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Notes to Accounts of South India Paper Mills Ltd.

Mar 31, 2015

CORPORATE INFORMATION

The South India Paper Mills Ltd is a Public limited Company, incorporated under the provisions of the Companies Act,1956. The Company is engaged in the manufacture of Paper, Paperboards, Cartons and Power Generation. Corporate Identity No. (CIN) of the Company is L85110KA1959PLC001352. Equity Shares of the Company are listed on the BSE (Bombay Stock Exchange) in India.

A. Terms / Rights attached to Equity Shares

1. The company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

2. During the year ended 31st March 2015, the amount of per share dividend recommended by the Directors for distribution to equity shareholders is Rs.2.50 (Previous Yr.: Rs.1.50).

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

NOTE 2 - Depreciation

Consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing from 1st April, 2014,the Company has realigned the remaining useful lives of its fixed assets in accordance with the provisions prescribed under Schedule II to the Act. Accordingly, the Company has computed depreciation as under:

i) in respect of assets existing as at the beginning of the year - carrying amount of the asset is depreciated over the remaining useful life of the assets after retaining residual value of the asset and where the fixed assets have completed their useful lives, the carrying value (net of residual value) as at April 1, 2014 has been debited to Retained Earnings, after considering the tax effect.

NOTE : 3. Exchange Differences

The Company has recognized an aggregate gain on exchange differences of Rs.77,86,936 (P.Y. Gain of Rs.12,81,192) in the Statement of Profit & Loss.

NOTE : 4 Employee benefits

a) Defined Contribution Plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plan ("the Scheme") for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable to the plan by the Company is at rates specified in the rules of the Scheme. Amount contributed to the Scheme is shown in Note No.24.

b) Defined Benefit Plans

The Company offers Gratuity benefit to its employees. The Company has set up a Trust for gratuity and the plan assets are invested with Life Insurance Corporation of India and in approved Bank Deposits.

NOTE : 5 Concession in customs duty availed for imports cleared under Export Promotion on Capital Goods Scheme Rs.3,85,43,853 ( P.Y : Rs.3,85,43,853). The company has fulfilled the export obligation of Rs.23,07,76,743/- towards duty saved concession amounting to Rs.3,50,92,482 upto 31.03.2015 & the Company is yet to complete the export obligation in respect of a duty amount of Rs.34,51,371.

NOTE : 6 Details of Contingent Liabilities and Commitments :

A) Contingent Liabilities and Claims not acknowledged as debts :

Sl. Particulars March 31, 2015 March 31, 2014 No.

1 Demands under the Central Excise Act:

a) Excise duty and penalty in respect of sale of sludge. Duty 3,54,725 3,54,725

(stay granted by CESTAT, Bangalore) Penalty 3,54,725 3,54,725

b) Excise duty and penalty in respect of removal Duty 8,15,339 8,15,339

of Capital goods (stay granted by CESTAT, Bangalore) Penalty 50,000 50,000

2 Demand of penalty on late payment of Service tax 2,63,068 2,63,068 (stay granted by CESTAT, Bangalore)

7. The Ministry of Micro, Small and Medium Enterprises has issued an office of memorandum dated 26th August 2008 which recommends that the Micro & Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the 'Micro, Small and Medium Enterprises Development Act, 2006' ('the Act'). Accordingly the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on information received and available with the Company. In the view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the Balance Sheet date.

NOTE : 8. Segment wise revenue, results and capital employed are furnished herein for : i) Paper & Paper Products and ii) Power

The Company's business segments are primarily (a) Paper and paper products and (b) Power . Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on a reasonable basis.

NOTE : 9 Leases

The Company is obligated under non-cancellable operating leases for office premises. The total rental expenses under non-cancellable operating leases amounted to Rs.16,16,518/- for the year ended March 31, 2015 (March 31, 2014 : Rs.31,67,815/-)

NOTE : 10. Previous year's figures have been re-grouped/re-classified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2014

CORPORATE INFORMATION

The South India Paper Mills Ltd is a public limited Company, incorporated under the provisions of the Companies Act, 1956. Corporate Identity No. (CIN) of the Company is L85110KA1959PLC001352. Equity Shares of the Company are listed on the BSE (Bombay Stock Exchange) in India. The Company is engaged in the manufacture of Paper, Paperboards, Cartons and power generation.

Sub-Note : 1 - Terms of Repayment of Deposits from Agents :

Deposits from Agents are in the nature of Deposits collected from Sales / Commission Agents and are repayable at the time of termination of the agency, or available against non payment of Trade Debtors.

Sub-Note : 2 - Terms of Repayment of Deposit from Others :

Deposit from Others is in the nature of Deposits collected from liason agents towards procuring materials. Deposit is repayable at the time of termination of the agency.

NOTE : 3. Segment wise revenue, results and capital employed are furnished herein for : i) Paper & Paper Products and ii) Power

The Company''s business segments are primarily (a) Paper and paper products and (b) Power . Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on a reasonable basis. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses.

NOTE : 4. Contingent Liabilities and Commitments not provided for : a) Claims not acknowledged as debts :

Sl. Particulars As at 31st March No. 2013-14 2012-13

1 Demands under the Central Excise Act:

a) Excise duty and penalty in respect of sale of sludge. Duty 3,54,725 3,54,725 (stay granted by CESTAT, Bangalore) Penalty 3,54,725 3,54,725

b) Excise duty and penalty in respect of removal Duty 8,15,339 8,15,339

of Capital goods (stay granted by CESTAT, Bangalore) Penalty 50,000 50,000

2 Demand of penalty on late payment of Service tax 2,63,068 2,63,068 (stay granted by CESTAT, Bangalore)

b) Commitments :

Estimated amount of contracts remaining to be executed 46,83,750 1,95,51,077 on capital account and not provided for (net of advance)

NOTE : 5 Concession in customs duty availed for imports cleared under Export Promotion on Capital Goods Scheme Rs.3,85,43,853 ( P.Y : 3,85,43,853). The company has fulfilled the export obligation of Rs.2,308 lakhs representing duty saved concession amounting to Rs.3,50,92,482 upto 31.03.2014 & the Company is yet to complete the export obligation in respect of a duty amount of Rs.34,51,371.

NOTE : 6 Details of transactions with related parties during the year 2013-14 :

Names of related parties and related party relationship:

Names of related parties Description of Relationship

Manish M Patel Key Management Personnel ("KMP")

[Managing Director]

Vandhana M. Patel Relative of Key Management Personnel ("Relatives of KMP")

[Wife of Managing Director]

NOTE : 7 Employee benefit plans Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans ("the Schemes") for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable to these plans by the Company are at rates specified in the rules of the Schemes. Amounts contributed to the schemes are shown in note no. 24.

Defined benefit plans

The gratuity plan of the Company is as per the Payment of Gratuity Act, 1972. The Company''s gratuity plan is funded; the plan assets are invested with LIC and in approved Bank Deposits by the Gratuity Trust Fund.

NOTE : 8. Exchange Differences

The Company has recognized an aggregate gain on exchange differences of Rs.12,81,192 (P.Y. loss of Rs.11,91,005) in the Statement of Profit and Loss.

NOTE : 9. Dues to micro, small and medium enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26th August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ''Micro, Small and Medium Enterprises Development Act, 2006'' (''the Act''). Accordingly, the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on information received and available with the Company. In the view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the Balance Sheet date.


Mar 31, 2013

CORPORATE INFORMATION

The South India Paper Mills Ltd is a public limited Company, incorporated under the provisions of the Companies Act, 1956. Equity Shares of the Company are listed on the BSE (Bombay Stock Exchange) in India. The Company is engaged in the manufacture of Paper, Paperboards, Cartons and power generation.

NOTE : 1. Segment wise revenue, results and capital employed are furnished herein for : i) Paper & Paper Products and ii) Power

The Company''s business segments are primarily (a) Paper and paper products and (b) Power . Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on a reasonable basis. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses.

NOTE : 2. Contingent Liabilities and Commitments not provided for : a) Claims not acknowledged as debts :



Sl. Particulars As at 31st March No. 2012-13 2011-12

1 Demands under the Central Excise Act:

a) Excise duty and penalty in respect Duty 3,54,725 3,54,725 of sale of sludge. (stay granted by CESTAT, Bangalore) Penalty 3,54,725 3,54,725

b) Excise duty and penalty in respect of removal Duty 8,15,339 8,15,339 of Capital goods** Penalty 50,000 1,00,000

2 Demand of penalty on late payment of Service tax** 2,63,068 2,63,068

** Application for stay of recovery is pending before the Appellate Authority i.e., CESTAT, Bangalore.

b) Commitments : Rs. Rs.

Estimated amount of contracts remaining to be executed 1,95,51,077 36,86,000 on capital account and not provided for (net of advance)

NOTE : 3. Concession in customs duty availed for imports cleared under Export Promotion on Capital Goods Scheme Rs.3,85,43,853 ( P.Y : 3,85,43,853). The company has fulfilled the export obligation of Rs.1,875 lakhs towards duty saved concession amounting to Rs.2,78,85,039 upto 31.03.2013 & the company is yet to complete the export obligation in respect of a duty amount of Rs.1,06,58,814.

NOTE : 4. Expenditure in foreign currency (Remitted) :

(other than imports)

Travelling Expenses, professional charges etc 4,81,678 7,55,769

NOTE : 5. FOB value of Exports during the year Rs.15,60,013 ( P.Y - Rs.22,16,023 ) NOTE : 37. Details of transactions with related parties during the year 2012-13 :

NOTE : 6 Employee benefit plans

Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans ("the Schemes") for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable to these plans by the Company are at rates specified in the rules of the Schemes. Amounts contributed to the schemes are shown in note no. 25.

Defined benefit plans

The gratuity plan of the Company is as per the Payment of Gratuity Act, 1972. The Company''s gratuity plan is funded; the plan assets are invested with LIC and in approved Bank Deposits by the Gratuity Trust Fund.

NOTE : 7. Leases

The Company has taken certain Godowns / Premises on operating lease. The Leases are cancellable without any material risk. The Company has recognized lease rental expense as under :

NOTE : 8. Exchange Differences

The Company has recognized an aggregate loss on exchange differences of 11,91,005 (P.Y. loss of Rs. 16,96,802) in the Statement of Profit and Loss.

NOTE : 9. Dues to micro, small and medium enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26th August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ''Micro, Small and Medium Enterprises Development Act, 2006'' (''the Act''). Accordingly, the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on information received and available with the Company. In the view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the Balance Sheet date.


Mar 31, 2012

CORPORATE INFORMATION

The Souh India Paper Mills Ld is a public limied Company, incorporaed under he provisions of he Companies Ac, 1956. Equiy Shares of he Company are lised on he BSE (Bombay Sock Exchange) in India. The Company is engaged in the manufacture of Paper, Paperboards, Cartons and power generation.


Mar 31, 2011

1. Segment wise revenue, results and capital employed are furnished herein for :

i) Paper & Paper products and ii) Power.

2. Contingent Liabilities :

(a) Claims not acknowledged as debts :

(i) A sum of Rs. 47,94,773 towards electricity tax on captive consumption of power (Oct 03 to June 04) and interest thereon ^ 26,85,797 aggregating to a demand of (Rs. 74,80,570 is not acknowledged by the Company.(previous year end - (Rs. 72,72,861)

Company is advised that levy is not tenable and has filed writ appeal before the High Court of Karnataka. As per the direction of Hon'ble High Court, the Company has deposited 50% of the original demand amounting to Rs. 41,79,338 which is shown under current assets.

High Court judgement is pending.

(ii) Claim for Central Excise Duty on sale of sludge (Rs. 3,54,725 and penalty (Rs. 3,54,725 is under appeal before Commissioner of Central Excise (Appeals).

(iii) Claim under Cenvat Credit Rules, 2004 on removal of Capital goods Rs. 8,15,339 and penalty Rs. 1,00,000 is under appeal before Additional Commissioner of Central Excise (Appeals).

(b) Letters of credit issued by Bank on behalf of the Company net of liability on goods received, which has been shown under Sundry creditors Rs. 348.73 lakhs (previous year 393.23 lakhs).

(c) Concession in customs duty availed for imports cleared under Export Promotion on Capital Goods Scheme Rs. 385.44 lakhs (last year Rs. 278.85 lakhs). The company has fulfilled the export obligation of Rs. 1,875 lakhs towards duty saved concession amounting to Rs. 278.85 upto 31-03-2011 & contingent liability amount on this account is Rs. 106.59 lakhs.

(d) Counter guarantees given to Bankers against guarantees issued (Rs. 10.68 lakhs ( Last year (Rs. 7.93 lakhs)

3. Deposit of (Rs.1,28,00,000/- has been pledged with M/s Vijaya Bank, Nanjangud for margin money on Letters of Credit and Bank Guarantees.

4. Instalments of Term loans due for repayment within 1 year : (Rs. 288 lakhs ( Prev year (Rs. 330 lakhs).

5. National Savings Certificate of (Rs. 1,000 is pledged with Central Excise Department.

6. There are no overdue deposits / unclaimed matured deposits as on 31-3-2011, since the company does not have any Fixed Deposit outstanding.

7. Sundry debtors includes amounts due from an associate concern (Rs. Nil .

8. Amounts due from companies in which Directors are interested : Nil

9. Loans & advances include a sum of (Rs. 5,44,31,138/- as advance for Capital goods.

10. Expenditure in foreign currency (Remitted) : (Rs. ^ (other than imports) 2010-2011 2009-2010

Travelling Expenses, professional charges etc. 580,442 587,791

11. No. of non resident shareholders as on 31-3-2011 is 48 & their share holding is 23,92,361 equity shares (last year- 29 no.s & 10,98,500 shares)

12. Amount due to Sundry Creditors that are SSI (Small Scale Industrial undertakings) and M S & M (Micro, Small & Medium Enterprises) (to the extent information is available with the Company) : Nil

13. Insurance charges includes insurance premia of (Rs. 69.00 lakhs paid to cover key managerial staff, under employer- employee scheme to cover the risk for the Company. (Pre.Yr. (Rs. 67.50 lakhs)

14. FOB value of Exports during the year (Rs. 7.32 lakhs ( last year - (Rs. NIL)

15. Disclosure of Related Party transactions as required by Accounting Standard - 18 (AS-18) :

Group A. Holding & Subsidiary Companies : Nil

Group B Key Management Personnel :

Mr Manish M Patel - Managing Director

Group C Associate Concerns: i)Name : 1) Bhadra Packaids Pvt Ltd (BPAL)

ii) Description of relationship between the parties : SIPM is holding 2,98,000 equity shares of ^10 each representing 50% of the equity capital of BPAL. In BPAL, SIPM also holds 24,000 preference shares of (Rs.100 each.

The Company has appointed Directors in Associate Concern to represent and safe guard the interest of the Company. None of the Directors of the Company nor their relatives whether directly or indirectly hold any shares in the Associate Concerns and hence they are not interested in any of the transactions with the Associate Concerns. Directors and their relatives do not have any transaction directly or indirectly with the Associate Concerns. Directors of the Company are not in receipt of any remuneration from Associate Concerns except sitting fees.

There were no transactions of material nature with its promoters, the Directors or the management, or their relatives, etc. that may have potential conflict with the interests of the Company at large.

Group D Enterprises over which Key Management Personnel are deemed to exercise significant influence : NIL

16. Exchange difference on foreign currency transaction credited to profit & loss A/c. Rs. 33.68 Lakhs (previous year credited (Rs. 36.34 lakhs)

17. Figures for the previous year have been regrouped wherever necessary to conform to that of the current year.


Mar 31, 2010

1. Contingent Liabilities :

(a) Claims not acknowledged as debts :

(i) A sum of Rs. 47,94,773 towards electricity tax on captive consumption of power (Oct 03 to June 04) and interest thereon Rs. 35,63,905 aggregating to a demand of Rs. 83,58,675 is not acknowledged by the Company.(previous year end - Rs. 83,58,675)

Company is advised that levy is not tenable and has filed writ appeal before the High Court of Karnataka. As per the direction of Honble High Court, the Company has deposited 50% of the original demand amounting to Rs. 41,79,338. Earlier demand of interest Rs. 35,63,902 got reduced to Rs. 24,78,088 consequent to reworking of interest based on Honble Karnataka High Court decision.

(ii) Turnover tax demanded on sale of newsprint Rs. 5,83,003 for 2000-01 is under appeal before Karnataka Appellate Tribunal, Bangalore. This amount has been paid under protest.

(b) Letters of credit issued by Bank on behalf of the Company net of liability on goods received, which has been shown under Sundry creditors Rs. 393.23 lakhs (previous year 401.60 lakhs).

(c) Concession in customs duty availed for imports cleared under Export Promotion on Capital Goods Scheme Rs. 278.85 lakhs (last year Rs. 278.85 lakhs)

(d) Counter guarantees given to Bankers against guarantees issued Rs. 7.93 lakhs (Last year Rs. 7.93 lakhs)

2. Deposit of Rs. 1,40,80,000/- has been pledged with M/s Vijaya Bank, Nanjangud for margin money on Letters of Credit and Bank Guarantees

3. Instalments of Term loans due for repayment within 1 year : Rs. 330 lakhs (Prev year Rs. 311 lakhs).

4. National Savings Certificate of Rs 1,000 is pledged with Central Excise Departmen

5. There are no overdue deposits / unclaimed matured deposits as on 31 -3-2010.

6. Sundry debtors includes amounts due from an associate concern Rs Nil.

7. Amounts due from companies in which Directors are interested : Nil

8. No. of non resident shareholders as on 31-3-2010 is 29 & their share holding is 10,98,500 equity shares (last year- 29 no.s & 11,01,050 shares)

9. Amount due to Sundry Creditors that are SSI (Small Scale Industrial undertakings) and M S & M (Micro, Small & Medium Enterprises) (to the extent information is available with the Company): Nil

10. Defined Benefit Plans for Employees (AS-15):

The Company had set up an Approved Gratuity Fund and been making contribution to the Fund based on Actuarial Valuation. Contribution to the Gratuity fund during the year was Rs 53,10,423.

11. Insurance charges includes insurance premia Rs 67.50 lakhs paid to cover key managerial staff, under employer- employee scheme to cover the risk for the Company. (Pre.Yr. Rs. 100.12 lakhs under key man insurance policy)

12. FOB value of Exports during the year Rs Nil (last year - Rs 36.88 lakhs)

13. Disclosure of Related Party transactions as required by Accounting Standard - 18 (AS-18): Group A. Holding & Subsidiary Companies : Nil

Group B Key Management Personnel:

Mr Manish M Patel - Managing Director Group C Associate Concerns: i) Name: 1) Bhadra Packaids Pvt Ltd (BPAL)

ii) Description of relationship between the parties : SIPM is holding 2,98,000 equity shares of Rs 10 each representing 50% of the equity capital of BPAL. In BPAL, SIPM also holds 24,000 preference shares of Rs 100 each.

The Company has appointed Directors in Associate Concern to represent and safe guard the interest of the Company. None of the Directors of the Company nor their relatives whether directly or indirectly hold any shares in the Associate Concerns and hence they are not interested in any of the transactions with the Associate Concerns. Directors and their relatives do not have any transaction directly or indirectly with the Associate Concerns. Directors of the Company are not in receipt of any remuneration from Associate Concerns except sitting fees.

There were no transactions of material nature with its promoters, the Directors or the management, or their relatives, etc. that may have potential conflict with the interests of the Company at large.

Group D Enterprises over which Key Management Personnel are deemed to exercise significant influence : NIL

14. Exchange difference on foreign currency transaction credited to profit & loss A/c. Rs. 36.34 Lakhs (previous year debited Rs. 91.34 lakhs)

15. Figures for the previous year have been regrouped wherever necessary to conform to that of the current year.

 
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