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Notes to Accounts of Kuantum Papers Ltd.

Mar 31, 2015

1.1.1 Rights, preferences and restrictions attached to each class of shares

a) Equity shares of Rs. 10 each, fully paid up

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders (except for interim dividend) in the ensuing Annual General Meeting.

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

b) 10% non-cumulative redeemable preference shares of Rs. 10 each, fully paid up

The Company has only one class of preference shares having a par value of Rs. 10 per share. Preference shareholders do not hold any voting rights.

The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The preference shareholder acquire voting right on par with equity shareholders if dividend on preference shares remain unpaid for a period of not less then 2 years or for any three years during a period of six years ending with financial year preceding the meeting. In the event of liquidation of the Company, the holders of preference shares will be entitled to receive the amount of their preference capital contribution before distribution of the remaining assets to the equity shareholders.

The preference shares are redeemable in 5 equal instalments of Rs. 600 lacs each at the end of 16th, 17th, 18th, 19th and 20th year, from the date of allotment, i.e., 13 September 2013 instead of earlier redemption at the end of 8th, 9th, 10th, 11th and 12th year.

Footnotes:

[1] Term Loan of:

a. Rs. 7,065.00 (previous year Rs. 3,339.12) are secured by a first parri passu charge on all the fixed assets (immovable and movable) of the Company, both present and future alongwith equitable mortgage of factory land and building at Sailakhurd and second charge on the current assets. The said loans are also secured by personal guarantees of directors.

b. Rs. 2,700.00 (previous year Rs. 3,450.00) is secured by a first parri passu charge on fixed assets (immovable and movable) of the Company, both present and future, alongwith equitable mortgage of factory land and building at Sailakhurd and second charge on the current assets. The said loans are also secured by personal guarantees of directors. The term loan is also secured by pledge of 10,00,000 equity shares of the Company by an associate company.

c. Rs. 285.37 (previous year Rs. 1,135.75) is secured by a first parri passu charge on all the fixed assets (immovable and movable) of the Company, both present and future, alongwith equitable mortgage of factory land and building at Sailakhurd . The said loans are also secured by personal guarantees of directors.

d. Rs. 510.71 (previous year Rs. Nil) Lakhs is secured by exclusive charge on the building at Industrial Area Chandigarh and is also secured by personal guarantees of directors.

e. During the current year, floating interest rate was in the range of 12.40% to 14% per annum (previous year 13.30% to 14% per annum).

During the year ended 31 March 2013 while filing its income tax return for the financial year 2011-12, the Company had exercised its option to claim tax holiday exemption for ten years in relation to its certain activities. However, inadvertently, the computation of deferred taxation for the previous year did not consider the consequential impact thereof. In the previous year, deferred tax was corrected and consequential adjustment in the form of deferred tax credit of Rs. 436.27 was recorded. As a result, profit for the previous year after tax was higher by Rs. 436.27.

#During the year, the Company has revalued freehold land as on 31 March 2015, at the fair values determined by an independent external valuer. The valuer determined the fair value by reference to market based evidence. Valuations performed by the valuer were based on active market prices, adjusted for any difference in the nature, location or condition of the specific property. The historical cost of freehold land was Rs. 77.67 lacs and the fair value was Rs. 41,372 lacs. Hence, the revaluation resulted in an increase in the book value of freehold land by Rs. 41,294.33 lacs which has been credited to revaluation reserve.

2.1 Background

Kuantum Papers Limited(''The Company") is a Company incorporated under the provisions of the Companies Act, 1956.

The Company is listed on Bombay Stock Exchange.The Company's business primarily consists of manufacture and sales of paper, mainly in the domestic markets. The manufacturing facilities and registered office of the Company are situated in SailaKhurd, District Hoshiarpur in the State of Punjab, with corporate office in Chandigarh.

3.1 Contingent liabilities, commitments and other litigation rs Lacs

Particulars As at As at 31 March 2015 31 March 2014

a) Claims against the Company not acknowledged as debts

- Income tax matters 529.90 394.73

- Excise duty matters 598.54 1,303.73*

b) Capital commitments

Estimated amount of contracts remaining to be executed on 1,887.64 176.73 capital account and not provided for (net of advances)

* Includes Rs. 549.28 in previous year which has been vacated vide order of Commissioner dated 3 April 2014.

{I} Refund case is pending with Commissioner (Excise), Rs. 52.15 is classified under Note 1.11(c), cenvat credit recoverable.

{ii} Appeal is pending with Chairman, Appellate Committee, Punjab Pollution Control Board, Patiala. Provision created amounting to Rs. 117 and advances deposited Rs. 62.40 therefore balance Rs. 54.60 is classified under Note 1.9 (e), statutory dues.

(d) Further, the Company has filed legal cases against certain parties for recoverability of balances due from them. Appropriate, provision wherever required has been created in the financial statements.

3.2 Borrowing cost relating to qualifying assets which has been considered as cost of fixed assets is amounting to Rs. 143.71 (previous year Rs. 248.30)

3.3 The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Based on the information presently available with the management, there are no dues outstanding to micro and small enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not received any claim for interest from any suppliers under the said Act.

The secured borrowing facilities of the Company are secured by way of personal guarantees of Chairman, and the Managing Director in favour of lenders.

3.4 Segment information

The Company is engaged in the business of manufacture and sale of paper, primarily in India and nearby markets, which is a primary segment for the Company and constitutes a single business segment. Accordingly, disclosure requirements of Accounting Standard 17 "Segment Reporting", prescribed by the Companies (Accounts) Rules, 2014 in relation to segment reporting is not given.

3.5 Leases Operating leases

The Company has taken office and residential premises under cancellable operating lease agreements.

Lease payments charged during the year in Statement of Profit and Loss aggregate Rs. 48.62 (previous year Rs. 44.91). Finance leases

The Company acquires certain computer and IT equipment under finance lease which had been capitalized/capital work in progress as a part of computers under fixed assets. At the end of lease period, the Company has the option either to terminate the lease and return the asset or renew the lease.

3.6 Disclosures pursuant to Accounting Standard 15 on "Employee Benefits":

Defined contribution plans

The Company's provident fund scheme and employee's state insurance (ESI) fund scheme are defined contribution plans. The Company has recorded expenses of Rs. 159.67 (previous year Rs. 155.68) under provident fund scheme and Rs.54.64 (previous year Rs. 53.91) under ESI scheme. These have been included in note 2.5 Employees benefits expenses, in the Statement of Profit and Loss.

Defined benefit plans

Gratuity (funded)

Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act or as per the Company's Scheme, whichever is more beneficial.

3.7 As per requirement of sub section (5) of section 135 of the Companies Act 2013, the Company was required to spend at least two percent of its average net profit for the three immediately preceding financial year, in pursuance of its Corporate Social Responsibilities (CSR) Policy. Till 31 March 2015, the Company has spent Rs. 31.95 towards CSR activities.

3.8 The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961. Since the law requires such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation of transactions with associated enterprises during the financial year and expects such records to be in existence latest by the due date as required under that law. The management is of the opinion that the above transactions are at arm's length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

3.9 Previous year figures have been regrouped / reclassified wherever considered necessary.


Mar 31, 2014

1. Background

Kuantum Papers Limited("the Company") is a Company incorporated under the provisions of the Companies Act, 1956.

The Company is listed on Bombay Stock Exchange. The Company''s business primarily consists of manufacture and sales of paper, mainly in the domestic markets. The manufacturing facilities and registered office of the Company are situated in Saila Khurd, District Hoshiarpur in the State of Punjab, with corporate office in Chandigarh.

2. Reconciliation of share capital outstanding as at the beginning and at the end of the year

a) During the current year and in the previous year, there has been no movement in the number of equity shares outstanding.

b) 10% redeemable non cumulative preference shares of Rs. 10 each fully paid up

3. Rights, preferences and restrictions attached to each class of shares

a) Equity shares of Rs. 10 each, fully paid up

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders (except for interim dividend) in the ensuing Annual General Meeting.

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

b) 10% non-cumulative redeemable preference shares of Rs. 10 each, fully paid up

The Company has only one class of preference shares having a par value of Rs. 10 per share. Preference shareholders do not hold any voting rights.

The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The preference shareholder acquire voting right on par with equity shareholders if dividend on preference shares remain unpaid for a period of not less then 2 years or for any three years during a period of six years ending with financial year preceding the meeting. In the event of liquidation of the Company, the holders of preference shares will be entitled to receive the amount of their preference capital contribution before distribution of the remaining assets to the equity shareholders.

The preference shares are redeemable in 5 equal instalments of Rs. 600 lacs each at the end of 8th, 9th, 10th, 11th and 12th year, from the date of allotment, i.e., 13 September 2013.

4. Disclosure pursuant to note 6(A)(i) of Part I of Schedule VI to the Companies Act, 1956

Aggregate of bonus shares issued, shares issue for consideration other than cash and shares brought back during the period of five years immediately preceding the reporting date is Nil (previous year Nil).

* During the year, 300 lacs, 10% Redeemable Preference shares, amounting to Rs. 3,000, were issued at a price of Rs. 10 per share to certain existing shareholders belonging to the Promoters group by converting unsecured loans.

Footnotes:1

[1] Term Loan of:

a. Rs. 3,339.12 (previous year Rs. 4,835) are secured by a first parri passu charge on all the fixed assets (immovable and movable) of the Company, both present and future alongwith equitable mortgage of factory land and building at Sailakhurd and second charge on the current assets. The said loans are also secured by personal guarantees of directors.

b. Rs. 3,450 (previous year Rs. 3,850) is secured by a first parri passu charge on fixed assets (immovable and movable) of the Company, both present and future, alongwith equitable mortgage of factory land and building at Sailakhurd and second charge on the current assets. The said loans are also secured by personal guarantees of directors. The term loan is also secured by pledge of 10,00,000 equity shares of the Company by an associate company.

c. Rs. 1,135.75 (previous year Rs. 2,557.41) is secured by a first parri passu charge on all the fixed assets (immovable and movable) of the Company, both present and future, alongwith equitable mortgage of factory land and building at Sailakhurd . The said loans are also secured by personal guarantees of directors.

d. The rate of interest on the loans ranges from 13.30% to 14% per annum.

During the year ended 31 March 2013 while filing its income tax return for the financial year 2011-12, the Company had exercised its option to claim tax holiday exemption for ten years in relation to its certain activities. However, inadvertently, the computation of deferred taxation for the previous year did not consider the consequential impact thereof. In the current year, deferred tax has been corrected and consequential adjustment in the form of deferred tax credit of Rs. 436.27 has been recorded. As a result, profit for the year after tax is higher by Rs. 436.27.

Footnotes:2

[1] Working capital loans are secured by hypothecation of all current assets, second charge on the fixed assets of the Company and personal guarantees of directors. The rate of interest on the loans is 13% per annum. [2] The rate of interest on public deposits for maturity period for one year varies from 10.50% to 11% per annum.

[2] The rate of interest on intercorporate deposits is 12% per annum.

5. Contingent liabilities and commitments

Particulars As at As at 31 March 2014 31 March 2013

a) Claims against the Company not acknowledged as debts

* Income tax matters 394.73 7.57

* Excise duty matters 1,303.73* 1,017.34

b) Capital commitments

Estimated amount of contracts remaining to be executed on 176.73 316.81

capital account and not provided for (net of advances)

* Includes Rs. 549.28 (previous year Rs. 384.05)which has been vacated vide order of Commissioner dated 3 April 2014.

c) During the year2011-12, a search was carried out by the Income tax authorities at various premises of the Company. The assessments are under progress. The management has assessed its position and is of the view that it would not have any impact on the financial statements of the Company as at and for the year ended 31 March 2014.

6. Borrowing costs amounting to Rs. 248.30 (previous year Rs. 381.34included in CWIP) attributable to acquisition and construction of fixed assets have been capitalized during the year.

7. The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Based on the information presently available with the management, there are no dues outstanding to micro and small enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not received any claim for interest from any suppliers under the said Act.

$ Includes Rs. 1,756 transfer from Ambalica Enterprises Private Limited consequent to merger with Esteem Finventures Limited during the previous year.

# includes public deposits matured and renewed during the year.

8. Segment information

The Company is engaged in the business of manufacture and sale of paper, primarily in India and nearby markets, which is a primary segment for the Company and constitutes a single business segment. Accordingly, disclosure requirements of Accounting Standard 17 "Segment Reporting", prescribed by the Companies (Accounting Standards) Rules, 2006 in relation to segment reporting is not given.

9. Leases

Operating leases

The Company has taken office and residential premises under cancellable operating lease agreements.

Lease payments charged during the year in Statement of Profit and Loss aggregate Rs. 44.91lacs (previous year Rs. 41.83lacs).

Finance leases

The Company acquires certain computer equipment under finance lease which had been capitalized as a part of computers under fixed assets. At the end of lease period, the Company has the option either to terminate the lease and return the asset or renew the lease.

10. Disclosures pursuant to Accounting Standard 15 on "Employee Benefits":

Defined contribution plans

The Company''s provident fund scheme and employee''s state insurance (ESI) fund scheme are defined contribution plans. The Company has recorded expenses of Rs. 155.68 (previous year Rs. 138.42) under provident fund scheme and Rs.53.91 (previous year Rs. 47.23) under ESI scheme. These have been included in note 2.5 Employees benefits expenses, in the Statement of Profit and Loss.

Defined benefit plans

Gratuity (funded)

Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act or as per the Company''s Scheme, whichever is more beneficial.

The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

The salary escalation rate is based on estimates of salary increases, which take into account inflation, promotion and other relevant factors.

*The Company is not informed by the insurer (Life Insurance Corporation of India) of the investment made by it or the break - down of plan assets by investment type.

* Gratuity and leave encashment have been provided on an actuarial basis for the Company as a whole. Accordingly, separate figures are not available on an individual basis and, thus, not included.

11. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961. Since the law requires such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation of transactions with associated enterprises during the financial year and expects such records to be in existence latest by the due date as required under that law. The management is of the opinion that the above transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

12. Previous year figures have been regrouped / reclassified wherever considered necessary.


Mar 31, 2013

1.1 Background

Kuantum Papers Limited (formerly known as ABC Paper Limited) ("The Company" ) is a Company incorporated under the provisions of the Companies Act, 1956.

The Company is listed on Bombay Stock Exchange. The Company''s business primarily consists of manufacture and sales of paper, mainly in the domestic markets. The manufacturing facilities and registered office of the Company are situated in Saila Khurd, District Hoshiarpur in the State of Punjab, with corporate office in Chandigarh.

2.1 Borrowing costs amounting to Rs. Nil (previous year Rs. 24.19 lacs) attributable to acquisition and construction of fixed assets have been capitalized during the year.

2.2 Based on the information presently available, there are no amounts due to any micro or small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006.

2.3 Segment information

The Company is engaged in the business of manufacture and sale of paper, primarily in India and nearby markets, which is a primary segment for the Company and constitutes a single business segment. Accordingly, disclosure requirements of Accounting Standard 17 "Segment Reporting", prescribed by the Companies (Accounting Standards) Rules, 2006 in relation to segment reporting is not given.

2.4 Leases

Operating leases

The Company has taken office and residential premises under cancellable operating lease agreements. Lease payments charged during the year in Statement of Profit and Loss aggregate Rs. 41.83 lacs (previous year Rs. 29.68 lacs).

Finance leases

The Company has, during the previous years, acquired computer equipment under finance lease which had been capitalized as a part of computers under fixed assets. At the end of lease period, the Company has the option either to terminate the lease and return the asset or renew the lease.

2.5 Disclosures pursuant to Accounting Standard 15 on "Employee Benefits"

Defined contribution plans

The Company''s provident fund scheme and employees'' state insurance (ESI) fund scheme are defined contribution plans. The Company has recorded expenses of Rs. 138.42 lacs (previous year Rs. 121.19 lacs) under provident fund scheme and Rs.47.23 lacs (previous year Rs. 44.18 lacs) under ESI scheme. These have been included in note 2.5 Employees benefits expenses, in the Statement of Profit and Loss.

Defined benefit plans

Gratuity

Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act or as per the Company''s Scheme, whichever is more beneficial.

2.6 The Company''s exposure in respect of foreign currency denominated liabilities not hedged by derivative instruments is as follows

2.7 Previous year figures have been regrouped / reclassified wherever considered necessary.


Mar 31, 2012

1.1 Background

Kuantum Papers Limited (formerly ABC Paper Limited) ("The Company") is a limited Company incorporated under the provisions of the Companies Act, 1956.

The Company is listed on Bombay Stock Exchange.

The Company's business primarily consists of manufacture and sales of paper, mainly in the domestic markets. The Company's name has changed from ABC Paper Limited to Kuantum Papers Limited w.e.f. 30 March 2012.

2.1 Contingent liabilities and commitments

Particulars As at As at 31 March 2012 31 March 2011

a) Claims against the Company not acknowledged as debts

- Income tax matters 7.57 394.73

- Excise duty matters 749.75 749.75

b) Capital commitments

Estimated amount of contracts remaining to be executed on 2266.12 882.39 capital account and not provided for (net of advances)

c) Guarantees given by the Company on behalf of other parties. - 720.00

d) During the year, a search was carried out by the Income tax authorities at various premises of the Company and the assessments are under progress. The management has assessed its position and is of the view that it would not have any impact on the financial statements of the Company as at and for the year ended 31 March 2012.

3.3 Borrowing costs amounting to Rs.24.19 lacs (previous year Rs. 14.25 lacs) attributable to acquisition and construction of fixed assets have been capitalized during the year.

3.4 Based on the information presently available, there are no amounts due to any micro or small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006.

3.5 The Company had a joint venture with Granit Research Development S.A. of Switzerland for treatment of black liquor through a process "Lignin Precipitation System (LPS)" plant in joint venture company (hereinafter referred as JV) under the name of "Greencone Environs Private Limited". The Company had invested a sum of Rs. 129.83 Lacs in equity (49.62%) and had an outstanding unsecured loan of Rs. 600.00 Lacs as on 31 March 2010.

During the previous year, consequent to an arrangement with a party, the investment was sold at par value and the value of investment amounting to Rs. 129.83 lacs earlier provided for, was written back. The Company had also received back the entire unsecured loan of Rs. 600.00 lacs during the previous year.

Pursuant to Accounting Standard (AS) 27 - Financial Reporting on interest in Joint Venture, the disclosures relating to the joint-venture viz., Greencone Environs Private Limited are as follows:

(a) As at 31 March 2012 and 31 March 2011, the Company did not have any interest in Greencone Environs Private Limited.

3.7 Segment information

The Company is engaged in the business of manufacture and sale of paper, primarily in India and nearby markets, which is a primary segment for the Company and constitutes a single business segment. Accordingly, disclosure requirements of Accounting Standard 17 "Segment Reporting", prescribed by the Companies (Accounting Standards) Rules, 2006 in relation to segment reporting is not given.

3.8 Leases

Operating leases

The Company has taken office premises and residential premises under operating lease agreements.

Lease payments charged during the year in Statement of Profit and Loss aggregate Rs. 29.68 lacs (previous year Rs. 28.20 lacs). Finance leases

The Company has, during the previous year, acquired computer equipment under finance lease which had been capitalized as a part of computers under fixed assets. At the end of lease period, the Company has the option either to terminate the lease and return the asset or renew the lease.

3.10 Disclosures pursuant to Accounting Standard 15 on "Employee Benefits"

Defined contribution plans

The Company's provident fund scheme and employee state insurance (ESI) fund scheme are defined contribution plans. The Company has recorded expenses of Rs. 121.19 lacs (previous year Rs. 101.90 lacs) under provident fund scheme and Rs.44.18 lacs (previous year Rs. 36.87 lacs) under ESI scheme. These have been included in note 2.5 Employees benefits expenses, in the Statement of Profit and Loss.

Defined benefit plans

Gratuity

Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act or as per the Company's Scheme, whichever is more beneficial.

The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

The salary escalation rate is based on estimates of salary increases, which take into account inflation, promotion and other relevant factors.

* Gratuity and leave encashment have been provided on an actuarial basis for the Company as a whole. Accordingly, separate figures are not available on an individual basis and, thus, not included.

The management remuneration paid/accrued during the year is in excess of the prescribed limits, by Rs. 29.06 lacs. The company has initiated an application for the approval with the Central Government, which is expected shortly.

3.23 In respect of major debtors, creditors and others balance confirmations have been received by the auditors from few parties. The balances of other parties have been incorporated in the financial statements at the value as per the books of account. The Company has considered them as good and necessary provisions have been made in respect of debtors/advances where recovery is considered doubtful.

3.24 The financial statement for the year ended 31 March 2011 had been prepared as per the then applicable pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of the revised schedule VI under the Companies Act, 1956, the financial statement for the year have been prepared as per revised schedule VI. Accordingly, the previous year figures have been classified to conform this year classification. The adoption of revised schedule VI for the previous year figures does not impact the recognition and measurement principles followed for the preparation of the financial statements.


Mar 31, 2010

1. Claims/demands against the company not acknowledged as debts and against which no provision has been made aggregate to Rs. 6,69,35,233/- (Previous YearRs. 10,61,41,071).

2. Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31s March, 2010 amounted to Rs.5,84,42,685/- (Previous Year Rs. 9,98,58,972/-).

3. Borrowing costs amounting to Rs, 2,70,60,179/- (Previous Year Rs. 6,62,09,921) attributable to acquisition and construction of fixed assets has been capitalized during the year.

4. The company has given a corporate guarantee of Rs. 720 lacs in favour of the State Bank of India (SBI) in consideration of their granting credit facilities of Rs. 720 lacs (term loan of Rs. 520 lacs and working capital facilities of Rs.200 lacs) to M/s Greencone Environs Pvt. Ltd. for setting up of a Lignin Precipitation System "LPS Project" at Sailakhurd for which the company is contingently liable. The working capital facilities were not availed by the company. The outstanding term loan as on 31.03.10 is Rs. 148.50 lacs.

5. There are no Micro, Small and Medium Enterprises to whom the company owes dues which are outstanding for more than 45 days as on the Balance Sheet date. The information required to be disclosed under the Micro, Small & Medium Enterprises Development Act, 2006, to be determined to the extent such parties have been identified on the basis of information available with the company. Accordingly the information as required under Micro, Small & Medium Enterprises Development Act, 2006 (MSMED) is not required to be provided.

6. The company received Rs. 100 lacs from the Ministry of New and Renewable Energy as Governments contribution against the capital outlay for installing a 10 MW Bio-mass Cogeneration Plant for the captive use of the company. As per Accounting Standard 12 and Accounting Policy followed by the company, the amount has been shown as a capital reserve which will neither be considered as deferred revenue nor will it be available for distribution as dividend.

7. The Auditors have issued letters of confirmation in duplicate to major debtors, creditors, depositors & others for confirming their balances. Balance confirmations have been received from major parties, except some parties whose outstanding are not material and some of whom are in dispute and/or under litigation with the Company. The balances of such parties have been incorporated in the financial statements at the value as per the books of account. The company, to the extent stated, has considered them as good and necessary provisions have been made in respect of debtors/advances under litigation and where recovery is considered doubtful.

8. The company has a joint venture with M/s Granit Recherche Developpement S.A. of Switzerland for treatment of black liquor through a process "Lignin Precipitation System (LPS)" plant in joint venture Company (hereinafter referred as JV) under the name of "M/s Greencone Environs Pvt. Ltd." The company has invested a sum of Rs. 1,29,83,000/- towards equity (49.62%) and given an unsecured loan of Rs 5,99,99,725/- as on 31.03.2010. The net worth of the JV has been eroded; and as an abundant caution, full provision for diminution in the value of investment has been made during the year. Pursuant to AS-27-"Financial Reporting on interest in Joint Venture", the disclosures relating to the joint-venture viz., M/s Greencone environs Pvt. Ltd. are as follows:

(a) The proportion of interest of the Company in the JV is by way of equity participation to the extent of 49.62%;

(c) The companys share of capital commitment in the JV as on 31st March, 2010 is Rs. Nil (previous year Rs. Nil).

(d) The companys share of contingent liabilities of the JV as on 31st March, 2010 is Rs. Nil (previous year Rs. Nil).

(e) There was no contingent liability outstanding as on 31 st March, 2010 in relation to the companys interest in the JValongwith the co-venturer.

9. Related Party Disclosure

A. Related Parties

(i) Key Managerial Personnel *Mr N K Bajaj, Chairman & Managing Director

Mr Pavan Khaitan, Managing Director

(ii) Associate Companies M/s Amrit Corp Ltd (ACL)

M/s Amrit Banaspati Company Ltd (ABCL)

M/s Esteem Finventures Ltd (Esteem)

M/s Greencone Environs Pvt Ltd (Greencone)

(iii) Entities/Parties over which key M/s Pooja Gases Pvt Ltd

managerial personnel are able to M/s Pushpak Finvest Pvt Ltd

exercise significant influence M/s United Holdings Pvt Ltd

* With effect from 16th July 2010, Mr. N. K. Bajaj ceased to be the Chairman & Managing Director.

10. Segment information

The Companys activities are covered in only one business segment i.e. manufacturing and selling of Writing & Printing Paper and therefore no segment information for the year ended 31st March, 2010 is required to be given.

11. Fixed Assets acquired under finance lease

Disclosure in respect of assets taken on lease under Accounting Standard AS-19 "Accounting for Leases" issued by the Institute of Chartered Accountants of India. (1) General description of thefinance lease

The Company has entered into finance lease arrangements for vehicles. Some of the significant terms and conditions of such leases are as follows:

Renewal for a further period on such terms and conditions as may be mutually agreed upon between lesser and the company.

Assets to be purchased by the company or the nominee appointed by the company at the end of the lease term.

Notes:

(a) The estimates of future salary increases, considered in actuarial valuation, takes into account the inflation, seniority, promotion and other relevant factors;

(b) The liability towards the earned leave for the year ended 31 st March, 2010, based on actuarial valuation amounting toRs. 17.09 lacs has been recognized in the profits loss account.

(c) The fair value of plan assets is Rs. 185.31 lacs which have been maintained with LIC policy (Rs. 109.84 lacs) and securities of Rs. 75.85 lacs transferred by the trust hitherto governed by Amrit Corp. Ltd. (Erstwhile Amrit Banaspati Co. Ltd. before scheme of arrangement). The securities will be encashed on maturity dates and funds will be deposited with LIC.

11. The previous years figures have been regrouped/re-arranged, wherever necessary, to make them comparable with the f igures for the current year.`

 
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