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Notes to Accounts of Orient Cement Ltd.

Mar 31, 2015

1. Corporate information

Orient Cement Limited (the Company) is a public Company domiciled in India. Its shares are listed on National and Bombay Stock exchanges in India. The cement undertaking of Orient Paper & Industries Limited (OPIL) had been transferred to the Company on a going concern basis w.e.f 1st April, 2012, pursuant to the scheme of arrangement approved by the Hon''ble Orissa High Court.

The Company is primarily engaged in the manufacture and sale of Cement and manufacturing facilities at present are located at Devapur in Telangana and Jalgaon in Maharashtra. The Company is also setting up a Greenfield Cement Project at Chittapur in Karnataka.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention.

3. Terms/ rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2015, the amount of per share dividend recognised as distribution to equity shareholders was Rs. 1.75 per share (including interim dividend Rs. 0.75 per share) (31st March 2014: Rs. 1.50 per share, including interim dividend of Rs. 0.75 per share).

4. Plant & Machinery aggregating to Rs. 60,502.67 lacs has been acquired and installed during the period April 01, 2013 to March 31, 2015 (duly certified by chartered engineers) which, pending commencement of commercial production, has been carried forward as Capital Work-in-Progress in these financial statements. As legally advised, the Company is entitled for Investment Allowance under section 32AC of the Income Tax Act, 1961 ("Act") since the above assets were acquired and installed during the specified period. Accordingly, deduction u/s 32AC on above assets has been considered in computation of current tax for the year ended March 31,2015.

5. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed at least five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the plan.

6. CAPITAL AND OTHER COMMITMENTS

(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. 16,414.46 lacs (31st March, 2014 Rs.82,351.39 lacs)

(b) For commitments relating to lease arrangements, please refer note

7. CONTINGENT LIABILITIES

(Rs. in Lacs)

31st March 2015 31st March 2014

Demands/claims by various Government authorities and others not acknowledged as debts and contested by the Company:

Excise Duty 3,769.59 3,676.21

Sales Tax 549.55 528.45

Escot Charges 14,398.60 11,010.60

Others 2,156.49 2,169.14

20,874.23 17,384.40

Against the above, payments have 467.29 450.13 been made under protest and/ or debts have been withheld by respective parties.

* Based on discussions with the solicitors/favorable decisions in similar cases/legal opinions taken by the Company, the management believes that the Company has a good chance of success in above-mentioned cases and hence, no provision there against is considered necessary.

8. The Company has been legally advised that it is eligible to claim credit for Advance tax of Rs. 1,698.15 lacs paid by Orient Paper & Industries Limited (demerged Company) under its PAN during the month of June, 2012, being the 1st installment for the financial year 2012-13, in terms of clauses 2.10, 6.1 (h) & (i) and 6.4 of the Scheme of arrangement approved by the Hon''ble High Court. In view of the above, the said payment of advance tax has been considered in the accounts for the year ended 31st March, 2013.

9. Based on the synergies, risks and return associated with business operations and in terms of Accounting Standard-17, the Company is engaged in a single reportable segment of manufacture and sale of cement during the year and hence treated the same as a single reportable segment as per Accounting Standard-17.

The Company at present, operates in India only and therefore the analysis of geographical segments is not applicable to the Company.

10. Charity and donation includes Rs. 200 lacs (31st March, 2014 : Rs. Nil) paid to Satya Electoral Trust, an approved Electoral Trust under the Income Tax Act, 1961.

11. PREVIOUS YEAR FIGURES

Previous year''s figures have been regrouped and rearranged wherever necessary, to conform to this year''s classification.


Mar 31, 2013

NOTE 1 CORPORATE INFORMATION

Orient Cement Limited (the Company) is a public Company domiciled in India and incorporated in the previous year on 22nd July, 2011 under the provisions of the Companies Act, 1956. The cement undertaking of Orient Paper & Industries Ltd (OPIL) has been transferred to the Company on a going concern basis w.e.f 1st April, 2012, pursuant to the scheme of arrangement approved by the Hon''ble Orissa High Court.

The Company is primarily engaged in the manufacture and sale of Cement and manufacturing facilities at present are located at Devapur in Andhra Pradesh and Jalgaon in Maharashtra.

NOTE 2 BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

NOTE 3 SCHEME OF ARRANGEMENT

a) Pursuant to the Scheme of Arrangement ("the scheme") approved by the Hon''ble High Court of Orissa, all the assets and liabilities of the Cement undertaking of Orient Paper & Industries Ltd (Demerged Company) have been transferred to and vested in the Company at their respective book values on a going concern basis from 1st April, 2012 being the appointed date.

As per the scheme, appointed date as approved by the Hon''ble High Court is 1st April, 2012 and effective date is 26th February, 2013 being the date on which the certified copy of the order sanctioning the said scheme is filed with the Registrar of Companies, Orissa in accordance with the Companies Act, 1956.

c) Pursuant to the scheme, 5 lacs equity shares of Rs. 1 each of the Company held by the demerged Company (OPIL) stand cancelled and the said amount has been credited to Capital Reserve.

d) Pursuant to the scheme, the Company has issued/alloted 204,868,760 equity shares of Rs. 1 each to the shareholders of the demerged Company aggregating to Rs. 2048.69 lacs, in the ratio of 1 equity share of face value of Rs. 1 each of the Company for every 1 equity share of face value of Rs. 1 each held in the demerged Company.

e) Pursuant to the scheme, the difference between the net book value of assets and liabilities of the Cement undertaking and shares issued to the shareholders of the demerged Company has been credited to General Reserve.

NOTE 4

The Company has not yet ascertained the stamp duty liability payable against Immovable Assets of Cement Undertaking of the Demerged Company transferred to the Company, pursuant to the Scheme of Arrangement approved by Hon''ble Orissa High Court as stated in Note 26 above and hence no provision thereof has been made in these financial statements and the same will be accounted for and capitalised with the respective assets, as and when the liability is ascertained.

NOTE 5 GRATuITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed at least five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the plan.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. There has been significant change in expected rate of return on assets due to the change in market scenario.

NOTE 6 LEASES

Operating lease: company as lessee

Certain office premises, depots etc are obtained on operating lease. The lease term is for 1-3 years and renewable for further period either mutually or at the option of the Company. There is no escalation clause in the lease agreement.

There are no restrictions imposed by lease arrangements. There are no subleases. The leases are cancelable.

NOTE 7 CAPITAL AND OTHER COMMITMENTS

(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. 245.78 lacs (31st March, 2012 Rs. Nil)

(b) For commitments relating to lease arrangements, please refer note 30)

NOTE 8 CONTINGENT LIABILITIES

Rs.In lacs

31-Mar-13 31-Mar-12

Demands/claims by various Government authorities and others not acknowledged as debts and contested by the Company:

Excise Duty 9,327.53

Sales Tax 485.44

Escot Charges 7,638.60

Others 1,468.49

* 18920.06

Against the above, payments have been made under protest and/ or debts 323.02

- have been withheld by respective parties.

* Based on discussions with the solicitors/ favorable decisions in similar cases/legal opinions taken by the Company, the management believes that the Company has a good chance of success in above-mentioned cases and hence, no provision there against is considered necessary.

NOTE 9

The Company has been legally advised that it is eligible to claim credit for Advance tax of Rs. 1698.15 lacs paid by Orient Paper & Industries Limited (demerged Company) under its PAN during the month of June,2012, being the 1st installment for the current financial year, in terms of clauses 2.10, 6.1 (h) & (i) and 6.4 of the Scheme of arrangement approved by the Hon,ble High Court. In view of the above, the said payment of advance tax has been considered in these accounts.

NOTE 10

The appointment and remuneration of Rs. 270.05 lacs paid to Managing Director is subject to approval of the shareholders of the Company.

NOTE 11

Based on the Synergies, risks and return associated with business operations and in terms of Accounting Standard-17, the Company is engaged in a single segment of manifactured and sale of cement during the year and hence treated as a single reportable segment as per Accounting Standard-17.

The Company at present, operates in India only and therefore the analysis of geographical segment is not applicable to the Company.

NOTE 12 PREVIOuS YEAR FIGuRES

Previous year''s figures have been regrouped and rearranged wherever necessary. Further, the current year figures being inclusive of figures of Cement undertaking of Orient Paper & Industries limited merged with the Company w.e.f. 1st April, 2012 (pursuant to a scheme of arrangement refer note 26), are not comparable with the previous year''s figures.

 
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