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Notes to Accounts of West Coast Paper Mills Ltd.

Mar 31, 2015

[a] Reconcilation of the number of shares outstanding at the beginning and at the end of the year :

[b] Rights, Preferences & restrictions attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 2 per share. Each Shareholder is eligible for one vote per share. The dividend if proposed by the Board of Directors is subject to the approval of shareholders, except in case of interim dividend (No dividend proposed for accounting year 2014-15). In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribtuion of all preferential amounts, in proportion of their shareholding.

[c] Shares in the Company held by each Shareholder holding more than 5% Shares

[d] 33,00,000 Equity Shares belonging to Promoter Group are locked-in till 14-06-2015.

1. Term loans from IFC, Washington & ICICI Bank Ltd., are secured by way of hypothecation on all movable fixed assets both present and future and are secured by equitable mortgage of immovable assets, both present and future on pari- passu basis.

2. Loan from State Bank of Mysore is secured by second charge on plant and machinery acquired / to be acquired under the project.

3. Interest free loan under Sales Tax Defferal Scheme availed from August 1994 to July 2006 of Rs. 66.88 Crores is being repaid in 12 installments of Rs. 5.57 Crores payable yearly starting from August 2006. (Balance outstanding - Rs. 11.15 Crores excluding current maturities)

Interest free loan under Sales Tax Defferal Scheme availed from June 2002 to June, 2014 of Rs. 160.98 Crores is being repaid in 12 installments on a year to year basis from 2014 to 2025. (Balance outstanding - Rs. 153.56 Crores excluding current maturities).

4. Loan of Rs. 25 Crores from IDBI Bank Ltd., (Rs. 6.25 Crores excluding current maturities) is secured by second charge on movable fixed assets whereas Loan of Rs. 25 Crores (Rs. 2.08 Crores excluding current maturities) is secured by current assets on pari-passu basis.

5. Loan from Axis Bank Ltd., is secured by second charge on movable fixed assets both present and future.

6. There is no default in repayment of loans and interest.

Note : There is no default in repayment of loans and interest.

Note :

1) Buildings are constructed on leasehold land for which the Company pays only ground rent except Non-factory buildings worth Rs. 188.03 Lacs (Rs. 188.03 Lacs) being the cost of ownership premises.

2) Leasehold Land represents the amount paid to Karnataka Industrial Area Development Board (KIADB), Bangalore against allotment of land at Kesaroli Village, Haliyal on Lease- cum-sale basis.

3) During the current year, foreign exchange fluctuation loss amounting to Rs. 941.85 Lacs (Previous Year Rs. 4646.00 Lacs) has been capitalized to the block of Plant & Machinery pursuant to notification No.G.S.R. 913 (E) dated 29.12.2011, applicable upto March 31, 2020. Notional exchange rate variation capitalised till 31.03.2015 is Rs. 7829.12 Lacs.

4) The Company has not incurred any capital expenditure for Research & Development during the year (Previous Year - NIL).

5) The Company was providing depreciation on Straight Line Method (SLM) for certain Plant & Machinery as per Schedule XIV of the Companies Act, 1956 wherein useful life was 18 years for continuous process plant which is increased to 25 years as per Schedule II of the Companies Act, 2013. However, Company is of the view that looking to the Chemical process industry useful life should not be more than 18 years and will therefore continues to provide depreciation at 5.28% on SLM. Similary, on Road & Drainage of RCC, it will continue to provide depreciation @ 1.63% on SLM. Further, the Company has also been providing depreciation on Written Down Value Method on "Other Assets" which the Company has decided to retain in terms of Proviso to Clause 3(i) of Part A of Schedule II of the Companies Act, 2013. However, for such assets acquired / constructed on or after 01.04.2014 useful life method (SLM) is followed as per Schedule II of the Companies Act, 2013 (Refer Note No.1.d.1 of Significant Accounting Policies)

Note:

There are no amounts due for payment to the Investors Education and Protection Fund under Section 205C of the Companies Act, 1956 at the year end. Section 125 of Companies Act, 2013 which corresponds to Section 205C of Companies Act, 1956 has not yet been notified.

(Amount in Rs. Lacs)

2.1 CONTINGENT LIABILITIES AND COMMITMENTS

2015 2014

I. Contingent Liabilities & Commitments

a. Guarantees Issued by Banks 3,150.19 4,688.83

b. Letters of Credit outstanding 13,807.09 11,494.57

c. Corporate guarantees given to the Banks & Institutions on behalf of related party 24,625.00 24,625.00 Shree Rama Newsprint Limited. (Refer note 2.38)

II. Claims against the Company not acknowledged as debts in respect of

a. Income tax matters, pending decisions on various appeals made 468.50 468.50

by the Company and by the Department (refer notes below)

b. Excise matters & Service Tax under dispute 82.32 136.77

c. Custom matter under dispute 439.03 439.03

d. Sales Tax matter, under dispute 30.66 30.66

e. Other matters, under dispute 2,100.00 2,100.00

III. Estimated amount of contracts remaining to be executed on Capital account and not 4,171.12 3,316.94 provided for (net of advance)

Notes :

1. The Income tax assessments of the Company have been completed upto Assessment Year 2012-13.

2. The total demand outstanding as on 31.03.2015 on account of income tax dues of various years is Rs. 468.50 lacs (Rs. 468.50 lacs ). The Company and the Income Tax Department are in appeal before the appellate authorities for various years. Since most of the issues raised in these years are already covered by the decisions of Hon'ble Income Tax Appellate Tribunal and CIT(A) in Company's favour, the Company is of the opinion that the demand is likely to be either deleted or substantially reduced in appeal before appellate authorities and in view of this, the Company has decided to adjust the short/excess provision, if any, after the appeals are disposed off.

3. The Company and the Income Tax Department are in appeal before the High Court of Bombay on various grounds decided by the Income Tax Appellate Tribunal. The Company has therefore not recorded adjustment of taxes/orders in the books.

I. Relationship :

a. Associate Company

1) Fort Gloster Industries Ltd., Kolkata (FGI)

2) Shree Rama Newsprint Limited (SRNL)

3) Speciality Coatings and Laminations Ltd.

b. Enterprises where principal shareholders have control

1) Veer Enterprises Ltd.

2) Shree Satyanarayan Investment Company Ltd.

3) Siddhi Trade & Holdings Pvt. Ltd.

4) Rangnath Bangur Charitable Trust

c. Key Management Personnel represented on the Board

1) Shri S. K. Bangur, Chairman & Managing Director

2) Shri K. L. Chandak, Executive Director

d. Non-Executive/Independent Directors on the Board

1) Shri Saurabh Bangur

2) Smt. Shashi Devi Bangur

3) Shri P. N. Kapadia

4) Lt. Gen. [Retd.] Utpal Bhattacharyya

5) Shri Krishna Kumar Karwa

6) Shri M. P. Taparia

II. The following is a summary of related party transactions

Pursuant to Accounting Standard 17 - Segment Reporting, information about Business Segments (Information provided in respect of revenue items for the year ended 31.03.2015 and in respect of assets / liabilities as at 31.03.2015 is discolsed as under :

a) Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable"

b) Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Investments, tax related assets and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as " Unallocable"

The Company has agreed to accept payment of Rs. 70 Lacs on completion date of Share Purchase Agreement(SPA) dated 21.05.2015 executed between the Company and Riddhi Siddhi Gluco Biols Ltd.,("Acquirer") against the outstanding inter corporate deposits of Rs. 5229.50 Lacs given to Shree Rama Newsprint Ltd (SRNL) as per books of accounts and balance amount of Rs. 5159.50 Lacs has been written off. This has also been confirmed by SRNL & acknowledged by the Acquirer on the letter dated 21.05.2015 written by the Company in pursuance of the said SPA.

The Company has entered into Share Purchase Agreement with Riddhi Siddhi Gluco Biols Ltd.,("Acquirer") on 21.05.2015 for sale of its Long Term Investments of 2,11,24,791 equity shares of Shree Rama Newsprint Ltd., for Rs. 0.75 Lacs against book value of Rs. 4540.86 Lacs subject to release of Corporate Guarantees of Rs. 24625.00 Lacs given to various banks by the Company and the Acquirer complying with the requirement of the Open Offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 or any other statutory approval. Since the transaction will be completed on fulfillment of the above conditions, loss of Rs. 4540.11 Lacs will be accounted by the Company in the Accounting Year 2015-16 on date of completion of transaction.

The Company had paid Rs. 362.22 Lacs towards the invocation of Corporate Guarantee given to a Bank on behalf of Speciality Coatings and Laminations Ltd (SPCL) and has extended fresh ICD of Rs. 50.00 Lacs & Interest of Rs. 1.78 Lacs - net of TDS (during 2013-14) for O.T.S. with Oriental Bank of Commerce & further it has also to recover Rs. 27.41 Lacs against supplies made to SPCL. Also it has given fresh ICD of Rs. 290 Lacs & interest of Rs. 32.02 Lacs-net of TDS, during 2014-15. The Company is hopeful of recovering the said total amount of Rs. 763.43 Lacs out of disposal of the assets of SPCL and hence, no provision has been made in the books of accounts.

The Company has investment of Rs. 4540.86 Lacs in Shree Rama Newsprint Ltd. (SRNL) and Rs. 94.96 Lacs in Jayashree Chemicals Ltd. There has been continuous diminution in the value of investment and at the year end there has been substantial reduction in the market value of these investments by Rs. 3294.50 Lacs and Rs. 54.56 Lacs respectively. The company has not made any provision towards the diminution in value as said investments are long term trade investments and diminution in value is temporary in nature.

Management expects that it would earn sufficient taxable income in future and therefore will be in a position to pay normal tax within the period specified under the Income Tax Act, 1961 and accordingly MAT credit entitlement of Rs. 3668.24 Lacs (Current Year Rs. NIL Previous year Rs. 153.82 Lacs) has been recognized.

Previous year's figures have been regrouped and reclassified wherever necessary.


Mar 31, 2013

1.1 RELATED PARTY DISCLOSURES

a. Related parties where control exists or where significant influence exists and with whom transactions have taken place during the year:

Associate Company

1) Fort Gloster Industries Ltd., Kolkata (FGI)

2) Shree Rama Newsprint Limited (SRNL) Enterprises where principal shareholders have control

1) Veer Enterprises Ltd.

2) Shree Satyanarayan Investment Company Ltd.

3) Siddhi Trade & Holdings Pvt. Ltd.

4) Rangnath Bangur Charitable Trust

Key Management Personnel represented on the Board

1) Shri S. K. Bangur, Chairman & Managing Director

2) Shri K.LChandak, Executive Director Non-Executive/Independent Directors on the Board

1) ShriR.N.Mody

2) Shri Haigreve Khaitan

3) ShriPNKapadia

4) Lt.Gen.[Retd.] Utpal Bhattacharyya

5) Shri Krishna Kumar Karwa

6) ShriSanjayKothari

7) ShriMPTaparia

8) Shri Saurabh Bangur

9) SmtShashi Devi Bangur

1.2 SEGMENT INFORMATION

The Company is in the business of manufacture & sale of Paper and Paper Boards & Duplex Boards. Considering the core activities of the Company, management is of the view that manufacture and sale of Paper and Paper Boards & Duplex Boards is the only reportable business segment and hence information relating to primary segment is not required to be disclosed.

1.3 During the current year company has retrospectively changed the method of providing depreciation on Power Block, Effluent Treatment Plant from Straight Line Method to Written Down Value Method due to technological changes. Differential depreciation of earlier years amounting to Rs.3,993.95 Lacs (shown as an exceptional items) and that of current year of Rs.644.70 Lacs is charged to Profit & Loss Account for the year due to which the profit for the current year has been understated to that extent.

1.4 The Company had paid an amount of Rs.362.22 Lacs towards the invocation of Bank Guarantee given to a Bank on behalf of Speciality Coatings and Laminations Ltd (SPCL). The Company has also to recover Rs.27.41 Lacs against supplies made to SPCL. The Company is hopeful of recovering the said amount out of disposal of the assets of SPCL and hence, no provision has been made in the books of accounts.

1.5 The Company has investment of Rs.4,540.86 Lacs in Shree Rama Newsprint Ltd. (SRNL) and Rs.94.97 Lacs in Jayashree Chemicals Ltd. There has been continuous diminution in the value of investment and at the year end there has been substantial reduction in the market value of these investments by Rs.2,958.61 Lacs and Rs.51.63 Lacs respectively. The Company has not made any provision towards the diminution in value as said investments are long-term trade investments and diminution in value is temporary in nature.

1.6 The Company has paid minimum managerial remuneration to Chairman & Managing Director in the Financial Year 2011- 12 and has filed application before the Ministry of Corporate Affairs, Govt, of India on 14.08.2012 for approval of excess remuneration of Rs.9 Lacs. The Government of India has not yet given any decision in this matter.

1.7 Previous year''s figures have been regrouped and reclassified wherever necessary.


Mar 31, 2012

A Unsecured Loans from others

1) Interim dividend on Preference Shares and tax thereon and proposed dividend on equity shares and tax thereon is out of opening surplus.

1. Term loans from IFC, Washington, Barclays Bank PLC & ICICI Bank Ltd., are secured by way of hypothecation on all movable assets both present and future and are secured by equitable mortgage of immovable assets , both present and future on pari-passu basis

2. Loans from State Bank of Mysore are secured by second charge on plant and machinery acquired / to be acquired under the project whereas loan against Cenvat Receivables is also secured by hypothecation of the same.

3 Interest free loan under Sales Tax Defferal Scheme availed from August 1994 to July 2006 of Rs.66.88 Crores is being repaid in 12 installments of Rs.5.57 Crores payable yearly starting from August 2006. (Balance outstanding - Rs.3344.10 lacs)

Interest free loan under Sales Tax Defferal Scheme is being availed from June 2002 for a period of 12 years up to May 2014 and will be repayable in 12 installments on a year to year basis from 2014 to 2025. (Balance outstanding - Rs.8806.43 Lacs)

4 There is no default in repayment of loans and interest.

1.2 FIXED ASSETS

1) Buildings are constructed on leasehold land for which the Company parts only ground rent except Non-factory buildings worth Rs.188.03 Lakhs (Rs.188.03 Lakhs) being the cost of ownership premises.

2) Leasehold Land represents the amount paid to Karnataka Industrial Area Development Board, Bangalore against allotment of land at Industrial Area, Mysore and Kesarolli village, Haliyal on Lease- cum-sale basis for a period of 11 years.

3) During the current period, foreign exchange fluctuation loss amounting to Rs.10049.27 lakhs has been capitalized to the block of Plant & Machinery pursuant to notification No.G.S.R. 913 (E) dated 29.12.2011, applicable upto March 31, 2020.

4) Sales / Adjustments includes subsidy of Rs.50.00 Lakhs received from Government of Karnataka for Effluent Treatment Plant and impairment loss of Rs.102.59 Lakhs on Plant & Machinery which are reduced from their respective blocks.

5) The Company has not incurred any capital expenditure for Research & Development during the year (Previous Year - Rs.15.45 lacs).

[All amounts in Rupees Lakhs, except share data and unless otherwise stated]

2012 2011

1.2 CONTINGENT LIABILITIES AND COMMITMENTS

I. Contingent Liabilities & Commitments

a Guarantees Issued by Banks 2,892.45 3,599.66

b Letters of Credit outstanding 1,921.58 2,685.24

c Corporate guarantee given to the Banks & Institutions on behalf of related party - Rama Newsprint & Papers Limited. 19.720.23 12.067.54

II. Claims against the Company not acknowledged as debts in respect of

a Income tax matters, pending decisions on various appeals made by the Company and by the Department (refer notes below) 9,606.00 5,518.65 b Excise matters & Service Tax under dispute 26.24 13.75

c Sales Tax matter, under dispute 30.66 30.66

cl Other matters, under dispute 2,100.00 2,100.00

III. Estimated amount of contracts remaining to be executed on Capital account and not provided for (net of advance) 293.73 1,520.36

1 The Income tax assessments of the Company have been completed upto Assessment Year 2009-10.

2 The Total demand outstanding as on 31.03.2012 on account of income tax dues for various assessment years is Rs.9606 lacs (Rs.5518.65 lacs). The Company and the Income Tax Department are in appeal before the Appellate authorities for various assessment years. Since most of the issues raised in these years are already covered by the decisions of Hon'ble Income Tax Appellate Tribunal and CIT(A) in Company's favour, the Company is of the opinion that the demands are likely to be either deleted or substantially reduced in appeal before appellate authorities and in view of this, the Company has decided to adjust the short/excess provision, if any, after the appeals are disposed off.

3 The Company and the Income Tax Department are in appeal before the High Court of Bombay on various grounds decided by the Income Tax Appellate Tribunal. The Company has therefore not recorded adjustment of Taxes in the books.

1.3 RELATED PARTY DISCLORUES

a. Related parties where control exists or where significant influence exists and with whom transactions have taken place during the year :

Associate Company

1 Fort Gloster Industries Ltd., Kolkata (FGI)

2) Rama Newsprint & Papers Limited (RNPL) Enterprises where principal shareholders have control

1) Veer Enterprises Ltd.

2) Shree Satyanarayan Investment Company Ltd.

3) Siddhi Trade & Holdings Pvt.Ltd.

4) Rangnath Bangur Charitable Trust

Key Management Personnel represented on the Board

1) Shri S.K.Bangur, Chairman & Managing Director

2) Shri K. L.Chandak, Executive Director Non-Executive/Independent Directors on the Board

1) Shri R.N.Mody

2) Shri C.K.Somany

3) Shri P N Kapadia

4) Lt.Gen.fRetd.] Utpal Bhattacharyya

5) Shri Krishna Kumar Karwa

6) Shri Sanjay Kothari

7) Shri M P Taparia

8) Shri Saurabh Bangur

9) Smt Shashi Devi Bangur

1.4 SEGMENT INFORMATION

The Company is in the business of Manufacture & Sale of Paper and Paper Boards & Duplex Boards. Considering the core activities of the Company, management is of the view that manufacture and sale of Paper and Paper Boards & Duplex Boards is the only reportable business segment and hence information relating to primary segment is not required to be disclosed.

1.5 NOTE ON DEPRECIATION

During the current year company has retrospectively changed the method of providing depreciation on New Fibre Line & Chemical Recovery Island from Straight Line Method to Written Down value Method due to technological changes. Differential depreciation of earlier years amounting to Rs. 6219.78 Lacs (shown as an exceptional items) and that of current year of Rs. 4216.42 Lacs is charged to Profit & Loss Account for the year due to which the loss for the current year has been overstated to that extent.

1.6 The Company had paid an amount of Rs. 362.22 lacs towards the invocation of Bank Guarantee given to a Bank on behalf of Speciality Coatings and Laminations Ltd (SPCL).The Company has also to recover Rs. 27.41 lacs against supplies made to SPCL. The Company is hopeful of recovering the said amount out of disposal of the assets of SPCL and hence, no provision has been made in the books of accounts.

1.7 The Company has investment of Rs. 4540.86 lacs in Rama Newsprint & Papers Ltd. (RNPL). At the year end there has been substantial reduction in the market value of this investment by Rs 2895.24 lacs. The company has not made any provision towards the diminution in value as said investment is a long term trade investment and diminution in value is temporary in nature.

1.8 The company has paid minimum managerial remuneration to the Chairman & Managing Director of Rs, 89.23 lacs and Executive Director of Rs. 79.63 lacs as per Schedule XIII of the Companies Act, 1956 subject to approval of members in the AGM to be held on 31.07.2012 and Central government in respect of the former.

1.9 Previous year's figures have been regrouped and reclassified wherever necessary.


Mar 31, 2011

(1) Contingent liabilities not provided for in respect of :

(a) Bank Guarantees outstanding : Rs. 3599.66 lacs (Rs. 1958.10 lacs).

(b) Letters of Credit outstanding : Rs. 2685.24 lacs (Rs. 4144.43 lacs).

(c) Corporate Guarantees given by the Company to the Banks & Institution : Rs.12067.54 lacs (Rs. 12132.42 lacs).

(d) Demand raised by the Income Tax department and Sales Tax department disputed by the Company : Rs. 5518.65 lacs (Rs. 6322.69 lacs) and Rs. 30.66 lacs (Rs. 30.66 lacs) respectively.

(e) Various demands of employees pending for adjudication : amounts not ascertainable.

(f) Claims against the Company, not acknowledged as debts : Rs. 2100 lacs

(2) (a) The Income tax assessments of the Company have been completed upto Assessment Year 2008-09.

(b) The Total demand outstanding as on 31.03.2011 on account of income tax dues for various assessment years is Rs.5518.65 lacs (Rs. 6322.69 lacs). The Company and the Income Tax Department are in appeal before the Appellate authorities for various assessment years. Since most of the issues raised in these years are already covered by the decisions of Honble Income Tax Appellate Tribunal and CIT(A) in Companys favour, the Company is of the opinion that the demands are likely to be either deleted or substantially reduced in appeal before appellate authorities and in view of this, the Company has decided to adjust the short/excess provision, if any, after the appeals are disposed off.

(c) The Company and the Income Tax Department are in appeal before the High Court of Bombay on various grounds decided by the Income Tax Appellate Tribunal. The Company has therefore not recorded adjustment of Taxes in the books.

(3) Estimated amount of contracts remaining to be executed on Capital account and not provided for Rs.1,520.36 lacs (Rs. 3,806.22 lacs).

(6) Disclosure pertaining to Micro, Small and Medium Enterprises Development Act, 2006 (as per information available with the Company) :

Principal amount due outstanding as at 31st March, 2011 is Rs.68.92 Lacs and interest paid or payable is Rs.NIL.

(7) The Company has been advised that its activity of investing surplus funds in Shares / Mutual Funds does not constitute trading activities, as such the details of purchases, opening and closing stocks and turnover in respect of aforesaid activities are not required to be furnished.

(8) The Company used to adjust the foreign currency exchange rate differences on amounts borrowed for acquisition of fixed assets, to the carrying cost of fixed assets in compliance with Schedule VI to the Companies Act, 1956 as per legal advice, which was at variance to the treatment prescribed as per Accounting Standard 11.

The Ministry of Corporate Affairs, G.O.I. vide Notification No.G.S.R. 225 (E) dated 31st March 2009, notified the Companies (Accounting Standards) Amendment Rules, 2009 (the said Rules) wherein option is given for adding or deducting the exchange rate variation from the cost of depreciable capital assets in respect of long term foreign currency loans upto 31.03.2011. The Company has, therefore, opted for adjusting the foreign currency exchange rate difference to the carrying cost of fixed assets as per the said Rules and the exchange loss of Rs. 942.90 lacs has been included in the Fixed Assets / Capital work in progress (exchange gain of Rs. 546.77 lacs reduced from capital work in progress in the previous year), due to which the depreciation for the current financial year is increased by Rs. 48.84 lacs (last year depreciation lowered by Rs.3.94 lacs).

(9) The Company had paid an amount of Rs. 362.22 lacs towards the invocation of Bank Guarantee given to a Bank on behalf of Speciality Coatings and Laminations Ltd (SPCL). The Company has also to recover Rs. 24.91 lacs against supplies made to SPCL. The Company is hopeful of recovering the said amount out of disposal of the assets of SPCL and hence, no provision has been made in the books of accounts.

(10) As per the Accounting Standard on Related Party Disclosures (AS 18), issued by the Institute of Chartered Accountants of India, the related parties of the Company are as follows:

A] Associate Company 1) Fort Gloster Industries Ltd., Kolkata (FGI)

2) Rama Newsprint & Papers Limited (RNPL)

B] Key Management Personnel 1) Shri.S.K.Bangur

Chairman & Managing Director

2) Shri.K.L.Chandak Executive Director

(14) Provision for Income Tax has been made in accordance with Section 115JB of Income Tax Act,1961.However, Management expects that it would be in a position to pay normal tax within the period specified under the Income Tax Act,1961 and hence MAT credit has been recognised.

(15) The year end shortfall, as there may be, pertaining to certain sundry debtors, loans and advances is not currently ascertainable and accordingly not provided for.

(16) As per Accounting Standard 15 "Employee Benefits", the disclosures of Employee benefits as defined in the Accounting Standard are given below :

Defined Contribution Plan

The Companys Provident Fund is exempted under section 17 of Employees Provident Fund Act, 1952. Conditions for grant of exemptions stipulates that the employer shall make good deficiency, if any, in the interest rate declared by the trust vis-à-vis statutory rate.

Defined Benefit Plan

The employees gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

(17) Previous years figures have been regrouped and reclassified wherever necessary and disclosed within brackets.




Mar 31, 2010

(1) Contingent liabilities not provided for in respect of:

(a) Bank Guarantees outstanding: Rs. 1958.10 lacs (Rs. 2194.81 lacs).

(b) Letters of Credit outstanding: Rs. 4144.43 lacs (Rs. 9532.23 lacs).

(c) Corporate Guarantees given by the Company to the Banks & Institution: Rs.12132.42 lacs (Rs.13415.47 lacs).

(d) Demand raised by the Income Tax department and Sales Tax department disputed by the Company: Rs. 6322.69 lacs (Rs.2798.17 lacs) and Rs. 30.66 lacs (Rs. 30.66 lacs) respectively.

(e) Various demands of employees pending for adjudication: amounts not ascertainable

(2) a) The Income tax assessments of the Company have been completed upto Assessment Year 2007-08.

b) The Total demand outstanding as on 31.03.2010 on account of income tax dues for various assessment years is Rs.6322.69 lacs (Rs. 2798.17 lacs). These dues will get substantially reduced once the order giving effect is passed by the Income Tax Department. The Company and the Income Tax Department are in appeal before the Appellate authorities for various assessment years. Since most of the issues raised in these years are already covered by the decisions of Honble Income Tax Appellate Tribunal in Companys favour, the Company is of the opinion that the demands are likely to be either deleted or substantially reduced in appeal before appellate authorities and in view of this, the Company has decided to adjust the shorty excess provision, if any, after the appeals are disposed off.

(3) Estimated amount of contracts remaining to be executed on Capital account and not provided for Rs. 3806.22 lacs (Rs.32016.16 lacs).

(4) Disclosure pertaining to Micro, Small and Medium Enterprises Development Act, 2006 (as per information available with the Company): Principal amount due outstanding as at 31st March, 2010 is Rs.72.44 Lacs and interest paid or payable is Rs.NIL.

(5) The Company has been advised that its activity of investing surplus funds in Shares / Mutual Funds does not constitute trading activities, as such the details of purchases, opening and closing stocks and turnover in respect of aforesaid activities are not required to be furnished.

(6) The Company used to adjust the foreign currency exchange rate differences on amounts borrowed for acquisition of fixed assets, to the carrying cost of fixed assets in compliance with Schedule VI to the Companies Act, 1956 as per legal advice, which was at variance to the treatment prescribed as per Accounting Standard 11.

The Ministry of Corporate Affairs, G.O.I, vide Notification No.G.S.R. 225 (E) dated 31st March 2009, notified the Companies (Accounting Standards) Amendment Rules, 2009 (the said Rules) wherein option is given for adding or deducting the exchange rate variation from the cost of depreciable capital assets in respect of long term foreign currency loans upto 31.03.2011. The Company has, therefore, opted for adjusting the foreign currency exchange rate difference to the carrying cost of fixed assets as per the said Rules and the exchange gain of Rs. 546.77 lacs has been reduced from the Fixed Assets / Capital work in progress (exchange loss of Rs. 3417.88 lacs included in capital work in progress in the previous year), due to which the depreciation for the current financial year is lower by Rs. 3.94 lacs.

(7) As per the Accounting Standard on Related Party Disclosures (AS 18), issued by the Institute of Chartered Accountants of India, the related parties of the Company are as follows:

A] Associate Company

1) Fort Gloster Industries Ltd., Kolkata (FGI)

2) Rama Newsprint & Papers Limited (RNPL)

B] Key Management Personnel

1) Shri.S.K.Bangur

Chairman & Managing Director

2) Shri.K.L.Chandak Executive Director

The following transactions were carried out with related parties during the year in the ordinary course of business.

(8) Provision for Income Tax has been made in accordance with Section 115JB of Income Tax Act,1961.However, management expects that it would be in a position to pay normal tax within the period specified under the Income Tax Act,1961 and hence MAT credit has been recognised.

(9) The year end shortfall, as there may be, pertaining to certain sundry debtors, loans and advances is not currently ascertainable and accordingly not provided for.

(10) Previous years figures have been regrouped and reclassified wherever necessary and disclosed within brackets.

 
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