Notes to Accounts of Mysore Paper Mills Ltd.
Mar 31, 2014
1. Share capital
* The Company in its 77th AGM held on 31.12.2012 has approved the
enhancement of Authorised Capital from 150.00 Crores to Rs 500.00
Crores. The Company has obtained exemption from BIFR for payment of
stamp duty towards issue of share certificate to GOK and also towards
filing fees to MCA. However, exemption for payment of stamp duty is
sought from GOK. Due to above, formalities for enhancement of
authorised capital is pending and consequently amount received from GOK
which is pending allotment is shown under Share Application Money
pending allotment to the extent within the authorised capital and under
current liabilities over and above the authorised share capital.
** Includes 9,00,000 shares allotted by way of Bonus Shares by
capitalisation of Share Premium and General Reserve
2. Borrowings
i) The mortgage and first charge on the company''s present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to banks for cash credit facility, rank pari- passu
in respect of term loans from financial institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of of the company
secured for cash credit facility rank pari-passu among the consortium
of bankers.
ii) Loan repayable on demand includes Working Capital facilities such
as Cash credit, Over drafts and overdue loans obtained from banks and
financial institutions are secured by hypothecation of company''s
present and future stock of raw materials, consumable stores, finished
goods, materials in process and book debts and by second charge on the
present and future assets of the company, which are offered by way of
first charge as security to Financial Institutions (IFCI) and Debenture
Trustees.
iii) (a) Term loans from Financial Institutions and Banks are secured
by a First charge on the company''s present and future immovable
properties, Plant and Machinery, Spares, Tools, accessories and certain
other movable properties and Second charge on the other assets offered
as security to banks for cash credit.
(b) Interest free term loan sanctioned by banks are governed by the
terms and conditions as set out in "Scheme for extending financial
assistance to sugar undertaking" in accordance with notification dated
07.12.2007 issued by Government of India. These loans are secured in
favour of concerned banks by residual pari - passu charge on the
company''s current and fixed assets (movable and immovable properties)
both present and future. The company has repaid the said loan to the
extent of Rs. 404.20 Lakhs (Rs. 404.20 Lakhs) and Rs. 7.04 Lakhs
outstanding as on 31.03.2014 is grouped under short term borrowings
secured.
iv) (a) 12.75 % Optionally Fully Convertible Debentures issued to IFCI
on conversion of entire overdue interest & funded interest term loan
aggregating to Rs.677.02 lakhs were redeemable in three equal annual
installments during FY 2010 to FY 2012 with earliest redemption due on
01.01.2010. Two installments were due to the extent of Rs. 451.35 Lakhs
and interest accrued thereon was due to the extent of Rs. 211.13 lakhs
was outstanding as on 31.03.2014.
(b) IFCI has approved One Time Settlement (OTS) of Loan repayment for
an amount of Rs. 339 Lakhs towards Principal and Interest vide letter
Ref IFCI/BLRO/MPMML/2014 - 311 dated 21.07.2014, which has BIFR
consent, IFCI has waived principal amount of Rs. 112.35 Lakhs. The
accrued Interest upto 31.03.2014 amounting to Rs. 211.13 Lakhs has also
become non payable. With this OTS amount payable towards IFCI to the
extent of Rs.339 Lakhs is disclosed under short term secured loan.
Income Recognised on account of Principal and Interest amount waived on
OTS is disclosed under Exceptional Items - Income to the extent of Rs.
239.98 Lakhs and reversal of current year interest to the extent of Rs.
83.50 Lakhs in accordance with the requirement of Accounting Standard 4
"contingencies and events occurring after the balance sheet date".
v) a) 8.27% Unsecured redeemable Non convertible bonds:
8.27% Unsecured redeemable non convertible bonds of Rs. 2625 Lakhs (Rs.
3500 lakhs) guaranteed by Government of Karnataka are redeemable in 4
equal installments from financial year 2013-14 onwards. During the FY
2013-14 the company has repaid an amount of Rs. 875 Lakhs towards 1st
Installment. Amount repayable less than one year to the extent of Rs.
875 Lakhs (Rs. 875 lakhs) have been shown under short term borrowings.
b) 8.49% Unsecured redeemable Non convertible bonds:
During 2010-11 the Company had raised Rs 5000 lakhs by issue of 8.49 %
Unsecured redeemable Non convertible bonds Guaranteed by Government of
Karnataka towards implementation of augmentation of power plant,
installing wet lap machine and implementing energy conservation
measures, which are redeemable in 4 equal installments from financial
year 2017-18 onwards. Due to non feasibility of the project part of
the amount to the extent of 4130.97 Lakhs have not been utilised for
the purpose, out of which amount including accumulated interest to the
extent of Rs.3433 lakhs (Rs.3146.93 lakhs) is deposited in a scheduled
bank is grouped/shown under cash and bank balances schedule No. 2.14.
c) 9.65% Unsecured redeemable Non convertible bonds:
During the FY 2012-13 the company had raised 9.65% unsecured Redeemable
Non-Convertible Unsecured Taxable Bonds Guaranteed by Government of
Karnataka to the extent of Rs. 5000 lakhs for a tenure of 10 years with
call option at the discretion of the company from 7th Year and
Redemption in 4 equal installments from F.Y. 2019-2020 onwards.
d) 8.95% Unsecured redeemable Non convertible bonds:
During the FY 2013-14 the company had raised 8.95% unsecured Redeemable
Non-Convertible Unsecured Taxable Bonds Guaranteed by Government of
Karnataka to the extent of Rs. 4000 lakhs for a tenure of 10 years with
call option at the discretion of the company from 7th Year and
Redemption in 4 equal installments from F.Y. 2020-2021 onwards.
vi) Short Term Loan from M/s Axis Bank Limited to the extent of Rs. 800
lakhs (Rs.800 lakhs) is due for repayment and the same is outstanding
as on 31.03.2014.
3. Trade payables
Note: The company has not received any intimation from the suppliers
regarding status under the Micro, Small and Medium Enterprises
Development Act, 2006. Hence no disclosure is made in respect of ;
i) Amount due and outstanding to suppliers as at the end of the
accounting year.
ii) Interest paid during the year.
iii) Interest payable at the end of the accounting year, and
iv) Interest accrued and unpaid at the end of the accounting year.
4. Tangible assets
a) Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles and earth moving equipments
relating to captive forest plantation.
b) Based on the Verification and management assessment there are no
impairment of assets as at 31st March, 2014.
c) The company has leased 4 acres of land for 20 years to M/s Anudeep
Corbonates (P) Ltd, for setting up of an ancillary unit for manufacture
of Burnt Lime and the same is governed by the Lease agreement dtd.
15.11.1997.
5. Loans and advances
* Loans and Advances (Unsecured considered good) includes an amount of
Rs. 85.12 Lakhs (Rs. 90.51 Lakhs) paid towards special advance to
employees and the same is classified under long term.
6. Other non-current assets - Unsecured, considered good
i. Expenditure relating to Captive Forest plantation other than fixed
assets are grouped under other current assets and is shown at note 2.11
and will be charged to profit & loss account as per Accounting Policy
No.1.02 (vii).
ii. Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulp wood requirement.
iii. Out of total leased area, the company has surrendered 4665.30
hectares of wild life areas to the Government as per the orders of the
Hon''ble Supreme Court. Further, as per the interim order of the Hon''ble
High Court, 3813 hectares of non-forestry land has to be surrendered to
the Government after extracting the yield from such areas in respective
maturity years and 1121 hectares have been surrendered so far.
iv. Phase-I of the Captive Forest Plantation Programme has been
financed by Overseas Development Agency, London, through Govt. of
Karnataka, partly by Grant and partly by Loan and Equity. Government
grants are accounted as per accounting Policy No. 1.10.
v. Company has received 201195.130 MT (194596.880 MT) of Wood from
Captive Forest Plantations during the year out of 2994.65 hectares
(2986.45 hectares) of land & has provided Rs.256.29 Lakhs (Rs. 174.94
Lakhs) towards 12.5% royalty/lease rental payable to Government of
Karnataka.
vi. Farm forestry expenditure is charged-off to the profit and loss
account.
7. Inventories (valued at cost or lower of net realisable value)
The company is in the process of identifying the Non-Moving items of
Stores & Spares, pending which the company has retained the provision
towards Non Moving Stores & Spares to the extent of Rs 640.86 Lakhs as
on 31.03.2014 which is adequate.
8. Trade receivables
a) Confirmation of balances received/to be received from debtors are
required to be reconciled wherever necessary and suitably adjusted.
b) During the year company has written back Rs 56 lakhs (Rs 62 lakhs)
for which the provision for bad and doubtful debts was made during
earlier years.
c) Doubtful debts includes an amount of Rs. 546.61 Lakhs (Rs. 454.72
Lakhs) being Interest provided on defaulted outstanding upto
31.03.2014. The same has been provided in full and accounted under
Provision for bad & doubtful debts.
9. Other income
a) Interest on Deposits and Advances include interest earned on Fixed
Deposits to the extent of Rs. 441.13 Lakhs (Rs. 306.63 Lakhs).
b) Provision no longer required-written back Includes withdrawal of
Provision for Bad & Doubtful Debts provided during earlier years
withdrawn on collection from debtors to the extent of Rs.56 Lakhs.
10. Finance costs
Interest on others includes:
a) Rs. 248.82 Lakhs towards interest on VAT, CST & Entry tax delayed
payments.
b) Rs. 7.18 Lakhs (Rs. 29.41 Lakhs) being interest on delayed payment
to Provident Fund Trust.
11.
i) Share Application Money grouped under Sch - 2.06 - other current
liabilities to the extent of Rs. 11710.55 Lakhs includes the following:
a) Government of Karnataka had accorded sanction of conversion of
entire GOK loan as on 31.03.2012 to the extent of Rs. 10102.50 Lakhs
into Equity vide GO NO.CI 86/CPM/2011 Dated 31.03.2012 and had made
Cash Equity Infusion to the extent of Rs.500 Lakhs vide GO NO. CI
86/CPM/2011 Dated 12.01.2012. The allotment of shares were approved by
members in the 77th AGM held on 31.12.2012. Due to pending formalities
at the Ministry of Corporate Affairs the amount of Rs. 7491.84 Lakhs is
disclosed under "Share application money pending allotment" Grouped
under Other Current Liabilities and an amount of Rs. 3110.66 Lakhs to
the extent of unallotted authorised capital is disclosed under Share
Application Money Pending Allotment and disclosed in the face of the
Balance Sheet.
b) During FY 2012-13 Government of Karnataka had converted outstanding
Guarantee Commission Payable as on 31.03.2013 as Investment to the
extent of Rs. 218.71 Lakhs vide its order No. CI 86 CPM 2011 Dt.
30.03.2013. The same is grouped under Share Application Pending
Allotment and grouped under Other Current Liabilities till further
approval from members and SEBI.
c) The Government of Karnataka has infused capital under Head of
Account 4860 - Capital outlay- investments in Public and other under
taking in the form equity has been accounted accordingly for the
following capital infusions:
During 2012-13:
i) G.O. NO : CI.131.CPM Dated 2.11.2012 Rs. 1000 lakhs
ii) G.O. NO : CI.131.CPM Dated 8.02.2013 Rs.1000 lakhs
During 2013-14:
i) G.O. NO : CI.99.CPI.2013 Dated 19.10.2013 Rs.1000 lakhs
ii) G.O. NO : CI.99.CPI.2013 Dated 19.03.2013 Rs.1000 lakhs
During the FY 2013-14, the above equity infusion of Rs.4000 lakhs which
is over and above authorised capital is grouped under other current
liabilities as share application money.
ii) During the FY 2013-14, GOK has granted working capital assistance
to the extent of Rs.2000 Lakhs vide G.O. No.: CI.99.CPI.2013 Dated
04.01.2014. the Amount later was converted into working capital loan
vide GO No. : CPM:2014 Dated 23.03.2014. However, terms and conditions
of the working capital loan was prescribed in the GO.
12. Outstanding forward contract as at the balance sheet date is as
given below:
a) The company has recognised Rs.75.83 Lakhs as Net Foreign Currency
liability on forward contracts disclosed under other current
liabilities.
b) The difference between the spot rate and the forward rate is
recognised as deferred premium and amortised over the period of the
contract. During the FY 2013-14 the company has amortised an amount of
Rs. 20.95 Lakhs towards premium on forward contracts.
c) The fair value of the foreign currency assets on the above forward
contracts have been restated as at the year end and foreign exchange
loss to the extent of Rs.32.74 Lakhs have been recognised in the profit
and loss account.
13. Contingent liabilities and commitments
31.03.2014 31.03.2013
Rs. In Lakhs Rs. In Lakhs
a) Claims against the company not
acknowledged as debt 1342.80 977.88
b) Letters of Credit and Guarantees 800.00 800.00
c) Estimated amount of contracts
remaining to be executed on capital
account and not provided for 1306.75 1177.43
3449.55 2955.31
14. An amount of Rs. 201.47 Lakhs (Rs. 124.16 Lakhs) interest payable
upto March-2014 towards purchase tax has not been provided as the
company has requested the Government for waiver of Purchase Tax payable
and the proposal is under active consideration of the Government.
15. Pending Legal Dispute on Forest Field Workers under the ''Karnataka
Daily Wage Workers Welfare Rules 2012'', no provision is made in the
books of account. As the matter is subjudice, quantification of
financial liability is not ascertainable.
16. Pending reconciliation with MESCOM an amount of Rs. 1042.86 Lakhs
(Rs. 677.94 Lakhs) being the disputed amount claimed is not provided in
the books as on 31.03.2014. Total arrears claimed by MESCOM as on
31.03.2014 is Rs. 3933.02 Lakhs (Rs. 2779.09 Lakhs) and provision held
by MPM is to the extent of Rs. 2890.16 Lakhs (Rs. 2101.15 Lakhs).
17. Figures for the previous year have been
regrouped/reclassified/recast wherever necessary to conform to current
year''s presentation.
18. The company has huge accumulated losses as per provisions of
Income Tax Act, 1961 and as a measure of prudence the company has not
recognized the deferred tax asset in financial statements.
19. EMPLOYEE BENEFITS
The fair value of the assets of the provident fund trust including the
return on the assets there of as on the Balance Sheet date being
greater than the obligations under the defined benefit plan, no further
charge to the profit and loss account is required.
20. The Accounts for the FY 2013-14 was approved by the Board on
03.09.2014 and reported by the statuary Auditors on 03.09.2014 were
revised in light of the observations of Comptroller and Auditor General
of India during their supplementary Audit under section 143 (6) and (7)
of the Companies Act 2013. There is no change in the profit or loss for
the year due to revision.
Mar 31, 2013
1.1PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS: AS-29
(a) Provision is recognized when
i. The company has a present obligation as a result of past event.
ii. It is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and iii. A reliable
estimate can be made of the amount of the obligation.
(b) Contingent liabilities are disclosed by way of Notes to accounts.
(c) Contingent assets are neither recognised nor disclosed.
i) Working Capital facilities obtained from banks are secured by
hypothecation of company''s present and future stock of raw materials,
consumable stores, finished goods, materials in process and book debts
and by second charge on the present and future assets of the company,
which are offered by way of first charge as security to Financial
Institutions (IFCI) and Debenture Trustees.
(ii) (a) Term loans from Financial Institutions and Banks are secured
by a First charge on the company''s present and future immovable
properties, Plant and Machinery, Spares, Tools, accessories and certain
other movable properties and Second charge on the other assets offered
as security to banks for cash credit.
(b) Interest free term loan sanctioned by banks are governed by the
terms and conditions as set out in "Scheme for extending financial
assistance to sugar undertaking" in accordance with notification dated
07.12.2007 issued by Government of India. These loans are secured in
favour of concerned banks by residual pari  passu charge on the
company''s current and fixed assets (movable and immovable properties)
both present and future. During the year, the company has repaid a sum
of Rs. 83.85 Lakhs (Rs.318.35 Lakhs).
iii) (a) 12.75 % Optionally Fully Convertible Debentures issued to IFCI
on conversion of entire overdue interest & funded interest term loan
aggregating to Rs.677.02 lakhs were redeemable in three equal annual
installments during FY 2010 to FY2012 with earliest redemption due on
01.01.2010. In the event of default, IFCI have the right to convert all
the defaulted amounts into equity at par. These debentures are secured
by way of first charge on the fixed assets of the company present and
future on pari-passu basis.
(b) The rescheduled repayment of First and Second Installment which was
due on 01.01.2012 has not been paid by the company. Total amount due to
IFCI as on 31.03.2013 is Rs. 451.35 Lakhs and the same is shown under
short term borrowing secured, as the company had defaulted the
repayment of loan Interest has been provided at band rate.
iv) The mortgage and first charge on the company''s present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to banks for cash credit facility, rank pari-passu
in respect of term loans from financial institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of the company secured
for cash credit facility rank pari-passu among the consortium of
bankers.
v) From Govt. of Karnataka
a) During the F.Y. 2012-13 the GOK has released working capital support
vide GOK order (i)GO CI.131.CPM 2012 Dated 02.11.2012 for Rs 1000 lacs
and (ii) CI.131.CPM 2012 Dated 8.02.2013 for Rs 1000 lacs . In the
absence of terms of sanction company has disclosed the said loan under
long term unsecured borrowings and has provided interest @ 9%.
vi) (i) 8.27% Unsecured redeemable Non convertible bonds:
8.27% Unsecured redeemable non convertible bonds of Rs.3500 lakhs
guaranteed by Government of Karnataka are redeemable in 4 equal
installments from financial year 2013-14onwards. Amount payable less
then one year to the extent of Rs 875 Lakhs have been shown under short
term borrowings
(ii) 8.49% Unsecured redeemable Non convertible bonds:
During 2010-11 the Company had raised Rs 5000 lakhs by issue of 8.49 %
Unsecured redeemable Non convertible bonds Guaranteed by Government of
Karnataka towards implementation of augmentation of power plant,
installing wet lap machine and implementing energy conservation
mesures, which are redeemable in 4 equal installments from financial
year 2017-18 onwards. Due to non feasability of the project part of the
amount to the extent of Rs. 4130.97 lakhs has not been utilised for the
purpose, out of which amount to the extent of Rs.3146.93 lakhs
(Rs.3307.71 lakhs) is deposited in a scheduled bank is grouped/shown
under cash and bank balances schedule no. 2.14.
iii) 9.65% Unsecured redeemable Non convertible bonds:
During the F.y. 2012-13 company has raised Rs.5000 Lakhs by issue of
9.65% Unsecured Redeemable Non-Convertible Taxable Bonds Guranteed by
Government of Karnataka towards working capital requirement. The Bonds
are for a tenure of 10 years with call option at the discretion of the
company from 7th Year and Redemption in 4 equal installments from F.Y.
2019-2020 onwards.
vii) Short Term Loan from M/s Axis Bank Limited to the extent of Rs.
800 lakhs (Rs.800 lakhs) is due for repayment and the same is
outstanding as on 31.03.2013.
i. Expenditure relating to Captive Forest plantation other than fixed
assets are grouped under other current assets and is shown at note 2.11
and will be charged to profit & loss account as per Accounting Policy
No.1.02 (vii).
ii. Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulp wood requirement.
iii. Out of total leased area, the company has surrendered 4665.30
hectares of wild life areas to the Government as per the orders of the
Hon''ble Supreme Court. Further, as per the interim order of the Hon''ble
High Court, 3813 hectares of non-forestry land has to be surrendered to
the Government after extracting the yield from such areas in respective
maturity years and 1121 hectares have been surrendered so far.
iv. Phase-I of the Captive Forest Plantation Programme has been
financed by Overseas Development Agency, London, through Govt. of
Karnataka, partly by Grant and partly by Loan and Equity. Government
grants are accounted as per accounting Policy No. 1.10.
v. Company has received 194596.880 MT (185994 MT) of Wood from Captive
Forest Plantations during the year out of 2986.45 hectares (2871.50
hectares) of land & has provided Rs.174.94 lakhs (Rs. 207.91 lakhs)
towards 12.5% royalty/lease rental payable to Government of Karnataka.
vi. Farm forestry expenditure is charged-off to the profit and loss
account.
(a) Government of Karnataka has released Rs.500 lacs towards fresh cash
equity infusion vide G.O.No. CI 86/CPM 2011, Bangalore Dated
12.01.2012. The same is disclosed under "Share application money
pending allotment" vide approval by members in the 77th AGM held on
31.12.2012. However approval from appropriate authorities is awaited
for allotment of shares.
(b) During the year Government of Karnataka has converted outstanding
Guarantee Commission Payable as on 31.03.2013 as Investment to the
extent of Rs.218.71 Lacs vide its order No. CI 86 CPM 2011 Dt.
30.03.2013. The same is grouped under Share Application Pending
Allotment till further approval from members and SEBI.
1.2 Contingent liabilities and commitments
31.03.2013 31.03.2012
Rs. In Lacs Rs. In Lacs
(a) Claims against the company not
acknowledged as debt 977.88 904.42
(b) Letters of Credit and Guarantees 800.00 3271.78
(c) Estimated amount of contracts
remaining to be executed
on capital account and not
provided for 1177.43 2061.20
2955.31 6237.40
1.3 An amount of Rs.124.16 lacs interest payable towards purchase tax
for the period Sep-09 to Mar-13 has not been provided as the company
has requested the Government for waiver of Purchase Tax payable and the
proposal is under active consideration of the Government.
1.4 Pending reconciliation with MESCOM an amount of Rs.677.94 Lacs
(Rs.369.52 lacs) being the disputed amount claimed is not provided in
the books as on 31.03.2013. Total arrears claimed by MESCOM as on
31.03.2013 is Rs. 2779.09 lacs and provision held by MPM is to the
extent of Rs.2101.15 lacs.
1.5 Figures for the previous year have been regrouped /
reclassified/recast wherever necessary to conform to current year''s
presentation.
1.6 Amounts have been rounded off to the nearest two decimal points of
lakh of rupees.
Mar 31, 2012
I) Working Capital facilities obtained from banks are secured by
hypothecation of company''s present and future stock of raw materials,
consumable stores, finished goods, materials in process and book debts
and by second charge on the present and future assets of the company,
which are offered by way of first charge as security to Financial
Institutions (IFCI) and Debenture Trustees.
ii) (a) Term loans from Financial Institutions and Banks are secured by
a First charge on the company''s present and future immovable
properties, Plant and Machinery, Spares, Tools, accessories and certain
other movable properties and Second charge on the other assets offered
as security to banks for cash credit.
(b) Interest free term loan sanctioned by banks are governed by the
terms and conditions as set out in "Scheme for extending financial
assistance to sugar undertaking" in accordance with notification
dated 07.12.2007 issued by Government of India. These loans are secured
in favour of concerned banks by residual pari - passu charge on the
company''s current and fixed assets (movable and immovable properties)
both present and future. During the year, the company has repaid a sum
of Rs.318.35 Lakhs.
iii) (a) Debentures (Series III)
Out of Debentures (Series I) amounting to Rs. 45.50 crs. the company,
with the approval of the investors had rolled over Rs. 20.00 crs. for a
further period of five years redeemable at par as under
At the end of 5th Year 30 % in 2010
At the end of 6th Year 30 % in 2011
At the end of 7th Year 40 % in 2012
These debentures are secured by way of mortgage of both movable and
immovable office properties owned by the company at Mumbai. During the
year the company has paid the final installment of Rs.800 Lakhs and
redeemed the debentures in full.
b) 12.75 % Optionally Fully Convertible Debentures issued to IFCI on
conversion of entire overdue interest & funded interest term loan
aggregating to Rs.677.02 lakhs were redeemable in three equal annual
installments during FY 2010 to FY2012 with earliest redemption due on
01.01.2010. In the event of default, IFCI have the right to convert
all the defaulted amounts into equity at par. These debentures are
secured by way of first charge on the fixed assets of the company
present and future on pari-passu basis.
During F.Y. 2010-11 the company had rescheduled the repayment of second
installment of Rs.225.67 Lakhs which was due on 01.01.2011 to
01.01.2012 at revised rate of interest of 15% p.a. During the FY
2011-12 an amount of Rs. 451.35 Lakhs being Second & Third Installment
was due on 01.01.2012 and the same is outstanding as on 31.03.2012, is
shown under short term borrowing secured.
iv) The mortgage and first charge on the company''s present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to banks for cash credit facility, rank pari-passu
in respect of term loans from financial institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of of the company
secured for cash credit facility rank pari-passu among the consortium
of bankers.
v) From Govt. of Karnataka
a) Government of Karnataka loans are of two types, viz (a) Direct loans
through budgetary allocations and (b) loans under the scheme of
Externally Aided Projects (EAP). In the absence of any reference to the
rate of interests and repayment schedule, interest on loans under EAP
scheme has been provided @ 14 % p.a. and no interest has been provided
on direct loans given by Government through budgetary allocation.
b) During FY. 2011-12 GOK vide GO No.CI 86 CPM 2011, Bangalore dated
31.03.2012 has accorded sanction of conversion of entire GOK loan into
equity. The amount has been shown under "Share application money
pending allotment", pending approval from members & SEBI.
vi) During the year the company has availed Short term working capital
loan from Bank against pledging fixed Deposits to the extent of Rs.
2000 lakhs. Outstanding amount as on 31.03.2012 of Rs. 1800 lakhs is
disclosed under Short term loans secured.
vii) i) 8.27% Unsecured redeemable Non convertible bonds:
8.27% Unsecured redeemable non convertible bonds of Rs.3500 lakhs
guaranteed by Government of Karnataka are redeemable in 4 equal
installments from financial year 2013-14 onwards.
ii) 8.49% Unsecured redeemable Non convertible bonds:
During 2010-11 the Company had raised Rs 5000 lakhs by issue of 8.49 %
Unsecured redeemable Non convertible bonds Guaranteed by Government of
Karnataka towards implementation of augmentation of power plant,
installing wet lap machine and implementing energy conservation
mesures, which are redeemable in 4 equal installments from financial
year 2017-18 onwards. Due to non feasability of the project part of the
amount to the extent of Rs. 984.04 lakhs has not been utilised for the
above purpose and Unuitilized amount to the extent of Rs. 3307.71 lakhs
(Rs.4046.25 lakhs) is deposited in a scheduled bank is grouped/shown
under cash and bank balances schedule no. 2.14.
viii) Short Term Loan from M/s Axis Bank Limited to the extent of Rs.
800 lakhs (Rs.900 lakhs) was due for repayment during the year and the
same is outstanding as on 31.03.2012.
The company has not received any intimation from the suppliers
regarding status under the Micro, Small and Medium Enterprises
Development Act, 2006. Hence no disclosure is made in respect of;
i) Amount due and outstanding to suppliers as at the end of the
accounting year.
ii) Interest paid during the year.
iii) Interest payable at the end of the accounting year and
iv) Interest accrued and unpaid at the end of the accounting year.
* Statutory dues includes overdue P. F. Contribution and other
recoveries to the extent of Rs. 1942.79 lakhs and the same was remitted
in full during May -12.
** Payable towards employees includes an arrears of DA of Rs. 531.73
lacs and Rs.952.20 lacs for FY 2010-11 and FY 2011-12 respectively.
i. Expenditure relating to Captive Forest plantation other than fixed
assets are grouped under other current assets and is shown at note 2.11
and will be charged to profit & loss account as per Accounting Policy
No.1.02 (vii).
ii. Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulp wood requirement.
iii. Out of total lease area, the company has surrendered 4665.30
hectares of wild life areas to the Government as per the orders of the
Hon''ble Supreme Court. Further, as per the interim order of the Hon''ble
High Court, 3813 hectares of non-forestry land has to be surrendered to
the Government after extracting the yield from such areas in respective
maturity years and 1121 hectares have been surrendered so far.
iv. Phase-I of the Captive Forest Plantation Programme has been
financed by Overseas Development Agency, London, through Govt. of
Karnataka, partly by Grant and partly by Loan and Equity. Government
grants are accounted as per accounting Policy No. 1.10.
v. Company has received 185994 MT (131254 MT) of Wood from Captive
Forest Plantations during the year out of 2871.50 hectares (3381.80
hectares) of land & has provided Rs.207.91 lakhs (Rs. 149.79 lakhs)
towards 12.5% royalty/lease rental payable to Government of Karnataka.
vi. Farm forestry expenditure is charged-off to the profit and loss
account.
b) The company identifies the inventory position for Non-Moving items
of Stores & Spares as at the every balance sheet date. Company as on
31.03.2012 has identified Non Moving Stores & Spares to the extent of
Rs.1281.71 lakhs ( 1281.71 lakhs) and holds a provision of Rs. 640.86
lacs.
a) Confirmation of balances received / to be received from debtors are
required to be reconciled wherever necessary and suitably adjusted.
b) During the year on collections the company has wirtten back Rs
217.01 lakhs (Rs.1.91 lakhs) for which the provision for bad and
doubtful debts was made during earlier years.
c) Dobutful debts includes an amount of Rs. 435.53 lakhs being Interest
provided on defaulted outstanding upto 31.03.2012. The same has been
provided in full and accoutned under Provision for bad & doubtful
debts.
a) Intererst on Deposits and Advances includes interest earned of
Rs.434.84 lacs on Fixed Deposit.
b) Provision no longer required-written back is on withdrawal of
Provision for Bad & Doubtful Debts provided during FY 2010-11 withdrawn
on collection from debtors.
c) Rebates & Incentives (Govt. Grants) received during the year has
been utilised for payment of additional cane price for F.Y. 2009-10 to
the extent of Rs.435.25 lakhs.
a) Interest on Term loan includes an amount of Rs.783.82 lakhs being
interest and Guarantee commission on 8.49% Unsecured redeemable Non
convertible bonds for the FY 2010-11 of Rs.272.68 lakhs & 35.48 lakhs
and 2011-12 of Rs.425.66 lakhs & 50 lakhs resepctively.
b) Interest on others includes Rs. 197.60 lakhs being interest on
delayed payment to Provident Fund Trust.
a) The Packing and Forwarding expenses accounted under the head
''Selling Expenses'' is net off cost of Rs.8.14 Lakhs (Rs.19.95 Lakhs)
of Ream Wrapper paper produced and used in packing of Writing &
Printing Paper and Newsprint.
b) Cash Discount on sales includes Cash Discount, Reel Rebate,
Quarterly Incentive, Annual incentive and Special Discount.
* Certain items of income and expenditure relating to prior period with
net credit of Rs.14.80 Lakhs (Rs.231.63 Lakhs debit) arising mainly on
account of short provision made during previous years in relation to
Guarantee Commission,amount recovered from supplier and reversal of
interest on dealer deposits.
1.01 Government of Karnataka has released Rs.500 lakshs towards fresh
cash equity infusion vide G.O.No. CI 86/CPM 2011, Bangalore Dated
12.01.2012. The same is disclosed under "Share application money
pending allotment" till approval from members & SEBI.
1.02 Contingent liabilities and commitments
31.03.2012 31.03.2011
Rs. In Lacs Rs. In Lacs
Claims against the company not
acknowledged as debt 904.42 52.77
Letters of Credit and Guarantees 3271.78 2603.04
Estimated amount of contracts remaining
to be executed on capital account and
not provided for 2061.20 3100.23
6237.40 5756.04
1.03 Pending reconciliation with MESCOM an amount of Rs.369.52 (Rs.
211.96) lacs being the disputed amount claimed is not provided in the
books as on 31.03.2012. Total arrears claimed by MESCOM as on
31.03.2012 is Rs.2637.47 lacs and provision held by MPM is to the
extent of Rs.2267.95 lacs.
1.04 Figures for the previous year have been
regrouped/reclassified/recast wherever necessary to confirm to current
year''s presentation.
1.05 Amounts have been rounded off to the nearest two decimal points of
lakh of rupees.
1.06 EMPLOYEE BENEFITS
a) The fair value of the assets of the provident fund trust including
the return on the assets thereof as on the Balance Sheet date being
greater than the obligations under the defined benefit plan, no further
charge to the profit and loss account is required.
Mar 31, 2011
1.01 SECURITIES OFFERED FOR LOANS
(i) Working Capital facilities obtained from banks are secured by
hypothecation of company''s present and future stock of raw materials,
consumable stores, finished goods, materials in process and book debts
and by second charge on the present and future assets of the company,
which are offered by way of first charge as security to Financial
Institutions (IFCI) and Debenture Trustees.
(ii) (a) Term loans from Financial Institutions and Banks are secured
by a First charge on the company''s present and future immovable
properties, Plant and Machinery, Spares, Tools, accessories and certain
other movable properties and Second charge on the other assets offered
as security to banks for cash credit.
(b) interest free term loan sanctioned by banks are governed by the
terms and conditions as set out in "Scheme for extending financial
assistance to sugar undertaking" in accordance with notification dated
07.12.2007 issued by Government of India. These loans are secured in
favour of concerned banks by residual pari - passu charge on the
company''s current and fixed assets (movable and immovable properties)
both present and future. During the year, the company has repaid a sum
of Rs 195.10 Lakhs.
(iii) (a) Debentures (Series III)
Out of Debentures (Series I) amounting to Rs. 45.50 crs. the company,
with the approval of the investors had folied over Rs. 20.00 crs. for a
further period of five years redeemable at par as under
1 At the end of 5th Year 30 % in 2010
2 At the end of 6th Year 30 % in 2011
3 At the end of 7th Year 40 % in 2012
These debentures are secured by way of mortgage of both movable and
immovable office properties owned by the company at Mumbai. During the
year the company has redeemed debentures of series III to the extent of
Rs 600 Lakhs.
(b) 12.75 % Optionally Fully Convertible Debentures issued to IFCI on
conversion of entire overdue interest & funded interest term loan
agreegating to Rs.677.02 lakhs are redeemable in three equal annual
installments during FY 2010 to FY2012 with earliest redemption due on
01.01.2010. in the event of default, IFCI shall have the right to
convert all the defaulted amounts into equity at par. These debentures
are secured by way of first charge on the fixed assets of the company
present and future on pari-passu basis.
7 he company has rescheduled the repayment of second installment of Rs
225.67 Lakhs which was due on 01.01. 2011 to 01.01.2012 at revised rate
of interest of 15% p.a.
iv) The mortgage and first charge on the company''s present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties end second charge on other assets
offered as security to banks for cash credit facility, rank pari-passu
in respect of term loans from financial institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of the company secured
for cash credit facility rank pari-passu among the consortium of
bankers.
4.02 TERM LOANS
a) FROM GOVT. OF KARNATAKA
Government of Karnataka loans are of two types, viz (a) Direct loans
through budgetary allocations and (b) loans under the scheme of
Externally Aided Projects (EAP). In the absence of any reference to the
rate of interests and repayment schedule, interest on loans under EAP
scheme has been provided @ 14 % p.a. and no interest has been provided
on direct loans given by Government through budgetary allocation.
Interest @ 9% p.a. as suggested by Accountant General Karnataka is not
considered pending its approval by Government of Karnataka.
b) OTHERS
i) 8.27% Unsecured redeemable Non convertible bonds:
8.27% Unsecured redeemable bonds of Rs.35 crores guaranteed by
Government of Karnataka are redeemable in 4 equal installments from
financial year 2013-14 onwards.
ii) 8.49% Unsecured redeemable Non convertible bonds:
During the year the Company has raised Rs. 50 Crores by issue of 8.49 %
Unsecured redeemable Non convertible bonds Guaranteed by Government of
Karnataka, which redeemable in 4 equal installments from financial year
2017-18 onwards. Unutilized amount to the extent of Rs. 40.46 crores is
deposited in a scheduled bank and grouped under cash and bank balances
schedule no 2.11.
4.03 CONTINGENT LIABILITY
Contingent liability in respect of:
(i) Letters of Credit and Guarantees Rs.2603.04 lakhs (Rs. 1973.08
lakhs).
(ii) Commitments for capital expenditure Rs 3100.30 lakhs (Rs. 2122.00
lakhs).
(iii) Claims against the company not acknowledged as debts Rs 52.77
lakhs (Rs. 70.77 lakhs)
4.04 DEBTORS, CREDITORS AND LOANS & ADVANCES:
a) Confirmation of balances received/to be received from debtors,
creditors and for loans and advances, are required to be reconciled
wherever necessary and suitably adjusted.
b) The company has not received any intimation from the suppliers
regarding status under the Micro, Small and Medium Enterprises
Development Act, 2006. Hence no disclosure is made in respect of;
i) Amount due and outstanding to suppliers as at the end of the
accounting year.
ii) Interest paid during the year.
iii) Interest payable at the end of the accounting year, and
iv) Interest accrued and unpaid at the end of the accounting year.
c) During the year the company has wirtten back Rs Nil lakhs (Rs. 1.91
lakhs) for which the provision for bad and doubtful debts was made
during earlier years.
d) During the year the company has made provision to the extent of
Rs.794.68 Lakhs towards bad and doubtful debts w. r.t outstanding of
M/s Varta, and M/s Victory Press Pvt Ltd to the extent of Rs.601.47
lakhs and Rs 193.21 lakhs respectively, the legal proceedings on both
the parties for recovering the dues are initiated and presently is at
arbitration level. Recovery of the above dues will be recognized in the
books on realization.
4.05 TAXATION
Provision towards Income Tax/KVAT/CST/other applicable taxes has been
made in the accounts as determined. Any further liability will be
provided in the accounts on completion of assessments and upon
determination of further liability. Income Tax assessments have been
completed up to FY 2008-09, KVAT up to FY 2008-09 and CST assessments
up to FY 2007-08
4.06 FIXED ASSETS
(i) Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles and earth moving equipments
relating to captive forest plantation.
(ii) The borrowing cost capitalised during the year is Rs 247.31 lakhs
(Rs. 182.02 lakhs) pertains to Captive Forest Plantation and Rs 628.08
lakhs (Rs 137.98 lakhs) pertains to Capital work in progress.
4.07 CAPTIVE FOREST PLANTATION
i. Expenditure relating to Captive Forest plantation other than fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to profit & loss account as per
Accounting Policy No.1.02 (vii).
ii. Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulp wood requirement.
iii. Out of total lease area, the company has surrendered 4665.30
hectares of wild life areas to the Government as per the orders of the
Hon''ble Supreme Court. Further, as per the interim order of the Hon''ble
High Court, 3813 hectares of non-forestry land has to be surrendered to
the Government after extracting the yield from such areas in respective
maturity years and 1121 hectares have been surrendered so far.
iv. Phase-I of the Captive Forest Plantation Programme has been
financed by Overseas Development Agency, London, through Govt, of
Karnataka, partly by Grant and partly by Loan and Equity. Government
grants are accounted as per accounting Policy No. 1.10.
v. Company has received 131254 MT (125426 MT) of Wood from Captive
Forest Plantations during the year out of 3381.80 hectares (1957
hectares) of land & has provided Rs. 149.79 lakhs (Rs. 154.24 lakhs)
towards 12.5% royalty/lease rental payable to Government of Karnataka.
vi. Farm forestry expenditure is charged-off to the profit and loss
account.
4.09 PRIOR PERIOD ADJUSTMENTS
a) Certain items of income and expenditure relating to prior period
with net debit of Rs.231.63 Lakhs (Rs 68.48 Lakhs) arising mainly on
account of short provision made during previous years in relation to
freight on pulp, interest on dealers deposit, Interest on Term loan,
entry tax and excess input tax availed.
b) The water charges receivable in the order of Rs 88 lakhs from
KPTCL/MESCOM and water charges payable in the order of Rs 60 lakhs to
KNNL as per revised rates has been provided in the books pending final
decision at appropriate levels in the Government.
4.10 DEFERRED TAX
The company has accumulated losses as per provisions of Income Tax Act,
1961 and as a measure of prudence the company has not recognized the
deferred tax asset in financial statements.
4.11 IMPAIRMENT OF ASSETS:
As the estimated recoverable amount of fixed assets is more than the
carrying amount of such assets, there is no impairment loss that heeds
to be provided as per AS- 28.
4.12 PROVISION FOR NON MOVING INVENTORIES:
Generally, the company identifies the inventory position for Non-Moving
Items of Stores & Spares, As at the Balance sheet date, the company has
identified Non moving stores to the extent of Rs. 12.82 crores (12.82
crores) and has made a provision of 50% on the as per accounting policy
no.1.02.
4.13 During the year, 19 (104) employees have opted Voluntary
Retirement Scheme introduced by the company and an amount of Rs. 80.56
Lakhs towards the same have been accounted and shown under Schedule
3.04.
4.14 Pending reconciliation with MESCOM an amount of Rs.211.96 lakhs
(the arrears claimed by MESCOM is Rs. 541.66 Lakhs and the amount
provided by MPM is Rs.329.70 Lakhs) towards arrears and interest
thereori is not recognized as expenditure in the books.
4.15 Loans and Advances (Unsecured considered good) under schedule 2.12
includes an advance to employees of Rs 98.66 lakhs (232.33 lakhs) and
Rs Nil (46.30 lakhs ) to contract workers paid against salary/wage
revision.
4.16 Related party disclosure as per Accounting Standard 18 is
applicable in respect of remuneration paid to Chairman and Managing
Director and the details of the same are given vide note on accounts
4.31 (c).
4.17 The Packing and Forwarding expenses accounted under the head
''Selling Expenses'' is net off cost of Rs 19.95 Lakhs (Rs.1.67 Lakhs) of
Ream Wrapper paper produced and used in packing of Writing & Printing
Paper and Newsprint.
4.18 The company has leased 4 acres of land for 20 years to M/s Anudeep
Corbonates (P) Ltd, for setting up of an ancillary unit for manufacture
of Burnt Lime and the same is governed by the Lease agreement
dtd.15.11.1997
4.20 During the year the company has accounted loss exchange rate
fluctuation to the extent of Rs.26.87 lakhs.
4.21 Figures for the previous year have been
regrouped/reclassified/recast wherever necessary to confirm to current
year''s presentation.
4.22 Amounts have be^n founded off to the nearest two decimal points of
lakhs of rupees.
4.24 EMPLOYEE BENEFITS
a) The fair value of the assets of the provident fund trust including
the return on the Assets thereof as on the Balance Sheet date being
greater than the obligations under the defined benefit plan, no further
charge to the profit and loss account is required.
Mar 31, 2010
1.1 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS : AS - 29
(a) Provision is recognised when :
i.The Company has a present obligation as a result of past event.
ii. It is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and
iii. A reliable estimate can be made of the amount of the obligation.
b) Contingent Liabilities are disclosed by way of Notes on accounts.
c) Contingent Assets are neither recognised not disclosed.
Mar 31, 2009
1.01. SECURITIES OFFERED FOR LOANS
(i) Working Capital facilities obtained from banks are secured by
hypothecation of Companys present and future stock of raw materials,
consumable stores, finished goods, materials in process and Book Debts
and by second charge on the present and future assets of the Company,
which are offered by way of first charge as security to Financial
Institutions (IFCI) and Debenture Trustees.
(ii) (a) Term Loans from Financial Institutions and Banks are secured
by a first charge on the companys present and future immovable
properties, Plant and Machinery, Spares, Tools accessories and certain
other movable properties and second charge on the other assets offered
as Security to Banks for cash credit.
(b) Interest free term loan sanctioned by banks are governed by the
terms and conditions as set out in "Scheme for extending financial
assistance to sugar undertaking" in accordance with notification dated
07.12.2007 issued by Government of India. These loans are secured in
favour of concerned banks by residual Pari - passu charge on the
companys current and fixed assets (movable and immovable properties)
both present and future.
(iii) (a) Debentures (Series II)
12.75% Optionally fully Convertible Debentures issued to IFCi on
conversion of entire over due interest & funded interest term loan
agregating to Rs.677.02 iakhs are redeemable in three equal annual
installments during FY2010 to FY2012 with earliest redemption due on
01.01.2010. In the event of default, IFCi shall have the right to
convert all the defaulted amounts into equity at par. These debentures
are secured by way of first charge on the fixed assets of the company
present and future on paripasu basis.
(IV) The mortgage and first charge on the companys present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial Institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of the company secured
for cash credit facility rank pari-passu among the consortium of
bankers.
2.02 TERM LOAN FROM GOVERNMENT OF KARNATAKA
Government of Karnataka loans are of two types, viz., (a) Direct loans
through budgetary allocations and (b) loans under the scheme of
Externally Aided Projects (EAP). In the absence of any reference to the
rate of interests and repayment schedule, interest on loans under EAP
scheme has been provided @ 14% p.a. and no interest has been provided
on direct loans given by Government through budgetary allocation.
Interest @ 9% p.a. as suggested by Accountant General, Karnataka, is
not considered pending its approval by Government of Karnataka.
During the year company has accounted two loans from Government of
Karnataka amounting to Rs. 835.41 lacs. Out of this, loan of Rs 761
lacs is provided by way of book adjustment towards Voluntary Retirement
Scheme vide order dated 13.02.2009 and accounted by us on
31.03.2009.The other interest free loan of Rs 74.41 lacs is by way of
conversion of purchase tax on sugar cane as per order dated 12.01.2009.
3.03 CONTINGENT LIABILITY
Contingent Liability in respect of:
(i) Letters of Credit and Guarantees Rs. 4343.18 lakhs (Rs. 80.79
lakhs).
(ii) Commitments for Capital Expenditure Rs. 3.37 lakhs (Rs. 17.04
lakhs).
(iii) Claims against the Company not acknowledged as debts Rs. 120.98
lakhs (Rs. 242.75 lakhs).
4.04.
DEBTORS, CREDITORS AND LOANS & ADVANCES:
a) Confirmation of balances received/to be received from debtors,
creditors and for loans and advances, are required to be reconciled
wherever necessary and suitably adjusted.
b) The company has not received any intimation from the suppliers
regading status under the Micro, Small and Medium Enterprises
Development Act, 2006. Hence no disclosure is made in respect of ;
i) Amount due and outstandina to suppliers as at the end of accounting
year.
ii) Interest paid during the year.
iii) Interest payable at the end of the accounting year, and
iv) Interest accrued and unpaid at the end of the accounting year.
(c) During the year the company has written off Rs 4.05 lacs (Rs.138
lacs) for which the provision for bad and doubtful debts was made
during earlier years.
4.05. TAXATION
Provision towards Income tax/KVAT/CST/other applicable taxes has been
made in the accounts as determined. Any further liability will be
provided in the accounts on completion of assessments and upon
determination of further liability. Income Tax assessments have been
completed upto FY 2006 and that of KVAT/CST assessments upto FY 2007
and FY 2008 respectively.
4.06. FIXED ASSETS
Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles, earth moving equipments relating
to captive forest plantation.
(ii) The borrowing cost capitalised during the year is Rs. 83.99 lakhs
(Rs. 63.54 lakhs) and pertains to Captive Forest Plantation.
(iii) During the year the company has identified Insurance spares of
capital in nature to the I extent of Nil (Rs 59.66 Lacs.)
4.07. CAPTIVE FOREST PLANTATION
(i) Expenditure relating to Captive Forest plantation other than fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to profit & loss account as per
Accounting Policy No. 1.02
(ii) Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulp wood requirement.
(iii) Out of total lease area, the company has surrendered 4665.30 ha.
of wild life areas to the Government as per the orders of the Honble
Supreme Court. Further, as per the interim order of the Honble High
Court, 3813 ha. of non-forestry land has to be surrendered to the
Government after extracting the yield from such areas in respective
maturity years and 1121 ha. have been surrendered so far.
(iv) Phase-! of the Captive Forest Plantation Programme has been
financed by Overseas Development Agency, London, through Govt, of
Karnataka, partly by Grant and partly by Loan and Equity. Government
grants are accounted as per accounting Policy No.1.10.
(v) Company has received 239884 MT (228667 MT) of Wood from Captive
Forest Plantations during the year out of 3686 hectares. (3165
hectares) of land & has provided for Rs. 236.66 lacs (Rs. 273.49 lacs)
towards 12.5% royalty/lease rental payable to Government of Karnataka.
(vi) Government has accorded in principle approval vide order Dated
31.03.2009 for adjustment of Rs 14.34 Crs as compensation on surrender
of 4665.3 hectares of wild life area back to Government against 12.5 %
lease rent payable by MPM to Government. The compensation amount is
accounted and disclosed as other income under schedule 3.01.
(vii) Farm forestry expenditure is charged-off to the profit and loss
account.
4.08. PRIOR PERIOD ADJUSTEMENTS
(a) Certain items of income and expenditure relating to prior period
with net debit of Rs. 569 Lacs (credit of Rs 229.10 Lacs) arising
mainly on account of short/non provision for 12.5% lease rent payable
to Government, withdrawal of provision of claim on Railways and others
have been shown under the head Prior Period Adjustment.
(b) The water charges receivable in the order of Rs 55 lacs from
KPTCL/MESCOM and water charges payable in the order of Rs 14 lacs to
KNNL as per revised rates are not accounted in the books pending final
decision at appropriate levels in the Government.
4.09 DEFERRED TAX
As a measure of prudence the company has not recognized the deferred
asset in the accounts. The net deferred tax asset as at the balance
sheet date is Rs 75.97 crores and the component of the same is as
under;
4.10 IMPAIRMENT OF ASSETS :
As the estimated recoverable amount of fixed assets is more than the
carrying amount of such assets, there is no impairment loss that needs
to be provided as per AS-28.
4.11. PROVISION FOR NON MOVING INVENTORIES :
Generally the company identifies the inventory position for non-moving
items of stores & spares. As at the Balance Sheet date the company has
identified non-moving stores & spares to the extent of Rs. 13.50 Crs
(Rs 14.40 Crs) and has made a provision of 50% on the same as per
Accounting policy No. 1.02.
4.12. The company has allotted the 48600 shares @ Rs 10/- each
amounting to Rs 4.86 lacs to Government of Karnataka by converting
share application money into share capital vide board resolution dated
24/04/2006.
4.13. 197 employees opted Voluntary Retirement scheme introduced by
the company. Out of total payment of Rs 761.29 lacs towards VRS based
on the pay back period as per AS 15, an amount of Rs 263.92 lacs has
been amortised during the year and the balance of Rs. 497.37 lacs is
treated as Deferred Revenue Expenditure and the same is shown under the
head Miscellaneous Expenditure in financial statement.
4.14 (a) The Sale of Energy to MESCOM is as per Power Purchase
Agreement upto 31.12.2008. The rate adopted for sale between
01.01.2009 to 31.03.09 is as per Government Order No EN/65/EEB/2008
Dated 27th January 2009.
b) Pending reconciliation with MESCOM an amount of Rs 91.10 lacs
towards arrears and interest there on is not recognized as expenditure
in the books. (The arrears claimed by MESCOM is Rs 300.26 lacs and the
amount provided by MPM is Rs. 209.16 Lacs).
4.15. Profit on sale of fixed asset represents sale of one of the
residential flats in Mumbai sold during the year for Rs 463.20 lacs.
4.16. Loan and Advances (Unsecured considered good) under schedule
2.12 includes advance to employees of Rs 247.99 lacs and Rs 53.50 lacs
to contract workers paid against salary/wage revision. In the case of
employees the Government has approved salary revision prospectively
w.e.f. 1.07.2009. Consequently the advance paid to employees is subject
to recovery and the same will be dealt-with in due course of time
appropriately. In respect of contract workers the wage revision is yet
to be approved by the Board and Gov- ernment.
4.17. Related party disclosure as per Accounting Standard 18 is
applicable in respect of Remuneration paid to Chairman and Managing
Director and the details of the same are given vide note on accounts
4.31 (c).
4.18. The Packing and Forwarding expenses accounted under the head
Selling Expenses is net of cost of Rs. 0.91 Lakhs (Rs. 16.42 Lakhs)
of Ream Wrapper paper produced and used in packing of Writing &
Printing Paper and Newsprint.
4.19. The company has leased 4 acres of land for 20 years to M/s
Anudeep Corbonates (P) Ltd, for setting up of an ancillary unit for
manufacture of Burnt Lime and the same is governed by the Lease
agreement dtd. 15.11.1997.
Mar 31, 2008
01.
SECURITIES OFFERED FOR LOANS
(i) Working Capital facilities obtained from banks are secured by
hypothication of Companys present and future stock of raw materials,
consumable stores, finished goods, materials in process and Book Debts
and by second charge on the present and future assets of the Company,
which are offered by way of first charge as security to Financial
Institutions (IFCI) and Debenture Trustees.
(ii) Term Loans from Financial Institutions and Banks are secured by a
first charge on the companys present and future immovable properties,
Plant and Machinery, Spares, Tools accessories and certain other
movable properties and second charge on the other assets offered as
Security to Banks for cash credit.
(iii) (a) Debentures (Series I & II) Non-convertible debentures (in two
series) issued on private placement basis together with interest
thereon costs, charges and remuneration of trustees payable by the
company in respect of the Bonds are secured by way of first charge on
Fixed Assets of the company on pari-passu basis present and future to
the satisfaction of the trustees. The terms of redemption of these
non-convertible debentures are as under.
(iv) The mortgage and first charge on the companys present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial Institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of the company secured
for cash credit facility rank pari-passu among the consortium of
bankers.
02.
TERM LOAN FROM GOVERNMENT OF KARNATAKA
Government of Karnataka loans are of two types, viz., (a) Direct loans
through budgetary allocations and (b) loans under the scheme of
Externally Aided Projects (EAP). In the absence of any reference to the
rate of interests and repayment schedule, interest on loans under EAP
scheme has been provided @ 14% p.a. and no interest has been provided
on direct loans given by Government through budgetary allocation.
Interest @ 9% p.a. as suggested by Accountant General, Karnataka, is
not considered pending its approval by Government of Karnataka.
03.
Contingent liability
Contingent Liability in respect of:
(i) Letters of Credit and Guarantees Rs. 80.79 lakhs (Rs. 810.49
lakhs).
(ii) Commitments for Capital Expenditure Rs. 17.04 lakhs (Rs. 34.41
lakhs).
(iii) Claims against the Company not acknowledged as debts Rs. 242.75
lakhs (Rs. 80.93 lakhs).
(iv) Wage Revision Arrears for employees and others Rs. Nil (Rs. 1951
lakhs).
04.
DEBTORS, CREDITORS AND LOANS & ADVANCES:
a) Confirmation of balances received/to be received from debtors,
creditors and for loans and advances, are required to be reconciled
wherever necessary and suitably adjusted.
b) The company has not received any intimation from the suppliers
regading status under the Micro, Small and Medium Enterprises
Development Act, 2006. Hence no disclosure is made in respect of ;
i) Amount due and outstanding to suppliers as at the end of accounting
year.
ii) Interest paid during the year.
iii) Interest payable at the end of the accounting year, and
iv) Interest accrued and unpaid at the end of the accounting year.
(c) During the year the company has written off Rs. 1.38 crores
(Previous year Nil) and has disclosed the same under Bad debts written
off arising out of court settlement with M/s Ambica Enterprises in
respect of dues owed to the company against sale of newsprint.
05.
TAXATION
Provision towards Income tax/KVAT/CST/other applicable taxes has been
made in the accounts as determined. Any further liability will be
provided in the accounts on completion of assessments and upon
determination of further liability. Income Tax assessments have been
completed upto FY 2005-06 and that of KVAT/CST/Others assessments upto
FY 2006-07.
06.
FIXED ASSETS
(i) Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles, earth moving equipments relating
to captive forest plantation.
(ii) The borrowing cost capitalised during the year is Rs. 63.54 lakhs
(Rs. 66.69 lakhs) and pertains to Captive Forest Plantation.
(iii) During the year the company has identified Insurance spares of
capital in nature to the extent of Rs 59.66 Lacs. Consequently
depreciation of Rs 12.59 Lacs is charged to prior period adjustment and
Rs 1.39 Lacs to Depreciation account in the profit and loss account.
07.
CAPTIVE FOREST PLANTATION
(i) Expenditure relating to Captive Forest plantation other than fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to profit & loss account as per
Accounting Policy No.1.02
(ii) Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulp wood requirement.
(iii) Out of total lease area, the company has surrendered 4665.30 ha.
of wild life areas to the Government as per the orders of the Honble
Supreme Court. Further, as per the interim order of the Honble High
Court, 3813 ha. of non-forestry land has to be surrendered to the
Government after extracting the yield from such areas in respective
maturity years and 1121 ha. have been surrendered so far.
(iv) Phase-I of the Captive Forest Plantation Programme has been
financed by Overseas Development Agency, London, through Govt, of
Karnataka, partly by Grant and partly by Loan and Equity. Government
grants are accounted as per accounting Policy No. 1.10.
(v) Company has received 228667 MT (178126 MT) of Wood from Captive
Forest Plantations during the year out of 3165 hectares. (3071
hectares) of land & has provided for Rs. 273.49 lacs (Rs. 202.95 lacs)
towards 12.5% royalty/lease rental payable to Government of Karnataka.
(vi) Farm forestry expenditure is charged-off to the profit and loss
account.
08.
PRIOR PERIOD ADJUSTEMENTS
Certain items of income and expenditure relating to prior period with
net credit of Rs 229.10 lakhs (Rs 313.93 lakhs) arising mainly on
account of withdrawal of provisions made in the earlier years in
respect of Excise Duty, gratuity on contract casuals, depreciation
relating to assets/insurance spares capitalized during the year and
others have been shown under the head Prior Period Adjustments.
09.
DEFERRED TAX
As a measure of prudence the company has not recognized the deferred
asset in the accounts. The net deferred tax asset as at the balance
sheet date is Rs 66.25 crores and the component of the same is as
under;
10.
IMPAIRMENT OF ASSETS :
As the estimated recoverable amount of fixed assets is more than the
carrying amount of such assets, there is no impairment loss that needs
to be provided as per AS-28.
11.
PROVISION FOR NON MOVING INVENTORIES :
Generally the company identifies the inventory position for non-moving
items of stores & spares. As at the balance sheet date the company has
identified non-moving stores & spares to the extent of Rs. 14.40 Crores
and has made a provision of 50% on the same as per Accounting policy
No.1.02.
12.
During the year the company has accounted grants provided by Government
of Karnataka by way of waiver of interest to the extent of Rs. 14.61
Crores & the same has been disclosed in the financial statements under
the head Rebates & Incentives under schedule no. 3.01.
13.
Gratuity liability on contract workers which was provided and deferred
to the extent of Rs. 1.28 crores in FY 2007 has been fully written off
during the year instead of providing Rs. 0.32 cr on deferred basis.
14.
Wage arrears of Rs. 1072.59 Lakhs to employees including contract &
Forest workers are fully paid during the year. The arrears in respect
of employees have been disclosed under schedule No 3.04 and that of
contract & forest workers are included under Labour charges.
Consequently the amount shown under contingent liability and amount
provided against doubtful advances have been fully withdrawn.
15.
Income by way of supply of filtered water shown under schedule 3.01
includes arrears of Rs.3.66 crores to be received from VISL arising out
of reconciliation & revision in rates in terms of the minutes dated
25th June 2008.
16.
The amount of credit of Rs. 1038.29 Lacs (144.82 Lacs) shown under the
head "Provision no longer required" under schedule 3.01 mainly relates
to withdrawal of provision made on doubtful advances to staff and
contract casuals (Rs 781.07 lacs) and withdrawal of provision upon
reconciliation of MESCOM account (Rs 213.86 lacs).
17.
Related party disclosure as per Accounting Standard 18 is applicable in
respect of Remuneration paid to Chairman and Managing Director and the
details of the same are given vide note on accounts 4.31 (c).
18.
The Packing and Forwarding expenses accounted under the head Selling
Expenses is net of cost of Rs. 4.37 Lakhs (Rs. 16.42 Lakhs) of Ream
Wrapper paper produced and used in packing of Writing & Printing Paper
and Newsprint.
19.
The company has leased 4 acres of land for 20 years to M/s Anudeep
Corbonates (P) Ltd, for setting up of an ancillary unit for manufacture
of Burnt Lime and the same is governed by the Lease agreement dtd.
15.11.1997.
20.
Figures for the previous year have been regrouped/reclassified/recast
wherever necessary to conform to current years presentation.
21. Amounts have been rounded off to the nearest two decimal points
of lakh of Rupees.
22. EMPLOYEE BENEFITS
a) The fair value of assets of the provident fund trust including the
return on the assets thereof as on the Balance Sheet date being greater
than the obligations under the defined benefit plan no further charge
to the profit and loss, account is required.
Mar 31, 2007
SECURITIES OFFERED FOR LOANS
Working Capital facilities obtained from banks are secured by
hypothication of Companys present and future stock of raw materials,
consumable stores, finished goods, materials in process and Book Debts
and by second charge on the present and future assets of the Company
which are offered by way of first charge as security to Financial
Institutions(IFCI) and Debenture Trustees.
Term Loans from Financial Institutions and Banks are secured by a first
charge on the companys present and future immovable properties, Plant
and Machinery, Spares, Tools accessories and certain other movable
properties and second charge on the other assets offered as Security to
Banks for cash credit.
Debentures (Series I & II)
Non-convertible debentures (in two series) issued on private placement
basis together with interest thereon costs, charges and remuneration of
trustees payable by the company in respect of the Bonds are secured by
way of first charge on Fixed Assets of the company on pari-passu basis
present and future to the satisfaction of the trustees. The terms of
redemption of these non-convertible debentures are as under.
The necessary amendments to the trust deed entered into with Canara
Bank, the trustees for the debenture holders, are under progress.
12.75% Optionally fully Convertible Debentures issued to IFCI for
Rs.677.02 lakhs are redeemable in three equal annual installment during
FY2010 to FY2012 with earliest redemption due on 01.01.2010. In the
event of default, IFCI shall have the right to convert all the
defaulted amount into equity at par. These debentures are secured by
way of first charge on the fixed assets of the company present and
future on paripasu basis.
(iv) The mortgage and first charge on the companys present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial Institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of the company secured
for cash credit facility rank pari-passu among the consortium of
bankers.
TERM LOAN FROM GOVERNMENT OF KARNATAKA
CONTINGENT LIABILITY
(i) Letters of Credit and Guarantees Rs. 810.49 lakhs (Rs. 5093.83
lakhs).
(ii) Commitments for Capital Expenditure Rs. 34.41 lakhs (Rs. 36.54
lakhs).
(iii) Claims against the Company not acknowledged as debts Rs. 80.93
lakhs (Rs. 311.18 lakhs).
(iv) Wage Revision Arrears for employees and others Rs. 1951 lakhs (Rs
2048 lakhs).
RECONCILIATION
Confirmation of balances received/to be received from debtors,
creditors and for loans and advances, are required to be reconciled
wherever necessary and suitably adjusted.
TAXATION
Provision towards Karnataka VAT/Sales Tax has been made in the accounts
as determined. Any further liability will be provided in the accounts
on completion of assessments/determination of further liability. Income
Tax and Karnataka VAT/Sales Tax assessments have been completed upto
financial year 2003-04.
FIXED ASSETS (SCH. 2.05)
(i) Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles, earth moving equipments relating
to captive forest plantation.
(ii) The borrowing cost capitalised during the year is Rs. 66.69 lakhs
(Rs. 56.19 lakhs) and pertains to Captive Forest Plantation.
ASSETS TAKEN ON LEASE
The assets were capitalised during the year at related residual values
considering the terms of lease agreement.
CAPTIVE FOREST PLANTATION
(i) Expenditure relating to Captive Forest plantation other than fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to revenue as per Accounting Policy
No.1.02 (b).
(ii) Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulp wood requirement.
(iii) Out of total lease area, the company has surrendered 4665.30 ha.
of wild life areas to the Government as per the orders of the Honble
Supreme Court. Further, as per the interim order of the Honble High
Court, 3813 ha of non-forestry land has to be surrendered to the
Government after extracting the yield from such areas in respective
maturity years and 1121 ha have been surrendered so far.
(iv) Phase-1 of the Captive Forest Plantation Programme has been
financed by Overseas Development Agency, London, through Govt. of
Karnataka, partly by Grant and partly by Loan and Equity. Government
grants are accounted as per accounting Policy No.1.10.
(v) Company has received 178126 MT (154326 MT) of Wood from Captive
Forest Plantations during the year out of 3071 hectares. (2956
hectares) of land.
Certain items of income and expenditure relating to prior period with
net credit of Rs 313.93 lakhs (debit of Rs 758.68 lakhs) arising mainly
on account of Cut of court settlement, Depreciation, transport susidy
on export of sugar, gate sale of sugar, FLC transactions, debit and
credit balances in both Sundry Debtors and Sundry Creditors accounts,
closure of lease accounts and others has been shown under the head
Prior Period Adjustments.
POWER PURCHASE AGREEMENT
Consequent upon approval of Power Purchase agreement by KERC on the
export of Power, and pending reconciliation of accounts with MESCOM,
necessary adjustments relating to value of exported power till March
2007 have been carried out in the books of accounts.
SHARE APPLICATION MONEY
An amount of Rs. 155.75 lakhs was treated as Share Application money
during FY 2002- 03, out of release of Rs. 559.15 lakhs by Govt. of
Karnataka (Dutch Assisted Project). In terms of Govt. order dated
30.3.2007, the Share application money is withdrawn and treated as
Guv., of Karnataka loan.
RELATED PARTY DISCLOSURE
Related party disclosure as per Accounting Standard 18 is related to
the extent of remuneration paid to Chairman and Managing Director and
the details of the same are given vide note 4.28(c).
Gratuity liability in respect of Contract Workers amounting to Rs.
160.24 lakhs is amortised over a period of five years. Rs. 32.05 lakhs
has been charged off during current year and the balance amount of Rs.
128.19 lakhs is carried forward as Miscellaneous Expenditure (to the
extent not written off or adjusted)
Bagasse for Captive consumption which was valued hitherto at equated
cost (excluding taxes) of Raw Materials (sugarcane) is now valued at
equated cost (including taxes) of Raw material (sugarcane) as part of
compliance of AS 2. Consequently profit for the year will be overstated
by Rs. 38.30 lakhs.
Provision of Rs. 62.33 lacs for diminution in the value of Investment
in Mysore Electcrical Industries Limited made in FY 2004-05 is written
back during the year as the same is no longer required.
The Packing and Forwarding expenses accounted under the head Selling
Expenses is net of cost of Rs. 16.42 lakhs of Ream Wrapper paper
produced and used for packing of Writing & Printing Paper and
Newsprint.
The company has leased 4 acres of land for 20 years to M/s Anudeep
Corbonates (P) Ltd, for setting up of an ancillary unit for manufacture
of Burnt Lime and the same is governed by the lease agreeement dt
15.11.1997.
Figures for the previous year have been regrouped/reclassified/recast
wherever necessary to conform with current years presentation.
Amounts have been rounded off to the nearest two decimal points of lakh
of rupees.
Mar 31, 2006
CONTINGENT LIABILITY
Contingent Liability in respect of:
Letters of Credit and Guarantees Rs. 5093.83 lakhs (Rs. 4236.13 lakhs).
Commitments for Capital Expenditure Rs. 36.54 lakhs (Rs. 110.97 lakhs).
Claims against the Company not acknowledged as debts Rs. 263.12 lakhs
(Rs. 381.56 lakhs).
Wage Revision Arreasrs for employees and others Rs. 2048 lakhs (Rs 2145
lakhs).
RECONCILIATION
Confirmation of balances received/to be received from debtors,
creditors and for loans and advances, are required to be reconciled
wherever necessarv nd suitably adjusted.
TAXATION
Provision towards Income Tax/Sales Tax has been made in the accounts as
determined. Any further liability will be provided in the accounts on
completion of assessments/determination of further liability. Income
Tax and Sales Tax assessments have been completed upto financial year
2002-03.
FIXED ASSETS (SCH. 2.05)
Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles, earth moving equipments relating
to captive forest plantation.
The borrowing cost capitalised during the year is Rs. 56.19 lakhs (Rs.
58.58 lakhs) and pertains to Captive Forest Plantation.
ASSETS TAKEN ON LEASE
Gross Value of Assets taken on Lease by the Company and in use as at
31.3.2006 is Rs. 2150.14 lakhs (Rs. 2150.14 lakhs), for which the
company has already discharged the entire liability towards the lease
rent. The assets are not capitalised pending transfer formalities.
CAPTIVE FOREST PLANTATION
Expenditure relating to Captive Forest plantation other than fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to revenue as per Accounting Policy
No.1.02 (b).
Government of Karnataka has leased 30,000 hectares of degraded forest
land and C and D class of lands to the company for raising captive
plantations and use it for meeting pulp wood requirement.
Out of total lease area, the company has surrendered 4665.30 ha. of
wild life areas to the Government as per the orders of the Honble
Supreme Court. Further, as per the interim order of the Honble High
Court, 3813 ha of non-forestry land has to be surrendered to the
Government after extracting the yield from such areas in respective
maturity years and 1086.29 ha have been surrendered so far.
Phase-1 of the Captive Forest Plantation Programme has been financed by
Overseas Development Agency, London, through Govt. of Kamataka, partly
by Grant and partly by Loan and Equity. Government grants are accounted
as per accounting Policy No. 1.10.
Company has received 154326 MT (120885 MT) of Wood from Captive Forest
Plantations during the year out of 2956 hectares. (3618 hectares) of
land.
PRIOR PERIOD ADJUSTEMENTS :
Certain items of income and expenditure relating to prior period with
net Debit of Rs 758.68 lakhs (Rs 801.16 lakshs debit) mainly relating
to reconciliation of captive forest plantation account (Rs 702.66
lakhs), withdrawal of claim against government for surrnder of wildlife
area(Rs 1251 lakhs) and others like accounting of sale of energy as per
tariff approved by KERC, withdrawal of excess provision made and
reconciliation of various sundry creditors and other account has been
shown under the head Prior Period Adjustments.
FRINGE BENEFIT TAX
Fringe benefit tax on the amount of provision of Rs 267.15 lakhs
towards the premium payble to superannuation fund is not provided for
in view of provisions of Sec 115 WC (1) (b) read with Sec 115 WB (1)(c)
and Sec 43 (B) of the Income Tax Act.
POWER PURCHASE AGREEMENT
Consequent upon approval of revised tariff by KERC on the export of
Power, necessary adjustments have been carried out in the books of
accounts. The formal power purchase agreements will be executed with
KPTCL / MESCOM in due course.
SHARE APPLICATION MONEY
Govt. of Netherlands has released Rs. 519.15 lakhs. The Govt. of India
passes on the External aid to State Government and the same was passed
on to MPM in the ratio of 70% as loan and 30% as equity. In view of
pending Order from Government, Rs 155.75 lakhs has been shown as share
application money in the Balance Sheet under share holders funds.
RESEARCH & DEVELOPMENT GRANT FROM GOVERNMENT OF INDIA
Out of grant of Rs. 27.50 lakhs received from Goverment of India in
respect of the project "Extension of Forestry Research in MPM" Rs.
21.70 lakhs has been credited to R & D expenses and balance of Rs. 5.80
lakhs carried over for adjustment in the next year.
The Packing and Forwarding expenses accounted under the head Selling
Expenses is net of cost of Ream Wrapper paper produced and used for
packing of Writing & Printing Paper and Newsprint.
OTHER INCOME INCLUDES :
Rs. 26.75 Cr (Rs. 35.60 Cr), comprising of cash support of Rs 12.35 Cr.
as revenue grant and non cash support by way of release and adjustment
of Rs 14.40 Cr, received from Government of Karnataka vide GO No. Cl 26
CPM 2006 dated 31.03.2006.
The company has leased 4 acres of land for 20 years to M/s. Anudeep
Carbonates (P) Ltd., in September 1997, for setting up of an ancillary
unit for manufacture of Burnt Lime.
Figures for the previous year have been regrouped/reclassified/recast
wherever necessary to conform with current years presentation.
Amounts have been rounded off to the nearest two decimal points of lakh
of rupees.
Mar 31, 2005
SECURITIES OFFERED FOR LOANS
Cash Credit Facility is secured by hypothecation of Company's present
and future stock of raw materials, consumable stores, finished goods,
materials in process and Book Debts and by second charge on the present
and future assets of the Company which are offered by way of first
charge as security to Financial Institutions and Banks.
Term Loans from Financial Institutions and Banks are secured by a first
charge on the company's present and future immovable properties, Plant
and Machinery, Spares, Tools accessories and certain other movable
properties and second charge on the other assets offered as Security to
Banks for cash credit.
Non-convertible debentures (in two series) issued on private placement
basis together with interest thereon costs, charges and remuneration of
trustees payable by the company in respect of the Bonds shall be
secured by way of first charge on Fixed Assets of the company on
pari-passu basis present and future to the satisfaction of the
trustees. The terms of redemption of these non-convertible debentures
are as under.
During FY 2005, Debentures amounting to Rs. 1015.80 lakhs were due, for
redemption. Of which, debentures of Rs. 237.30 lakhs were redeemed on
due dates and Rs. 478.50 lakhs after Balance Sheet date and balance
amount rolled over with the consent of the debenture holders. The
security by way of first charge on fixed assets of the company both
present and future on Pari-passu basis has to be created in favour of
the Trustees by working out applicable redemption period.
The mortgage and first charge on the company's present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial Institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of the company secured
for cash credit facility rank pari-passu among the consortium of
bankers.
TERM LOANS
Government of Karnataka :
Government loans are of two types, viz., Direct loans through budgetary
allocations and loans under the scheme of Externally Aided Projects
(EAR). In the absence of any reference to the rate of interests and
repayment schedule, interest on loans under EAR scheme has been
provided @ 14% p.a. and no interest has been provided on direct loans
given by Government through budgetary allocation.
The overdue amount of Rs. 928 lakhs consisting of Principal of Rs. 637
lakhs (Rs. 273) Funded Interest Term loan of Rs. 99.48 lakhs and
interest of Rs. 191.35 lakhs has not been paid to IFCI, pending its
approval on the request made by the company, on rephasement of the
same.
CONTINGENT LIABILITY
Contingent Liability in respect of:
Letters of Credit and Guarantees Rs. 4236.13 lakhs (Rs. 2794.94 lakhs).
Commitments for Capital Expenditure Rs. 110.97 lakhs (Rs. 117.22
lakhs).
Claims against the Company not acknowledged as debts Rs. 381.56 lakhs
(Rs. 330.91 lakhs).
Wage Revision Arrears for employees and others Rs. 2145 lakhs.
RECONCILIATION
Confirmation of balances received/to be received from debtors,
creditors and for loans and advances, are required to be reconciled
wherever necessary and suitably adjusted.
TAXATION
Provision towards Income Tax/Sales Tax has been made in the accounts as
determined. Any further liability will be provided in the accounts on
completion of assessments/determination of further liability. Income
Tax and Sales Tax assessments have been completed upto financial year
2001-02 and 2002-2003 respectively.
FIXED ASSETS (SCH. 2.05)
Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles, earth moving equipments relating
to captive forest plantation.
The borrowing cost capitalised during the year is Rs. 58.58 lakhs
(Rs.405.84 lakhs) and pertains to Captive Forest Plantation.
ASSETS TAKEN ON LEASE
Gross Value of Assets taken on Lease by the Company and in use as at
31.3.2005 is Rs. 2150.14 lakhs (Rs. 2150.14 lakhs), for which the
company has already discharged the entire liability towards the lease
rent. The assets are not capitalised pending transfer formalities.
CAPTIVE FOREST PLANTATION
Expenditure relating to Captive Forest plantation other than fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to revenue as per Accounting Policy
No.1.02 (b).
Government of Karnataka has leased 30,000 hectares of degraded forest
land and C and D class of lands to the company for raising captive
plantations and use it for meeting pulp wood requirement.
Out of total lease area, the company has surrendered 4265 ha. of wild
life areas to the Government as per the orders of the Hon'ble Supreme
Court. Further, as per the interim order of the Hon'ble High Court,
3813 ha of non-forestry land has to be surrendered to the Government
after extracting the yield from such areas in respective maturity years
and 1331 ha have been surrendered so far.
Phase-1 of the Captive Forest Plantation Programme has been financed by
Overseas Development Administration, London, through Govt. of
Karnataka, partly by Grant and partly by Loan and Equity. Government
grants are accounted as per accounting Policy No.1.10.
Company has received 120885 MT (164347 MT) of Wood from Captive Forest
Plantations during the year out of 3618 hectares. (4042 hectares) of
land.
SALES :
Sales figure in Profit and Loss Account is net of Cash Discount of
Rs. 265.67 lakhs (Rs. 929.07 lakhs).
DEFERRED TAXES ACCOUNTING FOR TAXES ON INCOME (AS-22) :
The Company, as at the end of 31-03-2005 has Net Deferred Tax Asset of
Rs. 5752.05 lakhs. As a measure of prudence, the company has not
recognised the Deferred Tax Asset in the accounts.
PRIOR PERIOD ADJUSTMENTS :
Certain items of income and expenditure relating to prior period with
net debit of Rs. 801.16 lakhs (Rs. 733.52 lakhs) mainly relating to
adjustment of purchase tax, sales tax, differential minimum wages,
depreciation on assets, withdrawal of excess provision made and
reconciliation of various sundry creditors and other accounts has been
shown under the head Prior Period Adjustments.
CLAIM AGAINST SURRENDER OF WILD LIFE AREA TO GOVERNMENT
As per the orders of the Hon'ble Supreme Court, the Company has
surrendered 4265 ha. of wild life area to the Government. The Company
made a claim of Rs. 12.51 cr. and accounted the same in FY 2003 as
income being the value of yield of 3018 ha. surrendered to Government
in earlier years towards 12.5% lease rent and requested for waiver of
12.5% lease rent payable in respect of the balance 1247 ha. The payment
against the claim and the request on waiver of lease rent is under
consideration of the Government. In view of this the amount of income
accounted in FY 2003, continues to be as receivable as approval
awaited. No provision was made for lease/rent up to FY 2004 as the
balance of 1247 ha of surrendered wild life area was not fully set off,
against such lease rent. During the year after setting up of the
balance area up to 1247 ha a provision of Rs. 148 lakhs is made towards
lease rent.
SHARE APPLICATION MONEY
Govt. of Netherlands has released Rs. 519.15 lakhs. The Govt. of India
passes on the External aid to State Government and the same was passed
on to MPM in the ratio of 70% as loan and 30% as equity. In view of
pending Order from Government, Rs 155.75 lakhs has been shown as share
application money in the Balance Sheet under share holders' funds.
POWER PURCHASE AGREEMENT
Pending approval of the Power Purchase Agreement by KERC, the value of
power exported by the Company to the grid has been accounted as per the
rates approved by KPTCL (earlier KEB), as per draft PPA signed between
MPM and KPTCL on 24.06.2004.
The Packing and Forwarding expenses accounted under the head 'Selling
Expenses' is net of cost of Ream Wrapper paper produced and used for
packing of Writing & Printing Paper and Newsprint.
OTHER INCOME INCLUDES :
Rs. 3560 lakhs (Rs. 2789 lakhs), on account of waiver interest dues
payable by the company to Government, as per GO dated 16-04-2005
The company has leased 4 acres of land for 20 years to M/s. Anudeep
Carbonates (P) Ltd., in September 1997, for setting up of an ancillary
unit for manufacture of Burnt Lime.
Figures for the previous year have been regrouped/reclassified/recast
wherever necessary to conform with current year's presentation.
Amounts have been rounded off to the nearest two decimal points of lakh
of rupees.
Mar 31, 2004
1.01 SECURITIES OFFERED FOR LOANS
(i) Cash Credit Facility is secured by hypothecation of Company's
present and future stock of raw materials, consumable stores, finished
goods, materials in process and Book Debts and by second charge on the
present and future assets of the Company which are offered by way of
first charge as security to Financial Institutions and Banks.
(ii) Term Loans from Financial Institutions and Banks are secured by a
first charge on the company's present and future immovable properties,
Plant and Machinery, Spares, Tools accessories and certain other
movable properties and second charge on the other assets offered as
Security to Banks for cash credit.
(iii) Non-convertible debentures (in two series) issued on private
placement basis together with interest thereon costs, charges and
remuneration of trustees payable by the company in respect of the Bonds
shall be secured by way of first charge on Fixed Assets of the company
on pari-passu basis present and future to the satisfaction of the
trustees the terms of redemption of these non-convertible debentures
are as under.
Sl Series I Series II
No.
1 At the end of 5th Year 30% in FY 2005 Put/Call option in FY 2006
2. At the end of 6th Year 30% in FY 2006 30% in FY 2007
3. At the end of 7th Year 40% in FY 2007 30% in FY 2008
4. At the end of 8th Year 40% in FY 2009
(iv) The mortgage and first charge on the company's present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of the company secured
for cash credit facility rank pari-passu among the consortium of
bankers.
1.02 TERM LOANS
a) Government of Karnataka
Government loans are of two types, viz.. Direct loans through budgetary
allocations and loans under the scheme of Externally Aided Projects
(EAP). in the absence of any reference to the rate of interests and
repayment schedule, interest on loans under EAP scheme has been
provided @ 14% pa. and no interest has been provided on direct loans
given by Government through budgetary allocation.
b) IFCI
The overdue amount of Rs. 273 lakhs has not been paid to IFCI pending
its approval on the request made by the company, on rephasement of
same.
1.03 CONTINGENT LIABILITY
Contingent Liability in respect of:
(i) Letters of Credit and Guarantees 2794.94 lakhs (Rs. 623.64 lakhs).
(ii) Claim from KPTCL Rs. 73.32 lakhs (Rs. 212.22 lakhs).
(iii) Commitments for Capital Expenditure Rs. 117.22 lakhs (Rs. 442.82
lakhs).
(iv) Claims against the Company not acknowledged as debts Rs. 330.91
lakhs (Rs. 298.00 lakhs).
1.04 RECONCILIATION
Confirmation of balances received/to be received from debtors,
creditors and for loans and advances, are required to be reconciled
wherever necessary and suitably adjusted.
1.05 TAXATION
Provision towards Income Tax/Sales Tax has been made in the accounts as
determined. Any further liability will be provided in the accounts on
completion of assessments/determination of further liability. Income
Tax and Sales Tax assessments have been completed upto financial year
2001-02 and 2002-2003 respectively.
1.06 FIXED ASSETS (SCH. 2.05)
(i) Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles, earth moving equipments relating
to captive forest plantation.
(ii) The borrowing cost capitalised during the year is Rs. 405.84 lakhs
(Rs. 422.98 lakhs) and pertains to Captive Forest Plantation.
1.07 ASSETS TAKEN ON LEASE
Gross Value of Assets taken on Lease by the Company and in use as at
31.3.2004 is Rs. 2150.14 lakhs (Rs. 2150.14 lakhs), for which the
company has already discharged the entire liability towards the lease
rent. The assets are not capitalised pending transfer formalities.
1.08 CAPTIVE FOREST PLANTATION
(i) Expenditure relating to Captive Forest plantation other than fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to revenue as per Accounting Policy
No.1.02(b).
(ii) Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulp wood requirement.
(iii) Out of total lease area, the company has surrendered 4265 ha. of
wild life areas to the Government as per the orders of the Hon'ble
Supreme Court. Further, as per the interim order of the Hon'ble High
Court, 3813 ha of non-forestry land has to be surrendered to the
Government after extracting the yield from such areas in respective
maturity years and 414 ha have been surrendered so far.
(iv) Phase-1 of the Captive Forest Plantation Programme has been
financed by Overseas Development Administration, London, through Govt.
of Karnataka, partly by Grant and partly by Loan and Equity. Government
grants are accounted as per accounting Policy No.1.10.
(v) Company has received 164347 MT (110877 MT) of Wood from Captive
Forest Plantations during the year out of 4042 hectares. (2741
hectares) of land.
1.09 GOODS IN TRANSIT INCLUDED IN INVENTORIES
Current Year Previous Year
Rs. in Lakhs
(a) Stores & Spares 136.45 71.37
(b) Raw Materials - 225.48
(c) Coal - 150.98
136.45 546.73
1.10 SALES
Sales figure in Profit and Loss Account is net of Cash Discount of Rs.
929.07 lakhs (Rs. 449.81 lakhs).
1.11 INTER CORPORATE LOANS
Loans and Advances include a sum of Rs. 50.00 lakhs given to M/s.
Mysore Lamps Works Limited, a Government of Karnataka undertaking,
which has become sick and referred to National Company Law Tribunal
(NCLT) (earlier BIFR), as per the provision of Sick Industrial
Companies (Special Provision) Act, 1985. NCLT has appointed IDBI as
operating agency. It is understood that Operating Agency has not
conducted any meeting on Mysore Lamps after 19th April, 2000. Pending
receipt of the final report of operating agency/NCLT no provision has
been made for the loan amount in the books of accounts in respect of
diminution in the value of loan amount, if any.
1.12 INVESTMENTS
MPM had invested Rs. 50 lakhs with M/s. Mysore Electrical Industries
Ltd., by way of inter corporate loan during 1998-99. MEI had not repaid
the loan amount and interest on time. Based on the request of MEI and
approval of Government, outstanding amount of Rs. 62.33 lakhs was
converted into equity shares of Rs. 10 each. M/s. MEI has been referred
to NCLT (earlier BIFR). Pending receipt of final order from NCLT, no
provision has been made for the diminution in the value of investments
in MEI.
1.13 PRIOR PERIOD ADJUSTMENTS
Certain items of income and expenditure relating to prior period net of
debit of Rs. 733.52 lakhs (Rs. 3.78 lakhs) mainly comprising of
unabsorbed expenses incurred on wild life area surrendered, short
accounting of receipt of material, excess interest charged to WIP,
difference in pulp consumption, stock variation of medicine,
depreciation for earlier years, are shown separately as prior period
adjustments.
1.14 CLAIM AGAINST SURRENDER OF WILD LIFE AREA TO GOVERNMENT
As per the orders of the Hon'ble Supreme Court, the Company has
surrendered 4265 ha. of wild life area to the Government. The Company
made a claim of Rs.12.51 cr. and accounted the same in FY2003 as income
being the value of yield of 3018 ha. surrendered to Government in
earlier years towards 12.5% lease rent and requested for waiver of
12.5% lease rent payable in respect of the balance 1247 ha. The payment
against the claim and the request on waiver of lease rent is under
consideration of the Government. In view of this the amount accounted
in FY 2003, continues to be as receivable. No provision has been made
for lease rent payable for the current year as the balance of 1247 ha
of surrendered wild life area has not been fully set off, against such
lease rent. Consequently the Company has written off unabsorbed
expenses of Rs.425.55 lakhs incurred on wild life area surrendered to
Government.
1.15 WAGE REVISION
In terms of MOS entered into between the Company and the Employees
Association wage revision to the employees of the Company is due w.e.f.
01.03.2002. Pending approval of the State Government, no provision has
been made in the books of accounts towards the additional burden on
account of revision in wages to the employees of the Company.
1.16 POWER PURCHASE AGREEMENT
Pending approval of the Power Purchase Agreement by KERC, the value of
power exported by the Company to the grid has been accounted as per the
rates approved by KPTCL (earlier KEB), as per draft PPA signed between
MPM and KPTCL on 24.06.2004.
1.17 DEFERRED TAXES - ACCOUNTING FOR TAXES ON INCOME (AS-22)
Consequent upon issue of comments by CAG on the accounts of the company
for the financial year 2003 on the treatment given by the Company on
Deferred Tax Asset as per AS-22, the amount of Deferred Tax Income of
Rs, 1072.45 lakhs accounted up to 31st March 2003 has been
withdrawn/adjusted during the year. However, the Company has sought an
opinion from the Expert Advisory Committee, of the institute of
Chartered Accountants of India, New Delhi in this regard. The impact,
if any, in respect of Deferred Tax Asset will be accounted on receipt
of the opinion of Institute of Chartered Accountants of India, New
Delhi.
1.18 the Packing and Forwarding expenses accounted under the head
Selling Expenses is net of cost of Ream Wrapper paper produced and used
for packing of Writing & Printing paper and Newsprint.
1.19 Other income includes :
a) Interest income of Rs.27.89 Crores on account of waiver of 50% of
interest dues payable by the company to Government, as per GO dated
04.05.2004.
b) Refund of income Tax including interest of Rs. 866.41 lacs
consequent upon issue of appellate orders by the Income Tax Department
in favour of the company.
1.20 The company has leased 4 acres of land for 20 years to M/s.
Anudeep Carbonates (P) Ltd., in September 1997, for setting up of an
ancillary unit for manufacture of Burnt Lime.
1.21 Figures for the previous year have been
regrouped/reclassified/recast wherever necessary to conform with
current year's presentation.
1.22 Amounts have been rounded off to the nearest two decimal points of
lakh of rupees.
1.22 a) The accounts approved by the Board on 30.08.2004 and reported
by Auditors on 24.09.2004 were revised as a result of observations by
comptroller and Auditor General of India. As a result of the revision
the loss for the year increased by Rs. 419.55 lakhs.
Mar 31, 2003
4.01 SECURITIES OFFERED FOR LOANS
i) Cash Credit Facility is secured by hypothecation of Company's
present and future stock of raw materials, consumable stores, finished
goods, materials in process and Book Debts and by second charge on the
present and future assets of the Company which are offered by way of
first charge as security to Financial Institutions and Banks.
ii) Term Loans from Financial Institutions and Banks are secured by a
First charge on the company's present and future immovable properties.
Rant and Machinery, Spares, Tools accessories and certain other movable
properties and Second charge on the other assets offered as Security to
Banks for Cash credit.
iii) Non-convertible Debentures (in two series) issued on Private
placement basis together with interest thereon costs, charges and
remuneration of trustees payable by the company in respect of the Bonds
shall be secured by way of first charge on Fixed Assets of the company
on Pari-passu basis present and future to the satisfaction of the
trustees the terms of redemption of these non-convertible debentures
are as under
iv) The mortgage and first charge on the company's present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial Institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of the company secured
for cash credit facility rank pari-passu among the consortium of
bankers.
4.02 INTEREST ON LOANS FROM GOVERNMENT
Government Loans are of two types, viz.. Direct Loans through budgetary
allocations and loans under the scheme of Externally Aided Projects
(EAP). In the absence of any reference to the rate of interest and
repayment schedule, interest on loans under EAP Scheme has been
provided at 14% p.a. and no interest has been provided on direct loans
given by Government through budgetary allocation.
4.03 CONTINGENT LIABILITY
Contingent Liability in respect of :
i) Letters of Credit and Guarantees Rs.623.64 lakhs (Rs.487.06 lakhs).
ii) Liability in respect of Securitisation of Lease Rentals Rs. Nil
(Rs.346.65 lakhs)
iii) Interest claim from KPTCL Rs.212.22 lakhs (Rs.117.32 lakhs).
iv) Commitments for Capital Expenditure Rs. 442.82 lakhs (Rs.99.57
lakhs).
v) Claims against the Company not acknowledged as debts Rs. 298.00
lakhs (Rs.248.78 lakhs).
4.04 RECONCILIATION
Some of the accounts of Sundry Debtors and Creditors and Advances are
under reconciliation with reference to Confirmation of Balances.
4.05 TAXATION
Provision towards Income Tax/Sales Tax has been made in the accounts as
determined. Any further liability will be provided in the accounts on
completion of assessments/determination of further liability. Sales Tax
and Income Tax assessments have been completed upto financial year
2000-2001.
4.06 FIXED ASSETS (SCH.2.05)
(i) Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles, earth moving equipments relating
to captive forest plantation.
(ii) The borrowing cost capitalised during the year is Rs.422.98 lakhs
(Rs.397.89 lakhs) and pertains to captive Forest Plantation.
4.07 ASSETS TAKEN ON LEASE
Gross Value of Assets taken on Lease by the Company and in use as at
31.3.2003 is Rs.2150.14 lakhs (Rs.2150.14 lakhs), for which the company
has already discharged the entire liability towards the lease rent.
The assets are not capitalised pending transfer formalities.
4.08 CAPTIVE FOREST PLANTATION
i) Expenditure relating to Captive Forest plantation other than Fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to revenue as per Accounting Policy
No.1.02(b).
ii) Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulp wood requirement.
iii) Phase-I of the Captive Forest Plantation Programme has been
financed by Overseas Development Administration, London, through Govt.
of Karnataka, partly by Grant and partly by Loan and Equity.
Government grants are accounted as per accounting Policy No.1.09.
iv) Company has received 85422 MT (80733 MT) of Wood from Captive
Forest Plantations during, the year out of 2741 hectares (2405
hectares) of land.
4.09 GOODS IN TRANSIT INCLUDED IN INVENTORIES:
Current Year Previous Year
Rs. in lakhs
(a) Stores & spares 71.37 47.04
(b) Raw Materials 225.48 781.12
(c) Coal 150.98 41.95
Total 546.73 870.11
4.10 SALES
Sales figure in Profit and Loss Account is net of Cash Discount of
Rs.449.81 lakhs (Rs.744.58 lakhs).
4.11 INTER CORPORATE LOANS
Loans and Advances include a sum of Rs.95.45 lakhs (Principal Rs.50
lakhs and interest accrued Rs.45.45 lakhs) given to M/s. Mysore Lamps
Works Limited a Government of Karnataka undertaking, which has been
referred to BIFR, as per the provision of Sick Industrial Companies
(Special Provision) Act, 1985. BIFR has appointed IDBI as Operating
agency. It is understood that Operating Agency has not conducted any
meeting on Mysore Lamps after 19th April 2000. In view of this,
interest of Rs. 45.45 lakhs accounted in the earlier years has been
provided for during the year.
4.12 AMORTISATION OF LEASING DEPOSIT
The Leasing Deposit received from KPCL towards residual value has been
amortised, consequent upon securitisation of Lease Rentals and an
amount of Rs. 103.95 lakhs (Rs.205.28 lakhs) has been accounted as
Income during the year.
4.13 INVESTMENTS
MPM had invested Rs.50 lakhs with M/s Mysore Electrical Industries
Ltd., by way of inter corporate loan during 1998-99. MEI had not repaid
the loan amount and interest on time. Based on the request of MEI and
approval of Government, outstanding amount of Rs.62.33 lakhs was
converted into equity shares of Rs.10 each. M/s MEI has been referred
to BIFR. BIFR is yet to pass final order on the status of the company.
Pending receipt of final order, no provision has been made for the
decline in the value of investments in MEI.
4.14 PRIOR PERIOD ADJUSTMENT
Certain items of income and expenditure relating to prior period net of
debit of Rs.3.78 lakhs (net of credit of Rs.86.53 lakhs) mainly
comprising of credit notes issued in respect of sales, cenvat credit,
sugar stock storage charges are shown separately as prior period
adjustments.
4.15 CLAIM AGAINST SURRENDER OF WILD LIFE AREA TO GOVERNMENT
Based on the orders of Hon'ble Supreme Court, plantations developed in
4265 Ha of wild life area cannot be harvested by the Company. The
Company, being a commercial organisation, cannot afford to lose the
developed crop in wild life areas and has, therefore, made a claim
equivalent to the yield that it has lost on 4265 Ha and has proposed to
adjust the same out of lease rent paid/payable by way of surrendering
12.50% of the area to the Government. The value of 12.50% lease rent
on the 3018 ha surrendered to the Government upto financial year 2001
works out to Rs.12.51 crores. The Company has requested for
reimbursement of this amount and for adjustment of the balance area of
1247.00 Ha of wild life areas in the lease rent to be paid by the
Company beyond financial year 2001. The Government has agreed to
consider the same. In view of this, an amount of Rs.12.51 crores has
been considered as income during the year and no provision has been
made towards 12.5 % lease rent payable to Govt. from FY 2002 onwards.
4.16 WAGE REVISION
In terms of MOS entered into between the Company and the Employees
Association, wage revision to the employees of the Company is due
w.e.f. 1.3.2002. Pending approval by the Board and the State
Government, no provision has been made in the books of accounts towards
the additional burden on account of revision in wages to the employees
of the Company.
Similarly, the impact of additional financial burden arising out of
revised Production Linked Incentive has not been provided in the books
pending approval of the State Government.
4.17 EFFLUENT TREATMENT PLANT
Effluent Treatment Plant implemented at a cost of Rs.14.46 Crores has
not been capitalized pending Arbitration Award. However, the interest
on borrowed costs has been charged to the revenue, as per Accounting
Standard 16.
4.18 DEFERRED TAXES -ACCOUNTING FOR TAXES ON INCOME
The company on re-examination of future profitability and as a measure
of abundant caution and consideration of prudence, has decided to
account for Deferred Tax Asset in respect of Unabsorbed Depreciation as
per Income Tax Assessments only since it is available for set off
against future profits for an unlimited period as per current tax laws.
Accordingly, a sum of Rs. 1262.00 lakhs recognised as Deferred Tax
Asset in earlier year has been re- appropriated during the year.
Similarly, for the year current year, a sum of Rs.543.45 lakhs has been
recognized as Deferred Tax Asset as detailed hereunder :
Rs.in lakhs
Components of Liability
On fiscal allowances on fixed assets 259.00
Components of Asset
Unabsorbed Depreciation as per Income Tax Act 802.45
Balance being Deferred Tax Asset 543.45
(Asset-Liability)
4.19 POWER PURCHASE AGREEMENT
The value of power exported by the Company to the Grid has been
accounted up to FY 2003 as per the applicable rates approved by KPTCL
under MNES guidelines. Consequent upon the disapproval of the
eligibility on MNES rates by KERC to the Company, KPTCL has offered to
purchase power at rates being paid by them and approved by KERC to
Jindal Tractbel Power Corporation Ltd., another independent power
producer Company under MNES guidelines. In view of this, differential
amount accounted, up to FY 2003 will be restructured by KPTCL in the
power rates payable on exports by MPM to Grid beyond April 2003 and
subject to approval by KERC.
4.20 VALUATION OF FINISHED STOCK
Hitherto, the valuation of finished stock was done without considering
generation/consumption of bagasse. In terms of Accounting Standard 2
the valuation of finished stock during the year is worked out after
considering the impact of bagasse generation/consumption. Consequently
the value of finished stock has increased by Rs. 44 lakhs and the net
loss for the year has decreased correspondingly.
4.21 BORROWING COST
In case of purchase of Raw Material through letters of credit the
borrowing cost incurred upto the date of consumption of such materials
or upto 180 days of buyers credit whichever is earlier is accounted as
purchase cost
4.22 The Company has in September 1997 leased 4 acres of land for 20
years to M/s. Anudeep Corbonates Pvt. Ltd., for setting up of an
ancillary unit for manufacture of Burnt Lime.
4.23 Expert opinion from Institute of Chartered Accountants of India is
being solicited with regard to applicability of AS 18 - Related Party
Disclosures in respect of transactions with Government/Quasi-Government
organisations.
4.24 Figures for the previous year have been
regrouped/reclassified/recast wherever necessary to conform with
current year's presentation.
4.25 Amounts have been rounded off to the nearest two decimal points of
lakh of rupees.
4.25(a) The accounts approved by the Board on 29-07-2003 and reported
by Auditor on 4-08-2003 were revised as a result of observations by
comptroller and Auditor General of India. As a result of the revision
the loss for the year reduced by Rs. 70.64 lakhs.
Mar 31, 2002
Share Capital:
Includes 9,00,000 shares allotted by way of Bonus Shares by
capitalisation of Share Premium and General Reserve
Other Notes:
1. SECURITIES OFFERED FOR LOANS
(i) Cash Credit Facility is secured by hypothecation of Companys
present and future stock of raw materials, consumable stores, finished
goods, materials in process and Book Debts and by second charge on the
present and future assets of the Company which are offered by way of
first charge as security to Financial Institutions and Banks.
(ii) Term Loans from Financial Institutions and Banks are secured by a
First charge on the companys present and future immovable properties.
Plant and Machinery, Spares, Tools accessories and certain other
movable properties and Second charge on the other assets offered as
Security to Banks for Cash credit.
(iii) Non-convertible Debentures issued on Private placement basis
together with interest thereon costs, charges and remuneration of
trustees payable by the company in respect of the Bonds shall be
secured by way of first charge on Fixed Assets of the company on
Pari-passu basis present and future to the satisfaction of the
trustees.
(iv) The mortgage and first charge on the companys present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial Institutions and banks.
Similarly hypothecation of present and future current assets together
with second charge on present and future assets of the company secured
for cash credit facility rank pari-passu among the consortium of
bankers.
2. INTEREST ON LOANS FROM GOVERNMENT
In the absence of any reference to rate of interest and repayment
schedule fixed by Government on its loans towards forestry project,
interest has been provided @ 14% per annum.
Similarly, in respect of loans obtained from Government towards OECF
and Dutch modernisation schemes, interest has been provided @ 14% per
annum pending receipt of terms of sanction from the Government.
3. CONTINGENT LIABILITY
Contingent Liability in respect of:
(i) Letters of Credit and Guarantees Rs. 487.06 lakhs (Rs. 1770.83
lakhs).
(ii) Liability in respect of Securitisation of Lease
Rentals Rs. 346.65 lakhs (Rs. 1031.21 lakhs)
(iii) Interest claim from KPTCL Rs. 117.32 lakhs (Rs. 60.22 lakhs).
(iv) Commitments for Capital Expenditure Rs. 99.57 lakhs (Rs. 188.42
lakhs).
(v) Claims against the Company not acknowledged as debts Rs. 248.78
lakhs (Rs. 401.90 lakhs).
4. RECONCILIATION
Some of the accounts of Sundry Debtors and Creditors and Advances are
under reconciliation with reference to Confirmation of Balances.
5. TAXATION
Provision towards Income Tax/Sales Tax has been made in the accounts as
per the respective Acts. Any further liability will be provided in the
accounts on completion of assessments/determination of further
liability. Sales Tax and Income Tax assessments have been completed
upto financial year 1999-2000.
6. DEFERRED TAXES - ACCOUNTING FOR TAXES ON INCOME
During the year, in terms of Accounting Standard 22 - Accounting for
taxes on income, the deferred tax of Rs 1791 lakhs has been recognised
as income by creating a Deferred Tax Asset in the Books of Accounts.
The deferred taxes reflect the impact of current year timing
differences between taxable income as per Income Tax Act and Accounting
income as per Books of Accounts and reversal of timing differences of
earlier years. The components of deferred taxes relate to both
depreciation and unabsorbed business losses are as under:-
A. UPTO THE FINANCIAL YEAR ENDING 31-03-2001
Rs. in Lakhs
Deferred tax liability on account of depreciation 811.31
Deferred tax asset on account of unabsorbed business losses 2299.26
Deferred tax asset (Net) 1487.95
B. FOR THE FINANCIAL YEAR 2001-02
Deferred tax liability on account of depreciation 1406.90
Deferred tax asset on account of unabsorbed business losses 4935.58
Deferred tax asset (Net) 3528.68
C. Deferred Tax Asset as on 31-03-2002 (A+B) 5016.63
D. Deferred Tax Income at tax rate of 35.7 % 1791.00
The Deferred Tax Asset will be set off against the future profits of
the company.
7. FIXED ASSETS (SCH. 2.05)
(i) Land includes Rs. 79.30 lakhs being the consideration paid to VISL
for 264.33 acres of land for which registration/documentation
formalities are pending.
(ii) Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles, earth moving equipments relating
to captive forest plantation.
(iii) The borrowing cost capitalised during the year is Rs. 397.89
lakhs (Rs. 1134.65 lakhs) which also includes borrowing cost on Captive
Forest Plantation.
8. ASSETS TAKEN ON LEASE
Gross Value of Assets taken on Lease by the Company and in use as at
31.3.2002 is Rs. 2150.14 lakhs, for which the company has already
discharged the entire liability towards the lease rent. The assets are
not capitalised pending transfer formalities.
9. CAPTIVE FOREST PLANTATION
(i) Expenditure relating to Captive Forest plantation other than Fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to revenue as per Accounting Policy
No. l.02 (b).
(ii) Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulp wood requirement.
(iii) Phase-1 of the Captive Forest Plantation Programme has been
financed by Overseas Development Administration, London, through Govt.
of Karnataka, partly by Grant and partly by Loan and Equity. Government
grants are accounted as per accounting Policy No. 1.09.
(iv) Company has received 80733 MT of Wood from Captive Forest
Plantations during the year out of 2405 hectares of land.
10. GOODS IN TRANSIT INCLUDED IN INVENTORIES:
Current Year Previous Year
Rs. in Lakhs
(a) Stores & spares 47.04 165.24
(b) Raw Materials 781.12 190.29
(c) Coal 41.95 75.59
Total 870.11 431.12
11. SALES
Sales figure in Profit and Loss Account is net of Cash Discount of Rs.
744.58 lakhs (Rs. 231.78 lakhs).
12. PROVISION FOR LEAVE SALARY
The company was hitherto providing liability towards encashment of
leave on the basis of earned leave at the credit of the employees at
the end of the year. However from the current year onwards provision
has been made based on the actuarial valuation. Consequently the loss
for the year is lower by Rs 158.80 Lakhs.
13. INTER CORPORATE LOANS
Loans and Advances include a sum of Rs. 88.50 lakhs (Principal Rs. 50
lakhs and interest accrued Rs. 38.50 lakhs) given to M/s Mysore Lamps
Works Limited a Government of Karnataka undertaking, which has been
referred to BIFR, as per the provision of Sick Industrial Companies
(Special Provision) Act, 1985. No provision is considered necessary on
this advance pending final decision by BIFR.
14. AMORTISATION OF LEASING DEPOSIT
The Leasing Deposit received from KPCL towards residual value has been
amortised, consequent upon securitisation of Lease Rentals and an
amount of Rs. 205.28 lakhs (Rs. 205.28 lakhs) has been accounted as
Income during the year.
15. ONE TIME SETTLEMENT OF FOREX LOAN OF CDC
In terms of One Time Settlement agreement dated 16-05-2001 between MPM
and Commonwealth Development Corporation (CDC) London, the outstanding
forex loan, including interest arrears, of UKP 5.86 million payable to
CDC by MPM was settled for UKP 3.75 million. Consequently, the benefit
of principle waiver aggregating to Rs 741.14 lakhs has been accounted
as income and that of waiver of interest aggregating to Rs 395.70 lakhs
has been apportioned to the Captive Forest Plantation Account. While
doing so, the necessary adjustments have been made in the Foreign
Exchange Fluctuation Reserve Account.
16. INTEREST ON PURCHASE TAX
The Company had preferred the claim on Govt for Rs 2579.98 lakhs
comprising Rs. 1788.06 lakhs towards refund of purchase tax paid by the
company and interest thereon of Rs 791.92 lakhs, as per rehabilitation
package approved by IDBI and accounted the same as income during the
financial year 1999-2000. Government, however, approved the refund of
purchase tax only. Hence the claim for interest of Rs. 791.92 lakhs has
been reversed during the year.
17. PRIOR PERIOD ADJUSTMENT
Hitherto the company was showing the items of income and expenditure
relating the prior period under the respective heads of accounts.
However from the current year onwards the same is grouped separately
and shown as "Prior Period Adjustment". Accordingly certain items of
Income and Expenditure relating to Prior period net of credit of Rs.
86.53 lakhs (net of credit of Rs. 75.85 lakhs) mainly comprising of
Sugar sales, export of power, selling expenses on cultural paper,
overdue interest, interest on term loan, salary and wages etc are shown
separateiy as "Prior Period Adjustments".
18. RELATED PARTY DISCLOSURES
Expert opinion from the Institute of Chartered Accountants of India is
being solicited as regards to the applicability of AS - 18 on Related
Party Disclosures as MPM is a Government Company.
19. Figures for the previous year have been
regrouped/reclassified/recast wherever necessary to conform with
current years presentation.
20. Amounts have been rounded off to the nearest two decimal points of
lakh of rupees.
Mar 31, 2001
1.01 SECURITIES OFFERED FOR LOANS :
(i) Cash Credit Facility is secured by hypothecation of Company's
present and future stock of raw materials, consumable stores, finished
goods, materials in process and Book Debts and by second charge on the
present and future assets of the Company which are offered by way of
first charge as security to Financial Institutions and Banks.
(ii) Term Loans from Financial Institutions and Banks are secured by a
first charge on the Company's present and future immovable properties,
Plant and Machinery, Spares, Tools, Accessories and certain other
movable properties and second charge on the other assets offered as
Security to Banks for cash credit.
(iii) Non-convertible Debentures issued on Private placement basis
together with interest thereon costs, charges and remuneration of
trustees payable by the company in respect of the Bonds shall be
secured by way of first charge on Fixed Assets of the company on pan
passu basis present and future to the satisfaction of the trustees.
(iv) The mortgage and first charge on the company's present and future.
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to Banks for cash credit facility, rank pari passu
in respect of term loans from financial institutions and banks.
Similarly, hypothecation of present and future current assets together
with second charge on present and future assets of the company secured
for cash credit facility rank pari passu among the consortium of
bankers.
(v) Foreign Currency Loan from Commonwealth Development Corporation,
UK, is secured by an Equitable Mortgage of Company's leasehold forest
land and second charge on factory's Non-Forest land, Building, Plant
and Machinery.
1.02 INTEREST ON LOANS FROM GOVERNMENT :
In the absence of any reference to rate of interest and repayment
schedule fixed by Government on its loans towards forestry project,
interest has been provided @ 14% per annum.
Similarly, in respect of loans obtained from Government towards OECF
and Dutch modernisation schemes, interest has been provided @14% per
annum pending receipt of terms of sanction from the Government.
1.03 FOREIGN CURRENCY LOAN :
Liability towards Foreign Currency Loan is translated in Indian
currency at the rates prevailing on the last day of the Financial Year.
This is done as per recommendations of Accounting Standards 11 issued
by the Institute of Chartered Accountants of India.The difference
arising on account of the above amounting to Rs. 1134.39 lakhs is
adjusted in Captive Forest Plantation as per Accounting Policy No.
1.08 as loan was borrowed for Afforestation Activities and it has no
impact on profit and loss for the current year.
1.04 CONTINGENT LIABILITY :
Contingent Liability in respect of :
(i) Letters of Credit and Guarantees Rs. 1770.83 lakhs (Rs. 1372.49
lakhs).
(ii) Liability in respect of Securitisation of Lease Rentals Rs.
1031.21 lakhs (Rs. 1715.78 lakhs).
(iii) Interest claim from KPTCL Rs. 60.22 lakhs.
(iv) Commitments for Capital Expenditure Rs. 188.42 lakhs (Rs. 241.77
lakhs).
1.05 RECONCILIATION :
Some of the accounts of Sundry Debtors and Creditors and Advances are
under reconciliation with reference to confirmation of Balances.
1.06 CLAIMS AGAINST THE COMPANY NOT ACKNOWLEDGED AS DEBTS :
Claims against the Company not acknowledged as debts Rs. 401.90 lakhs
(Rs. 248.83 lakhs).
1.07 LIABILITY TOWARDS TAXATION :
Provision towards Income Tax/Sales Tax has been made in the accounts as
per the respective Acts. Any further liability will be provided in the
accounts on completion of assessments/determination of further
liability. Sales Tax and Income Tax assessments have been completed
upto financial year 1998-99.
1.08 FIXED ASSETS (SCH.2.05)
(i) Land includes Rs. 79.30 lakhs being the consideration paid to VISL
for 264.33 acres of land for which registration/documentation
formalities are pending.
(ii) Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles, earth moving equipments relating
to captive forest plantation.
(iii) The borrowing cost capitalised during the year is Rs. 1134.65
lakhs (Rs. 2350.56 lakhs) which also includes borrowing cost on
Captive Forest Plantation.
1.09 ASSETS TAKEN ON LEASE :
Gross Value of Assets taken on Lease by the Company and in use as at
31-3-2001 is Rs. 2150.14 lakhs, for which the Company has already
discharged the entire liability towards the lease rent. The assets are
not capitalised pending transfer formalities.
1.10 PURCHASE TAX ON SUGARCANE :
Purchase tax on Sugar cane amounting to Rs. 254.27 lakhs has not been
provided for, as followed in previous year, pending approval of the
State Government for grant of exemption on payment of Purchase tax on
Sugar cane as per Rehabilitation Package.
1.11 CAPTIVE FOREST PLANTATION :
(i) Expenditure relating to Captive Forest Plantation other than Fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to revenue as per Accounting Policy
No. 1.02.
(ii) Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulpwood requirement.
(iii) Phase - I of the Captive Forest Plantation Programme has been
financed by Overseas Development Administration, London, through Govt.
of Karnataka, partly by Grant and partly by Loan and Equity.
Government grants are accounted as per accounting Policy No. 1.09.
(iv) Company has received 104683 MT of Wood from Captive Forest
Plantations during the year out of 3287 hectares of land. Company has
allotted 603 hectares of Forest plantations to Govt. of Karnataka
towards lease rent payable.
1.12 GOODS IN TRANSIT INCLUDED IN INVENTORIES :
Current Previous
Year Year
(Rs. in Lakhs)
(a) Stores and Spares 165.24 49.64
(b) Raw Materials 190.29 601.20
(c) Coal 75.59 89.99
Total 431.12 740.83
1.13 SALES :
Sales figure in Profit and Loss Account is net of Cash Discount of Rs.
231.78 lakhs (Rs. 170.64 lakhs).
1.14 INTER CORPORATE LOANS :
Loans and Advances include a sum of Rs. 78.88 lakhs (Principal Rs. 50
lakhs and interest accrued Rs. 28.88 lakhs) given to M/s Mysore Lamps
Works Ltd., which has been referred to BIFR, as per the provision of
Sick Industrial Companies (Special Provision) Act, 1985. No provision
is considered necessary on this advance pending final decision by BIFR
1.15 INSURANCE CLAIM :
73593 MT of Bagasse was destroyed by incidence of Fire on 30.3.01. The
Company has made claim of Rs. 636.69 lakhs, considering the cost of
Bagasse at
Equated Cost of Sugarcane, with United India Insurance Company Limited.
The Insurance company has informally indicated that this provisional
amount of ciaim will be settled for Rs. 431.75 lakhs and the same is
accounted as income during the year.
1.16 AMORTISATION OF LEASING DEPOSIT :
The Leasing Deposit received from KPCL towards residual value has been
amortised, consequent upon securitisation of Lease Rentals and an
amount of Rs. 205.28 lakhs (Rs. 770.75 lakhs) has been accounted as
Income during the year.
1.17 PRIOR PERIOD ADJUSTMENT :
Certain items of Income and Expenditure relating to Prior period net of
Rs. 75.85 lakhs Credit (Rs. 148.31 lakhs Credit) mainly comprising of
excess provision for Water charges, Electricity tax on Captive
Generation, inventory reconciliation difference, Professional charges
paid for preparation of DPR on Sugar Mill expansion and Co-generation
plant etc., are shown under respective heads of accounts and not shown
separately as "Prior Period Adjustments". This procedure has been
followed by the Company consistently.
1.18 DUES TO SMALL SCALE INDUSTRIES :
On the basis of information available with the company there are no
outstanding dues for more than 30 days in excess of Rs. 1 lakh in each
case payable to Small Scale Industrial Units as on 31-3-2001.
1.19 Figures for the previous year have been
regrouped/reclassified/recast wherever necessary to conform with
current year's presentation.
Mar 31, 2000
4.01 SECURITIES OFFERED FOR LOANS:
(i) Cash Credit Facility is secured by hypothecation of Company's
present and future stock of raw materials, consumable stores, finished
goods, materials in process and Book Debts and by second charge on the
present and future assets of the Company which are afforded by way of
first charge as security to Financial Institutions and Banks.
(ii) Term Loans from Financial Institutions and Banks are secured by a
first charge on the Company's present and future immovable properties,
Plant and Machinery, Spares, Tools, Accessories and certain other
movable properties and second charge on the other assets offered as
Security to Banks for cash credit.
(iii) During the year the Company has raised funds of Rs. 3386.00 lakhs
by issuing 13.75% Non-convertible Debentures of Rs. 1 lakh each at par
on private placement basis redeemable in three instalments, i.e., at
the end of 5th year, 6th year and 7th year. The said Bonds together
with interest there on, costs, charges and remuneration of Trustees
payable by the Company in respect of the Bonds shall be secured by way
of first charge on Captive Forest Plantation, or on Fixed Assets of the
company on pari passu basis present and future to the satisfaction of
the trustees.
(iv) The mortgage and first charge on the Company's present and future
immovable properties, plant and machinery, spares, tools, accessories
and certain other movable properties and second charge on other assets
offered as security to banks for cash credit facility, rank pari passu
in respect of term loans from financial institution and banks.
Similarly, hypothecation of present and future current assets and
second charge on present and future assets of the company which are
secured for cash credit facility rank pari passu among the consortium
of bankers.
(v) Foreign Currency Loan from Commonwealth Development Corporation,
UK, is secured by an Equitable Mortgage of Company's leasehold forest
land and second charge on factory's Non-Forest Land, Building, Plant
and Machinery.
4.02 INTEREST ON LOANS FROM GOVERNMENT:
In the absence of any reference to rate of interest and repayment
schedule fixed by Government on its loans towards forestry project,
interest has been provided @ 14% per annum as compared to 93.75%
charged in the earlier years. Consequently, the differential interest
of Rs. 705.91 lakhs has been charged to captive plantation account
during the year.
Similarly, in respect of loans obtained from Government towards OECF
and Dutch medernisation schemes, interest has been provided @ 14% per
annum pending receipt of terms of sanction from the Government.
The interest charges as above will not have an impact on the profit of
the year as interest on forestry is capitalised by charge to captive
plantation account and interest on modernisation schemes has been
charges to capital works in progress.
4.03 FOREIGN CURRENCY LOAN:
Liability towards Foreign Currency Loan is translated in Indian
currency at the rates prevailing on the last day of the Financial Year.
This is done as per recommendations of Accounting Standards 11 issued
by the Institute of Chartered Accountants of India. The difference
arising on account of the above amounting to Rs. 1133.33 lakhs is
adjusted in Captive Plantation as per Accounting Policy No. 1.08 as
loan was borrowed for Afforestation Activities and it has no impact on
profit and loss for the current year.
4.04 CONTINGENT LIABILITY:
Contingent Liability in respect of:
(i) Letter of Credit and Guarantees Rs. 1372.49 lakhs (Rs. 934.83
lakhs).
(ii) Liability in respect of Securatisation of Lease Rentals Rs.
1715.78 lakhs (Rs. 2400.33 lakhs).
(iii) Commitments for Capital Expenditure Rs. 241.77 lakhs (Rs. 1867.79
lakhs).
4.05 RECONCILIATION:
Some of the accounts of Sundry Debtors and Creditors and Advances are
under reconciliation.
4.06 CLAIMS AGAINST THE COMPANY NOT ACKNOWLEDGED AS DEBTS:
Claims against the Company not acknowledged as debts Rs. 248.83 lakhs
(Rs. 61.00 lakhs).
4.07 LIABILITY TOWARDS TAXATION:
Provision towards Income Tax/Sales Tax has been made in the accounts as
per the respective Acts. Any further liability will be provided in the
accounts on completion of assessments/determination of further
liability. Sales Tax and Income Tax assessments have been completed
upto financial year 1997-98.
4.08 FIXED ASSETS (SCH. 2.05)
(i) Land includes Rs. 79.30 lakhs being the consideration paid to VISL
for 264.33 acres of land for which registration/ documentation
formalities are pending.
(ii) Fixed assets include building, plant and machinery, furniture and
fittings, office equipments, vehicles, earth moving equipments relating
to captive forest plantation.
4.09 ASSETS TAKEN ON LEASE:
Gross Value of Assets taken on lease by the Company and in use as at
31-03-2000 is Rs. 2150.14 lakhs, for which the Company has already
discharges the entire liability towards the lease rent. The assets are
not capitalised pending transfer formalities.
4.10 CAPTIVE FOREST PLANTATION:
(i) Expenditure relating to Captive Forest Plantation other than Fixed
assets are grouped under Captive Forest Plantation and is shown in
Schedule 2.07 and will be charged to revenue as per Accounting Policy
No. 1.02.
(ii) Government of Karnataka has leased 30,000 hectares of degraded
forest land and C and D class of lands to the company for raising
captive plantations and use it for meeting pulpwood requirements.
(iii) Phase - I of the Captive Forest Plantation Programme has been
financed by Overseas Development Administration, London, through Govt.
of Karnataka, partly by Grant and partly by Loan and Equity.
Government grants are accounted as per accounting Policy No. 1.09.
(iv) During the year, Company has received 71302 MT of wood from
Captive Forest Plantations out of 1999 hectares of land. Company has
allotted 263 hectares of Forest Plantations to Govt. of Karnataka
towards lease rent payable.
4.11 GOODS IN TRANSIT INCLUDED IN INVENTORIES:
Current Previous
Year Year
(Rs. in Lakhs)
(a) Stores and Spares 49.64 59.56
(b) Raw Materials 601.20 243.89
(c) Coal 89.99 18.47
Total 740.83 321.92
1.12 SALES:
Sales figure in Profit and Loss Account is net of Cash Discount of Rs.
170.64 lakhs (Rs. 226.63 lakhs).
4.13 MODVAT CREDIT:
Till previous year the Modvat credit was grouped under Miscellaneous
income. From current year onwards, as per ICAI guidelines, the same is
being adjusted against purchases. This has no impact on the profit for
the year.
4.14 INTER CORPORATE LOANS:
Loans and Advances include a sum of Rs. 70.80 lakhs (Principal Rs. 50
lakhs and interest accured Rs. 20.80 lakhs) given to M/s. Mysore Lamps
Works Ltd., which has been referred to BIFR, as per the provision of
Sick Industrial Companies (Special Provision) Act, 1985. No provision
is considered necessary on this advance pending final decision by BIFR.
4.15(1) PROFIT FROM THE ORDINARY ACTIVITIES
Profit for the year includes:
Debit Credit (Rs. in Lakhs)
(a) Grant by way of exemption
on payment of purchase
tax on sugarcane as per
the rehabilitation package,
together with interest
thereon, with retrospective
effect the approval of which
is awaited from G. O. K. 2579.98
(b) Excess provision made in
respect of Gratuity liability in
the earlier years written back
bases on actuarial valuation
and the corpus of the Gratuity
Trust. 325.55
(c) Withdrawal of excess provision
on Income Tax for assessment
years 1996-97 and 1997-98
based on Appeal order together
with interest. 305.68
(d) Provisions no more
required. 346.99 42.50
(e) Refund due on completion
of assessment of Sales Tax
for 1995-96, pending issue
of refund order. 260.08
(f) Refund of Entry Tax as per
refund orders. 107.17
(g) Rebate on Sales Tax on Newsprint
for earlier years as per
Government orders. 3066.63 3066.63
3413.62 6687.59
Net Credit 3273.97
(II) EXTRAORDINARY ITEMS:
Amortization of leasing deposit
received from KPCL towards
Residual value consequent upon
securatisation of lease rentals
and pending transfer formalities of
the leased assets. 770.75
(III) PRIOR PERIOD ADJUSTMENTS:
Certain items of incomes and expenditures relating to prior period Net
of Rs. 148.31 lakhs (Credit) are shown under respective head of
accounts and not shown separately as "Prior Period Adjustments". This
procedure has been followed by the Company consistently.
4.16 DUES TO SMALL SCALE INDUSTRIES:
On the basis of information available with the company there are no
outstanding dues for more than 30 days in excess of Rs. 1 lakh in each
case payable to Small Scale Industries Units as on 31-3-2000.
4.17 Figures for the previous year have been
regrouped/reclassified/recast wherever necessary to confirm with
Current Year's classification.
Mar 31, 1999
1. SECURITIES OFFERED FOR LOANS
(i) Cash Credit Facility is secured by hypothecation of Company's
present and future stock of raw materials, consumable stores, finished
goods, materials in process and Book Debts and by second charge on the
present and future assets of the Company which are offered by way of
first charge as security to Financial Institutions and Banks.
(ii) Term Loans from Financial Institutions and Banks is secured by a
First charge on the Company's present and future immovable properties,
Plant and Machinery, Spares, Tools, Accessories and certain other
movable properties and Second charge on the other assets offered as
Security to Banks for cash credit.
(iii) The mortgage and first charge on the Company's present and future
immovable properties, Plant and Machinery, Spares, Tools, Accessories
and certain other movable properties and Second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial institutions and banks.
(iv) Foreign Currency Loan from Commonwealth Development Corporation,
UK, is secured by an Equitable Mortgage of Company's leasehold forest
land and Second charge on factory's Non-forest land, Building and Plant
and Machinery.
2. In the absence of any reference to rate of interest and repayment
schedule in respect of loans advanced by the Government of Karnataka,
towards Forestry Project, interest on Loans has been provided at the
rate at which Government of India has advanced these loans to Govt. of
Karnataka. However, if the normal rate of interest of Govt. of
Karnataka is applied, the total accumulated interest on these loans
upto 31st March 1999 works out to Rs. 1202.34 lakhs (Rs. 1179.31 lakhs)
as against Rs. 506.99 lakhs (Rs. 494.52 lakhs) provided by the Company
resulting in a shortfall of Rs. 695.35 lakhs (Rs. 684.79 lakhs). In
respect of loan obtained from Government of Karnataka towards OECF
Modernisation Scheme, interest will be accounted on receipt of terms
and references from Government of Karnataka which is awaited.
3. Contingent Liability in respect of :
(i) Letters of Credit and Guarantees Rs.934.83 lakhs (Rs. 2409.23
lakhs).
(ii) Liability in respect of Securitisation of Lease Rentals Rs.
2400.33 lakhs.
(iii) Commitments for Capital Expenditure Rs. 1867.79 lakhs (Rs.
3363.69 lakhs).
4. Some of the accounts of Sundry Debtors and Creditors and Advances
are under reconciliation with reference to Confirmation of Balances.
5. CLAIMS AGAINST THE COMPANY NOT ACKNOWLEDGED AS DEBTS
Claims against the Company not acknowledged as debts Rs. 61.00 lakhs
(Rs. 61.00 lakhs).
6. Liability towards Foreign Currency Loan is set up at the rates
prevailing on the last day of the Financial Year. This is done as per
recommendations of Accounting Standards-11 issued by the Institute of
Chartered Accountants of India. The difference arising on account of
the above amounting to Rs. 1163.65 lakhs is adjusted in Captive Forest
Plantation as per Accounting Policy No. 1.08 as loan was borrowed for
Afforestation Activities and hence has no impact on Profit and Loss for
the current year.
7. Gross Value of Assets taken on Lease by the Company and in use as
at 31-3-1999 is Rs. 2150.14 lakhs. The liability for future instalments,
in the form of Lease Rent, payable to the lessors in respect of these
assets amounts to Rs. 135.93 lakhs.
8. Provision towards Income Tax/Sales Tax has been made in the
accounts as per the respective Acts. Any further liability will be
provided in the accounts on completion of assessments/determination of
further liability. Sales Tax and Income Tax assessments have been
completed upto financial years 1994-95 and 1995-96 respectively.
9. INVENTORIES INCLUDE GOODS IN TRANSIT :
Current Previous
Year Year
(Rs. in Lakhs)
(a) Stores and Spares 59.56 242.36
(b) Raw Materials 243.89 1020.07
(c) Coal 18.47 156.11
Total 321.92 1418.54
10. Against the total depreciation of Rs.934.50 lakhs on original cost
for the year 1998-99 (Rs. 958.65 lakhs), Rs.42.78 lakhs has been
capitalised towards Captive Forest Plantations and the balance of Rs.
891.72 lakhs has been provided during the year.
11. During the year interest of Rs. 176.33 lakhs (Rs. 177.74 lakhs)
has been provided on overdue balances in respect of Newsprint Sales.
12. Sales figure in Profit and Loss Account is net of Cash Discount of
Rs. 226.63 (Rs. 159.51 lakhs).
13. CAPTIVE FOREST PLANTATION
Capital Expenditure on Buildings, Plant and Machinery, Furniture and
Fittings and Office Equipments relating to Captive Forest Plantations
amounting to Rs. 136.61 lakhs (Rs. 54.72 lakhs) is shown in Schedule
2.05. Other expenditure are grouped under Captive Forest Plantations
and is shown in Schedule 2.07 and will be charged to Revenue over
subsequent years as per Accounting Policy No. 1.02. Phase-I of the
Captive Forest Plantation Programme has been financed by Overseas
Development Administration, London, through Govt. of Karnataka, partly
by Grant and partly by Loan and Equity. Government grants are accounted
as per accounting Policy No. 1.09. The Government of Karnataka has
leased 30,000 hectares, of degraded forest land and C & D class of
lands to the Company for raising captive plantations and to use them
for meeting pulp wood requirement. Company has received 97918 MT of
Wood from Captive Forest Plantations out of 2728 hectares. Further
Company has allotted 239 hectares, to Govt. of Karnataka towards lease
rent payable.
14. 264.33 Acres of VISL land is in the possession of the Company
since inception. The issue was settled with VISL by paying
consideration of Rs. 79.30 lakhs. The same is capitalised pending
finalisation of formalities relating to Khata transfer.
15. The Company has entered into a lease transaction with M/s.
Karnataka Power Corporation Limited under Lease and Sale back
arrangement for Rs. 4286 lakhs. The lease rentals receivable for the
period from December 1998 to March 2003 amounting to Rs. 2628.52 lakhs
are securitised in favour of ICICI Limited, Mumbai, at a discounted
value of Rs. 1954.38 lakhs. The net amount of Rs. 1954.38 lakhs
received from ICICI arising out of securitisation transaction has been
accounted as income during the year.
16. Certain incomes and expenditures relating to prior period net of
Rs. 596.07 lakhs (Cr.) are shown under respective head of accounts and
are not shown separately as "Prior period adjustments". This procedure
has been followed by the Company consistently.
17. The impact of the proposed salary revision to Officers effective
from 1-1-1998 amounting to about Rs. 97 lakhs has not been provided for
in the books of accounts, pending approval of the State Government.
Also, the provisions for Gratuity and Leave encashment made based on
the pre-revised pay scales, is considered adequate, considering the
corpus of the Gratuity Trust and the service conditions on Leave
encashment.
18. The names of the small scale industrial units to whom the Company
owes exceeding Rs. 1 lakh in each case and which is outstanding for
more than 30 days as on 31-3-1999 are as under :
(a) M/s. VKR Engineers, Chennai.
(b) M/s. Lakshmi Engineering Enterprises, Mumbai.
(c) M/s. Commercial Enterprises, Mumbai.
(d) M/s. Anudeep Carbonates (P) Ltd., Bhadravati.
19. Figures for the previous year have been
regrouped/reclassified/recast wherever necessary to confirm with
current year's presentation.
20. Equity Capital includes 9,00,000 shares allotted by way of Bonus Shares by capitalisation of Share Premium and General Reserve.
Mar 31, 1998
1. SECURITIES OFFERED FOR LOANS
(i) Cash Credit Facility is secured by hypothecation of Company's
present and future stock of raw materials, consumable stores, finished
goods, materials in process and Book Debts.
(ii) Term Loans from Financial Institutions and Banks is secured by a
first charge on the Company's present and future immovable properties,
Plant and Machinery, Spares, Tools, Accessories and certain other
movable properties and second charge on the other assets offered as
Security to Banks for cash credit.
(iii) The mortgage and first charge on the Company's present and future
immovable - properties, Plant and Machinery, Spares, Tools, Accessories
and certain other movable properties and Second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial institutions and banks.
(iv) Foreign Currency Loan from Commonwealth Development Corporation,
UK, is secured by an Equitable Mortgage of Company's leasehold forest
land and Second charge on factory's Non-forest land, Building and Plant
and Machinery.
2. In the absence of any reference to rate of interest and repayment
schedule in respect of loans advanced by the Government of Karnataka
towards Forestry Project, interest on Loans has been provided at the
rate at which Government of India has advanced these loans to Govt. of
Karnataka. However, if the normal rate of interest of Govt. of
Karnataka is applied, the total accumulated interest on these loans
upto 31st March 1998 works out to Rs. 1179.31 lakhs (Rs. 1156.28 lakhs)
as against Rs. 494.52 lakhs (Rs. 482.05 lakhs) provided by the Company
resulting in a shortfall of Rs. 684.79 lakhs (Rs. 674.23 lakhs). In
respect of loan obtained from Government of Karnataka towards OECF
Modernisation Scheme, interest will be accounted on receipt of terms
and references from Government of Karnataka which is awaited.
3. Liability towards Foreign Currency Loan is set up at the rates
prevailing on the last day of the Financial Year This is done as per
recommendations of Accounting Standard - 11 issued by the Institute of
Chartered Accountants of India. The difference arising on account of
the above amounting to Rs. 1230.45 lakhs is adjusted in Captive Forest
Plantation as per Accounting Policy No. 1.08 as loan was borrowed for
Afforestation Activities and hence has no impact on profit & Loss for
the current year. The Company was valuing the yield obtained from
captive plantations at cost taking into account the expenditure
allocated to different species of wood, estimated standing wood and the
felled wood during the year. From the current year onwards the yield is
valued at cost as per Accounting Policy 1.02. Consequently income for
the year is higher by Rs. 253 lakhs.
4. Gross Value of Assets taken on Lease by the Company and in use as
at 31-03-1998 is Rs. 2150.14 lakhs. The liability for future instalments, in the form of Lease Rent, payable to the lessors in
respect of these assets amounts to Rs. 620.94 lakhs.
5. Provision towards Income Tax/Sales Tax has been made in the accounts as per the respective Acts. Any further liability will be provided in the accounts on completion of assessments/determination of further liability. Sales tax and Income tax assessments have been completed upto financial year 1994-95.
6. Against the total depreciation of Rs. 958.65 lakhs on original cost for the year 1997-98 (Rs. 1022.51 lakhs), Rs. 27.41 lakhs has been capitalised towards Captive Forest Plantations and the balance of Rs.
931.24 lakhs has been provided during the year.
7. During the year interest of Rs. 177.74 lakhs has been provided on
overdue balances in respect of Newsprint Sales.
8. CAPTIVE FOREST PLANTATION
Capital Expenditure on Buildings, Plant and Machinery, Furniture and
Fittings and Office Equipments relating to Captive Forest Plantations
amounting to Rs. 54.72 lakhs (Rs. 51.54 lakhs) is shown in Schedule
2.05. Other expenditure are grouped under Captive Forest Plantations
and is shown in Schedule 2.07 and will be charged to Revenue over
subsequent years as per Accounting Policy No. 1.02. Phase-I of the
Captive Forest Plantation Programme was financed by Overseas Development Administration, London, through Government of Karnataka, partly by Grant and partly by Loan and Equity. Government grants are accounted as per accounting Policy No. 1.09.
Company has received 91987 MT of wood from Captive Forest Plantations out of 1749 Ha. Further Company has allotted 275 Ha to Government of Karnataka towards lease rent payable.
9. 264.33 acres of VISL land is in the possession of the Company since inception. The issue was settled with VISL by paying consideration of Rs. 79.30 lakhs. The same is capitalised pending finalisation of formalities relating to Khata transfer.
10. Figures for the previous year have been regrouped/reclassified/recast wherever necessary to confirm with
current year's presentation.
Mar 31, 1997
1. SECURITIES OFFERED FOR LOANS
(i) Cash Credit Facility is secured by hypothecation of Company's
present and future stock of raw materials, consumable stores, finished
goods, materials in process and Book Debts.
(ii) Term Loans from Financial Institutions and Banks is secured by a
First charge on the Company's present and future immovable properties,
Plant and Machinery, Spares, Tools, Accessories and certain other
movable properties and Second charge on the other assets offered as
Security to Banks for Cash credit.
(iii) The mortgage and first charge on the Company's present and future
immovable properties, Plant and Machinery, Spares, Tools, Accessories
and certain other movable properties and Second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial institutions and banks.
(iv) Foreign Currency Loan from Commonwealth Development Corporation,
UK, is secured by an Equitable Mortgage of Company's leasehold forest
land and Second charge on factory's Non-forest land, Building and Plant
and Machinery.
2. In the absence of any reference to rate of interest and repayment
schedule in respect of loans advanced by the Government of Karnataka,
towards Forestry Project, interest on Loan has been provided at the
rate at which Government of India has advanced these loans to Govt. of
Karnataka. However, if the normal rate of interest of Govt. of
Karnataka is applied, the total accumulated interest on these loans
upto 31st March 1997 works out to Rs. 1156.28 lakhs (Rs. 1133.25 lakhs)
as against Rs. 482.05 lakhs (Rs. 469.58 lakhs) provided by the Company
resulting in a shortfall of Rs. 674.23 lakhs (Rs. 663.67 lakhs).
Further in the absence of any reference to rate of interest, no interest has been reckoned on loan obtained from Government of Karnataka towards OECF Modernisation Scheme.
3. Term Loans from Financial Institutions and Banks, Accounts of
Sundry Debtors/Creditors and Advances are under reconciliation Pending
reconciliation, the impact on accounts, if any, is not ascertainable.
4. Liability towards Foreign Currency Loan is set up at the rates
prevailing on the last day of the Financial Year. This is done as per
the recommendations of Accounting Standards-11 issued by the Institute
of Chartered Accountants of India. The difference arising on account
of the above amounting to Rs. 771.67 lakhs is adjusted in Captive
Forest Plantation as per Accounting Policy No. 1.08 as the loan was
borrowed for Afforestation Activities and hence has no impact on profit
& Loss for the current year. The Company was hitherto valuing the
yield obtained from captive plantations at current bought out cost.
However from the current year onwards the yield is valued at cost as
per Accounting Policy No. 1.02. Consequently profit for the year is
higher by Rs. 60.36 lakhs.
5.Gross Value of Assets taken on Lease by the Company and in use as
at 31st March 1997 is Rs. 2150.14 lakhs. The liability for future instalments, in the form of Lease Rent, payable to the lessors in respect of these assets amounts to Rs. 1224.51 lakhs.
6. Provision towards Income Tax/Sales Tax has been made in the
accounts as per the respective Acts. Any further liability will be
provided in the accounts on completion of assessments/determination of
further liability. Sales tax and Income tax assessment has been completed upto 1993-94.
7.INVENTORIES INCLUDE GOODS IN TRANSIT:
Current Previous
Year Year
(Rs. in Lakhs)
(a) Stores and Spares 56.71 178.74
(b) Raw Materials 1297.55 63.48
(c) Coal 12.24 8.80
Total 1366.50 251.02
8. Against the total depreciation of Rs. 1022.51 lakhs on original
cost for the year 196-97 (Rs. 461.27 lakhs), Rs. 19.47 lakhs has been
capitalised towards Captive Forest Plantations and the balance of Rs.
1003.04 lakhs has been provided during the year.
9.Sales figure in Profit and Loss Account is net of Cash Discount of
Rs. 228.05 lakhs (Rs. 152.06 lakhs).
10. CAPTIVE FOREST PLANTATION
Capital Expenditure on Buildings, Plant and Machinery, Furniture and
Fittings and Office Equipments relating to Captive Forest Plantations
amounting to Rs. 51.54 lakhs (Rs. 6.35 lakhs) is shown in Schedule
2.05. Other expenditure are grouped under Captive Forest Plantations
and is shown in Schedule 2.07 and will be charged to Revenue over
subsequent years as per Accounting Policy No. 1.02. Phase-I of the
Captive Forest Plantation Programme has been financed by Overseas
Development Administration, London, through Government of Karnataka,
partly by Grant and partly by Loan and Equity. Government grants are
accounted as per accounting Policy No. 1.09.
Company has received 95299 MT of wood from Captive Forest Plantations
out of 1673 Ha. Further Company has allotted 97 Ha to Government of
Karnataka towards lease rent payable.
Mar 31, 1996
4.01 SECURITIES OFFERED FOR LOANS
(i) Cash Credit Facility is secured by hypothecation of Company's
present and future stock of raw materials, consumable stores, finished
goods, materials in process and Book Debts.
(ii) Term Loans from Financial Institutions and Banks is secured by a
First charge on the Company's present and future immovable properties,
Plant and Machinery, Spares, Tools, Accessories and certain other
movable properties and Second charge on the other assets offered as
Security to Banks for Cash credit.
(iii) The mortgage and first on the Company's present and future
immovable properties, Plant and Machinery, Spares, Tools, Accessories
and certain other movable properties and Second charge on other assets
offered as security to Banks for cash credit facility, rank pari-passu
in respect of term loans from financial institutions and banks.
(iv) Foreign Currency Loan from Commonwealth Development Corporation,
UK, is secured by an Equitable Mortgage of Company's leasehold forest
land and Second charge on factory's Non-forest land, Building and
Plant and Machinery.
4.02 In the absence of any reference to rate of interest and repayment
schedule in respect of loans advanced by the Government of Karnataka,
towards Forestry Project, interest on Loan has been provided at the
rate at which Government of India has advanced these loans to Govt. of
Karnataka. However, if the normal rate of interest of Govt. of
Karnataka is applied, the total accumulated interest on these loans
upto 31st March 1996 works out to Rs. 1133.25 lakhs (Rs. 1117.09
lakhs) as against Rs. 469.58 lakhs (Rs. 458.33 lakhs) provided by the
Company resulting in a shortfall of Rs. 663.67 lakhs (Rs. 658.76
lakhs). Further in the absence of any reference to rate of interest,
no interest has been reckoned on loan obtained from Government of
Karnataka towards OECF Modernisation Scheme.
4.03 Term Loans from Financial Institutions and Banks are under
reconciliation. Pending final reconciliation and confirmation of the
loans, the waiver of Deferred Interest by these Institutions and Banks
amounting to Rs. 332.50 lakhs has not been adjusted in the accounts.
4.07 The Company was hitherto valuing Closing Stock of Bagasse at
Equated Cost of Raw Material (i.e., Sugarcane). However, from the
current year onwards, the quantity of Bagasse for Captive Consumption
only is valued at Equated Cost of Raw Material. The Quantity of
Bagasse determined as Excess is valued at Net realisable value.
Consequently Profit for the year is lower by Rs. 305.22 lakhs.
4.08 Liability towards Foreign Exchange Loans was hitherto set up in
the accounts at the rates prevailing at the time of receipt of loan.
However from the current year onwards, Liability towards Foreign
Currency Loan is set up at the rates prevailing on the last day of the
Financial Year. This is done as per the recommendations of Accounting
Standards 11 issued by the Institute of Chartered Accountants of
India. The difference arising on account of the above amounting to Rs.
262 lakhs is adjusted in Captive Forest Plantation as per Accounting
Policy No. 1.08 as the loan was borrowed for Afforestation Activities
and hence has no impact on profit for the current year.
4.10 Provision towards Income Tax/Sales Tax has been made in the
accounts on the basis of Assessments completed. Any further liability
will be provided in the accounts on completion of
assessments/determination of further liability.
4.13 Against the total depreciation of Rs. 461.27 lakhs on original
cost for the year 1995-96 (Rs. 505.08 lakhs), Rs. 17.62 lakhs has been
capitalised towards Captive Forest Plantations and the balance of Rs.
443.65 lakhs has been provided during the year. The Company has also
provided during the year arrears of Depreciation amounting to Rs.
2651.31 lakhs upto 31st March 1995.
4.15 CAPTIVE FOREST PLANTATION
Capital Expenditure during the year on Buildings, Plant and Machinery,
Furniture and Fittings and Office Equipments relating to Captive
Forest Plantations amounting to Rs. 6.35 lakhs (Rs. 327.97 lakhs) is
shown in Schedule 2.05. Other expenditure for the year are grouped
under Captive Forest Plantations and is shown in Schedule 2.07 and
will be charged to Revenue over subsequent years as per Accounting
Policy No. 1.02. Phase-I of the Captive Forest Plantation Programme
has been financed by Overseas Development Administration, London,
through Government of Karnataka, partly by Grant and partly by Loan
and Equity. Government grants are accounted as per accounting policy
No.1.09.
Mar 31, 1995
4.01 DEBENTURE LOANS
Pending finalisation of terms and manner of redemption of
the debentures to be issued to Unit Trust of India on
private placement, an amount of Rs.16.34 lakhs has been
repaid during the year on ad hoc basis.
4.02 SECURITIES OFFERED FOR LOANS
(i) Cash Credit Facility from Banks is secured by
hypothecation of Company's present and future stock of raw
materials, consumable stores, finished goods, materials in
process and Book Debts.
(ii) Debentures to be issued to the Unit Trust of India and
Term Loans from Financial Institutions and Banks is secured
by a First Charge on the Company's present and future
immovable properties (Land and Buildings), Plant and
Machinery, Spares, Tools, Accessories and certain other
movable properties and Second Charge on the other assets
offered as Security to Banks for Cash Credit Facility.
Charge in respect of Debentures is yet to be created.
(iii) The mortgage and First Charge on the Company's
present and future immovable properties, plant and
machinery, spares, tools, accessories and certain other
movable properties and Second Charge on other assets
offered as security to Banks for cash credit facility, rank
pari-passu towards charges created/to be created in respect
of Debentures to be issued to Unit Trust of India and term
loans from financial institutions and banks.
(iv) Foreign Currency Loan from Commonwealth Development
Corporation, U.K., is secured by an Equitable Mortgage of
Company's leasehold forest land and Second Charge on
factory's Non-forest Land, Building and Plant and
Machinery.
(v) Other loans from Banks is secured against Deposits with
respective Banks.
4.03. In the absence of any reference to rate of interest
and repayment schedule in respect of loans advanced by the
Government of Karnataka towards Forestry Project Phase-1,
interest on loan has been provided at the rate at which
Government of India has advanced these loans to Government
of Karnataka. However, if the normal interest rate of
Government of Karnataka is applied, the total accumulated
interest on these loans upto 31st March 1993 works out to
Rs.1,117.09 lakhs (Rs.1,110.22 lakhs) as against Rs.458.33
lakhs (Rs.454.05 lakhs) provided by the Company resulting
in a shortfall of Rs.658.76 lakhs (Rs.656.17 lakhs).
Further in the absence of any reference to rate of
interest, no interest has been reckoned on loan obtained
from Government of Karnataka towards OECF Modernisation
Scheme.
4.04. Term Loans from Financial Institutions and Banks are
under reconciliation. Pending final reconciliation of Term
Loans and Interest Liability as per Rehabilitation Package,
an amount of Rs.862.36 lakhs has been provided as interest
in the accounts during the year.
4.05 Sales figure in Profit and Loss Account is net of Cash
Discount of Rs.109.15 lakhs (Rs.44.41 lakhs).
4.06 CAPTIVE FOREST PLANTATION
Capital expenditure on Buildings, Plant and Machinery,
Furniture and Fittings and Office Equipments, Earth Moving
Equipments relating to Captive Forest Plantations amounting
to Rs.327.97 lakhs (Rs.272.69 lakhs) is shown in Schedule
2.06. Other expenditure are grouped under Captive Forest
Plantations and are shown in Schedule 2.08 and will be
charged to Revenue over subsequent years rate as per
Accounting Policy No. 1.02. Phase-I of the Captive Forest
Plantation Programme has been financed by Overseas
Development Administration, London, through Government of
Karnataka, partly by Grant and partly by Loan and Equity.
Government Grants are accounted as per Accounting Policy
No. 1.09.
4.07 VALUATION OF FINISHED AND UNFINISHED STOCK
Administrative Overheads which was hitherto included in the
cost for the purpose of valuation of Stock has been
excluded from the total cost from the current year as per
the advice of the Comptroller and Auditor General of India.
The impact of the same on the value of stock is negligible
for the current year.
4.08. ACCOUNTING FOR LEAVE AT CREDIT OF EMPLOYEES
The Company was hitherto accounting the encashment of leave
by the employees during the year in which payment was made.
However, from the current year onwards provision has been
made to bring to account the privilege leave (PL/EL) at
credit of the employees equivalent to its monetary value.
Consequently, the profit of the year is lower by Rs.193.68
lakhs.
4.09 The Company was hitherto providing for non-moving
stores excluding spares at 25% of the value so ascertained.
From the current year onwards all non-moving stores
including spares is ascertained and 50% of the value
thereof is provided in the accounts. Consequently, profit
for the year is lower by Rs.120.42 lakhs.
4.10 The Company was hitherto valuing yield from Captive
Plantation at a standard rate, based on cost incurred upto
31-03-1991, increased proportionately to further costs
depending on fellings every year.
However, based on the experience over the years and taking
into account the fluctuation in yield and the domestic
inflation factors, it was felt necessary to review the
pricing policy of captive yield. Accordingly, it has been
decided to value the captive yield based on current bought
out cost which would be more practicable in this case.
Consequently profit for the year is lower by Rs.354.66
lakhs.
4.11 In terms of Accounting Policy No.1.09 amounts lying
under Capital Subsidies and Grants as at 31st March 1994
and pertaining to construction of employees quarters is
deducted from the cost of respective asset (Sch. 2.06) and
grants relating to Captive Plantations is deducted from the
Captive Plantation cost incurred (Sch. 2.08).
4.12 Figures for the previous year have been
regrouped/reclassified/recast wherever necessary to conform
with current year's presentation.
Mar 31, 1994
4.01 DEBENTURE LOANS
Pending finalisation of terms and manner of redemption of the debentures to be issued to Unit Trust of India on private placement, an amount of Rs. 35.26 lakhs has been repaid during the year on ad hoc basis.
4.02 SECURITIES OFFERED FOR LOANS
(i) Cash Credit Facility is secured by hypothecation of Company's present and future stock of raw materials, consumable stores, finished goods, materials in process and Book Debts.
(ii) Debentures to be issued to the Unit Trust of India and Term Loans from Financial Institutions and Banks is secured by a First charge on the Company's present and future immovable properties (Land and Buildings), Plant and Machinery, Spares, Tools, Accessories and certain other movable properties and Second charge on the other assets offered as Security to Banks for Cash Credit Facility. Charge in respect of Debentures is yet to be created.
(iii) The mortgage and first charge on the Company's present and future immovable properties, plant and machinery, spares, tools, accessories and certain other movable properties and Second charge on other assets
offered as security to banks for cash credit facility, rank pari-passu towards charges created/to be created in respect of debentures to be issued to Unit Trust of India and term loans from financial Institutions and banks.
(iv) Foreign Currency Loan from Commonwealth Development Corporation, UK, is secured by an Equitable Mortgage of Company's leasehold forest land and a floating Second charge by way of a charge on Company's non-forest immovable properties and hypothecation of all movable properties, both present and future.
4.03 In the absence of any reference to rate of interest and repayment schedule in respect of loans advanced by the Government of Karnataka, towards Forestry Project Phase-I, interest on Loan of Rs. 1090 lakhs, which has been converted into Equity on 01-04-1993, has been provided at
the rate at which Government of India has advanced these loans to Government of Karnataka. However, if the normal interest rates of Government of Karnataka is applied, the total accumulated interest on these loans upto 31st March 1993 works out to Rs. 1110.22 lakhs (Rs. 1110.22 lakhs) as against Rs. 454.05 lakhs (Rs. 454.05 lakhs) provided by the Company resulting in a shortfall of Rs. 656.17 lakhs (Rs. 656.17 lakhs).
4.04 Consequent upon implementation of Rehabilitation Package sanctioned by the Financial Institutions, Banks and Government of Karnataka, outstanding loans amounting to Rs. 3400 lakhs has been converted into Equity and additional interest amounting to Rs. 558.58 lakhs has been
provided during the year.
4.05 Contingent Liability in respect of:
(i) Letters of Credit and Guarantees Rs. 368.46 lakhs (Rs. 1274.70 lakhs).
(ii) In accordance with IDBI proposal for not charging Guarantee Commission, the Company is approaching Government of Karnataka for waiver of the same. Hence no provision is made in the accounts. The approximate amount in respect of this as at 31st March 1994 is Rs. 1005 lakhs.
4.06 Term Loans from Financial Institutions and Banks, Accounts of Sundry Debtors/Creditors and Advances are under reconciliation. Pending reconciliation, the impact on accounts, if any, is not ascertainable.
CLAIMS AGAINST THE COMPANY NOT ACKNOWLEDGED AS DEBTS:
(i) No provision has been made in the accounts for Rs. 5215.00 lakhs (Rs. 5215.00 lakhs) on the demand raised by Central Excise Authorities as the Company is disputing the demand made on the clearance of paper due to classification of pulp differently by the Department. Consequent on the orders of Divisional Bench of Karnataka High Court, the matter is pending with Central Excise Authorities for adjudication.
(ii) Other Claims against the Company not acknowledged as debts Rs. 150.98 lakhs (Rs. 1634.10 lakhs).
4.08 The Company was hitherto accounting gratuity on cash basis. From the current year onwards gratuity is provided in the accounts on accrual basis as per actuarial valuation in accordance with Section 209 of the Companies Act. The amount of gratuity so provided as per actuarial valuation as at 31-03-1994 is Rs. 562.32 lakhs. As a result, profit
for the year is lower by Rs. 562.32 lakhs.
4.09 The Company was hitherto charging purchase of stores items costing Rs. 20 and below per unit to revenue. From the current year onwards all stores items are charged to revenue as and when consumed. The said change has resulted in increase in profit for the year by Rs. 37.82 lakhs.
4.10 Research and Development expenses is accounted as per Accounting Policy No. 1.07. Consequent upon this the amount of R & D expenses as at 31-03-1993 amounting to Rs. 142.29 lakhs together with current year's expenditure of Rs. 25.45 lakhs has been written off during the year. As a result profit for the year is lower by Rs. 167.74 lakhs.
4.11 In view of the uneconomical cost, the Company has withdrawn from the Diesel Power Generation Scheme of KEB. Hence the amount of Rs. 145.29 lakhs which was shown as Deferred Revenue Expenditure in the accounts has been written off during the year.
4.14 Against the total depreciation of Rs. 679.19 lakhs on original cost for the year 1993-94 (Rs. 1312.37 lakhs) Rs. 10.64 lakhs has been capitalised towards Captive Forest Plantations and the balance of Rs. 668.55 lakhs along with Rs. 617.45 lakhs out of the arrears of Rs. 5709.82 lakhs has been provided during the year. The arrears of
depreciation yet to be provided in the accounts as at 31-03-1994 works out to Rs. 5092.37 lakhs (Rs. 5709.82 lakhs). The Net Block shown in the accounts does not include the arrears of depreciation stated above.
4.15 Sales figure in Profit and Loss Account is net of Cash Discount of Rs. 44.41 lakhs (Rs. 23.94 lakhs).
4.16 CAPTIVE FOREST PLANTATION
Capital Expenditure on Buildings, Plant and Machinery, Furniture and Fittings and Office Equipments relating to Captive Forest Plantations amounting to Rs. 272.69 lakhs (Rs. 265.79 lakhs) is shown in Schedule 2.06. Other expenditure are grouped under Captive Forest Plantations
and is shown in Schedule 2.08 and will be charged to Revenue over subsequent years at standard rate as per Accounting Policy No. 1.02. Phase-I of the Captive Forest Plantation Programme has been financed by Overseas Development Administration, London, through Government of
Karnataka, partly by Grant and partly by Loan and Equity. Grants are accounted and shown under "CAPITAL SUBSIDIES AND GRANTS" as and when converted by Government of Karnataka (Schedule 2.03).
4.21 The Accounts approved by the Board and reported by the Statutory Auditors on 14-06-1994 have been revised in the light of the observation made by the Comptroller and Auditor General under Section 619 (4) of the Companies Act, 1956. There is no change in the working results of the
Company as a result of the revision of accounts.
Mar 31, 1992
The State Government has been releasing the funds received from Government of India to the company since 1984 for its forestry programme (Phase-I) as loan without any reference to the rate of interest and repayment. As per the agreed pattern of financing the project, part of the loan has to be converted into equity and grant and further the terms to the company should be the same as the terms prescribed by the Government of India to Government of Karnataka. The amount pending conversion into equity and grant is Rs. 193.71 lakhs. Similarly, the company has received Rs. 100.00 lakhs as loan for its bagasse pulping project which is pending conversion into equity. In view of the agreed pattern of investment, the company has provided interest only on the applicable loan portion at rates at which Government of India has sanctioned these amount to Government of Karnataka. However, if the normal interest rates of Government of Karnataka are applied the total accumulated interest on these loans works out to Rs. 909.26 lahs as against Rs. 370.95 lakhs provided by the company resulting in a shortfall of Rs. 583.31 lakhs.
Regarding following matters, no provision has been made in the accounts of the company :
Pending finalisation of terms of package of reliefs to be granted by the lending financial institutions and banks, interest on funded interest and on interest arrears, amounting to Rs. 1344.88 lakhs (Rs. 800.09 lakhs) and also penal interest, not quantified.
Contingent liability in respect of letters of credit and guarantees amounting to Rs. 768.76 lakhs (Rs. 820.17 lakhs).
Confirmation of Balances :
Accounting of Sundry Debtors/creditors and advances are under reconciliation with reference to confirmation of balances.
Term loans from banks and financial institutions have not been confirmed pending finalisation of rehabilitation package.
Gratuity :
Gratuity is accounted in accordance with the accounting policy no. 1.04. Proportionate liability, accruing for future payments relating to leaving/retiring employees is Rs. 528.37 lakhs as per actuarial valuation (Rs. 457.89 lakhs).
Claims against the company not acknowledged as debts :
Claims against the company not acknowledged as debts Rs. 1680.81 lakhs (Rs. 1259.37 lakhs).
No provision has been made in the accounts for Rs. 5215.00 lakhs (Rs. 5215.00 lakhs) on the demand raised by Central Excise authorities as the company is disputing the demand made on the clearance of paper due to classification of pulp differently by the department. The company has obtained a stay pending consideration of writ petition filed before the Hon'ble High Court of Karnataka.
Against the total depreciation of Rs. 1571.19 lakhs for the year 1991-92 (Rs. 1560.60 lakhs), Rs. 15.39 lakhs has been capitalised towards captive forest plantations and the balance of Rs. 1555.80 lakhs along with Rs. 1317.86 lakhs out of the arrears of Rs. 6505.56 lakhs has been provided during the year. The arrears of depreciation yet to be provided in the accounts as on 31-03-1992 works out to Rs. 5187.70 lakhs.
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