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Notes to Accounts of Sree Sakthi Paper Mills Ltd.

Mar 31, 2015

1. Discontinuing operations

On 14/11/2015, Board of Directors announced the plan to discontinue operations of the Duplex Board Division of the company operating at Chalakudy.

The decision of the disposal is in line with the company's long term strategy to focus on more profit making segments rather than low margin or loss making segments.

Further it was also decided to scrap the plant and machinery and building and sell off the same for which a valuation report has been placed and approved by the Board. It is proposed to sell off the land separately. It is expected that these operations will be concluded by March 2016.

At 31st March, 2015, the carrying amount of the assets of the division was Rs.529.55 lakhs and its liabilities were Rs.48.92 Lakhs. The above carrying amounts of assets were determined after providing for an impairment loss of Rs 614.80 Lakhs (Previous Year NIL) in the year ending on 31.03.2015.

The following statement shows the revenue and expenses of discontinuing operations:

2. During the last 5 years, the company has not issued any shares pursuant to any contract without payment being received in cash, as bonus shares or has not brought back any shares

3. No shares have been reserved for issue under options and contracts / commitments for the sale of shares / disinvestment

4. The Company has not issued any securities convertible into Equity or Preference Shares

5. No shares have been forfeited till date.

6. Out of the total share capital issued and called up, no calls are outstanding as unpaid

1 Nature of Security

a Term Loan Nature of Security

i. Federal Bank Ltd Paripassu first charge on the fixed assets and pari passu second charge on the current assets of the company.

ii. State Bank of Travancore Paripassu first charge on the fixed assets including equitable mortgage of land and pari passu second charge on the current assets of the company.

iii. Axis Bank Paripassu first charge on the fixed assets and pari passu second charge on the current assets of the company.

iv. Punjab National Bank Paripassu first charge on the fixed assets including equitable mortgage of land and pari passu second charge on the current assets of the company.

b. Vehicle loan from: Axis Bank (Loan 2) Hypothecation of Maruti Ritz car

Axis Bank (Loan 3) Hypothecation of Maruti Swift Desire Car

Axis Bank (Loan 4) Hypothecation of Maruti Ertiga VDI Car

2 Personal Guarantee Details Nil

3 Terms of Repayment of Term Loans

Loan Terms of Repayment

a. Federal Bank Ltd Repayment in graded instalments in 84 months:

Month 1 -40 : Rs 1.50 lacs each Month 41 – 60 : Rs 2.50 lacs each Month 61 – 84 : Rs 3.75 Lacs each

b. State Bank of Travancore (TL I) Repayment in 131 monthly instalments of Rs 7,58,000/- each and final payment of 7,02,000/-

c. State Bank of Travancore (TL II) Repayment in 131 monthly installments of Rs 4,55,000/- each and final payment of Rs 3,95,000/-

d. Axis Bank Repayment in 59 monthly installments of Rs 16,66,000 each and last installment of Rs. 17,06,000

e. Punjab National bank Repayment in 120 monthly installments of Rs 2,50,000/- each commencing from June 2014

f. Axis Bank (Vehicle Loan 2) Repayment in 36 EMI of Rs 17399/- each

g. Axis Bank (Vehicle Loan 3) Repayment in 60 EMI of Rs 11044/- each

h. Axis Bank (Vehicle Loan 4) Repayment in 60 EMI of Rs 16083/- each

There is no continuing default as on the date of balance sheet in repayment of loans and interest.

Mode of valuation: Inventory of raw materials and consumables are valued at cost or net realizable value, whichever is lower, under FIFO Method. Finished Goods are valued at cost or net realizable value whichever is lower. Cost for the purposes of valuation of finished goods includes cost of material, labour and other direct expenses. Stock-in-process is valued at raw material cost plus proportionate direct cost, wherever applicable. Scraped asset amounting to Rs. 457.98 lacs is stated at the value estimated by Approved Valuer.

Inventories in the nature of Renewable Energy Certificates (REC) are accounted for in accordance with Guidance Note on Accounting for Self Generated Emission Reductions issued by ICAI. Accordingly, RECs are recognized on approval of certificate from respective authority, which are valued at lower of cost or net realizable value. Cost comprises of cost incurred for certification of REC and NRV is the floor price fixed by Central Electricity Regulatory Commission.

i. CONTINGENT LIABILITIES NOT PROVIDED FOR

a) Unexpired Contracts for Capital Expenditure : Rs 278 lacs (Previous year Rs 277.37 lacs)

b) Usance Letter of credit remaining unpaid as on 31.03.2015 amounts to Rs 2585.86 lacs (Previous years Rs.2319.39 lacs)

c) Guarantee given by bank on behalf of the Company Rs 133.32 lacs (Previous year Rs 166.58 lacs)

d) Amount of Income tax liabilities disputed in appeal Rs 38.61 lacs (Previous year Rs 152.07 lacs)

e) Additional claims of electricity charges disputed Rs 2.80 lacs (Previous year Rs 2.80 lacs)

f) Sales Tax demand disputed under appeal is Rs 15.48 lacs (Previous year 15.66 lacs)

g) Excise duty disputed under appeal Rs 143.78 lacs (Previous year Rs 143.78 lacs)

h) Claim towards water charge raised by Kerala Water Authority for Rs 78.42 lacs disputed in appeal (Previous year Rs 78.42 lacs)

i) Acturial valuation of gratuity is presently based on the retirement age of 55 years. The Union has filed a case before Kerala High Court for increasing the retirement age to 58. Impact on provision for gratuity, if the case is decided against the Company, has not been ascertained.

j) Customs duty liability of Rs 58.79 lacs (Previous year Rs 58.79 lacs) under EPCG claim

k) Arrears of non - convertible cumulative preference dividend is Rs 131.96 lacs (Previous year Rs nil)

Notes: The following information shall be furnished at the end of the statement:

1. Names of subsidiaries which are yet to commence operations:

a) Sree Kailas Palchuram Hydro Power Ltd

b) Sree Adisakthi Mukkuttathode Hydro Power Ltd

c) Jalashaayi Alamparathode Hydro Power Ltd

2. Names of subsidiaries which have been liquidated or sold during the year: Nil

1. Names of associates or joint ventures which are yet to commence operations.

2. Names of associates or joint ventures which have been liquidated or sold during the year. Note: This Form is to be certified in the same manner in which the Balance Sheet is to be certified.


Mar 31, 2014

1 During the last 5 years, the company has not issued any shares pursuant to any contract without payment being received in cash, as bonus shares or has not brought back any shares

2 No shares has been reserved for issue under options and contracts / commitments for the sale of shares / disinvestment

3 The Company has not issued any securities convertible into Equity or Preference Shares

4 No shares have been forfeited till date.

5 Out of the total share capital issued and called up, no calls are outstanding as unpaid

6 Earnings per share:

The company reports basic and diluted Earnings per Share in accordance with AS 20. Basic Earnings per equity share have been computed by dividing net profit after tax by the weighted average number of equity shares outstanding at the end of the year. Diluted Earnings per share have been computed using the weighted average number of equity shares and potential equity shares outstanding at the end of the year.

i CONTINGENT LIABILITIES NOT PROVIDED FOR

i Unexpired Contracts for Capital Expenditure : Rs 277.37 Lacs (Previous year Rs 284 Lacs)

ii Usance Letter of credit remaining unpaid as on 31.03.2014 amounts to Rs 2319.39 Lacs (Previous years Rs. 2329 Lacs)

iii Guarantee given by bank on behalf of the Company Rs 166.58 Lacs (Previous year Rs 134.07 Lacs)

iv Amount of Income tax liabilities disputed in appeal Rs 152.07 Lacs (Previous year Rs 152.07 Lacs)

v Additional claims of electricity charges disputed Rs 2.80 Lacs ( Previous year Rs 53.15 Lacs)

vi Sales Tax demand disputed under appeal is Rs 15.66 Lacs (Previous year 15.48 Lacs)

vii Excise duty disputed under appeal Rs 143.78 Lacs (previous year Rs 0.95 Lacs)

viii Claim towards water charge raised by Kerala Water Authority for Rs 78.42 Lacs disputed in appeal (Previous year Rs 78.42 Lacs)


Mar 31, 2013

1 Most of the balances of Sundry Debtors, Sundry Creditors, Advances and Deposits are subject to confirmation.

2 Previous year figures have been re-cast, wherever necessary to comply with the requirements of Revised Schedule VI of The Companies Act 1956.

3 Assets, Loans and advances are in realizable state in the ordinary course of business.

4 Lease Transactions :

All assets acquired under finance lease basis are capitalized with corresponding liability recognizing the future liability on leases. The total minimum lease payments as on the balance sheet date, interest embedded in such payments and present value of lease payments are as follows :

(i) Total minimum

lease payments Nil (Previous Year Nil)

(ii) Future interest

embedded in i) Nil (Previous Year Nil)

(iii) Present value of

lease payments (i-ii) Nil (Previous Year Nil)

Finance charges on lease payments amounting to Rs. Nil (Previous Year Nil) for the year has been debited to profit and loss account under the head interest and bank charges. Lease expenses under non cancelable operating lease during the year amounts to Rs NIL (Previous Year Rs Nil)

Future minimum lease payments under non cancellable operating lease as on 31-03-2013 is as follows

Payable within One year NIL

Payable after one year

but before five years NIL

a. CONTINGENT LIABILITIES NOT PROVIDED FOR

a) Unexpired Contracts for Capital Expenditure : Rs 284 lacs (PY Rs 397.39 Lacs)

b) Usance Letter of credit remaining unpaid as on 31.03.2013 amounts to Rs 2329 Lacs (PY Rs. 2434.90 Lacs)

c) Guarantee given by bank on behalf of the Company Rs 134.07 Lacs (PY Rs 111.80 Lacs)

d) Amount of Income tax liabilities disputed in appeal Rs 152.07 Lacs (PY Rs 43.28 Lacs)

e) Additional claims of electricity charges disputed Rs 53.15 Lacs (PY Rs 4.05 Lacs)

f) Sales Tax demand disputed under appeal is Rs 15.48 Lacs (PY 15.48 Lacs)

g) Excise duty disputed under appeal Rs 0.95 Lacs (PY Rs 0.95 Lacs)

h) Claim towards water charge raised by Kerala Water Authority for Rs 78.42 Lacs (PY Rs NIL)

i) Customs duty liability of Rs 58.79 Lacs under EPCG Scheme (PY Rs 58.79 Lacs)


Mar 31, 2012

1 Previous year figures have been re-cast, wherever necessary to comply with the requirements of Revised Schedule VI of The Companies Act 1956.

2 Assets, Loans and advances are in realizable state in the ordinary course of business.

3 Lease Transactions : All assets acquired under finance lease basis are capitalized with corresponding liability recognizing the future liability on leases. The total minimum lease payments as on the balance sheet date, interest embedded in such payments and present value of lease payments are as follows :

Finance charges on lease payments amounting to (Previous Year Nil) for the year has been debited to Statement of Profit and Loss under the head interest and bank charges. Lease expenses under non cancelable operating lease during the year amounts to Rs NIL(Previous Year Rs Nil)

Future minimum lease payments under non cancellable operating lease as on 31-03-2012 is as follows:

4 The Company has not issued any securities convertible into Equity or Preference Shares

5 No shares have been forfeited till date.

6 Out of the total share capital issued and called up, no calls are outstanding as unpaid.

7 Earnings per share:

The company reports basic and diluted Earnings per Share in accordance with AS 20. Basic Earnings per equity share have been computed by dividing net profit after tax by the weighted average number of equity shares outstanding at the end of the year. Diluted Earnings per share have been computed using the weighted average number of equity shares and potential equity shares outstanding at the end of the year.

The above disclosures are based on information furnished by the independent actuary and relied upon by the auditors.

The estimates of future Salary increases, considered in the actuarial valuation, takes into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

8) Contingent liabilities not provided for

i) Unexpired Contracts for Capital Expenditure : Rs 397.39 lacs (Previous year Rs 546.42 Lacs)

ii) Usance Letter of credit remaining unpaid as on 31.03.2012 amounts to Rs.2434.90 lacs (Previous years 2390.85 Lacs)

iii) Guarantee given by bank on behalf of the Company Rs 111.80 Lacs (Previous year Rs.130.33 Lacs)

iv) Amount of Income tax liabilities disputed in appeal Rs 43.28 Lacs (Previous year Rs.87.25 Lacs)

v) Additional claims of electricity charges disputed Rs.4.05 Lacs (Previous year Rs 4.05 lacs)

vi) Sales Tax demand disputed under appeal is Rs 15.48 Lacs (Previous year 15.48 Lacs)

vii) Excise duty disputed under appeal Rs 0.95 Lacs (previous year Rs 0.95 Lacs)


Mar 31, 2011

1) Value of Imports calculated on C.I.F. basis

Raw Material: Rs 5117.81 Lakhs (Previous Year 3242.08 Lakhs) Stores & Spare parts:Rs 29.l8Lakhs.(Previous Year Rs. 31.38 Lakhs)

2) Expenditure in Foreign Currency: Traveling Expenses Nil ( Previous Year- Nil) Export commission Rs 7.04 Lakhs (Previous year- Rs 14.42 Lakhs )

Export claim Rs 5.55Lakhs (Previous year- Rs 6.79 Lakhs )

3) Earnings in Foreign Exchange

Export of goods FOB Basis - Rs.358.97Lakhs (Previous vear — 138.17 Lakhs

4) Sales are inclusive of Excise Duty &Cess.

5) Balances of Sundry Debtors, Sundry Creditors.Advances and Deposits are subject to confirmation.

6) Previous year figures have been re-arranged / re- grouped wherever necessary.

7) Assets, Loans and advances are in realizable state in the ordinary course of business.

8) Borrowing costs capitalized during this year Rs. 17.54Lakhs (Previous Year - Nil)

9) Lease Transactions :

All assets acquired under finance lease basis are capitalized with corresponding liability recognizing the future liability on leases.The total minimum lease payments as on the balance sheet date, interest embedded in such payments and present value of lease payments are as follows :

(i) Total minimum lease payments Nil (PreviousYear Nil)

(ii) Future interest embedded in (i) Nil (PreviousYear Nil)

(iii) Present value of lease payments (i-ii) Nil (PreviousYear Nil)

Finance charges on lease payments amounting to Rs. Nil (Previous Year Nil) for the year has been debited to profit and loss account under the head interest and bank charges.Lease expenses under non cancelable operating lease during the year amounts to Rs. NIL (PreviousYear Rs Nil)

Future minimum lease payments under non cancellable operating lease as on 31-03-201 I is as follows

Payable within One year NIL

Payable after one year but before five years NIL

10) Secured Loans

a) Term loans from State Bank of Travancore, Syndicate Bank Ltd and IDBI Bank Ltd. are secured by paripassu first charge on the fixed assets and paripassu second charge on Current Assets of the Company except those assets otherwise specifically charged.

b) Cash Credit Loan from Federal bank Ltd, Bank of India and IDBI Bank Ltd. are secured by paripassu first charge on the entire inventories and receivables and further secured by paripassu second charge on the entire fixed assets of the Company.

11) Contingent Liabilities not provided for

a) Unexpired Contracts for Capital Expenditure : Rs 546.42 Lakhs (Previous year Rs 83.84 Lakhs)

b) Usance Letter of credit remaining unpaid as on 31.03.2011 amounts to Rs.2390.85 Lakhs (Previous years Rs.2034.36 Lakhs)

c) Guarantee given by bank on behalf of the Company Rs. 130.33 Lakhs(Previous year Rs. 124.60 Lakhs)

d) Amount of Income tax liabilities disputed in appeal Rs 87.25 Lakhs ( Previous year Rs.20.56 Lakhs)

e) Additional claims of electricity charges disputed Rs.4.05 Lakhs( Previous year Rs 4.05 lakhs)

f) Sales Tax demand disputed under appeal is Rs 15.48 Lakhs(Previous year Rs 27.76 lakhs)

g) Excise duty disputed under appeal Rs 0.95 Lakhs(previous year Rs Nil)

12) Based on the information available with the Company as at the year-end, there are oo balances due to undertaking defined under Micro,Small and Medium Enterprises development Act 2006

For the For the year ended year ended Particulars 31st March 31st March 2011 2010 The principal amount and the Nil Nil interest due thereon remaining unpaid to any supplier as at the end of each accounting year.

The amount of interest paid by Nil Nil the Company along with the amounts of the payment made to the supplier beyond the appointed day during the year.

The amount of interest due and Nil Nil payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act.

The amount of interest accrued and Nil Nil remaining unpaid at the end of the year.

The amount of further interest Nil Nil remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise.

13) Current market value of the quoted investments is Rs 40.42 Lakhs (Previous Year Rs.41.23 Lakhs)

14) There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2011

15) Details of Provisions Pursuant to Accounting Standard - 29 - Provisions, Contingent Liabilities and Contingent Assets

(Rs in Lakhs) Opening Balence Provision made during the year 01.04.10 01.04.09 10.11 09.10

Sundry Debtors 11.90 70.90 74.96 61.00

Income tax 116.67 62.00 285.65 116.67

Proposed Dividend 147.93 246.54 213.67 147.93

Corporate Dividend tax 22.85 41.90 57.33 22.85

Gratuity & Leave encashment 74.05 72.96 14.83 6.11



Utilized during closing Balence the year 10.11 09.10 31.03.11 31.03.10

Sundry Debtors 71.86 120.00 15.00 11.90

Income tax 123.98 62.00 278.34 116.67

Proposed Dividend 147.93 246.54 213.67 147.93

Corporate Dividend tax 44.69 41.90 35.49 22.85

Gratuity & Leave 5.05 5.02 83.83 74.05 encashment


Mar 31, 2010

1. Value of Imports calculated on C.I.F. basis.

Raw Material: Rs. 3242.08 Lakhs (Previous Year Rs. 2884.55 Lakhs) Stores & Spare Parts: Rs. 31.38 Lakhs (Previous Year Rs. 1164 Lakhs)

2. Expenditure in Foreign Currency:

Travelling Expenses: Nil (Previous Year - Rs. 6.25 Lakhs) Export commission Rs 14.42 Lakhs (Previous year- Rs 19.51 Lakhs) Export claim Rs. 6.79 Lakhs (Previous year-Rs. 21.32 Lakhs)

3. Earnings in Foreign Exchange

Export of goods on FOB Basis - Rs. 138.17 Lakhs (Previous year - Rs. 1595.92 Lakhs)

4) Sales are inclusive of Excise Duty & Cess.

5) Balances of Sundry Debtors, Sundry Creditors, Advances and Deposits are subject to confirmation.

6) Previous year figures have been rearranged / regrouped wherever necessary.

7) Assets, Loans and advances are in realizable state in the ordinary course of business.

8. Borrowing costs capitalized during this year - Rs. Nil Lakhs (Previous Year - 5.08 Lakhs)

9. Lease Transactions:

All assets acquired under finance lease basis are capitalized with corresponding liability, recognizing the future liability on leases. The total minimum lease payments as on the balance sheet date, interest embedded in such payments and present value of lease payments are as follows :

Finance charges on lease payments amounting to Nil (Previous Year Rs. 0.38 Lakhs) for the year has been debited to profit and loss account under the head interest and bank charges.

Lease expenses under non cancelable operating lease during the year amounts to Rs. NIL.

Future minimum lease payments under non cancellable operating lease as on 31 -03-2010 is as follows:

10. Secured Loans

a) Car loans from ICICI Bank Ltd is on hire purchase basis.

b) Term loans from Syndicate Bank Ltd, Industrial Development Bank of India Ltd and Federal Bank Ltd are secured by pari passu first charge on the fixed assets and pari passu second charge on Current Assets of the Company except those assets otherwise specifically charged.

c) Cash Credit Loan from Federal bank Ltd, Bank of India and Industrial Development Bank of India Ltd are secured by pari passu first charge on the entire inventories and receivables and further secured by pari passu second charge on the entire fixed assets of the Company.

11)Contingent Liabilities not provided for

a) Unexpired Contracts for Capital Expenditure : Rs 83.84 Lakhs (Previous year Rs 26 Lakhs)

b) Usance Letter of credit remaining unpaid as on 31.03.2010 amounts to Rs.2034.36 Lakhs (Previ- ous years Rs. 1442.21 Lakhs)

c) Guarantee given by bank on behalf of the Com- pany Rs. 124.60 lakhs (Previous year - Rs. 87.78 Lakhs)

d) Amount of Income tax liabilities disputed in appeal Rs.20.56 lakhs ( Previous year Rs.20.56 Lakhs)

e) Additional claims of electricity charges disputed Rs.4.05 Lakhs( Previous year Rs 4.05 lakhs)

f) Sales Tax paid disputed under appeal 2005-06 Rs 3.89 Lakhs, 2006-07 Rs 8.39 Lakhs and for the year 2007-08 Rs 15.48 Lakhs

12) Based on the information available with the Com- pany as at the year-end, there are no balances due to undertaking defined under Micro.Small and Medium Enterprises development Act 2006

13. Earnings per share:

The company reports basic and diluted Earnings per Share in accordance with AS 20. Basic Earnings per equity share have been computed by dividing net profit after tax by the weighted average number of equity shares outstanding at the end of the year. Diluted Earnings per share have been computed using the weighted average number of equity shares and potential equity shares outstanding at the end of the year.

14. Current market value of the quoted investments is Rs. 41.23 Lakhs (Previous Year Rs. 22.97 Lakhs)

15. There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2010)

16. Details of Employee Benefits : Disclosures required under Accounting Standard 15 - Employee Benefits (Revised 2005)

a. Defined Contribution Plans : During the Year, the following amounts have been recognised in the Profit and Loss account on account of defined contribution plan.