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Notes to Accounts of Mangalam Cement Ltd.

Mar 31, 2015

NOTE 1

Accounting Policies and Notes on Accounts for the year ended 31st March 2015.

1. (a) Pursuant to the enactment of Company

Act 2013, the Company revised its policy of providing depreciation in fixed assests effective from April 1, 2014 by depreciating carrying amount of fixed assets as on April 1, 2014 over the remaining useful life of the assets as per Schedule II as against at the rate and in the manner specified in Schedule XIV to the Companies Act 1956. Consequently,-

(i) Where the useful life is nil as on 1st April 2014 depreciation of Rs. 128.42 Lacs (Rs. 84.77 Lacs net of deffered tax) has been deducted from retained earnings.

(ii) Depreciation for the year is lower by Rs. 917.23 Lacs

(b) Depreciation for the year includes Rs. 8.91 Lacs (Previous year Rs. 8.91 Lacs) being depreciation on the increased amount of assets due to revaluation and an equivalent amount has been transferred from the Revaluation Reserve to the Statement of Profit & Loss.

2. Exceptional items of Rs. 343.21 Lacs represent interest on disputed U.P. entry tax for earlier year charged and collected by the commercial taxes department, U.P.

3. Contingent Liabilities and Commitments (to the extent not provided for)-

i. Contingent Liabilities:

(a) Claims against the Company not acknowledged as debts - (Rs. in Lacs) 31st March, 31st March, 2015 2014

Taxation Matters

- Direct tax 1949.26 1120.69

- Indirect tax 6360.44 6520.85

Others 1013.39 344.23

(b) The Jute Packaging (Compulsory use in Packing Commodities) Act 1987 was stayed by the Rajasthan High Court in 1997. However, the Jute Commissioner issued a show cause notice on 14.08.2002 for non- use of Jute Packaging Material. This has been challenged by the Company and the amount involved is not quantifiable.

4. The Board of Directors has proposed a dividend of Rs. 2 per equity shares of Rs. 10 each for the year ended 31st March 2015 and the total proposed dividend amounts to Rs. 533.88 Lacs and corporate dividend tax to be Rs. 108.68 Lacs.

5. Revenue expenditure on Research and Development amounting to Rs. 105.60 Lacs (Previous Year Rs. 317.35 Lacs) is shown in the Statement of Profit & Loss. Capital expenditure relating to Research and Development amounting to Rs. Nil (Previous Year Rs. 14.92 Lacs) has been included in fixed assets.

6. The Company is engaged only in the cement business and there are no separate reportable segments.

7. Previous year's figures have been regrouped and rearranged wherever necessary.




Mar 31, 2014

1. Depreciation for the year includes Rs. 8.91 lacs (Previous year Rs. 8.91 lacs) being depreciation on the increased amount of assets due to revaluation and an equivalent amount has been transferred from the Revaluation Reserve to the Statement of Profit & Loss.

2. Contingent Liabilities and Commitments (to the extent not provided for) -

i. Contingent Liabilities:

(a) Claims against the Company not acknowledged as debts -

(Rs in lacs) Particulars As at As at 31st March, 31st March, 2014 2013

Taxation patters

- Direct tax 1120.69 1628.55

- Indirect tax 6520.85 2685.05

Others 544.25 211.64

(b) The Jute Packaging (Compulsory use in Packing Commodities) Act 1987 was stayed by the Rajasthan High Court in 1997. However, the Jute Commissioner issued a show cause notice on 14.08.2002 for non-use of Jute Packaging (V^aterial. This has been challenged by the Company and the amount involved is not quantifiable.

3. The Board of Directors has proposed a dividend ofRs. 3 per equity shares ofRs. 10 each for the year ended 31st |V|ar 2014 and the total proposed dividend amounts to Rs. 800.81 lacs and corporate dividend tax to be Rs. 136.10 lacs.

4. Revenue expenditure on Research and Development amounting to Rs. 317.35 lacs (Previous year Rs. 284.27 lacs) is shown in the Statement of Profit & Loss. Capital expenditure relating to Research and Development amounting to Rs. 14.92 lacs (Previous yearRs. 40.06 lacs) has been included in fixed assets.

5. Employee Defined Benefits:

(a) Defined Contribution Plans

The Company has Recognised expenses towards the defined contribution plans as under:

6. Related party information:

Particulars

I- List of related parties

(a) Key Management Personnel

(b) Enterprise in which Key Management Personnel is able to exercise significant influence 31st March, 2014

(1) Shri A.V. Jalan

(2) Smt.Vidula Jalan

(1) Pilani Investment & Industrial Corporation Ltd.

(2) Vidula Consultancy Service Ltd.

(3) |V|angalam Timber Products Ltd.

(4) Aditya Marketing & Manufacturing Ltd.

31st March, 2013

(1) Shri A.V. Jalan

(2) Smt.Vidula Jalan

(1) Pilani Investments Industrial Corporation Ltd.

(2) Vidula Consultancy Service Ltd.

(3) Man9a^arn Timber Products Ltd.

(4) Aditya Marketing & Manufacturing Ltd.

Note: the amounts related to gratuity cannot be ascertained separately since they are included in the contribution in this respect made to the insurance company on a group basis for all the employees together. inclusive of service tax amounting to Current yearRs. 3.23 lacs, (Previous yearRs. 4.33 lacs)

7. (a) All Raw Materials consumed are indigenous, (b) Stores and spare parts consumed:


Mar 31, 2013

1. Depreciation for the year includes Rs. 8.91 lacs (Previous year Rs. 8.91 lacs) being depreciation on the increased amount of assets due to revaluation and an equivalent amount has been transferred from the Revaluation Reserve to the Statement of Profit & Loss.

2. Contingent Liabilities and Commitments (to the extent not provided for)-

i. Contingent Liabilities:

(a) Claims against the Company not acknowledged as debts - Differential of royalty on limestone Rs. 159.83 lacs (previous year Rs. 159.83 lacs), Disputed Cenvat and other excise claims Rs. 1483.38 lacs (previous year Rs. 1330.56 lacs), Disallowance of credit notes & differential tax on raw material (Sales Tax) etc. Rs. 4.08 lacs (previous year Rs. 4.08 lacs), Claims by customers and others Rs. 51.81 lacs (previous year Rs. 54.21 lacs), Income Tax matters Rs. 1628.55 lacs (previous year Rs. 531.95 lacs), Differential of Central Sales Tax Rs. 733.34 lacs (previous year Rs. 686.28 lacs), Haryana VAT matters Rs. 0.68 lacs (previous year Rs. 0.68 lacs), UP sales tax Rs. 0.43 lacs (previous year Rs. 0.43 lacs), UP Entry tax Rs. 450 lacs (previous year Rs. Nil), Interest Demanded on Deferment of VAT (Raj.) Rs. 11.12 lacs (previous year Rs. Nil).

(b) The Jute Packaging (Compulsory use in Packing Commodities) Act 1987 was stayed by the Rajasthan High Court in 1997.

However, the Jute Commissioner issued a show cause notice on 14th August, 2002 for non-use of Jute Packaging Material. This has been challenged by the Company and the amount involved is not quantifiable.

The Company has engaged competent professional advisors to defend its positions against all disputed claims/ notices and based on advice received no liabilities are expected to materialise.

3. The Board of Directors has proposed a dividend of Rs. 6 per equity shares of Rs. 10 each for the year ended 31st March, 2013 and the total proposed dividend amounts to Rs. 1601.63 lacs and corporate dividend tax to be Rs. 272.20 lacs.

4. Revenue Expenditure on Research and Development amounted to Rs. 284.27 lacs (Previous year Rs. 191.76 lacs) is shown in statement of Profit & Loss. Capital Expenditure relating to Research and Development amounting to Rs. 40.06 lacs (Previous year Rs. 76.64 lacs) has been included in fixed assets.

5. It is not possible to ascertain the quantum of accrual with reasonable certainty in respect of insurance, other claims and performance guarantees, the same are continued to be accounted on settlement basis.

6. (a) Capital work-in-progress includes machinery under installation and building and other assets under erection.

7. Previous year''s figures have been regrouped and rearranged wherever necessary.


Mar 31, 2012

1. Depreciation for the year includes Rs. 8.91 lacs (Previous year Rs. 9.10 lacs ) being depreciation on the increased amount of assets due to revaluation and an equivalent amount has been transferred from Revaluation Reserve to the Profit and Loss Account.

2. In view of the long delay in obtaining approval of Hon'ble High Court of Orissa and uncertainty, all essential and vital parameters considered in approving the scheme of amalgamation including fair basis, now resulting in unfavourable share exchange ratio, the scheme of amalgamation of Mangalam Timber Products Ltd (MTPL) with the company has been withdrawn.

3. Consequent to withdrawal of scheme of amalgamation interest free loan of Rs. 30 Crores advanced to MTPL has been converted into Inter-Corporate deposit repayable on demand with interest @12.5% p.a.

4. Contingent Liabilities and Commitments (to the extent not provided for)

i. Contingent Liabilities

(a) Claims against the Company not acknowledged as debts - Differential of royalty on limestone Rs. 159.83 lacs

(previous year Rs. 180.34 lacs), Disputed Cenvat and other excise claims Rs. 1330.56 lacs (previous year Rs. 1157.12 lacs), Disallowance of credit notes & differential tax on raw material (Sales Tax) etc. Rs. 4.08 lacs (previous year Rs. 9.72 lacs), Turnover tax Rs. Nil (previous year Rs. 3.13 lacs), Claims by customers and others Rs. 54.21 lacs (previous year Rs. 50.51 lacs), Income Tax matters Rs. 531.95 lacs (previous year Rs. 542.86 lacs), Differential of CST Rs. 686.28 lacs (previous year Rs. 639.22 lacs), Haryana VAT matters Rs. 0.68 lacs (previous year Rs. 0.68 lacs), UP sales tax Rs. 0.43 lacs (previous year Rs. Nil).

(b) Other money for which the company is contingently liable- The Jute Commissioner has issued a show cause notice dated 14th August, 2002 for non use of Jute Packaging Material as stipulated under the Jute Packaging Material (Compulsory use in Packing Commodities) Act 1987, which has been stayed by the Honorable Rajasthan High Court, Jodhpur. Liabilities on this account upto 30.06.1997 are presently not quantifiable.

5. Board of director has proposed a dividend of Rs. 6 per equity shares of Rs. 10 each for the year ended 31st May 2012 and total proposed dividend will be Rs. 1601.63 lacs and corporate dividend tax will be Rs. 259.82 lacs.

6. (a) During the year Rs. 6 lacs (Previous year Rs. Nil) has been received as Government Grant in the nature of "Grants Related to Specific Fixed Assets". This amount has been reduced from the cost of concerned Fixed Assets.

(b) Government grant received in the nature of "Grants related to Revenue" Rs. 1.58 lacs (Previous year Rs.2.49 lacs) reduced from the related expenditure.

7. Revenue Expenditure on Research and Development amounting to Rs. 191.76 lacs (Previous year Rs. 131.53 lacs) is shown under the head Research and Development Account (under relevant heads in the previous year). Capital Expenditure relating to Research and Development amounting to Rs. 76.64 lacs (Previous year Rs. 2.66 lacs) has been included in fixed assets.

8. (i) Pursuant the order dated 30th November, 2007 of the Hon'ble Rajasthan High Court reversal of deferred tax liability for the year Rs. 28.39 lacs (previous year Rs. 1164 lacs has been adjusted from securities premium account) has been credited to against Securities Premium Account.

9. It is not possible to ascertain the quantum of accrual with reasonable certainty in respect of insurance, other claims and performance guarantees, the same are continued to be accounted on settlement basis.

10. (a) Capital work-in-progress includes machinery under installation and building and other assets under erection.

11. Previous year's figures have been regrouped and rearranged wherever necessary.


Mar 31, 2010

1. Buildings, Plant and Machinery and Railway siding were revalued as on 1st January, 1988 by the valuer after considering useful life, quotations and R.B.I, indices, etc. As a result net book value of such assets was increased by Rs.2355.16 lacs which was transferred to revaluation reserve. Depreciation for the year" includes Rs. 9.17 lacs (Previous year Rs. 9.19 lacs) being depreciation on the increased amount of assets due to revaluation and an equivalent amount has been transferred from Revaluation Reserve to the Profit and Loss Account.

2. Contingent liabilities not provided for:

(i) Claims against the Company not acknowledged as debts:

(a) Differential of royalty on limestone Rs. 180.34 lacs (previous year Rs.180.34 lacs), (b) Disputed Cenvat and other excise claims Rs. 1100.60 lacs (previous year Rs.1017.53 lacs).

(c) differential tax on raw material (Sales Tax) etc. Rs. 9.72 lacs (previous year Rs. 9.72 lacs).

(d) Turnover tax Rs. 3.13 lacs (previous year Rs. 3.13 lacs), (e) Claims by customers and others Rs. 50.81 lacs (previous year Rs.87.79 lacs) (f) Income Tax matters Rs. 76.26 lacs (previous year Rs. 76.26 lacs), (g) Differential of CST Rs. 592.16 lacs (previous year Rs. 545.11 lacs), (h) Haryana VAT matters Rs. 0.68 lacs (previous year Nil).

(ii) The Jute Commissioner has issued a show cause notice dated 14.08.2002 for non use of Jute Packaging Material as stipulated under the Jute Packaging Material (Compulsory use in Packing Commodities) Act 1987, which has been stayed by the Honorable Rajasthan High Court, Jodhpur. Liabilities on this account upto 30.06.1997 are presently not quantifiable.

3. Estimated capital commitments outstanding Rs. 9457.70 lacs (previousyear Rs. 475.78 lacs) against which advance paid Rs. 4542.51 lacs (Previous year Rs. 115.15 lacs).

4. It is not possible to ascertain the quantum of accrual with reasonable certainty in respect of insurance, other claims and performance guarantees, the same are continued to be accounted on settlement basis.

5 (i) During the year the company has bought back 13,39,418 equity shares at value of Rs.1003.90 lacs (previous year 213560 equity shares at value of Rs.114.69 lacs) out of General Reserve till closure of the scheme on 30.07.2009. The shares bought back were extinguished and the share capital has been reduced to this extent and total nominal value of equity shares purchased Rs.133.94 lacs (Previous year Rs.21.36 lacs) have been transferred to Capital Redemption Reserve.

(ii) Consequent to above 1339418 equity shares which were bought back during the period 1st April 2009 to the date of record date did not carry dividend and provision of Rs.73.67 lacs for dividend and corporate dividend tax of Rs.12.52 lacs made as on 31.03.2009 on these shares has been written back during the year.

6, Maximum amount due at any time during the year from an officer of the Company under the head "Loans and Advances" is Rs. 0.77 lac (Previous year Rs.0.36 lac).

7. (i) Capital work-in-progress includes advance against capital orders, machinery under installation and building and other assets under erection.

8 The company is engaged only in cement business and there are no separate reportable segments as pei Accounting Standard 17.

9. Previous years figures have been regrouped and rearranged wherever necessary.

 
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