Mar 31, 2016
b Rights, preferences and restrictions attached to shares Equity Shares
The Company has one class of Equity Shares having par value of Rs 10/- per share. Each Shareholder is entitled to one vote per share and equal right for dividend. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts in proportion to their shareholding.
7.5% Non- cumulative Redeemable Preference Shares
7.5% Non- Cumulative Redeemable Preference shares of Rs.100/- each are redeemable at par within a period not exceeding nine years from date of allotment i.e. 10th October, 2012. In the event of liquidation, the preference shareholders are eligible to receive the paid up value of the preference share, if any out of the remaining assets of the Company in preference to equity shareholders. c The Company does not have any Holding company / ultimate Holding Company.
e No Equity shares have been reserved for issue under options and contracts/commitments for the sale of shares / disinvestment as at the Balance sheet date.
1. Royalty on wood had been increased by the Government of Odisha with retrospective effect from 1st April, 1988 vide its letter dated 2nd September, 1993 against which the Company had filed a writ petition before the Odisha High Court. The Odisha High Court vide its order dated 16th May, 1995 had upheld the writ petition of the Company. Government of Odisha had filed a Special Leave Petition before the Supreme Court. The Hon''ble Supreme Court vide its order dated 11th November, 2003 has dismissed the special leave petition filed by the Government of Odisha and upheld the decision of the Hon''ble High Court of Odisha passed in favour of the Company. The Hon''ble Supreme Court had also directed the Govt. of Odisha to implement the judgment of the Hon''ble High Court of Odisha expeditiously and in any case within a period of four months from the date of the order of the Supreme Court. Subsequently, Government of Odisha has lodged a claim for Rs.303.49 lacs (net of excess amount of royalty paid by the Company in earlier years) on the Company on account of alleged failure in taking up replantation in the area harvested by the Company. This claim has been denied by the Company. In terms of the Supreme Court judgment, the Company has lodged its claim with the Government of Odisha, the monetary value of which is much higher in comparison to the claim lodged by the Govt. of Odisha against the Company, to honour its commitments made to the Company as directed by the Hon''ble High Court of Odisha and upheld by the Hon''ble Supreme Court. The Management is of the view that no provision against the said demand is necessary, as no liability is likely to arise on this account and Rs.81.04 lacs paid in earlier year and included under advances recoverable has been considered good of recovery.
2. Government of Odisha has issued Demand Notice for Rs.1224.92 Lacs towards License fees, Import fees, Excise Duty, Pass fees, Application fees on import of Methanol into Odisha without obtaining license from competent authority from the year 2002-03 to 2008-09.
The Company has already taken license from concerned authorities and challenged above demand on the ground that as methanol is imported from other countries, provision of Odisha Excise (Methanol Alcohol) Rules 1976 are not applicable for use of Methanol as raw material.
The Company has obtained interim stay on above matter from the Hon''ble High Court of Odisha at Cuttack on 20.11.08, for Rs.847.00 Lacs and for Rs.223.57 Lacs furnished Indemnity Bond.
A further demand has been received for the year 2009-10 & 2010-11 totaling Rs.154.20 Lacs for which necessary documents has been submitted for signing of Indemnity Bond.
Pass fees paid for import of Methanol into Odisha amounting to Rs. 224.41 lacs for the year 2007-08, 2008-09, 2009-10, 2010-11 & 2011-12 has been shown as advance which is considered as good for recovery, since the management is of the view that no liability is likely to arise on this account in future.
3. Demand for Rs.18.15 Lacs (Previous year Rs.27.32 Lacs) against Delay payment Surcharge from Odisha State Electricity Board has not been accepted by the Company and the matter is under dispute. However, as a matter of abundant caution an equivalent amount has been provided for to take care of the liability, if any, in this respect.
4. SEGMENT INFORMATION
a. The Company operates in one segment only i.e. Medium Density Fibre Board and accordingly information required under Accounting Standard-17 issued by Central Government is not applicable.
b. In order to sustain long-term availability of firewood, principal raw material for the Company''s main product- Medium Density Fibre
Board, the Company is engaged in plantation under various schemes on the land owned by third parties. The Company''s role is to develop and supply seedlings to such third parties. Since development of seedlings is an integral part of plantation activity which is incidental to main activity of the Company, this operation has not been treated as a separate segment under Accounting Standard - 17 issued by Central Government.
5. Related party information as identified by the management as per Accounting Standard-18 on Related Party Disclosure issued by Central Government.
A) List of related parties:
i) Key Management Personnel:
1) Shri Tara Chand Sharma (01.04.2014 - 31.07.2015)
2) Shri Soumitra Kumar De ( 13.08.2015 - 31.03.2016)
ii) Enterprises over which significant influence exercised by Director :
Mangalam Cement Ltd.
6. Tax credit shall be allowed to the extent of amount of MAT paid in earlier years depending upon the profits earned by the Company in future years, in accordance with the provisions of Section 115JAA of the Income Tax Act, 1961.
7. In accordance with the license granted by the Government of Odisha in the year 1986, the Company had undertaken plantation in certain Government land which is ready for harvesting. Despite consistent follow up, the Government did not allow the Company to harvest the plantation on the pretext that the Special Leave Petition filed by the Government of Odisha was pending before the Hon''ble Supreme Court. The Hon''ble Supreme Court had dismissed the Special Leave Petition filed by the Government of Odisha in the royalty matter, as referred to in Note No.2 above. Since the Government of Odisha had not allowed the Company to harvest the plantation done by the Company even after the dismissal of Special Leave Petition filed by the Government of Odisha, the Company had no alternative but to file a Writ Petition in the High Court of Odisha seeking direction to allow the Company to harvest the plantation done by the Company on its own cost on Government land and also other stipulations relating to rate of royalty and weighment norms. The Hon''ble High Court of Odisha had vide its order dated 8th July, 2004, had without expressing any opinion with regard to merits of the contentions raised by the Company, disposed of the petition with a direction to the Government of Odisha and its various officers to dispose of the representations made to them strictly in accordance with law as expeditiously as possible preferably within a period of six months. In compliance with the directions from the Hon''ble High Court of Odisha, the Government has reiterated its claim for recovering cost of plantation on 244.825 hectares. The Company has denied its liability to any such claim.
8. (i) The Company has undertaken Plantation under Farm Forestry Scheme, inter-alia, in the State of Chhattisgarh in association with the forest department of Chhattisgarh Government. As per the agreement part sale consideration of supply of seedlings is to be paid to the Company at the time of harvesting of the plantation. Accordingly, part sale consideration of Rs. 73.38 Lacs relating to earlier years along with interest will be received by the Company at the time of harvesting. Based on the legal opinion obtained by the Company, the same will be accounted for in the year in which the plantation is harvested.
(ii) The Company has undertaken Plantation under Farm Forestry Scheme, inter-alia, in the State of Odisha in association with the Farmers by bipartite agreement. As per the agreement part sale consideration of supply of seedlings is to be paid to the Company at the time of harvesting of the plantation. Accordingly, part sale consideration of Rs. 2.22 Lacs relating to this year along with interest will be received by the Company at the time of harvesting. Based on the legal opinion obtained by the Company, the same will be accounted for in the year in which the plantation is harvested.
9. Pursuant to Rehabilitation Scheme Sanctioned by Board of Industrial & Financial Reconstruction (BIFR), the Company is exempted from payment of electricity duty on power consumed for a period of 10 years from the date of sanction of the scheme. BIFR has discharged the Company from the purview of Sick Industrial Companies (Special Provision) Act,1985.
Accordingly Rs. 197.75 Lacs being amount paid for the period from 1st April, 2000 to 31st March, 2008 and considered as income in earlier years have been shown as Other Advance under Long Term Advance.
Based on legal opinion obtained by the Company, all terms and conditions so far not implemented by respective agencies as stated in the Rehabilitation Scheme sanctioned by BIFR are still in force.
10. The Company''s CDM Project already been registered at UNFCCC and pending completion of certain procedural formalities 1764076 tCER unit has not yet been received.
11. Trade Receivables outstanding for more than six months from the date they are due for payment includes Rs. 337.82 Lacs (Previous Year Rs. 278.25 Lacs) which have become overdue. Legal and other persuasive steps have been taken for recovery of such debtors. Such debtors have been considered good and eventually recoverable. Accordingly, no provision against the same has been considered necessary.
12. EMPLOYEES BENEFIT
(I) Defined Benefit Plans Gratuity
The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme of the Gratuity Fund Trust, administered and managed by the Independent Board of Trustees, the Company first makes the payment to vested employees at retirement, death, incapacitation or termination of employment of an amount based on the respective employee''s salary and the tenure of employment and then gets the reimbursement from it. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation.
Leave Encashment
The Company makes the annual provision in the Statement of Profit and Loss for the leave liability on the basis of the actuarial valuation for the Leave encashment Scheme which is an unfunded Plan for the qualified employees.
(II) Defined Contribution Plans Provident Fund
The employees of the Company receive defined contribution for Provident Fund benefit. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the company make monthly contributions at specified percentage of the employee''s salary to the concerned Provident Fund Authorities. The Company has no liability to Fund the shortfall in the interest over the statutory rate declared by the Government.
Employees State Insurance
Both the employees and the Company make monthly contributions at specified percentage of the employee''s salary to the concerned ESI Authorities.
Other Defined contribution for Employee Benefits
The defined contribution for Employees State insurance, Leave Travel Allowance and Medical reimbursements are recognized on actual basis in the Statement of Profit & Loss in the year when the eligible employee actually renders the service.
The estimates of future salaries increases, considered in actuarial valuations, take in to account of inflation, seniority, promotion and other relevant factors such as supply and demand in employment market.
13. i) The Gratuity scheme is invested in a Group Gratuity policy offered by Life Insurance Corporation (LIC) of India. The information on the allocation of the fund into major asset classes and expected return on each major class are not readily available. The expected rate of return on plan assets is based on the assumed rate of return provided by the Company''s Actuary.
ii) The Leave Encashment scheme is invested in a Group Leave Encashment policy offered by Life Insurance Corporation (LIC) of India. The information on the allocation of the fund into major asset classes and expected return on each major class are not readily available. The expected rate of return on plan assets is based on the assumed rate of return provided by the Company''s Actuary.
14. DERIVATIVE INSTRUMENTS
The Company does not enter into any derivative instruments for trading or speculative purposes.
15. MICRO ENTERPRISES AND SMALL ENTERPRISES
There are no Micro and Small enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have identified on the basis of information available with the Company. This has been relied upon by the auditors
16. Previous year''s figures have been regrouped/rearranged wherever considered necessary.
Mar 31, 2015
1.Rights, preferences and restrictions attached to shares Equity Shares
The Company has one class of Equity Shares having par value of Rs 10/-
per share. Each Shareholder is entitled to one vote per share and equal
right for dividend. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the
Company after payment of all preferential amounts in proportion to
their shareholding.
7.5% Non-cumulative Redeemable Preference Shares
7.5% Non- Cumulative Redeemable Preference shares of Rs.100 each are
redeemable at par within a period not exceeding nine years from the
date of allotment i.e 10th October 2012. In the event of liquidation,
the preference shareholders are eligible to receive the paid up value
of the preference share, if any out of the remaining assets of the
Company in preference to equity shareholders.
2. The Company does not have any Holding company / ultimate Holding
Company.
3. No Equity shares have been reserved for issue under options and
contracts/commitments for the sale of shares / disinvestment as at the
Balance Sheet date.
4. Disclosure to Financial Statements
(Rs. in lacs)
31ST MARCH, 31ST MARCH,
2015 2014
A. Contingent liabilities not provided
for in respect of :
a) Sales Tax matters pending in appeal 480.31 483.54
b) Entry Tax matters pending in appeal 47.53 47.53
c) Income Tax matter pending in appeal 70.28 70.28
d) Excise/Service Tax matters as under :
i) Excise matters pending in appeal 135.82 135.82
ii) Service Tax on Outward Freight 52.21 52.21
e) State Excise matters pending in appeal 1,224.92 1,224.92
f) Bank guarantees given in favour of District
Magistrate and Collector Nabarangpur and
remaining outstanding 5.00 5.00
g) Demand of Electricity Duty raised by Southern
Electricity Supply Company of Odisha Ltd.
for the period from April, 2008 to J
anuary, 2011 70.53 70.53
(part of BIFR period). [Also refer
Note No 2.26(10)]
B. Royalty on wood had been increased by the Government of Odisha with
retrospective effect from 1st April, 1988 vide its letter dated 2nd
September, 1993 against which the Company had filed a writ petition
before the Odisha High Court. The Odisha High Court vide its order
dated 16th May, 1995 had upheld the writ petition of the Company.
Government of Odisha had filed a Special Leave Petition before the
Supreme Court. The Hon'ble Supreme Court vide its order dated 11th
November, 2003 has dismissed the special leave petition filed by the
Government of Odisha and upheld the decision of the Hon'ble High Court
of Odisha passed in favour of the Company. The Hon'ble Supreme Court
had also directed the Govt. of Odisha to implement the judgement of the
Hon'ble High Court of Odisha expeditiously and in any case within a
period of four months from the date of the order of the Supreme Court.
Subsequently, Government of Odisha has lodged a claim for Rs.303.49
lacs (net of excess amount of royalty paid by the Company in earlier
years) on the Company on account of alleged failure in taking up
replantation in the area harvested by the Company. This claim has been
denied by the Company. In terms of the Supreme Court judgement, the
Company has lodged its claim with the Government of Odisha, the
monetary value of which is much higher in comparison to the claim
lodged by the Govt. of Odisha against the Company, to honour its
commitments made to the Company as directed by the Hon'ble High Court
of Odisha and upheld by the Hon'ble Supreme Court. The Management is of
the view that no provision against the said demand is necessary, as no
liability is likely to arise on this account and Rs.81.04 lacs paid in
earlier year and included under advances recoverable has been
considered good of recovery.
C. Government of Odisha has issued Demand Notice for Rs.1224.92 Lacs
towards License fees, Import fees, Excise Duty, Pass fees, Application
fees on import of Methanol into Odisha without obtaining license from
competent authority from the year 2002-03 to 2010-11.
The Company has already taken license from concerned authorities and
challenged above demand on the ground that as methanol is imported from
other countries, provision of Odisha Excise (Methanol Alcohol) Rules
1976 are not applicable for use of Methanol as raw material.
The Company has obtained interim stay on above matter from the Hon'ble
High Court of Odisha at Cuttack on 20.11.08, for Rs.847.00 Lacs and for
Rs.223.57 Lacs furnished Indemnity Bond.
A further demand has been received for the year 2009-10 & 2010-11
totaling Rs.154.20 lacs for which necessary documents has been
submitted for signing of Indemnity Bond.
Pass fees paid for import of Methanol into Odisha amounting to Rs.
224.41 lacs for the year 2007-08, 2008-09, 2009-10 , 2010-11 & 2011-12
has been shown as advance which is considered as good for recovery,
since the management is of the view that no liability is likely to
arise on this account in future.
D. Demand for Rs.27.32 Lacs against Delay payment Surcharge from
Odisha State Electricity Board has not been accepted by the Company and
the matter is under dispute. However, as a matter of abundant caution
an equivalent amount has been provided for to take care of the
liability, if any, in this respect.
5. SEGMENT INFORMATION
a. The Company operates in one segment only i.e. Medium Density Fibre
Board and accordingly information required under Accounting Standard-17
issued by Central Government is not applicable.
b. In order to sustain long-term availability of firewood, principal
raw material for the Company's main product- Medium Density Fibre
Board, the Company is engaged in plantation under various schemes on
the land owned by third parties. The Company's role is to develop and
supply seedlings to such third parties. Since development of seedlings
is an integral part of plantation activity which is incidental to main
activity of the Company, this operation has not been treated as a
separate segment under Accounting Standard - 17 issued by Central
Government.
6. Related party information as identified by the management as per
Accounting Standard-18 on Related Party Disclosure issued by Central
Government.
A) List of related parties:
Party Relation
i) Key Management Personnel
Shri Tara Chand Sharma Manager
(Appointed w.e.f. 14.05.2014)
ii) Enterprises over which significant
influence exercised by Director:
Mangalam Cement Ltd. Smt. Vidula Jalan
7. Tax credit shall be allowed to the extent of amount of MAT paid in
earlier years depending upon the profits earned by the Company in
future years, in accordance with the provisions of Section 115JAA of
the Income Tax Act, 1961.
8. In accordance with the license granted by the Government of Odisha
in the year 1986, the Company had undertaken plantation in certain
Government land which is ready for harvesting. Despite consistent
follow up, the Government did not allow the Company to harvest the
plantation on the pretext that the Special Leave Petition filed by the
Government of Odisha was pending before the Hon'ble Supreme Court. The
Hon'ble Supreme Court had dismissed the Special Leave Petition filed by
the Government of Odisha in the royalty matter, as referred to in Note
No.2 above. Since the Government of Odisha had not allowed the Company
to harvest the plantation done by the Company even after the dismissal
of Special Leave Petition filed by the Government of Odisha, the Company
had no alternative but to file a Writ Petition in the High Court of
Odisha seeking direction to allow the Company to harvest the plantation
done by the Company on its own cost on Government land and also other
stipulations relating to rate of royalty and weighment norms. The
Hon'ble High Court of Odisha had vide its order dated 8th July, 2004,
had without expressing any opinion with regard to merits of the
contentions raised by the Company, disposed of the petition with a
direction to the Government of Odisha and its various officers to
dispose of the representations made to them strictly in accordance with
law as expeditiously as possible preferably within a period of six
months. In compliance with the directions from the Hon'ble High Court of
Odisha, the Government has reiterated its claim for recovering cost of
plantation on 244.825 hectares. The Company has denied its liability
to any such claim.
9.(i) The Company has undertaken Plantation under Farm Forestry Scheme,
inter-alia, in the State of Chhattisgarh in association with the forest
department of Chhattisgarh Government. As per the agreement part sale
consideration of supply of seedlings is to be paid to the Company at
the time of harvesting of the plantation. Accordingly, part sale
consideration of Rs. 73.38 lacs relating to earlier years along with
interest will be received by the Company at the time of harvesting.
Based on the legal opinion obtained by the Company, the same will be
accounted for in the year in which the plantation is harvested.
(ii) The Company has undertaken Plantation under Farm Forestry Scheme,
inter-alia, in the State of Odisha in association with the Farmers by
bipartite agreement. As per the agreement part sale consideration of
supply of seedlings is to be paid to the Company at the time of
harvesting of the plantation. Accordingly, part sale consideration of
Rs. 0.96 lacs relating to this year along with interest will be
received by the Company at the time of harvesting. Based on the legal
opinion obtained by the Company, the same will be accounted for in the
year in which the plantation is harvested.
(iii) Company has entered into a tripartite agreement under VSS (Vana
Surakhya Samiti) scheme comprising Company, Farmer and Forest Dept. As
per the said agreement the Company will identify Farmers, their land
and sell the high quality Seedlings to them as well as provide technical
assistance till 4 to 5 years and will buy back the plantation after that
at the rate finalized by CPT (Cluster Plantation Team). This will help
the Company in procuring Raw Materials at easy and convenient mode.
10. Pursuant to Rehabilitation Scheme sanctioned by Board of
Industrial & Financial Reconstruction (BIFR), the Company is exempted
from payment of electricity duty on power consumed for a period of 10
years from the date of sanction of the scheme. BIFR has discharged the
Company from the purview of Sick Industrial Companies (Special
Provision) Act,1985. Accordingly Rs. 197.75 Lacs being amount paid for
the period from 1st April, 2000 to 31st March, 2008 and considered as
income in earlier years have been shown as Other Advance under Long
Term Advance. Based on legal opinion obtained by the Company, all
terms and conditions so far not implemented by respective agencies as
stated in the Rehabilitation Scheme sanctioned by BIFR are still in
force.
11. The Company's CDM Project already been registered at UNFCCC and
pending completion of certain procedural formalities tCER unit has not
yet been received
12. Trade Receivables outstanding for more than six months from the
date they are due for payment includes Rs.288.19 Lacs (Previous Year
Rs.213.72 Lacs) which have become overdue. Legal and other persuasive
steps have been taken for recovery of such debtors. Such debtors have
been considered good and eventually recoverable. Accordingly, no
provision against the same has been considered necessary.
13. EMPLOYEES BENEFIT
(I) Defined Benefit Plans Gratuity
The Company provides for gratuity, a defined benefit retirement plan
covering eligible employees. As per the scheme of the Gratuity Fund
Trust, administered and managed by the Independent Board of Trustees,
the Company first makes the payment to vested employees at retirement,
death, incapacitation or termination of employment of an amount based
on the respective employee's salary and the tenure of employment and
then gets the reimbursement from it. Vesting occurs upon completion of
five years of service. Liabilities with regard to the Gratuity Plan are
determined by actuarial valuation.
Leave Encashment
The Company makes the annual provision in the Statement of Profit and
Loss for the leave liability on the basis of the actuarial valuation
for the Leave Encashment Scheme which is an unfunded plan for the
qualified employees.
(II) Defined Contribution Plans
Provident Fund
The employees of the Company receive defined contribution for Provident
Fund benefit. Aggregate contributions along with interest thereon are
paid at retirement, death, incapacitation or termination of employment.
Both the employees and the company make monthly contributions at
specified percentage of the employee's salary to the concerned
Provident Fund Authorities. The Company has no liability to Fund the
shortfall in the interest over the statutory rate declared by the
Government.
Employees State Insurance
Both the employees and the Company make monthly contributions at
specified percentage of the employee's salary to the concerned ESI
Authorities. Other Defined contribution for Employee Benefits
The defined contribution for Employees State Insurance, Leave Travel
Allowance and Medical Reimbursements are recognised on actual basis in
the Statement of Profit & Loss in the year when the eligible employee
actually renders the service.
14. i) The Gratuity scheme is invested in a Group Gratuity policy
offered by Life Insurance Corporation (LIC) of India.The information on
the allocation of the fund into major asset classes and expected return
on each major class are not readily available. The expected rate of
return on plan assets is based on the assumed rate of return provided
by the Company's Actuary.
ii) The Leave Encashment scheme is invested in a Group Leave Encashment
policy offered by Life Insurance Corporation (LIC) of India. The
information on the allocation of the fund into major asset classes and
expected return on each major class are not readily available. The
expected rate of return on plan assets is based on the assumed rate of
return provided by the Company's Actuary.
15. DERIVATIVE INSTRUMENTS
The Company does not enter into any derivative instruments for trading
or speculative purposes.
16. MICRO ENTERPRISES AND SMALL ENTERPRISES
There are no Micro and Small enterprises, to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March,
2015. This information as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006 has been determined
to the extent such parties have identified on the basis of information
available with the Company. This has been relied upon by the auditors
17. Previous year's figures have been regrouped/rearranged wherever
considered necessary.
Mar 31, 2014
[Rs. in lacs]
31ST MARCH, 2014 31ST MARCH, 2013
1. Contingent liabilities not provided far in respect of:
a) Sales Tax matters pending
to appeal 483.54 1,295.46
b) Entry Tax matters pending
in appeal 47.53 47.53
c) Income Tax matter pending
in appeal 70.28 70.23
d) Excise/Serwice Tax matters as under;
i] Excise matters pending
in appeal 135.62 135.82
ii) Service Tax on Outward Freight 52.21 52.21
e) State Excise matters pending
In appeal 1,224.92 1,070.72
f) Bank guarantees given in
favour of District Magistrate
and Collector Nabarangpurahd
remaining outstanding 5.00 5.00
g> Demand of Electricity Duty
raised by Southern
Electricity Supply Company of
Odisha Ltd. for the period from
April, 20Q8 to January, 2011 70.53 70,53
[part of BIFB period).
[{Also refer Note No. 2.27(11)]
2, Royalty on wood had been increased by the Government of Odisha with
retrospective effect from 1st April, 1988 vide its letter dated 2nd
September, 1993 against which the Company had filed a writ petition
before the Odisha High Court. The Odisha High Court vide Its order
dated 16th May, 1995 had upheld the writ petition of the Company,
Government of Odisha had filed a Special Leave Petition before the
Supreme Court, The Hon''ble Supreme Court vide its order dated ilth
November, 2003 has dismissed the special leave petition filed by the
Government of Odisha apd upheld the decision of the Hon''ble High Court
of Odisha passed in favour of the Company. The Hon''ble Supreme Court
had also directed the Govt, of Odisha to implement the Judgement of the
Hqn''ble High Court of Odisha expeditiously and in any C3se within a
period of four months from the date of the order of the Supreme
Court/Subsequently, Government of Odisha has lodged a claim for
Rs.303.49 lacs [net of excess amount of royalty paid by the Company In
earlier years) on the Company on account of alleged failure in taking
up replantation in the area harvested by the Company. This claim has
been denied by the company. In terms of the Supreme Court judgement,
the Company has lodged its claim with the Government of Odisha, the
monetary value of which Is much higher In comparison to the dairh
lodged by the Govt, of Odisha against the company, to honour Its
commitments made to the Company as directed by the Hon''ble High Court
of Odisha and upheld by the Hon''ble Supreme Court. The Management Is of
the view that no provision against the said demand Is necessary, as no
liability is likely to arise on this account and Rs.81.CM lacs paid in
earlier year and included under advances recoverable has been
considered good oi recovery
3, Government of Odisha has issued Demand Notice for Rs.1070.72 Lacs
towards Licence fees, Import fees, Excise Duty, Pass fees, Application
fees on Import of Methanol into Odisha without obtaining licence from
competent authority for the year 2002-03 to 2008-09.
The Company, has already taken license from concerned authorities and
challenged above demand on the ground thai as methanol is in ter-alla
Imported from other countries, provision of Odisha Excise (Methanol
Alcohol) Rules 1976 are not applicable for use of Methanol as raw
material.
The Company has obtained interim stay on above matter from the Hon''ble
High Court of Odisha at Cuttack on 20.11.08, for Rs.847.00 Lacs &
Rs.223.57 Lacs nas furnished Indemnity tlond.
A further demand has been received for the year 2009-10 & 2010-11
totaling Rs.lS4.20 lacs for which necessary documents have been
submitted for execution of Indemnity Bond.
Pass fees paid for Import of Methanol Into Odislm amounting to
Rs.224.41 lacs for the year 2007-08, 2008-09, 2009-10, 2010-11 &
2011-12 has been shown as advance which is considered as good for
recovery, since the management is of the view that ho liability is
likely to arise on this account in future.
4. Demand for Rs.27.32 Lacs against "Delayed payment Surcharge (DPS)"
from Odisha State Electricity Board has not been accepted by the
Company and the matter is under dispute. However, as a matter of
abundant caution an equivalent amount has been provided for to take
care of the liability, If any, in this respect.
5. SEGMENT INFORMATION
a) The Company operates inane segment only i.e. Medium density Fibre
Board and accordingly Information required under Accounting Standard-17
issued by Central Government is not applies ble.
b) In order to sustain long-term availability of firewood, principal
raw material for the Company''s main product- Medium Density Fibre
Board, the Company is engaged in plantation under various schemes on
the l3nd owned by third parties. The Company''s role is to develop and
supply seedlings to such third parties. Since development of seedlings
is an integral part of plantation activity which is incidental to main
activity of the Company, this operation has not been treated as a
separate segment under Accounting Standard - 17 issued by Central
Government,
6, Tax credit shall be allowed to the extent of amount of MAT paid In
earlier years depending upon the profits earned by the Company in
future years, in accordance with the provisions of Section 115JAA of
the Income Tax Act, 1961.
7, Salaries and Wages aggregating to Rs.27.49 Lacs (Previous year
Rs.26.11 Lacs) identifiable with forest operation have been allocated
directly to respective functional account heads Instead of debiting to
primary heads bf account.
8, |n accordance with the licence granted by the Government of Odisha
in the year 1386, the Company had undertaken plantation In certain
Government land which is ready for harvesting. Despite consistent
follow up, the Government did not allow the Company to harvest the
plantation on the pretext that the Special Leave Petition filed by the
Government of Odisha was pending before the Hon''ble Supreme Court. The
Hon''ble Supreme Court had dismissed the Special Leave Petition filed by
the Government of Odisha in the royalty matter, as referred to in Note
No.2 above. Since the Government of Odisha bad not allowed the Company
to harvest the plantation done by the Company even after the dismissal
of Special Leave Petition filed by the Government of Odisha, the
Company had no alternative but to file a Writ Petition In the Nigh
Court of Odtsha seeking direction to allow the Company to harvest the
plantation done hy the Company on its own cost on Government land and
also other stipulations relating to rate of royalty and weighrrtent
norms. The Hon''ble High Court of Odisha had vide its order dated 8th
July, 2004, had without expressing any opinion with regard to merits of
the contentions raised bythe company, disposed of the petition with a
direction to the Government of Odisha and its various officers to
dispose of the representations made to them strictly In accordance with
law as expeditiously as possible preferably within a period of six
months. In compliance with the directions from the Hon''ble High Court
of Odisha, the Government has reiterated its claim for recovering cost
of plantation on 244.825 hectares. The Company has denied its liability
to any such claim.
9- (i) The Company has undertaken Plantation under Farm Forestry
Scheme, inier-alia, in the State of Chhattisgarh in association with
the forest department of Chhattisgarh Government. As per the agreement
pari sale consideration of supply of seedlings is to be paid to the
Company at the time of harvesting of the plantation, Accordingly, part
sale consideration of Rs. 73.38 lacs relating to previous years along
with interest will be received by the company at the time of
harvesting. Based on the legal opinion obtained by the company the same
will be accounted for in the year in which the plantation Is harvested.
(ii) The Company has undertaken Plantation under Farm Forestry Scheme,
inter-alla, in the State of Odisha in association with the Farmers by
bipartite agreement. As per the agreement part sale consideration of
supply of seedlings is to be paid to the Company at the time of
harvesting of the plantation. Accordingly, pari, sale consideration of
Rs. 0.96 lac relating to this year along with interest will be received
by the company at the time of harvesting. Based on the legal opinion
obtained by the company, the same will be accounted for in the year in
which the plantation is harvested.
(iii) During the year company has entered into a tripartite agreement
under VSS (Vana Surakhya Samiti) scheme comprising Company, Farmer and
Forest Dept. As per the said agreement company will identify Farmers.
their land and sell the high quality Seedlings to them as well as
provide technical assistance till 4 to 5 years 3nd will buy back the
plantation after that at the rate finalized by CPT (Cluster Plantation
Team). This will help company in procuring Raw Materials at easy and
convenient mode,
10. Pursuant to Rehabilitation Scheme sanctioned by Board of
Industrial & Financial Reconstruction {B1FR), the Company Is exempted
from payment of electricity duty on power consumed for a period of 10
years from the date of sanction of the scheme. BIFR has discharged the
company from the purview o'' Sick industrial Companies (Special
Provision) Act,1985.
Accordingly Rs, 197.75 Lacs being amount paid for tfie period from 1st
April, 2000 to 31st March, 2008 and considered as income in earlier
years have been shown as Other Advance under Long Term Advance.
Based on legal opinion obtained by the company, all terms and
conditions so far not implemented by respective agencies as stated In
the Rehabilitation Scheme sanctioned by BIFRare still in force.
11. The Company''sCDM Project h3salready been registered at UNFCCC and
pending completion of certain procedural formalities tCER units has not
yet been received.
12. Trade receivables outstanding for more than six months from the
date they are due for payment Includes Rs. 213.72 Lacs (Previous Year
Rs.120.99 Lacs) which have become overdue. Legal and other persuasive
steps have been taken for recovery of such receivables. These
receivables have been considered good and eventually recoverable.
Accordingly, no provision against the same has been considered
necessary.
13. EMPLOYEES BENEFIT
(I) Defined Benefit Wans
Gratuity
The Company provides gratuity, a defined benefit plan (the ''Gratuity
Plan'') covering eligible employees in accordance with the Payment of
Gratuity Act, 1972. As per ihe scheme of the Gratuity FundTrusl,
administered and managed by the Independent Board of Trustees, the
Company first makes the payment to vested employees at retirement,
death, Incapacitation or termination of employment of an amount, based
on the respective employee''s salary and the tenure of employment and
then gets the reimbursement from it. Vesting occurs upon completion of
five years of service. The Company''s liability is provided and funded
on the basis of year end Actuarial Valuation [using the Projected Unit
Credit method). Actuarial losses/gains are recognised in the Profit and
Loss Statement in the year in which they arise.
Leave Encashment and Compensated Absences
Accumulated compensated absences which are expected to be availed or
encashed within 12 months from the year end are treated as short term
employee benefits. The obligation towards the same is measured at the
expected cost of accumulating compensated absences as the additional
amount expected to be paid as a result of the unused entitlements as at
the year end.
Accumulated compensated absences which are expected to be availed or
encashed beyond 12 months from the year end are treated as other long
term employee benefits. The Company''s liability is actuarially
determined (using the Projected Unit Credit method} at the end of each
year. Actuarial losses/gains are recognised in the Profit and Loss
Statement In the year in which they arise.
(II) Defined Contribution Plans
Provident Fund
Contribution towards provident fund is made to the regulatory
authorities, where the Company has no further obligations. Such
benefits are classified as defined contribution schemes as the Company
does not carry any further obligations, apart from the contributions
made on a monthly basis.
Superannuation Fund
The Company has the Superannuation Scheme for the executive cadre of
employees viz President, Senior Vice President and Vice President, who
has completed 5 years of continuous service. The Company makes the
defined contribution on annual basis for the eligible employees to the
Trust fund, which is administered and managed by the independenl Board
of Trustees. The Company forwards the settlement request of the vested
employees at retirement, death, incapacitation to the fund. Fund makes
the payment of the commuted value arid buys the annuity for the
uncommuted credit balance of the concerned members.This year no
executive is entitled under thisscheme.
Employees State Insurance
Contribution to Central Government administered Employees'' State
Insurance Scheme for eligible employees is recognised as charge in
Profit and Loss Statement In the year in which they arise.
14. i) The Gratuity scheme is invested in a Group Gratuity policy
offered by Life Insurance Corporation (LIC) of India. The information
on the allocation of the fund Into major asset classes and expected
return on each major class are not readily available. The expected rate
of return on plan assets Is based on the assumed rate of return
provided by company''s Actuary.
ii) The Leave Encashment scheme Is Invested In a Group Leave Encashment
policy offered by life Insurance Corporation (tlC) of India. The
Information on the allocation of the fund into major asset classes and
expected return on each major class are not readily available. The
expected rate of return on ptan assets is based on the assumed rate of
return provided by company''s Actuary,
15. DERIVATIVE INSTRUMENTS
The Company does not enter into any derivative instruments for trading
or speculative purposes.
16. MICRO ENTERPRISES AND SMALL ENTERPRISES
There are no Micro and Small enterprises to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March.
2014. This information as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006 has been determined
to the extent such parties have identified on the basis of Information
available with the Company. This has been relied upon hy the auditors.
17. Figures are expressed in Rupees In Lacs.
18. Previous year''s figures have been regrouped / rearranged wherever
considered necessary.
Mar 31, 2013
Note 1.1 Disclosure to Financial Statements
(Rs. in lacs)
31ST MARCH,
2013 31ST MARCH,
2012
1. Contingent liabilities not
provided for in respect of :
a) Sales Tax matters pending
in appeal 1,295.46 1,356.37
b) Entry Tax matters pending in appeal 47.53 47.53
c) Income Tax matter pending in appeal 70.28
d) Excise/Service Tax matters as under :
i) Excise matters pending in appeal 135.82 135.82
ii) Service Tax on Outward Freight 52.21 52.21
e) State Excise matters pending
in appeal 1,070.72 1,070.72
f) Bank guarantees given in favour
of District Magistrate and Collector
Nabarangpur and
remaining outstanding 5.00 5.00
g) Demand of Electricity Duty raised
by Southern Electricity Supply
Company of Odisha Ltd. for the
period from April, 2008 to January, 2011 70.53 70.53
(part of BIFR period). (Also refer Note No. 11)
2. Royalty on wood had been increased by the Government of Odisha with
retrospective effect from 1st April, 1988 vide its letter dated 2nd
September, 1993 against which the Company had filed a writ petition
before the Odisha High Court. The Odisha High Court vide its order
dated 16th May, 1995 had upheld the writ petition of the Company.
Government of Odisha had filed a Special Leave Petition before the
Supreme Court. The Hon''ble Supreme Court vide its order dated 11th
November, 2003 has dismissed the special leave petition filed by the
Government of Odisha and upheld the decision of the Hon''ble High Court
of Odisha passed in favour of the Company. The Hon''ble Supreme Court
had also directed the Govt. of Odisha to implement the judgement of the
Hon''ble High Court of Odisha expeditiously and in any case within a
period of four months from the date of the order of the Supreme Court.
Subsequently, Government of Odisha has lodged a claim for Rs.303.49
lacs (net of excess amount of royalty paid by the Company in earlier
years) on the Company on account of alleged failure in taking up
replantation in the area harvested by the Company. This claim has been
denied by the company. In terms of the Supreme Court judgement, the
Company has lodged its claim with the Government of Odisha, the
monetary value of which is much higher in comparison to the claim
lodged by the Govt. of Odisha against the company, to honour its
commitments made to the Company as directed by the Hon''ble High Court
of Odisha and upheld by the Hon''ble Supreme Court. The Management is of
the view that no provision against the said demand is necessary, as no
liability is likely to arise on this account and Rs.81.04 lacs paid in
earlier year and included under advances recoverable has been
considered good of recovery.
3. Government of Odisha has issued Demand Notice for Rs.1070.72 Lacs
towards Licence fees, Import fees, Excise Duty, Pass fees, Application
fees on import of Methanol into Odisha without obtaining licence from
competent authority from the year 2002-03 to 2008-09.
The Company, after obtaining licence from relevant authorities, has
challenged above demand on the ground that as methanol is imported from
other countries, provision of Odisha Excise (Methanol Alcohol) Rules
1976 are not applicable for use of Methanol as raw material.
The Company has obtained interim stay on above matter from the Hon''ble
High Court of Odisha at Cuttack on 20.11.08, for Rs.847.00 Lacs &
Rs.223.57 Lacs furnished under Indemnity Bond.
Pass fees paid for import of Methanol into Odisha amounting to Rs.
224.41 lacs for the year 2007-08, 2008-09, 2009-10, 2010-11 & 2011-12
has been shown as advance which is considered as good for recovery,
since the management is of the view that no liability is likely to
arise on this account in future. There is no import of methnol during
the year 2012- 13.
4. Demand for Rs.27.32 Lacs against Delay payment Surcharge from
Odisha State Electricity Board has not been accepted by the Company and
the matter is under dispute. However, as a matter of abundant caution
an equivalent amount has been provided for to take care of the
liability, if any, in this respect.
5. SEGMENT INFORMATION
a) The Company operates in one segment only i.e. Medium Density Fibre
Board and accordingly information required under Accounting Standard-17
issued by Central Government is not applicable.
b) In order to sustain long-term availability of firewood, principal
raw material for the Company''s main product- Medium Density Fibre
Board, the Company is engaged
in plantation under various schemes on the land owned by third parties.
The Company''s role is to develop and supply seedlings to such third
parties. Since development of seedlings is an integral part of
plantation activity which is incidental to main activity of the
Company, this operation has not been treated as a separate segment
under Accounting Standard  17 issued by Central Government.
6. Related party information as identified by the management as per
Accounting Standard-18 on Related Party Disclosure issued by Central
Government.
A) List of related parties:
Party Relation
i) Key Management Personnel
Shri Ashok Purohit Manager
ii) Enterprises over which significant influence exercised by Director
:
a) Vidula Consultancy Services Ltd.
Smt. Vidula Jalan
b) Mangalam Cement Ltd.
7. Tax credit shall be allowed to the extent of amount of MAT paid in
earlier years depending upon the profits earned by the Company in
future years, in accordance with the provisions of Section 115JAA of
the Income Tax Act, 1961.
8. Salaries and Wages aggregating to Rs.26.11 Lacs (Previous year
Rs.20.69 Lacs) and consultancy charges of Rs.16.83 lacs (Previous year
Nil) identifiable with forest operation have been allocated directly to
respective functional account heads instead of debiting to primary
heads of account.
9. In accordance with the licence granted by the Government of Odisha
in the year 1986, the Company had undertaken plantation in certain
Government land which is ready for harvesting. Despite consistent
follow up, the Government did not allow the Company to harvest the
plantation on the pretext that the Special Leave Petition filed by the
Government of Odisha was pending before the Hon''ble Supreme Court. The
Hon''ble Supreme Court had dismissed the Special Leave Petition filed by
the Government of Odisha in the royalty matter, as referred to in Note
No.2 above. Since the Government of Odisha had not allowed the Company
to harvest the plantation done by the Company even after the dismissal
of Special Leave Petition filed by the Government of Odisha, the
Company had no alternative but to file a Writ Petition in the High
Court of Odisha seeking direction to allow the Company to harvest the
plantation done by the Company on its own cost on Government land and
also other stipulations relating to rate of royalty and weighment
norms. The Hon''ble High Court of Odisha had vide its order dated 8th
July, 2004, had without expressing any
opinion with regard to merits of the contentions raised by the company,
disposed of the petition with a direction to the Government of Odisha
and its various officers to dispose of the representations made to them
strictly in accordance with law as expeditiously as possible preferably
within a period of six months. In compliance with the directions from
the Hon''ble High Court of Odisha, the Government has reiterated its
claim for recovering cost of plantation on 244.825 hectares. The
Company has denied its liability to any such claim.
10. The Company has undertaken Plantation under Farm Forestry Scheme,
inter-alia, in the State of Chhattisgarh in association with the forest
department of Chhattisgarh Government. As per the agreement part sale
consideration of supply of seedlings is to be paid to the Company at
the time of harvesting of the plantation. Accordingly, part sale
consideration of Rs. 73.38 lacs (Previous year Rs. 73.38 lacs) relating
to previous years along with interest will be received by the company
at the time of harvesting. Based on the legal opinion obtained by the
company, the same will be accounted for in the year in which the
plantation is harvested.
11. Pursuant to Rehabilitation scheme Sanctioned by Board of
Industrial & Financial Reconstruction (BIFR), the Company is exempted
from payment of electricity duty on power consumed for a period of 10
years from the date of sanction of the scheme. BIFR has discharged the
company from the purview of Sick Industrial Companies (Special
Provision) Act,1985.
Accordingly Rs. 197.75 Lacs being amount paid for the period from 1st
April, 2000 to 31st March, 2008 and considered as income in earlier
years have been shown as Other Advance under Long Term Advance.
Based on legal opinion obtained by the company, all terms and
conditions so far not implemented by respective agencies as stated in
the Rehabilitation Scheme sanctioned by BIFR are still in force.
12. The Company''s CDM Project has been registered at UNFCCC and is
currently undergoing verification for actual quantification of emission
reduction.
13. (i) Trade Receivables outstanding for more than six months from
the date they are due for payment includes Rs. 120.99 Lacs (Previous
Year Rs.144.27 Lacs) which have become overdue. Legal and other
persuasive steps have been taken for recovery of such debtors. Such
debtors have been considered good and eventually recoverable.
Accordingly, no provision against the same has been considered
necessary.
(ii) Trade Receivables amounting to Rs. 2.42 lacs (Previous Year Rs
64.91 Lacs ) considered as doubtful of recovery in the earlier years,
have been written off during the year, which has been adjusted against
provision for doubtful debts.
14. EMPLOYEES BENEFIT
(I) Defined Benefit Plans
Gratuity
The Company provides for gratuity, a defined benefit retirement plan
covering eligible employees. As per the scheme of the Gratuity Fund
Trust, administered and managed by the Independent Board of Trustees,
the Company first makes the payment to vested employees at retirement,
death, incapacitation or termination of employment of an amount based
on the respective employee''s salary and the tenure of employment and
then gets the reimbursement from it. Vesting occurs upon completion of
five years of service. Liabilities with regard to the Gratuity Plan are
determined by actuarial valuation.
Leave Encashment
The Company makes the annual provision in the Profit & Loss Statement
for the leave liability on the basis of the actuarial valuation for the
Leave encashment Scheme which is an unfunded Plan for the qualified
employees.
(II) Defined Contribution Plans
Provident Fund
The employees of the company receive defined contribution for Provident
Fund benefit. Aggregate contributions along with interest thereon are
paid at retirement, death, incapacitation or termination of employment.
Both the employees and the company make monthly contributions at
specified percentage of the employee''s salary to the concerned
Provident Fund Authorities. The company has no liability to Fund the
shortfall in the interest over the statutory rate declared by the
Government.
Superannuation Fund
The Company has the Superannuation Scheme for the executive cadre of
employees viz President, Sr. Vice President and Vice President, who has
completed 5 years of continuous service. The Company makes the defined
contribution on annual basis for the eligible employees to the Trust
fund, which is administered and managed by the Independent Board of
Trustees. The Company forwards the settlement request of the vested
employees at retirement, death, incapacitation to the Fund. Fund makes
the payment of the commuted value and buys the annuity for the
uncommuted credit balance of the concerned members. This year no
executive is entitled under this scheme.
Employees State Insurance
Both the employees and the company make monthly contributions at
specified percentage of the employee''s salary to the concerned ESI
Authorities.
Other Defined contribution for Employee Benefits
The defined contribution for Leave Travel Allowance and Medical
reimbursements are recognized on actual basis in the Profit & Loss
Account in the year when the eligible employee actually renders the
service.
15. i) The Gratuity scheme is invested in a Group Gratuity policy
offered by Life Insurance Corporation (LIC) of India. The information
on the allocation of the fund into major asset classes and expected
return on each major class are not readily available. The expected rate
of return on plan assets is based on the assumed rate of return
provided by company''s Actuary.
ii) The Leave Encashment scheme is invested in a Group Leave Encashment
policy offered by Life Insurance Corporation (LIC) of India. The
information on the allocation of the fund into major asset classes and
expected return on each major class are not readily available. The
expected rate of return on plan assets is based on the assumed rate of
return provided by company''s Actuary.
16. DERIVATIVE INSTRUMENTS
The Company does not enter into any derivative instruments for trading
or speculative purposes.
17. MICRO ENTERPRISES AND SMALL ENTERPRISES
There are no Micro and Small enterprises, to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March,
2013. This information as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006 has been determined
to the extent such parties have identified on the basis of information
available with the Company. This has been relied upon by the auditors
18. Figures are expressed in Rupees in Lacs.
19. Previous year''s figures have been regrouped / rearranged wherever
considered necessary.
Mar 31, 2012
A The company has only one class of Issued share i.e, Equity Shares
having par value of Rs 10/- per share. Each Shareholder is entitled to
one vote per share and equal right for dividend. In the event of
liquidation the equity shareholders ae eligible to receive the
remaining assets of the company after payment of all preferential
amount in proportion to their shareholding.
b The company does not have any Holding company / ultimate Holding
Company.
Notes:
a Term loan taken from banks is repayable in 7 quaterly equal
installment of Rs.14 lacs each starting from 1st April 2012 and balance
in the 8th installment.
b Term loan is secured by hypothecation of assets acquired out of term
loan.
c Deferred payment liabilities are secured by hypothecation of assets
acquired out of loan. Repayment schedule of the same for the next three
years is Rs.7.35 Lacs, Rs.4.71 Lacs & Rs.0.33 Lacs respectively.
d Loan from Mangalam Cement Limited amounting to Rs. 3,000 lacs
received at the time of pending scheme of amalgamation of the company
with them which was subsequently withdrawn by Mangalam Cement Limited
has been classified as Long term Borrowing in view of representation
made by the company for rescheduling the payment terms.
e Repayment schedule of Other loans for next five years are Rs.125
lacs, Rs.150 lacs, Rs.75 lacs, Rs.150 lacs & Rs.75 lacs respectively.
f Cash credit amounting to Rs.995.32 Lacs (PY Rs.707.33 Lacs) and bill
discounting and letter of credit amounting to Rs.379.50 Lacs (PY
Rs.344.69 lacs) are secured by prior charge by way of hypothecation of
stocks, debts and other current assets and second charge to be created
over entire fixed assets both present and future.
Note 1.1 Disclosure to Financial Statements
(Rs. in lacs)
31ST MARCH,
2012 31ST MARCH,
2011
1. Contingent liabilities not provided
for in respect of :
a) Sales Tax matters pending in appeal 1,403.90 1,304.14
b) Excise/Service Tax matters as under :
i) Excise matters pending in appeal 135.82 135.82
ii) Service Tax Outward Freight Nil 52.21
c) State Excise matters pending in appeal 1,070.72 847.15
d) Bank guarantees given in favour of
District Magistrate and Collector
Nabarangpur and remaining outstanding 5.00 5.00
e) Demand of Electricity Duty raised by
Southern Electricity Supply Company of
Odisha Ltd. for the period from April,
2008 to January, 2011 70.53 Nil
(part of BIFR period). (Also refer
Note No. 11)
2. Royality on wood had been increased by the Government of Odisha
with retrospective effect from 1st April, 1988 vide its letter dated
2nd September, 1993 against which the Company had filed a writ petition
before the Odisha High Court. The Odisha High Court vide its order
dated 16th May, 1995 had upheld the writ petition of the Company.
Government of Odisha had filed a Special Leave Petition before the
Supreme Court. The Hon'ble Supreme Court vide its order dated 11th
November, 2003 has dismissed the special leave petition filed by the
Government of Odisha and upheld the decision of the Hon'ble High Court
of Odisha passed in favour of the Company. The Hon'ble Supreme Court
had also directed the Govt. of Odisha to implement the judgement of the
Hon'ble High Court of Odisha expeditiously and in any case within a
period of four months from the date of the order of the Supreme Court.
Subsequently, Government of Odisha has lodged a claim for Rs.303.49
lacs (net of excess amount of royalty paid by the Company in earlier
years) on the Company on account of alleged failure in taking up
replantation in the area harvested by the Company. This claim has been
denied by the company. In terms of the Supreme Court judgement, the
Company has lodged its claim with the Government of Odisha, the
monetary value of which is much higher in comparison to the claim
lodged by the Govt. of Odisha against the company, to honour its
commitments made to the Company as directed by the Hon'ble High Court
of Odisha and upheld by the Hon'ble Supreme Court. The Management is of
the view that no provision against the said demand is necessary, as no
liability is likely to arise on this account and Rs.81.04 lacs paid in
earlier year and included under advances recoverable has been
considered good of recovery.
3. Government of Odisha has issued Demand Notice for Rs.1070.72 lacs
towards Licence fees, Import fees, Excise Duty, Pass fees, Application
fees on import of Methanol into Odisha without obtaining licence from
competent authority from the year 2002-03 to 2008-09.
The Company, after obtaining licence from relevant authorities, has
challenged above demand on the ground that as methanol is imported from
other countries, provision of Odisha Excise (Methanol Alcohol) Rules
1976 are not applicable for use of Methanol as raw material.
The Company has obtained interim stay on above matter from the Hon'ble
High Court of Odisha at Cuttack on 20.11.08 for Rs.847.00 lacs &
Rs.223.57 lacs furnished under Indemnity Bond.
Pass fees paid for import of Methanol into Odisha amounting to Rs.
224.41 lacs for the year 2007-08, 2008-09,2009-10 , 2010-11 & 2011-12
has been shown as advance which is considered as good for recovery,
since the management is of the view that no liability is likely to
arise on this account in future.
4. Demand for Rs.27.32 Lacs against Delay Payment Surcharge from
Odisha State Electricity Board has not been accepted by the Company and
the matter is under dispute. However, as a matter of abundant caution
an equivalent amount has been provided for to take care of the
liability, if any, in this respect.
5. SEGMENT INFORMATION
a) The Company operates in one segment only i.e. Medium Density Fibre
Board and accordingly information required under Accounting Standard-17
issued by Central Government is not applicable.
b) In order to sustain long-term availability of firewood, principal
raw material for the Company's main product- Medium Density Fibre
Board, the Company is engaged in plantation under various schemes on
the land owned by third parties. The Company's role is to develop and
supply seedlings to such third parties. Since development of seedlings
is an integral part of plantation activity which is incidental to main
activity of the Company, this operation has not been treated as a
separate segment under Accounting Standard- 17 issued by Central
Government.
6. Tax credit shall be allowed to the extent of amount of MAT paid in
earlier years depending upon the profits earned by the Company in
future years, in accordance with the provisions of Section 115JAA of
the Income Tax Act, 1961.
7. Salaries and Wages aggregating to Rs.20.69 Lacs (Previous year
Rs.15.41 Lacs) identifiable with forest operation have been allocated
directly to respective functional account heads instead of debiting to
primary heads of account.
8. In accordance with the licence granted by the Government of Odisha
in the year 1986, the Company had undertaken plantation in certain
Government land which is ready for harvesting. Despite consistent
follow up, the Government did not allow the Company to harvest the
plantation on the pretext that the Special Leave Petition filed by the
Government of Odisha was pending before the Hon'ble Supreme Court. The
Hon'ble Supreme Court had dismissed the Special Leave Petition filed by
the Government of Odisha in the royalty matter, as referred to in Note
No.2 above. Since the Government of Odisha had not allowed the Company
to harvest the plantation done by the Company even after the dismissal
of Special Leave Petition filed by the Government of Odisha, the
Company had no alternative but to file a Writ Petition in the High
Court of Odisha seeking direction to allow the Company to harvest the
plantation done by the Company on its own cost on Government land and
also other stipulations relating to rate of royalty and weighment
norms. The Hon'ble High Court of Odisha had vide its order dated 8th
July, 2004, had without expressing any opinion with regard to merits of
the contentions raised by the company, disposed of the petition with a
direction to the Government of Odisha and its various officers to
dispose of the representations made to them strictly in accordance with
law as expeditiously as possible preferably within a period of six
months. In compliance with the directions from the Hon'ble High Court
of Odisha, the Government has reiterated its claim for recovering cost
of plantation on 244.825 hectares. The Company has denied its liability
to any such claim.
9. The Company has undertaken Plantation under Farm Forestry Scheme,
inter-alia, in the State of Chhattisgarh in association with the forest
department of Chhattisgarh Government. As per the agreement part sale
consideration of supply of seedlings is to be paid to the Company at
the time of harvesting of the plantation. Accordingly, part sale
consideration of Rs. 73.38 lacs (Previous year Rs. 73.38 lacs) relating
to previous years along with interest will be received by the company
at the time of harvesting. Based on the legal opinion obtained by the
company, the same will be accounted for in the year in which the
plantation is harvested.
10. Pursuant to Rehabilitation scheme Sanctioned by Board of
Industrial & Financial Reconstruction (BIFR), the Company is exempted
from payment of electricity duty on power consumed for a period of 10
years from the date of sanction of the scheme. BIFR has discharged the
company from the purview of Sick Industrial Companies (Special
Provision) Act,1985.
Accordingly Rs. 197.75 Lacs being amount paid for the period from 1st
April, 2000 to 31st March, 2008 and considered as income in earlier
years have been shown as Other Advance under Long Term Advance.
Based on legal opinion obtained by the company, all terms and
conditions so far not implemented by respective agencies as stated in
the Rehabilitation Scheme sanctioned by BIFR are still in force.
11. The Company's CDM Project has been registered at
UNFCCC and is currently undergoing verification for actual
quantification of emission reduction.
12 (i) Trade Receivables outstanding for more than six months from the
date they are due for payment amounts to Rs. 144.27 Lacs (Previous Year
Rs. 142.34 Lacs) which have become overdue. Legal and other persuasive
steps have been taken for recovery of such debtors. Such debtors have
been considered good and eventually recoverable. Accordingly, no
provision against the same has been considered necessary.
(ii) Trade Receivables amounting to Rs. 64.91 lacs (Previous Year- Nil)
considered as doubtful of recovery in the earlier years, have been
written off during the year, which has been adjusted against provision
for doubtful debts.
13. EMPLOYEES BENEFIT
(I) Defined Benefit Plans Gratuity
The Company provides for gratuity, a defined benefit retirement plan
covering eligible employees. As per the scheme of the Gratuity Fund
Trust, administered and managed by the Independent Board of Trustees,
the Company first makes the payment to vested employees at retirement,
death, incapacitation or termination of employment of an amount based
on the respective employee's salary and the tenure of employment and
then gets the reimbursement from it. Vesting occurs upon completion of
five years of service. Liabilities with regard to the Gratuity Plan are
determined by actuarial valuation.
Leave Encashment
The Company makes the annual provision in the Profit & Loss statement
for the leave liability on the basis of the actuarial valuation for the
Leave encashment Scheme which is an unfunded Plan for the qualified
employees.
(II) Defined Contribution Plans Provident Fund
The employees of the company receive defined contribution for Provident
Fund benefit. Aggregate contributions along with interest thereon are
paid at retirement, death, incapacitation or termination of employment.
Both the employees and the company make monthly contributions at
specified percentage of the employee's salary to the concerned
Provident Fund Authorities. The company has no liability to Fund the
shortfall in the interest over the statutory rate declared by the
Government.
Superannuation Fund
The Company has the Superannuation Scheme for the executive cadre of
employees viz President, Sr. Vice President and Vice President, who
has completed 5 years of continuous service. The Company makes the
defined contribution on annual basis for the eligible employees to the
Trust fund, which is administered and managed by the Independent Board
of Trustees. The Company forwards the settlement request of the vested
employees at retirement, death, incapacitation to the Fund. Fund makes
the payment of the commuted value and buys the annuity for the
uncommuted credit balance of the concerned members. This year no
executive is entitled under this scheme.
Employees State Insurance
Both the employees and the company make monthly contributions at
specified percentage of the employee's salary to the concerned ESI
Authorities.
Other Defined contribution for Employee Benefits
The defined contribution for Employees State Insurance, Leave Travel
Allowance and Medical reimbursements are recognized on actual basis in
the Profit & Loss Statement in the year when the eligible employee
actually renders the service.
14. i) The Gratuity scheme is invested in a Group Gratuity policy
offered by Life Insurance Corporation (LIC) of India. The information
on the allocation of the fund into major asset classes and expected
return on each major class are not readily available. The expected rate
of return on plan assets is based on the assumed rate of return
provided by company's Actuary.
ii) The Leave Encashment scheme is invested in a Group Leave Encashment
policy offered by Life Insurance Corporation (LIC) of India. The
information on the allocation of the fund into major asset classes and
expected return on each major class are not readily available. The
expected rate of return on plan assets is based on the assumed rate of
return provided by company's Actuary.
15. DERIVATIVE INSTRUMENTS
The Company does not enter into any derivative instruments for trading
or speculative purposes.
16. MICRO ENTERPRISES AND SMALL ENTERPRISES
There are no Micro and Small enterprises, to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March,
2012. This information as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006 has been determined
to the extent such parties have identified on the basis of information
available with the Company. This has been relied upon by the auditors.
17. Figures are expressed in Rupees in Lacs.
18. Previous year's figures have been regrouped / rearranged wherever
considered necessary.
Mar 31, 2011
(Rs. in lacs)
31ST MARCH, 31ST MARCH,
2011 2010
1. Contingent liabilities not provided
for in respect of :
a) Sales Tax matters pending in appeal 1304.14 564.05
b) Excise/Service Tax matters as under :
i) Excise matters pending in appeal 135.82 132.93
ii) Service Tax outward freight 52.21 29.47
c) State Excise matters pending in appeal 847.15 847.15
d) Bank guarantees given in favour of District 5.00 5.00
magistrate and Collector Nabarangpur and
remaining outstanding
2. Royality on wood had been increased by the Government of Orissa with
retrospective effect from 1st April, 1988 vide its letter dated 2nd
September, 1993 against which the Company had filed a writ petition
before the Orissa High Court. The Orissa High Court vide its order
dated 16th May, 1995 had upheld the writ petition of the Company.
Government of Orissa had filed a Special Leave Petition before the
Supreme Court. The Hon'ble Supreme Court vide its order dated 11th
November, 2003 has dismissed the special leave petition filed by the
Government of Orissa and upheld the decision of the Hon'ble High Court
of Orissa passed in favour of the Company. The Hon'ble Supreme Court
had also directed the Govt. of Orissa to implement the judgement of the
Hon'ble High Court of Orissa expeditiously and in any case within a
period of four months from the date of the order of the Supreme Court.
Subsequently, Government of Orissa has lodged a claim for RS.303.49
lacs (net of excess amount of royalty paid by the Company in earlier
years) on the Company on account of alleged failure in taking up
replantation in the area harvested by the Company. This claim has been
denied by the company. In terms of the Supreme Court judgement, the
Company has lodged its claim with the Government of Orissa, the
monetary value of which is much higher in comparison to the claim
lodged by the Govt. of Orissa against the company, to honour its
commitments made to the Company as directed by the Hon'ble High Court
of Orissa and upheld by the Hon'ble Supreme Court. The Management is of
the view that no provision against the said demand is necessary, as no
liability is likely to arise on this account and Rs.81.04 lacs paid in
earlier year and included under advances recoverable has been
considered good of recovery.
3. Government of Orissa has issued Demand Notice for Rs.847.15 lacs
towards licence fees, import fees, Excise Duty, Pass fees, application
fees on import of Methanol into Orissa without obtaining licence from
competent authority from the year 2002-03 to 2006-07.
The company, after obtaining licence from relevant authorities, has
challenged above demand on the ground that as methanol is imported from
other countries, provision of Orissa Excise (Methanol Alcohol) Rules
1976 are not applicable for use of Methanol as raw material.
The Company has obtained interim stay on above matter from the Hon'ble
High Court of Orissa at Cuttack on 20.11.08.
Pass fees paid for import of Methanol into Orissa amounting to Rs.
224.21 lacs for the year 2007-08, 2008-09,2009-10 & 2010-11 has been
shown as advance which is considered as good for recovery, since the
management is of the view that no liability is likely to arise on this
account in future.
3. Demand for Rs. 31.29 Lacs (Previous year Rs.30.29 Lacs) against
maximum demand charges from Orissa State Electricity Board has not been
accepted by the Company and the matter is under dispute. However, as a
matter of abundant caution an equivalent amount has been set aside and
kept as a contingency provision to take care of the liability, if any,
in this respect.
4. SEGMENT INFORMATION
a) The Company operates in one segment only i.e. Medium Density Fibre
Board and accordingly information required under Accounting Standard
AS-17 issued by Central Government is not applicable.
b) In order to sustain long-term availability of firewood, principal
raw material for the Company's main product, namely, Medium Density
Fibre Board, the Company is engaged in plantation under various schemes
on the land owned by third parties. The Company's role is to develop
and supply seedlings to such third parties. Since development of
seedlings is an integral part of plantation activity which is
incidental to main activity of the Company, this operation has not been
treated as a separate segment under Accounting Standard AS Ã 17 issued
by Central Government.
5. Related party information as identified by the management as per
Accounting Standard-18 on Related Party Disclosure issued by Central
Government.
a) List of related parties:
i) Key Management Personnel - Shri Sujoy Sen - Manager
ii) Enterprises over which
significant influence
exercised by Director -
- Vidula Consultancy
Services Ltd.
- Smt Vidula Jalan
- Mangalam Cement Ltd.
6. Tax credit shall be allowed to the extent of amount of MAT paid in
earlier years depending upon the profits earned by the Company in
future years, in accordance with the provisions of Section 115JAA of
the Income Tax Act, 1961.
7. a) Salaries and Wages aggregating to Rs. 15.41 lacs (Previous
year Rs.10.56 Lacs) identifiable with forest operation have been
allocated directly to respective functional account heads instead of
debiting to primary heads of account.
b) Advances in the nature of loans, interest free to employees
outstanding as on 31st March, 2011 Rs. 5.95 lacs (previous year Rs.8.25
Lacs) maximum amount outstanding during the year Rs. 10.10 lacs (
previous year Rs. 16.79Lacs) are as per general rules of the Company.
c) Borrowing cost capitalized during the year Rs. Nil (previous Year
Rs. 65.43 Lacs )
8. In accordance with the licence granted by the Government of Orissa
in the year 1986, the Company had undertaken plantation in certain
Government land which is ready for harvesting. Despite consistent
follow up, the Government did not allow the Company to harvest the
plantation on the pretext that the Special Leave Petition filed by the
Government of Orissa was pending before the Hon'ble Supreme Court. The
Hon'ble Supreme Court had dismissed the Special Leave Petition filed by
the Government of Orissa in the royalty matter, as referred to in Note
No.2 above. Since the Government of Orissa had not allowed the Company
to harvest the plantation done by the Company even after the dismissal
of Special Leave Petition filed by the Government of Orissa, the
Company had no alternative but to file a Writ Petition in the High
Court of Orissa seeking direction to allow the Company to harvest the
plantation done by the Company on its own cost on Government land and
also other stipulations relating to rate of royalty and weighment
norms. The Hon'ble High Court of Orissa had vide its order dated 8th
July, 2004, had without expressing any opinion with regard to merits of
the contentions raised by the company, disposed off the petition with a
direction to the Government of Orissa and its various officers to
dispose off the representations made to them strictly in accordance
with law as expeditiously as possible preferably within a period of six
months. In compliance with the directions from the Hon'ble High Court
of Orissa, the Government has reiterated its claim for recovering cost
of plantation on 244.825 hectares. The Company has denied its liability
to any such claim.
9. The Company has undertaken Plantation under Farm Forestry Scheme,
inter-alia, in the State of Chhattisgarh in association with the forest
department of Chhattisgarh Government. As per the agreement part sale
consideration of supply of seedlings is to be paid to the Company at
the time of harvesting of the plantation. Accordingly, part sale
consideration of Rs. 73.38 (Previous year Rs. 73.38) relating to
previous years along with interest will be received by the company at
the time of harvesting. Based on the legal opinion obtained by the
company, the same will be accounted for in the year in which the
plantation is harvested.
10. Pursuant to Rehabilitation scheme sanctioned by Board of
Industrial & Financial Reconstruction (BIFR), the Company is exempted
from payment of electricity duty on power consumed for a period of 10
years from the date of sanction of the scheme. BIFR has discharged the
company from the purview of Sick Industrial Companies (Special
Provision) Act,1985. Accordingly Rs. 157.76 Lacs being amount paid for
the period from 1st April 2000 to 31st March 2007 and considered as
income in earlier years have been shown as Advance recoverable. Based
on legal opinion obtained by the company, all terms and conditions so
far not implemented by respective agencies as stated in the
Rehabilitation Scheme sanctioned by BIFR are still in force.
11. The Company's CDM Project has received the host country approval
on 3rd September, 2008 vide letter No.4/7/2007-CCC of Government of
India, Ministry of Environment & Forest. The project as on Balance
Sheet date has reached the Validation Stage and is likely to be
consider for registration.
12. Survey in respect of Insurance claim of fire at Hydraulic Room is
likely to be completed shortly and their report is still awaited.
13 Sundry Debtors outstanding for more than six months includes Rs
142.34 Lacs (previous year 138.01 Lacs) which have become overdue.
Legal and other persuasive steps have been taken for recovery of such
debtors. Such debtors have been considered good and eventually
recoverable. Accordingly, no provision against the same has been
considered necessary.
14. EMPLOYEES BENEFIT
(I) Defined Benefit Plans
Gratuity
The Company provides for gratuity, a defined benefit retirement plan
covering eligible employees. As per the scheme of the Gratuity Fund
Trust, administered and managed by the Independent Board of Trustees,
the Company first makes the payment to vested employees at retirement,
death, incapacitation or termination of employment of an amount based
on the respective employee's salary and the tenure of employment and
then gets the reimbursement from it. Vesting occurs upon completion of
five years of service. Liabilities with regard to the Gratuity Plan are
determined by actuarial valuation.
Leave encashment
The Company makes the annual provision in the Profit & Loss account for
the leave liability on the basis of the actuarial valuation for the
Leave encashment Scheme which is an unfunded Plan for the qualified
employees.
(II) Defined Contribution Plans
Provident Fund
The employees of the company receive defined contribution for Provident
Fund benefit. Aggregate contributions along with interest thereon are
paid at retirement, death, incapacitation or termination of employment.
Both the employees and the company make monthly contributions at
specified percentage of the employee's salary to the Provident Fund
Trusts and/or the concerned Provident Fund Authorities. The company
has no liability to Fund the shortfall in the interest over the
statutory rate declared by the Government.
Superannuation Fund
The Company has the superannuation Scheme for the executive cadre of
employees viz President, Sr. Vice President and Vice President, who has
completed 5 years of continuous service. The company makes the defined
contribution on annual basis for the eligible employees to the Trust
fund, which is administered and managed by the Independent Board of
Trustees. The Company forwards the settlement request of the vested
employees at retirement, death, incapacitation to the Fund. Fund makes
the payment of the commuted value and buys the annuity for the
uncommutted credit balance of the concerned members. This year no
executive is entitled under this scheme.
Employees State Insurance
Both the employees and the company make monthly contributions at
specified percentage of the employee's salary to the concerned ESI
Authorities.
Other Defined contribution for Employee Benefits
The defined benefits in respect of leave travel allowance and Medical
reimbursements are recognized on actual basis in the Profit & Loss
Account in the year when the eligible employee actually renders the
service.
15. DERIVATIVE INSTRUMENTS
The Company does not enter into any derivative instruments for trading
or speculative purposes.
16. MICRO ENTERPRISES AND SMALL ENTERPRISES
There are no Micro and Small enterprises, to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March,
2011. This information as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006 has been determined
to the extent such parties have identified on the basis of information
available with the Company. This has been relied upon by the auditors
17. Figures are expressed in Rupees in Lacs.
18. Previous year's figures have been regrouped / rearranged wherever
considered necessary.