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Notes to Accounts of Kakatiya Cement Sugar & Industries Ltd.

Mar 31, 2014

1.1 Equity Shares of 1,46,862 of Rs.10 each to be alloted to Shareholders of Sree Kailash Sugars and Chemicals Limited based on the outcome of the case pending with the Honorable Andhra Pradesh High Court.

2.1. Other Liabilites repesents liability to Sri S.R Kailash .The Company has filed a Petition in AP High Court against Arbitration award amounting to Rs.129.25 given in favour of Sri S. R. Kailash and pending decision of the AP High court and the same is retained in Fixed deposit with Andhra bank.

3.1 Statutory & Other liabilites represent amounts payable towards Excise Duty, Service Tax, Sales tax VAT and Tax Deducted at Source.

4.1: Other Advances include Income tax paid under protest for AY 2007-08 amounting to Rs. 602.10 Lacs and Sales tax paid under protest amounting to Rs. 200.54 Lakhs.

Note.5.1 : Interest income represents Interest on Fixed Deposits and Interest on eletricity deposits

Note 6 : EMPLOYEE BENEFITS

As per Accounting Standard 15 "Employee Benefits", the disclosures as defined in the Accounting Standard are given below:

Defined Benefit plans:

The company operates post retirement gratuity plan with LIC. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The Company has determined the leave encashment provision based on independent actuary.

Note: 7. Provisions, Contingent Liabilities and Contingent Assets:

Disclosures required by AS-29 "Provisions, Contingent Liabilities & Contingent Assets"

i) Disputes with regard to Power purchase Tariff and PLF with regard to sale of power to APTRANSCO amounting to Rs. 1772.05 lakhs, out of which Rs. 1042.27 lakhs was considered as income, matter is pending before APERC.

ii) Claims against the company by APCPDCL/APSPDCL amounting to Rs.907.41 lakhs towards wheeling charges for energy wheeled from company''s bagasse based co-generation unit to cement division for which writ petition filed in the High court of Andhra Pradesh and stay obtained.

iii) Duty on Electricity generated and consumed was levied by the A.P.Govt. at Rs.0.25 paise per unit from 17.07.2003. The High Court has stayed the operation of A.P. Electricity Duty Amendment Act, but asked to submit monthly returns of generation. The duty amount as on 31.03.2014 was Rs.1106.90 lakhs.

iv) For the Asst. years 1999-00, 2000-01 and 2001-02 Income tax paid Rs. 123.98 lakhs under protest against the demand of Rs.136.40 lakhs towards disallowance of un-absorbed depreciation / losses. The matter pending in appeal before the High Court of Andhra Pradesh.

v) For the Asst. Year 2010-11 and 2011-12 there was a demand of Rs.52.92 and 64.45 lakhs respectively towards denial of exemption u/s. 80-IA to Company''s Power Division and other disallowances in Sugar and Cement Divisions. The matter is pending before CIT (Appeals).

vi) Sales tax paid under protest for the Asst. years 2001-02,2002-03 of Rs.188.56 lakhs against a demand of Rs.188.56 lakhs regarding disputed sales tax on Molasses sales. The matter is under appeal before the High Court of Andhra Pradesh.

vii) The Company has paid Rs.1.00 crore as per the directions of Hon''ble High Court against demand of Rs.850.22 lakhs from the forest department towards Net Present Value (NPV) in respect of diverted forest land for renewal of Mining lease under Forest (Conservation) Act, 1980. The matter is pending in appeal before the High Court of Andhra Pradesh.

The Company accounts for intersegment sales and transfer at average Market Price.

Note 8 : CLASSIFICATION

Previous Year figures have been regrouped wherever necessary to conform to current Year''s groupings / classification.


Mar 31, 2013

Note 1.1 : The company has only one class of equity shares having face value of RS. 10 each. Each shareholder of Equity share entitled to one vote per share. The company delcared and pays dividend in Indian rupees the dividend proposed by board of directors is subject to approval of shareholders in ensuing Annual general meeting.

2.1 Equity Shares of 1,46,862 of RS. 10 each to be alloted to Shareholders of Sree Kailash Sugars and Chemicals Limited based on the outcome of the case pending with the Honorable Andhra Pradesh High Court.

3.1. Other Liabilites repesents liability to Sri S.R Kailash .The Company has filed a Petition in AP High Court against Arbitration award amounting to RS. 129.25 given in favour of Sri S. R. Kailash and pending decision of the AP High court and the same is retained in Fixed deposit with Andhra bank.

Note 4 : RELATED PARTY DISCLOSURES

i) Key management personnel:

P.Venkateswarlu. P.Veeraiah.

ii) Relatives of key management personnel:

P.Samrajyam. P.Radha.

iii) Enterprise in which key management personnel and their relatives have control:

Standard Construction Co. (Partnership Company). Kakatiya Finance and Leasing Company Pvt Limited.

Note 5 : EMPLOYEE BENEFITS

As per Accounting Standard 15 "Employee Benefits", the disclosures as defined in the Accounting Standard are given below

Defined Benefit plans:

The company operates post retirement gratuity plan with LIC. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The Company has determined the leave encashment provision based on independent actuary.

Note.6. Provisions, Contingent Liabilities and Contingent Assets:

Disclosures required by AS-29 "Provisions, Contingent Liabilities & Contingent Assets”

i) Disputes with regard to Power purchase Tariff and PLF with regard to sale of power to APTRANSCO amounting to RS. 1387.57 lakhs, out of which RS. 1215.04 lakhs was considered as income, matter is pending before APERC.

ii) Claims against the company by APCPDCL/APSPDCL amounting to RS. 902.97 lakhs towards wheeling charges for energy wheeled from company''s bagasse based co-generation unit to cement division for which writ petition filed in the High court of Andhra Pradesh and stay obtained.

iii) Duty on Electricity generated and consumed was levied by the A.P.Govt. at RS. 0.25 paise per unit from 17.07.2003. The High Court has stayed the operation of A.P. Electricity Duty Amendment Act, but asked to submit monthly returns of generation. The duty amount as on 31.03.2013 was RS. 979.86 lakhs.

iv) For the Asst. years 1999-00, 2000-01 and 2001-02 Income tax paid RS. 123.98 lakhs under protest against the demand of RS. 136.40 lakhs towards disallowance of un-absorbed depreciation/losses. The matter pending in appeal before the High Court of Andhra Pradesh.

v) For the Asst. Year 2010-11 there was a demand of RS. 90.78 lakhs towards denial of exemption u/s. 80-IA to Company''s Power Division and other disallowances in Sugar and Cement Divisions. The matter is pending before CIT (Appeals).

iv) Sales tax paid under protest for the Asst. years 2001-02,2002-03 of RS. 188.56 lakhs against a demand of RS. 188.56 lakhs regarding disputed sales tax on Molasses sales. The matter is under appeal before the High Court of Andhra Pradesh.

vii) The Company has paid RS. 1.00 crore as per the directions of Hon''ble High Court against demand of RS. 850.22 lakhs from the forest department towards Net Present Value (NPV) in respect of diverted forest land for renewal of Mining lease under Forest (Conservation) Act, 1980. The matter is pending in appeal before the High Court of Andhra Pradesh.

Note 7 : CLASSIFICATION

Previous Year figures have been regrouped wherever necessary to conform to current Year''s groupings /classification.


Mar 31, 2012

Note 1.1 : The company has only one class of equity shares having face value of Rs. 10 each. Each shareholder of Equity share entitled to one vote per share. The company declared and pays dividend in Indian rupees. The dividend proposed by board of directors is subject to approval of shareholders in ensuring Annual general meeting .

2.1 Equity Shares of 146862 of Rs. 10 each to be allotted to Shareholders of Sree Kailash Sugars and Chemicals Limited based on the outcome of the case pending with the Honorable Andhra Pradesh High Court.

3.1. Other Liabilities represents liability to Sri S.R. Kailash. The Company has filed a Petition in AP High Court against Arbitration award amounting to Rs. 129.25 given in favour of Sri S.R. Kailash and pending decision of the AP High Court. The same is retained in Fixed Deposit with Andhra Bank.

4.1. The Rupee Term Loans are secured by joint equitable mortgage by way of deposit of title deeds of the Company's all Immovable properties both present and future and by way of hypothecation of all movable assets (Other than book debts), ranking pari-pasu interest, subject to prior charges on movable assets in favor of the company's Bankers for Working Capital facility. There are no amounts repayable outstanding beyond 12 months from the balance sheet date.

4.2. Statutory & other liabilites represent amounts payable towards Excise Duty Service Tax Sales tax and TDS.

Note 12.1 : Aggregate market value of Quoted Investments Rs. 6.33 Lakhs as against (P.Y 8.48Lakhs)

5.1. Deposits Others includes amount retained in Fixed deposit with Andhra Bank amounting to Rs. 129.25 liable to Sri S.R. Kailash against the orders of AP High Court (Refer Note No. 6.1).

6.1: Other Advances include Income tax paid under protest AY 2007-08 amounting to Rs. 602.10 Lacs (PY 27.98 Lacs) and Sales tax paid under protest amounting to Rs. 200.54 Lakhs (PY 200.54 Lacs)

Note.19.1 : Interest income represents Interest on Fixed Deposits and Interest on eletricity deposits

Note 7 : RELATED PARTY DISCLOSURES

i) Key management personnel:

P.Venkateswarlu.

P.Veeraiah.

ii) Relatives of key management personnel:

P.Samrajyam.

P.Radha.

iii) Enterprise in which key management personnel and their relatives have control:

Standard Construction Co. (Partnership Company).

Kakatiya Finance and Leasing Company Pvt Limited.

*Figures in bracket represents previous year.

* As company taken Group Gratuity Policy for the first time comparative figures are not given.

Note 6 : PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Disclosures required by AS-29 "Provisions, Contingent Liabilities & Contingent Assets"

i) Disputes with regard to Power purchase Tariff and PLF with regard to sale of power to APTRANSCO amounting to Rs. 1245.28 lakhs, out of which Rs. 1038.89 lakhs was considered as income, matter is pending before APERC.

ii) Claims against the company by APCPDCL/APSPDCL amounting to Rs. 651.58 lakhs towards wheeling charges for energy wheeled from company's bagasse based co-generation unit to cement division for which writ petition filed in the High court of Andhra Pradesh and stay obtained.

iii) Duty on Electricity generated and consumed was levied by the A.P.Govt. at Rs. 0.25 paise per unit from 17.07.2003. The High Court has stayed the operation of A.P. Electricity Duty Amendment Act, but asked to submit monthly returns of generation. The duty amount as on 31.03.2012 was Rs. 873.56 lakhs.

iv) For the Asst. years 1999-00, 2000-01 and 2001-02 Income tax paid Rs. 123.98 lakhs under protest against the demand of Rs. 136.40 lakhs towards disallowance of un-absorbed depreciation / losses. The matter pending in appeal before the High Court of Andhra Pradesh.

v) For the Asst. Year 2009-10 there was a demand of Rs. 456.45 lakhs towards denial of exemption u/s. 80-IA to Company's Power Division and other disallowances in Sugar and Cement Divisions. The matter is pending before CIT (Appeals).

iv) Sales tax paid under protest for the Asst. years 2001-02,2002-03 of Rs. 188.56 lakhs against a demand of Rs. 188.56 lakhs regarding disputed sales tax on Molasses sales. The matter pis under appeal before the High Court of Andhra Pradesh.

vii) The Company has paid Rs. 1.00 crore as per the directions of Hon'ble High Court against demand of Rs. 850.22 lakhs from the forest department towards Net Present Value (NPV) in respect of diverted forest land for renewal of Mining lease under Forest (Conservation) Act, 1980. The matter is pending

Segment liabilities in respect of secured loans are allocated by the management to each of the segment on a reasonable basis having relation to the utilisation of the loans to the particular segment.

Note 7 : CLASSIFICATION

Previous Year figures have been regrouped wherever necessary to conform to current Year's groupings / classification.


Mar 31, 2011

1. Sugar sales include Rs 336.04 lakhs of bagasse sale by sugar division to power division. Power Division sales includes, sale of power to cement division amounting to Rs 812.85 lakhs and to sugar division amounting to Rs 172.12 lakhs and sale of Steam to Sugar Division amounting to Rs 241.26 lakhs. Cost of inter division transfers were included in power and fuel expenses.

2. Share Capital Suspense represents the outstanding amount earmarked for allotment of shares in the ratio of 1:25, to the holders of shares of Sree Kailas Sugars and Chemicals Limited (SKSCL), which has been merged with the Company pursuant to the Scheme of Rehabilitation sanctioned by the BIFR.

3. The Excise Duty payable on the Closing Stocks of Cement Division, Sugar Division is Rs 2.59 lakhs and Rs 131.08 lakhs respectively is included in the value of closing stocks. There is no impact on Profit of the Company.

4. The liability in respect of Gratuity has been arrived at as on 31st March 2011 for Rs 309.96 lakhs on accrual basis.

5. The Rupee Term loans are secured by joint equitable mortgage by way of deposit of title deeds of the Company's all immovable properties both present and future and hypothecation of all movable assets (other than book debts) ranking pari-passu interse, subject to prior charge on movable assets in favour of Company's bankers for securing working capital facility.

6. Working Capital facilities sanctioned by State Bank of India and Andhra Bank is secured by hypothecation of stocks of raw materials, stock-in-process, finished goods, spares and book debts, second charge on all immovable properties both present and future and also by the personal guarantee of the Managing Director and Jt. Managing Director.

7. As per the information available with the company as on date there are no outstandings to MSMED units.

8. Additional information pursuant to the provisions of paragraph 3,4-C and 4-D of Part II of Schedule VI of the Companies Act, 1956 (as certified by the Management).

(Value - Rs In Lakhs)

The details of the Managerial Remuneration are mentioned in Note No. 6 (a) of the Notes to the Accounts. Sri P. Veeraiah, Jt. Managing Director is related to Sri P. Venkateswarlu, Chairman & Managing Director.

9. ACCOUNTING FOR TAXES:

Deferred Ta x Asset of Rs 135.90 lakhs is recognized as attributable to the timing difference between depreciation as per Companies Act and Income Tax Act.

Income tax comprises Current Tax determined in accordance with the Income Tax Law. Deferred Ta x charged or credited reflecting the tax effect of timing difference between accounting income and Taxable Income for the year.

10. Other Liabilities includes a sum of Rs 129.25 lakhs being balance out of the gross amount of Rs 310.61 lakhs received under an arbitration award. The amount is kept under Fixed Deposit, pending resolution of the outstanding disputes.

11. Contingent Liabilities:

i) Disputes with regard to Power purchase Tariff and PLF with regard to sale of power to APTRANSCO amounting to Rs 1245.28 lakhs, out of which Rs 1038.89 lakhs was considered as income, matter is pending before APERC.

ii) Claims against the company by APCPDCL/APSPDCL amounting to Rs 548.89 lakhs towards wheeling charges for energy wheeled from company's bagasse based co-generation unit to cement division for which writ petition filed in the High court of Andhra Pradesh and stay obtained.

iii) Duty on Electricity generated and consumed was levied by the A.P.Govt. at Rs 0.25 paise per unit from 17.07.2003. The High Court has stayed the operation of A.P. Electricity Duty Amendment Act, but asked to submit monthly returns of generation. The duty amount as on 31.03.2011 was Rs 770.87 lakhs.

iv) For the Asst. years 1999-00,2000-01 and 2001-02 Income tax paid Rs 123.98 lakhs under protest against the demand of Rs 136.40 lakhs towards disallowance of un-absorbed depreciation/ losses. The matter pending in appeal before the High Court of Andhra Pradesh.

v) For the Asst. Year 2007-08 Income Tax paid Rs 301.50 lakhs under protest against demand of Rs 737.68 lakhs towards denial of exemption u/s. 80-IA to Company's Power Division and other disallowances in Sugar and Cement Divisions. The matter is pending before ITAT,Hyderabad.

vi) For the Asst. Year 2008-09 there was a demand of Rs 319.92 lakhs towards denial of exemption u/s. 80-IA to Company's Power Division and other disallowances in Sugar and Cement Divisions. The matter is pending before CIT(Appeals).

vii) Sales tax paid under protest for the Asst. years 2001-02,2002-03 of Rs 188.56 lakhs against a demand of Rs 188.56 lakhs regarding disputed sales tax on Molasses sales. The matter is under appeal before the High Court of Andhra Pradesh.

viii) The Company has paid Rs 1.00 crore as per the directions of Hon'ble High Court against demand of Rs 850.22 lakhs from the forest department towards Net Present Value (NPV) in respect of diverted forest land for renewal of Mining lease under Forest (Conservation) Act, 1980. The matter is pending in appeal before the High Court of Andhra Pradesh.

12. Certain Sundry Debtors and Creditors are subject to confirmation and reconciliation.

13. Previous Year figures have been regrouped wherever necessary to conform to current Year's groupings / classifications.

14. Figures have been rounded-off to the nearest thousand.


Mar 31, 2010

1. Sales include Rs.116.89 lakhs of bagasse sale by sugar division to power division. Sale of Power Division includes, sale of power to cement division amounting to Rs.831.32 lakhs and to sugar division amounting to Rs.59.39 lakhs and sale of Steam to Sugar Division amounting to Rs.118.55 lakhs. Cost of inter division transfers were included in power and fuel expenses.

2. Share Capital Suspense represents the outstanding amount earmarked for allotment of shares in the ratio of 1:25, to the holders of shares of Sree Kailas Sugars and Chemicals Limited (SKSCL), which has been merged with the Company pursuant to the Scheme of Rehabilitation sanctioned by the BIFR.

3. The Excise Duty payable on the Closing Stocks of Cement Division, Sugar Division is Rs.2.89 lakhs and Rs.23.60 lakhs respectively is included in the value of closing stocks. There is no impact on Profit of the Company.

4. The liability in respect of Gratuity has been arrived at as on 31st March 2010 for Rs.279.24 lakhs on accrual basis.

5. The Rupee Term loans are secured by joint equitable mortgage by way of deposit of title deeds of the Companys all immovable properties both present and future and hypothecation of all movable assets (other than book debts) ranking pari-passu interse, subject to prior charge on movable assets in favour of Companys bankers for securing working capital facility.

6. Working Capital facilities sanctioned by State Bank of India and Andhra Bank is secured by hypothecation of stocks of raw materials, stock-in-process, finished goods, spares and book debts, second charge on all immovable properties both present and future and also by the personal guarantee of the Managing Director and Jt. Managing Director.

7. As per the information available with the company as on date there are no outstandings to MSMED units.

8. ACCOUNTING FOR TAXES:

Deferred Tax Asset of Rs.157.16 lakhs is recognized as attributable to the timing difference between depreciation as per Companies Act and Income Tax Act.

Income tax comprises Current Tax and Fringe Benefit Tax for the period, determined in accordance with the Income Tax Law. Deferred Tax charged or credited reflecting the tax effect of timing difference between accounting income and Taxable Income for the year.

9. Other Liabilities includes a sum of Rs.173.17 lakhs being balance out of the gross amount of Rs.310.61 lakhs received under an arbitration award. The amount of Rs.173.17 lakhs is kept under Fixed Deposit, pending resolution of the outstanding disputes.

10. Contingent Liabilities:

i) Disputes with regard to Power purchase Tariff and PLF with regard to sale of power to APTRANSCO amounting to Rs.1057.40 lakhs, out of which Rs.851.01 lakhs was considered as income, matter is pending before Apex court.

ii) Claims against the company by APCPDCL/APSPDCL amounting to Rs.548.89 lakhs as on 31.03.2010 towards wheeling charges for energy wheeled from companys bagasse based co-generation unit to cement division for which writ petition filed in the High court of Andhra Pradesh and stay obtained.

iii) Claims against the company by Electrical Inspectorate GOVT. of Andhra Pradesh amounting to Rs.676.43 lakhs as on 31.03.2010 towards Electricity Duty on captive consumption w.e.f.17.07.2003 @ Rs.0.25 per unit.

iv) For the Asst. years 1999-00,2000-01 and 2001-02 Income tax paid Rs.123.98 lakhs under protest against the demand of Rs.136.40 lakhs towards disallowance of un-absorbed depreciation / losses. The matter pending in appeal before the High Court of Andhra Pradesh.

v) For the Asst. Year 2007-08 Income Tax paid Rs.150.00 lakhs under protest against demand of 523.92 lakhs towards denial of exemption u/s. 80-IA to Companys Power Division and other disallowances in Sugar and Cement Divisions. The matter is pending before CIT (Appeals).

vi) Sales tax paid under protest for the Asst. years 2001-02,2002-03 and 2005-06 of Rs.200.54 lakhs against a demand of Rs.212.52 lakhs regarding disputed sales tax and input tax credit availed on coal purchases for the period Apr05 to Dec05. The matter is under appeal before the High Court of Andhra Pradesh.

vii) The Company has paid Rs.1.00 crore as per the directions of Honble High Court against demand of Rs.850.22 lakhs from the forest department towards Net Present Value (NPV) in respect of diverted forest land for renewal of Mining lease under Forest (Conservation) Act, 1980. The matter is pending in appeal before the High Court of Andhra Pradesh.

11. Certain Sundry Debtors and Creditors are subject to confirmation and reconciliation.

12. Previous Year figures have been regrouped wherever necessary to conform to current Years groupings / classifications.