previous year Rs. 2.05 Crore) for long term compensated Absences.

e) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risk of assets management, historical results on plan assets and the policy for plan assets management.

f) The estimates of future salary increase, considered in actuarial valuation, after taking account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

9. Exceptional Items for the previous year ended 31ffl March, 2014 represent gain on Derivative transactions Rs. 13.30 Crore, write back of provisions for diminution in the value of investments Rs. 4.53 Crore. and losses due to adverse operating parameters during stabilization period at Unit -JKPM Rs.35.32 Crore.

10. Interest Income includes Rs. 0.53 Crore (Previous year Rs 0.28 Crore) on Deposits with banks, Rs. 0.22 Crore (Previous year Rs. 0.10 Crore) on Income Tax refund and Rs. 7.91 Crore (Previous year Rs. 5.31 Crore) on others.

11. a) Future minimum lease payments under non-cancelable operating leases as on 31st March, 2015 are Rs.

12. Rs.20 Crore - Rs. 6.18 Crore within one year and Rs. 24.70 Crore later than one year but not later than five years and Rs. 11.32 Crore after Five year (Previous year Rs. Nil - Rs. Nil within one year and Rs. Nil later than one year but not later than five years).

b) Future minimum lease payments under non-cancelable Finance leases as on 31st March, 2015 are Rs. 0.82 Crore - Rs. 0.47 Crore within one year and Rs. 0.35 Crore later than one year but not later than five years (Previous year Rs. 1.29 Crore - Rs. 0.47 Crore within one year and Rs. 0.82 Crore later than one year but not later than five years) and their present value as on 31st March, 2015 are Rs. 0.76 Crore - Rs. 0.42 Crore within one year and Rs.0.34 Crore later than one year but not later than five year (Previous year Rs. 1.14 Crore - Rs. 0.39 Crore within one year and Rs. 0.75 Crore later than one year but not later than five year),

13. Based on information so far available in respect of MSME (as defined in The Micro Small & Medium Enterprises Developments Act, 2006) there is no delay in payment of dues to such enterprises during the year and there is no such dues payable at the end of the period,

14. Consumption of Stores, Spares is net off scrap sale of Rs. 6.62 Crore (Previous year Rs. 6.46 Crore).

15. a) In accordance with Announcement issued by the Institute of Chartered Accountants of India all outstanding derivatives except those covered under AS 11 (revised 2003) are marked to market on Balance Sheet date and there is gain of Rs. 0.36 Crore - reversal of previously recognized MTM Losses (Previous year gain of Rs. 0.55 Crore - reversal of previously recognized MTM Losses) which has been recognized in Statement of Profit and Loss.

16. Depreciation has been provided in accordance with Part C, Schedule II of the Companies Act, 2013 w.e.f.In April, 2014. Consequently the Depreciation and amortization expenses for the year are lower by Rs.37.02 Crore.

17. Current year's figures include impact of Scheme of Arrangement, hence previous year figures are not comparable. Previous year's figures have been re-grouped/re-arranged wherever necessary.


Mar 31, 2014

1. Estimated amount of (i) contracts remaining to be executed on capital account (Net of Advances) Rs. 27.19 Crore (Previous year Rs. 63.96 Crore), (ii) Investment Rs. 5.40 Crore (Previous year Rs. 12.60 Crore) and,

(iii) Export commitments against import of capital goods under EPCG scheme Rs. 864.90 Crore (Previous year Rs. 809.82 Crore).

2. Contingent liabilities in respect of claims not acknowledged and not provided for, are as follows:

Rs. in Crore (10 million)

31st March, 2014 31st March, 2013

a) Excise duty liability in respect of matters in appeals 12.69 12.63

b) Sales tax liability in respect of matters in appeals 2.82 2.82

c) Other Matters 9.99 10.82

In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

3. a) The Company has entered into a Take or Pay agreement for the purpose of sourcing lime from JK Enviro-Tech Limited. The Company has given an undertaking that on the happening of certain events, it will takeover the Loan taken by JK Enviro-Tech Limited from IDFC Limited. The current outstanding is Rs 11.76 Crore (including principal and interest) as on 31st March, 2014.

b) The Company has agreed with HDFC Limited that on happening of certain events, it will take all steps as may be required to ensure the timely repayment of the loan obligations of the Housing Subsidiaries for the loan availed from HDFC Limited. The current outstanding is Rs 36.09 Crore (including principal and interest) as on 31st March, 2014.

4. In respect of levy of Octroi pertaining to Unit - CPM by Songadh Group Gram Panchayat, the Company has paid Rs.1.25 Crore till 31st March 1997 under protest and also created a liability for the similar amount. As the matter is still pending in the court of law, the necessary adjustment, if any, would be made after its disposal.

5. The Company has only one business segment i.e. Paper and Boards and geographical reportable segment i.e. Operations mainly within India, hence Segment Reporting as defined in Accounting Standard (AS - 17) is not required.

6. a) Land, Roads, Buildings and Pulp Mill Plant & Machinery of Unit - CPM were revalued as on 30.09.1976.

The revaluation in respect of these assets (other than Land and Roads) were updated and Plant & Machinery of Paper Machine I & II and Railway Sidings were revalued as on 31.03.1994 based on current replacement cost by the approved valuers appointed for the purpose. As a result, the book value of such assets has been increased by Rs. 42.27 Crore, which has been transferred to Revaluation Reserve during the year ended 31.03.1994.

b) The Assets of Rs.134.15 Crore held for Sale, disclosed under the heading of "Other Current Assets" in Note No. 20, consists of Old Pulp Mill, Recovery Island and Power Block (Coal Fired Boilers & TG Sets) based on lower of Written Down Value and estimated Net Realisable Value. The Management intends to use these assets in various projects under consideration.

7. a) Long Term Loans and Advances includes concessional loan of Rs.18.98 Crore (previous year Rs. Nil) and

Short Term Loans and Advances includes Rs. 2.00 Crore (Previous year Rs. 20.98 Crore including concessional loan of Rs. 18.98 Crore) to JK Paper Employees'' Welfare Trust, a shareholder of the Company and loan to employees of Rs. 0.40 Crore (Previous year Rs. 0.45 Crore) in the ordinary course of business and as per service rules of the Company.

b) The Company entered in to an arrangement with JK Enviro-Tech Limited to process its Lime sludge and convert it to Lime on a cost plus basis to meet the pollution control norms under CREP. Loans and Advances include Rs. 19.04 Crore (Previous year Rs. 15.06 Crore) against future supplies.

c) Advances recoverable in cash or in kind or for value to be received under "Short Term Loan and Advances" in Note No.19, includes Rs. 7.77 Crore ( Previous Year Rs. 5.22 Crore) payments made for various development projects being undertaken by the Company including in Vietnam and Myanmar .The same will be adjusted once these projects are finalised .

8. a) Sales include export incentives of Rs. 3.14 Crore (Previous year Rs. 3.91 Crore).

b) Discount includes Trade Discount Rs 55.05 Crore (Previous year Rs. 54.19 Crore).

b) Defined Benefit Plans -

Gratuity Expense Rs. 1.39 Crore (Previous year Rs. 3.10 Crore) has been recognized in "Salaries, Wages, Bonus and Gratuity etc." under Note 25.

Amount recognized as an expense and included in Note 25 & Note 47 below, Item "Contribution to Provident and Other Funds" Rs. 7.35 Crore (Previous year Rs. 5.88 Crore).

c) Defined Contribution Plans -

Amount recognized as an expense and included in Note 25 Item "Contribution to Provident and Other Funds" Rs. 1.12 Crore (Previous year Rs. 2.14 Crore) for Superannuation Fund.

d) Other long-term benefits -

Amount recognized as an expense and included in Note 25 Item "Salaries, Wages, Allowances etc." Rs. 2.05 Crore (Previous year Rs. 1.31 Crore) for long term compensated Absences.

e) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risk of assets management, historical results on plan assets and the policy for plan assets management.

f) The estimates of future salary increase, considered in actuarial valuation, after taking account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

9. Exceptional Items for the year ended 31st March, 2014 represent gain on Derivative transactions Rs.13.30 Crore, write back of provisions for diminution in the value of investments Rs.4.53 Crore and losses due to adverse operating parameters during stabilization period at Unit -JKPM Rs.35.32 Crore.

10. Interest Income includes Rs. 0.28 Crore (Previous year Rs 1.03 Crore) on Deposits with banks, Rs. 0.10 Crore (Previous year Rs. 0.06 Crore) on Income Tax refund and Rs. 5.31 Crore (Previous year Rs. 7.72 Crore) on others.

11. Capital Work-in-progress includes machinery, building under construction and the following expenses pending allocation/capitalization.

12. a) Future minimum lease payments under non-cancelable operating leases as on 31st March, 2014 are Rs. Nil, Rs. Nil within one year and Rs. Nil later than one year but not later than five years (Previous year Rs. 0.04 Crore, Rs. 0.04 Crore within one year and Rs. Nil later than one year but not later than five years).

b) Future minimum lease payments under non-cancelable Finance leases as on 31st March, 2014 are Rs. 1.29 Crore, Rs. 0.47 Crore within one year and Rs. 0.82 Crore later than one year but not later than five years (Previous year Rs. 1.64 Crore, Rs. 0.47 Crore within one year and Rs. 1.17 Crore later than one year but not later than five years) and their present value as on 31st March, 2014 are Rs. 1.14 Crore, Rs. 0.39 Crore within one year and Rs.0.75 Crore later than one year but not later than five year (Previous year Rs.1.39 Crore, Rs. 0.35 Crore within one year and Rs.1.04 Crore later than one year but not later than five year).

13. Based on information so far available in respect of MSME (as defined in ''The Micro Small & Medium Enterprises Developments Act, 2006) there is no delay in payment of dues to such enterprises during the year and there is no such dues payable at the end of the period.

14. Consumption of Stores, Spares is net off scrap sale of Rs. 6.46 Crore (Previous year Rs. 5.29 Crore).

15. a) In accordance with Announcement issued by the Institute of Chartered Accountants of India all outstanding derivatives except covered under AS 11 (revised 2003) are marked to market on Balance Sheet date and there is gain of Rs. 0.55 Crore - reversal of previously recognised MTM Losses (Previous year gain of Rs. 0.18 Crore - reversal of previously recognised MTM Losses) which has been recognized in Statement of Profit and Loss.

16. a) Pursuant to the Accounting Standard (AS 22) - ''Accounting for Taxes on Income'', deferred tax (liability)/ asset at Balance Sheet date is:

b) Based on the past performance and current plans, the Company expects to continue to generate taxable income which will enable it to utilise MAT credit entitlement.

c) During the current year the Company has provided Current Tax Rs. 0.08 Crore (Previous year Rs. 0.02 Crore) and also reversed MAT credit Entitlement of Rs. 0.33 Crore (previous year recognized MAT credit entitlement of Rs.1.80 Crore) related to earlier years.

17. Disclosure as required under ''Related Party Disclosures'' (AS 18) issued by The Institute of Chartered Accountants of India are as below:

a. List of Related Parties

i. Subsidiaries (Wholly Owned)

- Songadh Infrastructure & Housing Limited

- Jaykaypur Infrastructure & Housing Limited

ii. Subsidiary

- JK Enviro-Tech Limited

iii. Joint Venture

- Oji JK Packaging Private Limited

iv. Enterprise over which KMP''s have significant influence

- Habras International Limited

v. Key Management Personnel (KMP)

- Shri Harsh Pati Singhania - Vice Chairman & Managing Director

- Shri Om Prakash Goyal - Whole-time Director

Key Management Personnel (KMP) :

The remuneration paid to Vice Chairman & Managing Director Rs. 3.05 Crore (Previous year Rs. 2.90 Crore) and Whole Time Director Rs. 1.78 Crore (Previous year Rs. 1.58 Crore). The remuneration paid to the Managerial Personnel by way of minimum remuneration, in terms of the appointment, exceeds the limit prescribed under Section 309(3) of the Companies Act, 1956, by Rs. 3.52 Crore, and is subject to requisite approvals from the Central Government of India. Remuneration is excluding provision for Gratuity & Leave Encashment, where the actuarial valuation is done on overall Company basis.

18. During the year, JK Enviro-Tech Limited has become a Subsidiary of the Company. The Stock Exchanges have conveyed their "no-objection" to the proposed Scheme of Arrangement for transfer of Lime Kiln Undertaking of the Subsidiary w.e.f. 1st April 2013, to the Company. The Company will now file the said Scheme before the High Court of Gujarat for its approval. Pending approval, no impact has been considered in the standalone accounts of the Company in the current financial year.

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

As per our report of even date

20 Principles of Consolidation:

a) The Consolidated Financial Statements comprise of the financial statements of JK Paper Limited (Parent Company) and the following as on 31st March, 2014;

b) The Financial Statements of the Parent Company and its Subsidiaries have been consolidated on a line by line basis by adding together the book value of like items of assets, liabilities, income and expenses, after eliminating intra-group balances and intra-group transactions.

JK Enviro-Tech Limited has become a subsidiary of the Company and consolidated during the current year, hence the figure of current year are not comparable with the previous year.

c) In case of Joint Venture, Company has adopted the proportionate consolidation method in accordance with Accounting Standard (AS-27) - "Financial Reporting of Interest in Joint Ventures".

d) The Accounting Policies of the Parent Company, its Subsidiaries and Joint Venture are largely similar, hence not be re-produced.

e) Significant Accounting Policies and Notes on Accounts of the Financial Statements of the Company and its Subsidiaries are stated in their respective Financial Statements.

21 Trade Payable includes Rs. 0.07 Crore, Capital work in progress includes Rs. 5.60 Crore, Current Tax (MAT) includes Rs. 0.05 Crore and Deferred Tax Credit includes Rs. 0.06 Crore for share of Joint Venture.

22 Estimated amount of (i) contracts remaining to be executed on capital account (Net of Advances) Rs. 30.56 Crore (Previous year Rs. 63.96 Crore) including share of Joint Venture Rs. 3.37 Crore (Previous year Rs. Nil),

(ii) Investment Rs. 5.40 Crore (Previous year Rs. 12.60 Crore) and, (iii) Export commitments against import of capital goods under EPCG scheme Rs. 864.90 Crore (Previous year Rs. 809.82 Crore).

23 Contingent liabilities in respect of claims not acknowledged and not provided for, are as follows:

Rs. in Crore (10 million) 31st March, 2014 31st March, 2013

a) Excise duty liability in respect of matters in appeals 12.69 12.63

b) Sales tax liability in respect of matters in appeals 2.82 2.82

c) Other Matters 9.99 10.82

In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

24 a) The Company has entered into a Take or Pay agreement for the purpose of sourcing lime from JK Enviro-Tech Limited. The Company has given an undertaking that on the happening of certain events, it will takeover the Loan taken by JK Enviro-Tech Limited from IDFC Limited. The current outstanding is Rs. 11.76 Crore (including principal and interest) as on 31st March, 2014.

b) The Company has agreed with HDFC Limited that on happening of certain events, it will take all steps as may be required to ensure the timely repayment of the loan obligations of the Housing Subsidiaries for the loan availed from HDFC Limited. The current outstanding is Rs. 36.09 Crore (including principal and interest) as on 31st March, 2014.

25 Segment Reporting

The Company has identified business segment as the primary segment, after considering all the relevant factors. The Company''s manufactured products are sold primarily within India hence there is no reportable geographical segment.

The Company''s operation predominantly relates to manufacture of Paper & Boards. Other Business Segment comprises activities for providing housing facilities to the employees engaged in Paper & Board manufacturing business and manufacturing of Lime for JK Paper Limited. These operations are insignificant in the context of total turnover, hence same has been shown as "Others".

26 a) Land, Roads, Buildings and Pulp Mill Plant & Machinery of Unit - Central Pulp Mills were revalued as on 30.09.1976. The revaluation in respect of these assets (other than Land and Roads) were updated and Plant & Machinery of Paper Machine I & II and Railway Sidings were revalued as on 31.03.1994 based on current replacement cost by the approved valuers appointed for the purpose. As a result, the book value of such assets has been increased by Rs. 42.27 Crore, which has been transferred to Revaluation Reserve during the year ended 31.03.1994.

b) The Assets of Rs.134.15 Crore held for Sale, disclosed under the heading of "Other Current Assets" in Note No.20, consists of Old Pulp Mill, Recovery Island and Power Block (Coal Fired Boilers & TG Sets) based on lower of Written Down Value and estimated Net Realisable Value. The Management intends to use these assets in various projects under consideration.

27 a) Long Term Loans and Advances includes concessional loan of Rs.18.98 Crore (previous year Rs. Nil) and Short Term Loans and Advances includes Rs. 2.00 Crore (Previous year Rs. 20.98 Crore including concessional loan of Rs. 18.98 Crore) to JK Paper Employees'' Welfare Trust, a shareholder of the Company and loan to employees of Rs. 0.40 Crore (Previous year Rs. 0.45 Crore) in the ordinary course of business and as per service rules of the Company.

b) Advances recoverable in cash or in kind or for value to be received under "Short Term Loan and Advances" in Note No.19 ,includes Rs.7.77 Crore (Previous Year Rs.5.22 Crore) payments made for various development projects being undertaken by the Company including in Vietnam and Myanmar .The same will be adjusted once these projects are finalised .

28. Exceptional Items for the year ended 31st March, 2014 represent gain on Derivative transactions Rs.13.30 Crore, write back of provisions for diminution in the value of investments Rs.4.53 Crore. and losses due to adverse operating parameters during stabilization period at Unit -JKPM Rs.35.32 Crore.

29. a) Pursuant to the Accounting Standard (AS 22) - ''Accounting for Taxes on Income'', deferred tax (liability)/ asset at Balance Sheet date is:

b) Based on the past performance and current plans, the Company expects to continue to generate taxable income which will enable it to utilise MAT credit entitlement.

c) During the current year the Company has provided Current Tax Rs. 0.08 Crore (Previous year Rs. 0.02 Crore) and also reversed MAT credit Entitlement of Rs. 0.33 Crore (previous year recognized MAT credit entitlement of Rs.1.80 Crore) related to earlier years.

30. Disclosure as required under ''Related Party Disclosures'' (AS 18) issued by The Institute of Chartered Accountants of India are as below:

a) List of Related Parties

i. Enterprise over which KMP''s have significant influence

- Habras International Limited

ii. Key Management Personnel (KMP)

- Shri Harsh Pati Singhania - Vice Chairman & Managing Director

- Shri Om Prakash Goyal - Whole-time Director

Key Management Personnel (KMP) :

The remuneration paid to Vice Chairman & Managing Director Rs. 3.05 Crore (Previous year Rs. 2.90 Crore) and Whole Time Director Rs. 1.78 Crore (Previous year Rs. 1.58 Crore). The remuneration paid to the Managerial Personnel by way of minimum remuneration, in terms of the appointment, exceeds the limit prescribed under Section 309(3) of the Companies Act, 1956, by Rs. 3.52 Crore, and is subject to requisite approvals from the Central Government of India. Remuneration is excluding provision for Gratuity & Leave Encashment, where the actuarial valuation is done on overall Company basis.

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


Mar 31, 2013

1. Estimated amount of (i) contracts remaining to be executed on capital account (Net of Advances) Rs. 63.96 Crore (Previous year Rs. 668.29 Crore) and (ii) Investment Rs. 12.60 Crore (Previous year Rs. Nil). Export commitments against import of capital goods under EPCG scheme Rs. 809.82 Crore (Previous year Rs. 364.81 Crore).

2. Contingent liabilities in respect of claims not acknowledged and not provided for, are as follows:

Rs. in Crore (10 million)

31st March, 2013 31st March, 2012

a) Excise duty liability in respect of matters in appeal 12.63 9.83

b) Sales tax liability in respect of matters in appeals 2.82 3.69

c) Other Matters 10.82 27.78

In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

3. a) The Company has entered into a Take or Pay agreement for the purpose of sourcing lime from JK Enviro-Tech Ltd. The Company has given an undertaking that on the happening of certain events, it will takeover the Loan taken by JK Enviro-Tech Ltd. from IDFC Ltd. The current outstanding is Rs. 17.17 Crore (including principal and interest) as on 31st March, 2013.

b) The Company has agreed with HDFC Limited that on happening of certain events, it will take all steps as may be required to ensure the timely repayment of the loan obligations of the Housing Subsidiaries for the loan availed from HDFC Limited. The current outstanding is Rs. 38.40 Crore (including principal and interest) as on 31st March, 2013.

4. In respect of levy of Octroi pertaining to Unit - CPM by Songadh Group Gram Panchayat, the Company has paid Rs.1.25 Crore till 31st March 1997 under protest and also created a liability for the similar amount. As the matter is still pending in the court of law, the necessary adjustment, if any, would be made after its disposal.

5. The Company has only one business segment i.e. Paper and Boards and geographical reportable segment i.e. Operations mainly within India, hence Segment Reporting as defined in Accounting Standard (AS - 17) is not required.

6. Land, Roads, Buildings and Pulp Mill Plant & Machinery of Unit - CPM were revalued as on 30.09.1976. The revaluation in respect of these assets (other than Land and Roads) were updated and Plant & Machinery of Paper Machine I & II and Railway Sidings were revalued as on 31.3.1994 based on current replacement cost by the approved valuers appointed for the purpose. As a result, the book value of such assets has been increased by Rs. 42.27 Crore, which has been transferred to Revaluation Reserve during the year ended 31.3.1994.

7. a) Loans and Advances includes loans of Rs. 20.98 Crore (previous year Rs. 23.48 Crore) to JK Paper Employees'' Welfare Trust, a shareholder of the Company, {includes Short Term Loan Rs. 2.00 Crore (Previous year Rs. 2.00 Crore), Long Term Loan of Rs. Nil (Previous year Rs. 2.00 Crore) and a concessional loan of Rs. 18.98 Crore (Previous year Rs. 19.48 Crore)} and loan to employees of Rs. 0.45 Crore (Previous year Rs. 0.65 Crore) in the ordinary course of business and as per service rules of the Company. b) The Company entered in to an arrangement with JK Enviro-Tech Limited to process its Lime sludge and convert it to Lime on a cost plus basis to meet the pollution control norms under CREP. Loans and Advances include Rs. 15.06 Crore (Previous year Rs. 6.19 Crore) against future supplies.

8. a) Sales include export incentives of Rs. 3.91 Crore (Previous year Rs. 2.76 Crore).

b) Discount includes Trade Discount Rs 54.19 Crore (Previous year Rs. 53.46 Crore).

9. Interest Income includes Rs. 1.03 Crore (Previous year Rs 5.15 Crore) on Deposits with banks, Rs. 0.06 Crore (Previous year Rs. 0.39 Crore) on Income Tax refund and Rs. 7.72 Crore (Previous year Rs. 11.67 Crore) on others.

10. Capital Work in progress includes machinery, building under construction and the following expenses pending allocation/capitalization.

11. a) Future minimum lease payments under non-cancelable operating leases as on 31st March, 2013 are Rs. 0.04 Crore - Rs. 0.04 Crore within one year and Rs. Nil later than one year but not later than five years (Previous year Rs. 0.10 Crore - Rs. 0.05 Crore within one year and Rs. 0.05 Crore later than one year but not later than five years).

b) Future minimum lease payments under non-cancelable Finance leases as on 31st March, 2013 are Rs. 1.64 Crore - Rs. 0.47 Crore within one year and Rs. 1.17 Crore later than one year but not later than five years (Previous year Rs. Nil) and their present value as on 31st March, 2013 are Rs. 1.39 Crore - Rs. 0.35 Crore within one year and Rs. 1.04 Crore later than one year but not later than five year (Previous year Rs. Nil).

12. Based on information so far available in respect of MSME (as defined in ''The Micro Small & Medium Enterprises Developments Act, 2006) there is no delay in payment of dues to such enterprises during the year and there is no such dues payable at the end of the period.

13. Consumption of Stores, Spares is net of scrap sale of Rs. 5.29 Crore (Previous year Rs. 3.54 Crore).

14. a) In accordance with Announcement issued by the Institute of Chartered Accountants of India all outstanding derivatives except covered under AS 11 (revised 2003) are marked to market on Balance Sheet date and there is gain of Rs. 0.18 Crore - reversal of previously recognised MTM Losses (Previous year Loss of Rs. 0.42 Crore) which has been recognized in Statement of Profit and Loss.

b) Forward contract outstanding for purpose of hedging as at Balance Sheet date:

c) Nominal amounts of Currency and Interest Rate Swaps for hedging entered into by the Company and outstanding at end of the year is Rs. 198.12 Crore (Previous year Rs. 227.02 Crore).

d) Foreign currency exposure not hedged as at Balance Sheet date:

15. Disclosure as required under ''Related Party Disclosures'' (AS 18) issued by The Institute of Chartered Accountants of India are as below:

a. List of Related Parties

i. Subsidiaries (Wholly Owned)

- Songadh Infrastructure & Housing Ltd.

- Jaykaypur Infrastructure & Housing Ltd.

ii. Joint Venture

- Oji JK Packaging Pvt. Ltd.

iii. Associate

- JK Enviro-Tech Ltd.

iv. Enterprise over which KMP''s have significant influence

- Habras International Limited

v. Key Management Personnel (KMP)

- Shri Hari Shankar Singhania* - Chairman

- Shri Harsh Pati Singhania - Managing Director

- Shri Om Prakash Goyal - Whole-time Director

* Deceased on 22nd February, 2013.

16. During the year the Company has entered into Joint Venture for the purpose of manufacturing and sale of corrugated packaging products with Oji Holding Corporation, Japan and Marubeni Corporation, Japan. Accordingly "Oji JK Packaging Pvt. Ltd." has become a Joint Venture (JV) in India consisting 60% holding by Oji Holding Corporation, Japan, 20% holding by Marubeni Corporation, Japan and 20% holding by the Company. The Company has subscribed Rs. 2.40 Crore as it''s share of Equity in JV. There has been no operation in the JV Company during the year except issue of share capital, hence the requirement of AS 27 does not arise.

17. Exceptional Items represents provision of earlier periods no longer required.

18. The proceeds of the Right issue and FCCB have been fully utilized for the expansion project.

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

 
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