CONTENTS Page · 2018-02-14 · P.B.No.43, Kallarackal Buildings Baker Hill Kottayam ... g)...

1

CONTENTS Page

Board of Directors 02

Notice 03

Five Years Digest 04

Employment Cost Summary 05

Directors’ Report 06

Comments of the Comptroller andAuditor General of India 23

Replies to comments of the Statutory Auditors 25

Auditors’ Report 28

Balance Sheet 34

Statement of Profit & Loss 35

Cash Flow Statement 36

Notes forming part of the Financial Statements 38

2

BOARD OF DIRECTORS

Chairman cum Managing Director : Shri. M.V. Narasimha Rao

Directors : Shri. S.N. BhattacharyyaAir Cmde. Prodip Kumar Mukherjee, VSMShri. S.K.SinghShri. K.S.Srinivas (from 22.05.2013)Shri. Prakash P. Mugdiya (from 08.05.2012)Shri. N Chandrasekharan Nair (from 07.05.2013)

Company Secretary : Shri. L.R.Ekanath

Bankers : Central Bank of India: Corporation Bank: State Bank of Travancore: HDFC Bank Ltd: State Bank of India: Indian Bank: Canara Bank: Federal Bank

Statutory Auditors : M/s. Cheriyan & CheriyanChartered AccountantsP.B.No.43, Kallarackal BuildingsBaker HillKottayam – 686 001

Cost Auditors : M/s. N.P. Gopalakrishnan & CoKochi

Legal Advisers : M/s. Menon & MenonKochi.

: M/s. Menon & PaiKochi.

Registered Office : Newsprint NagarKottayam DistrictKeralaPin Code-686 616

3

By order of the Board of Hindustan Newsprint Ltd.

(L.R.Ekanath) Company Secretary

Registered OfficeNewsprint NagarDistrict Kottayam

Dated this 27th day of September 2013

Enclosures:

Note:

1. A Member entitled to attend and vote is entitled to appoint a proxy to attend and vote in his stead.A proxy need not be a Member of the Company.

2. Consent for shorter notice from all Members entitled to attend and vote at this meeting hasbeen obtained.

NOTICE

Notice is hereby given that the 30th Annual General Meeting of the Members of Hindustan Newsprint Limited will beheld at its Registered Office at Newsprint Nagar, District Kottayam, Kerala on Monday, the 30th September 2013 at1600 hrs. to transact the following business:-

ORDINARY BUSINESS

i) To receive, consider, approve and adopt the Director’s Report and the Audited Balance Sheet as at31st March 2013 and Profit and Loss Account for the year ended on that date, together with the Report of theStatutory Auditors thereon and also the Comments and Review of the Comptroller and Auditor General of India,under Section 619(4) of the Companies Act, 1956.

4

FIVE-YEAR DIGEST

2012-13 2011-12 2010-11 2009-10 2008-09Production in MT #101597 102450 104911 100546 108005Sales in MT *101597 102450 104911 120986 87476Sales Turnover 32358 31504 30166 28439 29767Other Income 437 2489 1352 459 694Cost of good sold (exclu int & depn) 32885 32066 29739 32902 27015Gross Margin (90) 1927 1779 (4004) 3446Interest 705 368 62 67 134Cash Profit (+)/ deficit(-) (795) 1559 1717 (4070) 3312Depreciation & DRE 1022 1154 1176 1229 1202Profit /(Loss) before Tax (1817) 404 541 (5300) 2110Provision for Tax (8) (285) 38 (497) 846Profit /(Loss)after Tax (1809) 689 504 (4802) 1264Equity 10000 10000 10000 10000 10000Reserves and Surplus 8094 9903 9214 9175 13977Deferred tax liability 2656 2664 3017 3025 3245Loans(excluding interest accrued) 7454 3835 1367 0 3266Long-term 0 0 0 0 935Short-term 7454 3835 1367 0 2331Gross Block 43611 41916 41960 40632 40353Capital Work in Progress 35 39 42 1861 1713Net Fixed Assets(excluding 14333 13707 14687 14530 15480work in progress)Deferred revenue expenditure 0 0 0 0 0Current assets, Loans and 18970 15455 15491 14228 21913AdvancesCurrent Liabilities and Provision 12781 7031 8545 8419 8618Working Capital 6189 8424 6946 5809 13295Capital Emloyed 20522 22131 21633 20339 28775Net worth 18094 19903 19214 19175 23977RatiosGross margin to capital employed (0.004) 0.087 0.082 (0.197) 0.120Cash Profit to capital employed (0.039) 0.070 0.079 (0.200) 0.115P B T as a percentage of sale -5.62% 1.28% 1.79% -18.63% 7.09%Debt equity ratio 0.000 0.000 0.000 0.000 0.094No of employees 731 809 909 978 1036# excluding trial production of 1685MT writing and printing paper.* excluding 1685 MT writing and printing paper.

( Lakhs)

5

EMPLOYMENT COST SUMMARY ( Lakhs)

For the Year ended 31/3/2013 31/3/2012 31/3/2011 31/3/2010 31/3/2009(A) Salaries and Wages, Ex-gratia etc. ( Rs.Lakh)

a) Basic Pay, PP & NPA 2295.14 2720.30 2,278.30 1,663.24 1210.41b) NPA 3.30 3.11 2.79 3.40 0.90c) VDA & Dearness Pay 1173.38 1,297.45 1,574.52 1,233.67 1451.19d) Salaries & Wages -Trainees 157.75 110.42 34.39 27.76 33.28e) HRA 138.74 153.81 159.75 116.89 94.14

f) Other allowances like CCA,Shift Allowance,Sp.Allowance Canteen Allowance,Steering Allowance, Washing Allowance,PTA, Hill Tract Allowance etc… 59.28 67.43 80.37 36.48 39.68

g) Conv.Reimburesement & Fixed Conv.Allowance 85.90 101.87 116.94 75.76 77.60h) Tution Fee 5.99 7.07 3.83 1.89 1.98i) Overtime 401.98 383.27 263.54 174.24 180.12j) Leave Encashment 94.19 0.00 0.00 635.56 301.75

Sub Total (a-j) 4415.65 4844.73 4514.43 3968.89 3391.05Provision for pay revision 0 378.91 165.03 1246.95Salaries and wages incl.provision for pay revision 4415.65 4844.73 4893.34 4133.92 4638.00Ex-gratia for VRS Optees 2.92 0.00 0.00 0.00 0.00 Sub total(A) 4418.57 4844.73 4893.34 4133.92 4638.00(B) Employees’ Benefits ( Lakh)

a) Provident Fund and other Fund 480.30 476.39 410.34 365.55 330.00b) Gratuity 0.00 0.00 0.00 1,112.60 187.97c) Productivity Linked Incentive 0.00 0.00 63.67 44.51 96.08d) Township(Net after township income) 180.35 185.01 165.49 155.75 152.45e) Education 21.95 20.28 26.57 29.00 36.74f) Medical 226.56 236.97 249.43 223.17 202.52g) Leave Travel Concession 11.89 5.54 6.25 6.51 18.21h) Canteen subsidy (net) 165.54 168.39 103.01 117.67 95.81I) Others(Grants and Subsidies to Club, 121.65 173.16 111.75 65.73 100.02

Uniforms and Liveries,Training exp.etc…) Sub Total(B) 1208.24 1265.74 1136.51 2120.49 1219.80 Total (A+B) ( Lakh) 5626.81 6110.47 6029.85 6254.41 5857.80

No.of Employees 731 809 909 978 1036

Average salaries and wages etc.peremployee per annum ( ) 604456 598854 538321 422691 447683

Average cost of employee benefits peremployee per annum ( ) 165286 156457 125029 216820 117742

Average employment cost peremployee per annum ( )-including provision for pay revision 769741 755311 663350 639511 565425-excluding provision for pay revision 769741 755311 621666 622636 445063

6

DIRECTORS’ REPORT TO THE SHAREHOLDERS

To

The MembersHindustan Newsprint Ltd

Gentlemen,

Your Directors present their 30th Annual Report with the Audited Statement of Accounts, Auditors’ Report andComments of the Comptroller and Auditor-General of India for the year ending March 31, 2013.

1 Operational and Financial Performance:

During the year under review, your Company achieved a production of 103282 MT(including trialproduction of 1685 MT writing & printing paper), which is 103.2% of the installed capacity as comparedto 102450 MT during the previous year. During the year your Company sold 103282 MT(including1685 MT of writing & printing paper) as against 104911 MT during the previous year. The salesduring the year was 323.58 crore as compared to 315.04 crore during the previous year. Thestock was NIL at the end of 31.03.2013.

The highlights of performance of your Company during Financial Year 2012-13 together withcorresponding figures for the Previous Year are given below.

1.2 Financial Results:

Particulars 2012-13 2011-12Sales Turnover 32358 31504Profit/(loss) before Interest Depreciation and Income Tax (90) 1927Interest 705 368Cash Profit / (Loss) (795) 1559Depreciation and Deferred Revenue Expenditure Write-off 1022 1154Profit/(Loss) before tax (1817) 404Provision for taxation 8 (285)Profit/(Loss) after tax (1809) 689

2012-2013 2011-2012

ProductInstalledCapacity(MT)

Production(MT)

CapacityUtilisation (%)

Production(MT)

CapacityUtilisation (%)

Saleable Newsprint 100000 103282* 103 102450 102Chemi Mech Pulp 60000 42556 71 45695 76Chemical Pulp 27400 15543 57 15240 56De-inked Pulp 33000 32116 97 28866 87

* includes trial production of 1685 MT of writing and printing paper.

( Lakh)

1.1 Production Summary:

7

2. Contribution to the Exchequer:During the year under review, your Company contributed to the Exchequer an amount of 670 lakh by way of duties and taxes, the break-up of which, together with the comparable figures

of the previous year, is given below:-

3. Marketing Activities:Your Company sold the entire production of 103282 MT (including 1685 MT of writing and printingpaper) and achieved zero stock by March 31, 2013. The net sales realization improved by about 1100 per MT during FY 2012-13 as compared to FY 2011-12.

4. Fibre Development and Procurement Activities (FDP) :The FDP Department of your Company, besides fulfilling the requirement of fibrous raw materialsrequired for achieving the targeted production, is also carrying out the following activities for ensuringlong term fibre security for your company’s operations.

4.1 Captive Plantation:Captive Plantations were raised in an area of 3625.173 ha in the land allotted by Govt. of Kerala onlease. Out of this 327.291 ha was included in National Parks & Sanctuaries, 190.423 ha is comingunder the core area of Periyar Tiger Reserve and 365.48 ha plantations are under encroachmentthreat of encroachment and litigation.An area of 72.3125 ha was further reduced due to distributionto landless people, surrendering of unsuitable area and handing over to KSEB The effective areaof plantations with HNL at present is 2669.6665 ha which are being maintained properly. During2012-13 materials from an area of 450 ha in Munnar, Kottayam, Malayattoor Divisions and HNLCompound were extracted. In these areas coppice crops will be maintained or fresh plantations willbe raised as per requirement.

4.2 Encroachment in Captive Plantation Area:

Your Company has been facing severe encroachment problems in the Captive Plantation areaslocated in Munnar Division. The programme for extraction of material from Captive Plantationareas was disrupted by threat of encroachment and disputes regarding ownership of land betweenRevenue Department and State Forest Department. Even though the Company has taken necessaryaction including moving the Hon’ble High Court of Kerala for obtaining back the possession andinvoked the Magisterial powers of the Estate Officer of the Company for evicting the encroachersand also met the Chief Minister of Kerala for eviction of encroachers, our effort still remains to bematerialized in ameliorating the issues in its entirety.

4.3 Purchases at Gate Scheme

Your Company has been procuring materials under the Purchase at Gate Scheme from 1998 onwards.

Contribution to the Exchequer: Particulars 2012-13 2011-12

Customs Duty 147 128Excise Duty 46 5CST/VAT 404 344Rates & Taxes 44 40Corporate Income Tax 0 68Dividend Tax 0 65Service Tax 29 0Total 670 650

( Lakh)

8

Due to many reasons the availability of pulpwood under PaG Scheme was reduced. Mainly pulpwoodlike Eucalyptus, Acacia, Mangium etc. have found an alternative market as they are being purchasedby plywood industries paying a very high price. The total quantity of mateial, mainly Bamboo,procured under Purchase at Gate Scheme during 2012-13 was 2446 MT.

4.4 Tissue Culture Bamboo

In view of the dwindling availability of Bamboo in the state resulted from gregarious flowering, yourcompany has introduced a scheme to increase the Bamboo resource in the State. This schemeenvisages promotion of cultivation of high yielding thorn-less Bamboo propagated through TissueCulture method. Instead of establishing a Tissue Culture lab in your company, which requires hugeinvestment, it was decided to make use of the facilities of Tissue Culture lab at NPM, a Unit of HPC.20,000 Nos of Semi hardened Tissue Culture plantlets from NPM lab were brought to your Companyand the multiplication and hardening were carried out at HNL utilizing the mist chambers. About50,000 plantlets were sold/distributed among farmers through organizations. So far, plantations usingTissue Culture Bamboo plantlets are being raised in HNL Compound every year in the availablearea. The balance plantlets are being multiplied again for next year planting programme and distribution.

5. Expansion cum Diversification Project (EDP)Earlier proposal for Expansion-Cum-Diversification Project (EDP) could not be implemented due tosteep increase in project cost and was kept in abeyance. Subsequently, it was planned to move aheadwith EDP in a phased manner. In the first phase, your company had decided to go for a 300 TPDDeinking plant for manufacturing of writing and printing grade paper. M/s Tata Consulting EngineersLtd, Mumbai, who is the consultant for the project, has done the evaluation and submitted thecomparative statement. Further process is stalled since Voith has not complied with ourperformance guarantee clause.

With regard to the power plant on BOOT basis, we had awarded work order to M/s aXYKno capitalServices, Nagpur for providing advisory services to select a Developer. The consultant hascommenced their work and process of preparing Request for Qualification (RfQ) for selecting aDeveloper for setting up 80MW power plant is in progress. Simultaneously, drafting of land leave &license Agreement is also progressing. The valuation of infrastructure earmarked for 80MW powerplant on BOOT basis was carried out by an approved Valuer and final report had been submitted.The tendering for selecting an approved Environment consultant for obtaining environmentclearance for the proposed power plant is going on. The study by KSEB to assess the capability ofexisting power line for power evacuation has to be carried out.

Since the new paper machine project was kept in abeyance, as a short term measure with lowinvestment, two new proposals were mooted to grab the emerging market and for improved margin.Accordingly, it was decided to go for refurbishment of the existing paper machine to provide swingfacility and for technology up-gradation & capacity enhancement of existing deinking plant toproduce writing & printing grade pulp besides newsprint grade pulp. Necessary clearances arebeing obtained for this proposal.

Through refurbishment of existing paper machine, it is envisaged production of writing & printinggrade paper besides low grammage (upto 42GSM) newsprint of better quality. The swing facility willprovide flexibility to HNL to switch over to a product depending on the market demand and price.

Tendering for appointment of a consultant for the refurbishment of the paper machine is going on.

9

Through Up-gradation of existing 100TPD deinking plant, it is envisaged a capacity enhancement to150TPD and to produce WPP grade pulp besides newsprint grade to use in Paper Machine. Thetender has been released for selecting a suitable bidder for the project. Two bidders are in the fray.Evaluation of the techno-commercial bid is over. Price bid has been opened and in under evaluationand negotiation.

6. Quality and Environmental Management System and OHSAS CertificationYour company has been certified in Quality Management System under the standards ISO 9001:2008,Environmental Management System under ISO 14001:2004 and Occupational Health and SafetyAssessment Series (OHSAS 18001:2007). The system continues to be in place with regularmonitoring and surveillance audits conducted as per requirements of the Standards.

Your Company has also met the majority of the action points as per Charter on CorporateResponsibility for Environmental Protection (CREP).

7. Human Resources Development:As a visionary in development, your company has given great prominence to Human ResourcesDevelopment (HRD) by imparting need based training, interceding internal or external resourcepersons. This develops the key competencies of the employees that enable them to perform currentand future jobs through planned learning activities and enable them to manage change.

The growth and advancement needs of the employees for the fulfillment of the organization’sobjectives have been factored into the HRM policies of the Company.

Altogether, HNL has accomplished the task for the year under review by conducting 34 in-housetraining programmes in which 915 persons participated. In addition, the Company also conducted 15External programmes in which 31 persons participated in various training institutions of repute.

FACTS AND FIGURES (1st April, 2012 to 31st March, 2013) :

(a) Training Programmes:

Type of Trainings No. of Trainings Participants

� In House 34 915� External Programme 15 31

Topics No. of Programmes Participants� Safety, First Aid & Fire, Preparedness etc 6 72

� Energy Conservation/OHSAS & Environment Management System 13 278

(b) Awareness Programmes:

10

8. Industrial Relations and Employee Welfare MeasuresAs in earlier years, this year also the Company was very much successful in continuing theharmonious Industrial Relations. The participative work culture of the Company through constantinteractions with the Trade Unions and their representatives at political level together has facilitatedin having a very healthy Industrial Relations and ensuing zero man days loss due to strike.

The welfare measures offered to the employees and their dependants were also continued duringthe year. HNL, as a socially responsible organization, has been involved in various social activitieslike providing basic amenities like, drinking water, school facilities, free medical check-up to nearbyvillages and villages near the plantation areas etc.

9. Employees participation in ManagementIn order to inculcate a culture of participative management various committees like WorksCommittee, Safety Committee, Canteen Committee, Grievance Committee and bipartiteparticipative forum like Shop Floor Councils and Plant Floor councils are functioning successfully.The Communication meeting between the Unions and the HoDs is also continued for betterunderstanding. Also more emphasis is given to Health and Safety of employees with the OHSASCertification, thereby improving Employees awareness in healthy food habits and life style.

10. Particulars of Employees:During the Financial year, the Company did not have any employee for the whole or part of the year,who is receiving an aggregate remuneration of 60 lakh per annum or 5 Lakh per month.Therefore, the particulars of the employees under Section 217 (2A) of the Companies (Particulars ofEmployees) Amendment Rules, 2011 may be treated as NIL.

11. Position of employment of members of SC/ST/OBC, etc.The position of Employment of the members of Scheduled Caste (SC)/ Scheduled Tribes (ST)/OBCEx service man and Persons with Disabilities (PwD) as on March 31, 2013 is shown inAnnexure I attached.

12. Position of women employees:The particulars of women employees in the Company as on March 31,2013 are given inAnnexure-II attached.

Topics No. of Apprentices as on 31/03/2013

Trade 76

Diploma 26

VHSE 1

Graduates 19

(c) Apprenticeship Training (G.O.I/year)

11

13. Promotion of Official Language usage:The Company continued to implement the Presidential Directives on implementation of the officiallanguage (OL). As part of this, intensive training programmes, Official Language Month andPeriodical Workshop including High Level OL Workshop and Hindi Computer Training Programmesfor the Employees/Officers of all categories were arranged. A number of competitions in Hindi wereconducted and the winners were suitably awarded. Apart from this ‘All South India OL Conference’,OL Management Programme for Senior Officials of the Company, All Kerala PG Level Hindi EssayCompetitions’ have been organized as part of Special OL Programme. Inter unit Hindi Competitionsincluding OL Seminar has also been conducted in the Company. The Company has already beenawarded for the Second time with the prestigious Regional Official Language Shield of Dept. ofOfficial Language, Ministry of Home Affairs, Government of India for excellent and effectiveimplementation of Official Language Rules/Policies of Government of India. Besides this, in terms ofexcellent implementation of OL Rules/Policies of Government of India like previous years this yearalso the Company has been awarded with prestigious Official Language Shield of Town OfficialLanguage Implementation Committee (TOLIC), Kottayam. In the Joint OL Competitions conductedby TOLIC Kottayam this year also a number of employees and school going children of employeeshave been awarded with prize. Employees of the Company as well as their school going childrenwere awarded with cash prizes under different OL incentive schemes. Company’s Website isalready functioning in trilingual form i.e. Malayalam, Hindi and English. Along with multiusersoftware Shreelipi Kairali Unicode is now being used in different departments. Besides this in OLSection work is done on Unicode based Computer. Web magazine e-Drishti is also coming out fromtime to time. The Company has taken utmost effort for proper and effective implementation ofAnnual Programme of the Department of Official Language, Ministry of Home Affairs, Governmentof India.

14. Assistance/Recognition from Government of KeralaGovt. of Kerala during 2010-11 had fixed rates of Raw materials like Acacia, Mangium and FloweredBamboo at a reasonable level which were lesser than the rates of the previous year. Even thoughyour Company had requested to retain the prices of 2010-11, during the year 2011-12 also there wassome increase in the prices of Eucalyptus and Reed. Again higher rates were fixed for 2012-13 yearfor various raw materials. Your Company has already requested the GoK to reduce the rates to thelevel of 2011-12.

15. Energy Conservation:The particulars as required under Section 217(1) (e) of the Companies Act, 1956, the report onEnergy Conservation, Technology Absorption, etc, are given in Annexure –III of this report. Duringthe year, a number of energy conservation schemes were implemented and achieved a reduction ofspecific energy of newsprint by 54 Kwh/MT.Your Company received the Kerala State Energy Conservation Award (First Place) in the categoryof Large Scale Industries for excellent energy management system and for the continued efforts inpromoting Energy Conservation and Energy Efficient measures.Comprehensive energy audit of the entire organization has been carried out during the year as a partof enhancing energy management system and as an obligation to the Energy Conservation Act, 2001.

12

16. VigilanceYour Company is committed to the highest ethical practices in all its activities. In order to maintainthe values of ethics, probity and public accountability, a multi pronged strategy is adopted whichconsists of preventive, deterrent and punitive measures. To encourage a culture of honesty andtransparency in the company, the guidelines of CVC on leveraging technology are adhered to.Tender documents and contracts finalized are uploaded on the Company website regularly.Payments are made mostly through EFT/RTGS. Various systems improvement and preventivevigilance activities are undertaken to sensitize the employees about corruption and combat it in orderto ensure probity and integrity in the Organization so that the Company can gain through greatertransparency and optimal management of resources. Training programmes are conducted tosensitize the officials regarding probity and honesty. For participate vigilance management, stakeholders meeting was organized in the company.

17. Corporate GovernanceA report on Corporate Governance is attached.

18. Corporate Social ResponsibilityYour Company, a premier Public Sector Undertaking has always given top priority for its obligation tothe society and the people in need especially those residing in nearby villages with special emphasisfor the surrounding areas of the mill. The Company continues its’ pursuit in making its presence insocial, economical, infrastructural, educational, cultural activities etc., development for augmentingthe quality of life of people in areas surrounding the mill and the society in general.

19. Directors’ Responsibility StatementPursuant to Section 217 (2AA) the Companies Act, 1956, your Directors hereby state that:-i) in the preparation of Annual Accounts, the applicable accounting standards had been followed

along with proper explanation relating to material departures;ii) your Directors had selected such accounting policies and applied them consistently and made

judgments and estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit or loss of theCompany for that period;

iii) your Directors had taken proper and sufficient care for the maintenance of the adequateaccounting records in accordance with the provisions of this Act and for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;

iv) Your Directors had prepared the Annual Accounts on a going-concern basis.20. Auditors:

M/s.Cheriyan & Cheriyan, Chartered Accountants, Kottayam, were appointed as Auditors of yourCompany for the year 2012-13 vide Lr.No.CA.V/COY/CENTRAL GOVERNMENT,HNEWSP(1)206 dated 1/8/2012 by the Comptroller and Auditor General of India, Govt of India, under Section619 (2) of the Companies Act, 1956.

21. Comments of the Comptroller and Auditor General of IndiaThe comments of the Comptroller and Auditor General of India under section 619(4) of theCompanies Act 1956 on the Accounts of the Company for the year ended 31st March 2013 are givenin Annexure IV forming part of this report.

13

22. Replies to Comments of the Statutory AuditorsReplies to comments of the Statutory Auditors are given in Annexure-V of this report.

23. Board meetingsThe Board of Directors of your Company held four meetings on June 08, 2012, September 11, 2012,December 27, 2012 and March 15, 2013 during the year under review.

24. Audit CommitteeThere was no Audit Committee during the year under review.

25. Composition of Board of DirectorsDuring the year under review Shri Prakash P. Mugdiya was appointed as Non-official Part-timeDirector for a period of three years vide DHI Order No.8(41)/2004-PE-VII dated 8th May 2012.

26. Business OutlookIndian newsprint market is growing at a CAGR of 12% as compared to negligible growth rates indeveloped countries. Strong growth rates in Indian newsprint market unlike developed countries ison the back of strong user industry growth driven by economic growth and the rise in literacy rates.CRISIL Research estimated demand for newprint to grow by 9-10 per cent CAGR from 2.1million tones in 2011-12 to 3.4 million tones in 2016-17.The business outlook appears to be little satisfactory, as the cost of newsprint is rising in the domesticmarket due to increase in prices of fibrous raw materials and power & fuel as compared tointernational market, which remains stable. There is a demand fuelled by an increase in newspaperreadership. In the present scenario of growth in the newsprint industry, the domestic newsprintmanufacturing industry perceives an opportunity for investment in sustainable competitiveness.However, your Company has taken relentless efforts to create stability in the changing marketenvironment, and to provide platform for future growth.

27. AcknowledgementYour Directors wish to place on record their sincere appreciation of the dedicated and enthusiasticefforts of the employees at all levels for the smooth conduct of business operations of yourCompany. Your Directors acknowledge the guidance and assistance received from the Departmentof Heavy Industry, Ministry of HI&PE, Ministry of Environment & Forests, Govt. of India, the Govt.of Kerala and the Holding Company, Hindustan Paper Corporation Ltd, from time to time. YourDirectors are also thankful to the Comptroller and Auditor General of India,the Statutory Auditorsand the Cost Auditors for their valuable suggestions and guidance. Your Directors are also grateful tothe Customers, Suppliers/Vendors and Bankers for their continued patronage and support.

M V Narasimha RaoChairman

Place: Newsprint NagarDate: 27.09.2013.

For and on behalf of the Board of Directors of Hindustan Newsprint Limited

14

REPORT ON CORPORATE GOVERNANCE

1. Company’s philosophy on code of GovernanceThe company’s philosophy on Corporate Governance envisages attainment of the highest level oftransparency, accountability and equity in all facets of its operation and in all its interaction with itsstakeholders, including share holders, employees, lenders and the Government. The company iscommitted to achieving and maintaining good standards of Corporate Governance.

2. Board of DirectorsThe Board of HNL is structured in accordance with the Corporate Governance Guidelines for CPSEsand various office Memorandum issued by Department of Public Enterprises (DPE).Details of the composition of the Board of Directors, category of the Directors, their attendance atthe Board meeting(s) and Annual General Meeting, other Directorship held by them during FY2012-13 are given below:

Name

BoD Meeting(s)attended/held duringtenure of Directors

AGM attended Other Directorship

a) Functional Directors1) Shri M V Narasimha Rao

Chairman-cum-Managing Director(from 09.02.2012)

2) Air Cmde. ProdipKumar Mukherjee, VSM

b) Nominee Directors3) Shri SN Bhattacharyya4) Shri S K Singh

c) Non-official Part-time Director5) Shri Prakash P. Mugdiya

4/4

4/4

3/44/4

2/4

BoD of the Company met four times during the financial year under report (i.e. June 08, 2012, September11, 2012, December 27, 2012 and March 15, 2013) and all information required pursuant to the DPEGuidelines were placed before the Board.

Yes

-

--

-

03

-

0304

-

15

3. Audit CommitteeThere was no audit committee during the year under review.

4. DisclosuresDetails of Remuneration paid to Functional Directors are under:

Part-time Non-official (Independent) Director(s)Part-time Non-official Directors do not have any material pecuniary relationship or transaction with theCompany and its Management. They do not receive any remuneration/commission except Sitting Fee(s)payment of which is made pursuant to Clause 118A of the Articles of Association of the Company at therate approved by the Board.Payment of Sitting Fee during FY 2012-13 is 10,000/-.

Sl. No Particulars 2012-13

(a) Salary & Allowances 13,32,664.00

(b) Contribution to PF 1,54,268.00

(c) Other Benefits 44,577.00 Total: 15,31,509.00

5. Annual General Meetings (immediately preceding 3 years)

AGM for FY ended Date and Time of AGM Venue

2011-12 November 06, 2012: 1200 hours Registered office

2010-11 September 21, 2011: 1030 hours -do-

2009-10 August 27,2010 : 1600 hours -do-

16

ANNEXURE-I TO THE DIRECTORS' REPORT

Position regarding employment of Scheduled Castes/Scheduled Tribes, Ex-Servicemen/OBC etc. as on 31.3.2013.

2. Representation of Ex-Servicemen

Total No. of Disabled % Dependent of % Other Ex- % Group Employees Ex-Servicemen Ex-Servicemen Service-

killed in action men

A 141 - - - - 1 0.70

B 55 - - - - 0 0

C 494 - - - - 8 1.61

D 41 - - - - 0 0

1. Representation of SCs/STs/OBCs

A 141 6 4.25 0 0 18 12.76

B 55 1 1.81 1 1.81 13 23.63

C 494 33 6.68 1 0.20 135 27.32

D 41 9 21.95 0 0 22 53.65

%GroupTotal No. ofEmployees

No. ofSCs %

No. ofSTs

No. ofOBC %

A 141 2 Orthopaedically disabled B 55 0 C&D 535 4 Orthopaedically disabled

2 Deaf1 Blind

3. Representation of Persons with Disabilities (PwD)

Group Total No.of No.of Physically Category of Physically ChallengedEmployees Challenged

17

ANNEXURE-II TO THE DIRECTORS’ REPORT

Representation of Female Employees as on 31.3.2013

75000-90000 0 0 065000-75000 1 0 043200-66000 0 0 036600-62000 6 0 032900-58000 47 5 10.64%29100-54500 11 3 27.27%24900-50500 20 1 5.00%20600-46500 19 2 10.53%16400-40500 37 7 18.92%Sub Total 141 18 12.76%

B. SUPERVISORS

16400-40500 0 0 012600-32500 36 3 8.33%11500-29600 19 1 5.26%Sub Total 55 4 7.27%

C. WORKMEN

12600-32500 46 8 17.39%11500-29600 97 4 4.12%10700-27600 196 25 12.75%10000-25200 47 0 09500-24000 25 5 20.00%8900-22000 27 2 7.40%8500-20500 30 6 20.00%8200-19800 26 4 15.38%7900-18100 35 1 2.86%7700-17200 5 0 07500-16500 1 0 0Sub Total 535 55 10.28%

GRAND TOTAL 731 77 10.53%

Total No. ofNo. of Female Percentage

Employees Employees Pay Scale

A. EXECUTIVES

18

ANNEXURE-III TO THE DIRECTORS’ REPORT

Particulars with respect to Conservation of Energy.

ENERGY CONSERVATION SCHEMES COMPLETED DURING 2012-13

1 Installation of a blowing system to directly feed Wood - fines to Lime – Kiln to partiallysubstitute Furnace Oil. During 2012-13 150 MT of wood-fines have been fired in Lime –Kiln resultingin a saving of about 45 KL of Furnace Oil.

2 Energy Efficient Pump installed to transfer 6% caustic from Causticizing plant to CMP Plant hadbeen taken on line by carrying out necessary modifications in the pipeline.

3 Resizing of 37 Kw/1500 rpm motor of CP HD Pump (431-01) to a 15KW/1500 rpm motor resultingin an annual saving of about 30000 KWHr.

4 Usage of 6800 MT Wood fines and 1150 MT of DIP/ETP Sludge (Process waste) as fuel in FBCboilers. An equivalent coal saving of about 5500 MT could be achieved.

5 Optimization of pulp mix ratio by reducing the percentage of CMP Pulp by 4% and increasing DIPshare. A reduction of about 130 Million KWHr could be achieved through this.

6 Installations of variable Frequency Drive for Re -Winder trim blower system resulting in a saving ofabout 12000 KWHr.

7 Replacement of conventional motors with Energy efficient motors (6 Nos). An approximate savingof 0.23 Million KWHr could be achieved through this.

ENERGY CONSERVATION SCHEMES TO BE IMPLEMENTED DURING 2013-14

1 Modification of Calendar system in Paper Machine by isolating one of the rolls and reducing theelectrical load by 25%

2 Replacement of conventional asbestos sheets in plant areas (10 Nos) with transparent sheets toenhance green lighting in some more areas.

3 Improvement of steam supply system by proper insulation of lines, arresting leakages and replacingfaulty steam traps.

4 Replacement of Conventional motors with energy efficient motors as an ongoing scheme to improveenergy efficiency.

5 Installation of Variable frequency drive for 831-31 Dye Pump.

6 Replacement of conventional street lights with energy efficient LED Lights.

19

A. CONSERVATION OF ENERGY

FORM - A

Form for disclosure of particulars with respect to Conservation of EnergyPower & fuel Consumption

Sl.No. Particulars 2012-13 2011-12

1 Electricitya) Purchased Power (lakh KWH) 706.8 744.78

Total amount ( Lakhs) 3287.87 2749.12

Cost Per unit (Paise/KWH) 465 369

b) Own Generationi) Thro' Diesel generator

Units (lakhs KWH) 0.044 0.0748

Units per Litre of Diesel Oil 2.005 2.86

Duty paid on Power generation ( Lakhs) 0.0005 0.0011

ii) Thro' Steam Turbine/ Generators

Units (lakhs KWH) 1002.72 993.92

MT of input steam per MWH 6.67 6.70

Duty paid on Power generation ( Lakhs) 12.03 10.95

2 Coal (Steam Coal for Boilers)Quantity (MT) 149340 137123

Total Cost ( Lakhs) 7116.46 5534.39

Average rate ( /MT) 4765 4036

3 Furnace OilQuantity(KL) 1578 1740

Total Amount ( Lakhs) 677.14 619.74

Average rate ( /KL) 42911 35617

4 Other fuel/Internal GenerationI) Clarifier Sludge (MT) 1150 2806

ii) Coconut shell/Cashew nut shell

Quantity in MT Coconut shell 0 0

Cashew nut shell 0 0

Total Cost ( Lakhs) 0 0

Rate/MT ( ) Coconut shell 0 0

Cashew nut shell 0 0

iii) Wood dust 6800 8629

20

CONSUMPTION PER UNIT OF PRODUCTION

Quality Paper(W&P)-Trial MT 1685 0

Newsprint 49 GSM MT 110000 45258 44551

Newsprint 45 GSM MT 56339 57899

103282 102450

Consumption per Unit

Electricity KWH/MT 1600 1655 1697

Furnace Oil Litre/MT 18.5 15.2 16.98

Coal MT/MT 1.42 1.45 1.33

C.V of Coal (ADB) Kcal/Kg 4200 4580 3990

Others

Coconut shell/cashew shell MT/MT 0 NIL 0

Wood dust (MT) MT/MT 0 0.066 0.084

Clarifier Sludge MT/MT 0 0.011 0.027

Water KL/MT 91 104 100

Production details Unit Norm 2012-13 2011-12

21

TECHNOLOGY ABSORPTIONFORM –B

Specific area in which R&D R&D works on the following areas were carried out:carried out by the company

Benefits derived as a resultof the above R&D

i) Development of pilot plant for making Calcium chloride from limesludge.

ii) Chemi-mechanical pulping characteristics of wood under weatherprotected storage in comparison to normal open storage.

i) The pilot plant operation in making calcium chloride from lime sludgehas been demonstrated successfully and this has been proved tobe a viable option.

This has been initiated an over all savings of 6130/- per everyMT of Calcium chloride prepared.

ii) The two different mode of storage for different periods, the changestaken place in the wood are more or less same with respect towood density, alkali consumption, unbleached pulp brightness, pulpyield and strength properties up to 6 months. But marginal increasein peroxide requirement is observed for the material stored morethan 6 months under weather protected in comparison to normalopen storage. This is due to the possibility of fungal attack withprevailing humid weather, which may decay the material slowlywhen stored under weather protected than open storage. Beyond6 months storage, the strength properties decrease slowly.

In view of increased bleach chemical requirement for more than 6months storage of wood under weather-protected, normal openstorage is preferable.

a) Green liquor impregnation and Kraft pulping of Acaciaauriculaeformis a study on reduction in conventional cooking liquor.

b) Feasibility study on making high brightness (> 80% ISO) writingand printing paper with existing pulp (excluding CMP) mill facility.

c) Study on use of high brightness CMP in writing and printing paper.

a) Capital : Nil lakh

b) Recurring : 43.79 lakh

c) Total : 43.79 lakh

d) Total R&D expenditure

as % of total turnover : 0.13

The efforts are limited to in-house R&D activities.

Future plan

Expenditure on R&D

Technology absorption,adoption and innovation

1

2

3

4

5

Form for disclosure of particulars with respect toTechnology Absorption and Research and Development

22

1

C. FOREIGN EXCHANGE EARNINGS & OUTGO

Activities relating to exports, initiatives

taken to increase exports, development of

new export markets and products and ser-

vices, and export plans.

As the export market is not remunerative,

at present, the company has no plans.

2 Total Foreign Exchange Outgo 3447.60 lakh

3 Foreign Exchange Earnings Nil

23

ANNEXURE-IV

24

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDERSECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF HINDUSTAN

NEWSPRINT LIMITED, ‘KOTTAYAM’ FOR THE YEAR ENDED 31 MARCH 2013

The preparation of financial statements of Hindustan Newsprint Limited, Kottayam for the year ended 31March 2013 in accordance with the financial reporting framework prescribed under the Companies Act,1956 is the responsibility of the management of the company. The statutory auditor appointed by theComptroller and Auditor General of India under Section 619(2) of the Companies Act, 1956 is responsiblefor expressing opinion on these financial statements under Section 227 of the Companies Act, 1956 basedon independent audit in accordance with the standards on Auditing prescribed by their professional body,the Institute of Chartered Accountants of India. This is stated to have been done by them vide their AuditReport dated 05.09.2013.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit underSection 619(3)(b) of the Companies Act, 1956 of the financial statements of Hindustan Newsprint Limited,Kottayam for the year ended 31 March 2013. This supplementary audit has been carried out independentlywithout access to the working papers of the statutory auditor and is limited primarily to inquiries of thestatutory auditor and company personnel and a selective examination of some of the accounting records.On the basis of my audit, nothing significant has come to my knowledge which would give rise to anycomment upon or supplement to Statutory Auditor’s report under Section 619(4) of the CompaniesAct, 1956.

For and on behalf of Comptroller and Auditor General of India.

(M.V. Rajeswari)PRINCIPAL DIRECTOR OF COMMERCIAL AUDIT

AND EX-OFFICIO MEMBER AUDIT BOARD

Place: ChennaiDated: September 26, 2013

25

ANNEXURE-V TO THE DIRECTORS’ REPORTREPLIES TO COMMENTS OF THE STATUTORY AUDITORS

Sl.No Comments Replies

1 Addition to Plant & Machinery under FixedAssets (Note11) includes a sum of 433.12 lakhswhich, in our opinion, is in the nature of repairs.This has resulted in a net understatement of Lossto the extent of 411.48 lakhs.

During the FY 2012-13, the company hasventured into Development of a new product, i.e.,Writing and Printing Paper with the existingNewsprint Machine. In order to transform thatendeavor into reality, an array of new additionsand System up-gradation was undertaken in thePaper Machine and Pulp Mills. Several otherPlants and Equipments were also revamped inorder to increase the speed and performance ofthe machine.

In this regard the paragraph 23 of the AccountingStandard 10 issued by the Institute of CharteredAccountants of India is reproduced below:

23. Subsequent expenditures related to an item offixed asset should be added to its book value onlyif they increase the future benefits from the exist-ing asset beyond its previously assessed standardof performance.

It can be asserted with conviction that the expen-diture incurred on schemes for up-gradations andadditions during the year have increased thefuture benefits from those assets beyond their pre-viously assessed/ stated standard of performancesuch that there is an increase in capacity/life ofthe asset as envisaged in paragraph 23 of AS 10.Therefore, we are absolutely correct in ourcontention that those expenditure surely qualifyas Capital Expenditure.

Moreover, on review of Accounts by C&AG, theyhave contradicted the opinion of the StatutoryAuditors and has confirmed that the accountingtreatment given by the Company for Fixed Assetsvaluing 1,58,52,795/- is in order.

In view of the above, the Assets which wereCapitalized during the year, righteously qualify tobe treated in the same manner.

26


2 Advance to suppliers under the head Short TermLoans & Advances (Note 17) includes 135.89lakhs paid to Workmen as Compensation onDisengagement from services over and above thefund available for this purpose. There is noagreement in force as on Balance Sheet date. This,in our opinion, is not in the nature of an advanceand a provision for the amount paid in excess oughtto have been made in accounts. Non provisionthereof has resulted in an understatement of Lossto the extent of 135.89 lakhs

HNL engages around 700 casual workers throughvarious Contractors for running the mill inaddition to its regular employees. A scheme wasintroduced in 2002 for separation with somemonetary benefit on attaining the age of 58.Accordingly the scheme Disengagement Compen-sation was launched with a share @ 3/- per dayof attendance for each worker to be contributedby the contractor. This was subsequently increasedto 5 and 7 in two phases. The schemeenvisages a payment of 15 days wages for eachcompleted year of service on the basis of lastdrawn wage. As the Principal Employer, theCompany will pay the amount initially.

It may kindly be noted that till 2006 there wascredit balance in the Accounts, which indicatesthat fund was available for separation. From 2007onwards the exodus of workmen was on a higherscale which led to the depletion of the fund andthe consequent debit balance.

Since almost all workers who joined the Companyduring 1978-1982 have now left the Company, theseparation will be miniscule from 2013-14.Further, it has been decided to enhance thecontribution considerably, so that the corpus willincrease and over a period of time the Fund willhave sufficient balance. It may please noted thatthe increase in the contribution can be made onlyat the time of negotiation for fixation of revisedwages. The Current wage period of the casualworkers has expired in January, 2013. The wageperiod is for 3 years. Already 2 rounds ofnegotiation have been conducted.

Hence the argument of the Auditor that thecompany needs to make provision in the accountsas the liability has crystallized during the year isnot correct. Accordingly it was decided not tomake any provision in the accounts for the aboveadvance payment made towards Compensationfor Disengagement.

27


3 Assets for disposal included in Other CurrentAssets, (Note 18), include an amount of 112.05lakhs being items of Fixed Assets scrapped duringthe year but credited in ‘Prior Period Expenses asRepairs & Maintenance’. This, in our opinion,should have been credited to Fixed Assets and notto prior period expenses. This has resulted in anunderstatement of Loss to the extent of 112.05lakhs.

During a communication meeting with the TradeUnions, one of the union members raised theissue that significant volume of scraps havebeen generated at various plants, which hadaccumulated at different locations over severalyears. There was no system in place to collect itin a centralized manner. Consequently there is nocontrol over the valuable material which ends upin wastage.

In response to the above criticism by the unionsand also to solve the issue of wastage, anenclosure under the commercial department wasidentified as a Scrap yard. It was also decidedthat all the scraps generated at different plantswould be accumulated at the said enclosure (Scrapyard), which would eventually be disposed off ata profit.

It may please be noted that considerable quantityof metal scraps were generated in the process ofrepairs and maintenance of Machinery andBuildings and the accumulation has taken placeover several years in the past. Since theexpenditure had already been accounted indifferent previous Financial years under the headRepairs and Maintenance, we have credited 112.05 lakh being the value of scrap to PriorPeriod Expenses.

Though the Auditor has objected to the aboveaccounting treatment, the company took anundivided opinion to account for the scrap insupport of the argument that identification andaccounting of scrap was essential to protect thescrap from being wasted as already indicatedabove.

28

CHERIYAN & CHERIYANCHARTERED ACCOUNTANTS P. B. No. 43, Kallarackal Bldgs

Miss East Road, Kottayam-686 001Tel. 2562527 / 2563449 / 2565571Fax-2563449, (Res) 2562495E: mail: [email protected]

Partners:K. I. John. B. A., F. C. A.Iype John, B.com., F. C. A., I. S. A.(ICAI)Anu Iype John, B.com., F. C. A., I. S. A.(ICAI)

Independent Auditors Report

To the Members of HINDUSTAN NEWSPRINT LIMITEDReport on the Financial StatementsWe have audited the accompanying financial statements of Hindustan Newsprint Limited (theCompany) which comprise the balance sheet as at 31st March 2013, the statement of profit and lossand the cash flow statement for the year then ended and a summary of the significant accountingpolicies and other explanatory information

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give a true and fairview of the financial position, the financial performance and cash flows of the Company in accordancewith the Accounting Standards referred to in sub -section (3C) of section 211 of the Companies Act,1956 (the Act) . This responsibility includes the design, implementation and maintenance of internalcontrols relevant to the preparation and presentation of the financial statements that give a true andfair view and are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We haveconducted our audit in accordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India. Those Standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement. An audit involves performing procedures to obtain audit evidence aboutthe amounts and disclosures in the financial statements.

The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal controls relevant to the Company’s preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of the accounting estimates made by management, as well as evaluating theoverall presentation of the financial statements. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our audit opinion.

Branch: E 9, 4th Floor, Metro Plaza, Market Road, Near High Court, Kochi. Tel: 0484-6590233.

29

OpinionIn our opinion and to the best of our information and according to the explanations given to us,

i) Addition to Plant & Machinery under Fixed Assets (Note 11) includes a sum of 433.12lakhs which, in our opinion, is in the nature of repairs. This has resulted in a net understatementof Loss to the extent of 411.48 lakhs.

ii) Advance to Suppliers under the head Short Term Loans & Advances (Note 17) includes 135.89 lakhs paid to Workmen as Compensation on Disengagement from services over

and above the fund available for this purpose. There is no agreement in force as on BalanceSheet date. This, in our opinion, is not in the nature of an advance and a provision for theamount paid in excess ought to have been made in accounts. Non provision thereof hasresulted in an understatement of Loss to the extent of 135.89 lakhs.

iii) Assets for disposal included in Other Current Assets, (Note 18), include an amount of 112.05 lakhs being items of Fixed Assets scrapped during the year but credited in ‘Prior

Period Expenses as Repairs and Maintenance’. This, in our opinion, should have been creditedto Fixed Assets and not to Prior Period Expenses. This has resulted in an understatement ofLoss to the extent of 112.05 lakhs.

iv) Hence, in our view, the ‘Profit before Tax’ (item XI) in the Statement of Profit & Loss forthe year ended March 31, 2013 would be (2476.42) lakhs as against (1817.00) lakhs.

Subject to the above, the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

a) in the case of the balance sheet, of the state of affairs of the Company as at 31stMarch 2013

b) in the case of the statement of profit and loss, of the LOSS for the year ended on thatdate; and

c) in the case of the cash flow statement, of the cash flows for the year ended on that date

Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”), as amended,

issued by the Central Government of India in terms of sub-section (4A) of section 227 ofthe Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and5 of the Order.

2. As required by section 227(3) of the Act, and subject to our opinion qualified as above, wereport that:

a. we have obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Companyso far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with bythis Report are in agreement with the books of account;

30

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statementcomply with the Accounting Standards referred to in subsection (3C) of section 211 of theCompanies Act, 1956; and

e. Vide Notification No.GSR 829 (E) dated 21st October 2003, the Central Government haddirected that the provisions of section 274 (1) (g) of the Companies Act 1956 shall not applyto a Government Company. Accordingly, a report under section 227 (3) (f) is not applicableto the Company.

f. Since the requirements of section 441A of the Companies Act,1956 are not notified as on31st March 2013, in our opinion, a report on whether the cess payable under section 441 Ahas been paid or not is not relevant for the Company as on date.

For CHERIYAN & CHERIYANChartered Accountants

CA. Iype John FCA, DISA (ICAI)M.No: 201430 (Partner)

FRN 000624S

Kottayam5th Sept., 2013

31

ANNEXURE TO AUDITORS’ REPORT

The Annexure referred to in our report to the members of

Hindustan Newsprint Limited for the year ended 31st March 2013.

We report that:

1. a. The Company has maintained proper records showing full particulars, including quantitativedetails and situation of fixed assets.

b. The fixed assets have been physically verified by the management during the year. We areinformed that no material discrepancies were noticed by the management on such verification.

c. The company has not disposed off a substantial part of the fixed assets during the year.

2. a. As explained to us, the inventory has been physically verified during the year by themanagement. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedures ofphysical verification of inventory followed by the management are reasonable and adequate inrelation to the size of the company and the nature of its business.

c. In our opinion and according to the information and explanations given to us and on the basis ofour examination of the records of inventory, the Company is maintaining proper records ofinventory. The discrepancies noticed on physical verification of inventory as compared to thebook records were not material and have been properly dealt with in the books of account.

3 The company has not taken loans from parties listed in the registers during the year. The companyhas not granted unsecured loans to parties listed in the Register maintained under Section 301 of theCompanies Act,1956;

4. In our opinion and according to the information and explanations given to us, there are adequateinternal control procedures commensurate with the size of the company and nature of its businesswith regard to the purchase of inventory and fixed assets and with regard to the sale of goods. Duringthe course of our audit, no major weakness has been noticed in the internal controls.

5. a. In our opinion and according to the information and explanations given to us, transactions thatneed to be entered into a Register in pursuance of section 301 of the Companies Act, 1956 havebeen so entered.

b. In our opinion and according to the information and explanations given to us, the transactionmade in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 has not exceeded Rupees Five Lakhs in respect of anyparty during the year.

CHERIYAN & CHERIYANCHARTERED ACCOUNTANTS

P. B. No. 43, Kallarackal BldgsMiss East Road, Kottayam-686 001Tel. 2562527 / 2563449 / 2565571Fax-2563449, (Res) 2562495Branch: E 9, 4th Floor, Metro Plaza, MarketRoad, Near High Court, Kochi.Tel: 0484-6590233.E: mail: [email protected]

Partners:K. I. John. B. A., F. C. A.Iype John, B.com., F. C. A., I. S. A.(ICAI)Anu Iype John, B.com., F. C. A., I. S. A.(ICAI)

32

6. In our opinion and according to the information and explanations given to us, the company has notaccepted deposits from the public within the meaning of Section 58A and 58AA of the CompaniesAct,1956 and the Rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature ofits business.

8. The company has maintained cost records pursuant to the Companies (Cost and Accounting RecordsRules) 2011 as prescribed by the Central Government under section 209(1)(d) of the CompaniesAct,1956.

9. a. According to the records of the Company and the information and explanations given to us, theCompany is regular in depositing with appropriate authorities undisputed statutory dues includingInvestor Education Protection Fund, Provident Fund and Employees State Insurance dues.

b. The details furnished by the Company regarding disputed dues on account of Sales Tax, IncomeTax, Customs Duty, Wealth Tax, Excise Duty, Service tax, and Cess as applicable on 31st March2013 are given here below:

Name of the Nature of the Amount Period to which The forum where statute dues ( Lakh) the amount relates the dispute is pendingIncome Tax Act Demand under 5.06 Assessment Year 1995-96 Income Tax Appellate1961 Section 143(3) Tribunal

26.05 Assessment Year 1996-97 Income Tax AppellateTribunal

15.18 Assessment Year 2007-08 CIT (Appeals)




Sales Tax LawsKerala General KGST,CST, 138.09 1984-85 to Under various forumsSales Tax Act, Surcharge, etc. 1998-99 Assessment1963

KVAT Act, 2003 KVAT 12.59 2005-06 Assessment Appellate Tribunal

CST Act, 1956 CST 1211.76 2006-07 Assessment Modified Order aftergiving effect to hon.High court awaiting.

KVAT Act, 2003 KVAT 15.09 2006-07 Assessment Commissioner (Appeals)

KVAT Act, 2003 KVAT 15.89 2007-08 Assessment Commissioner (Appeals)

c. According to the information and explanation given to us, there are no disputed statutoryliabilities not deposited.

10. This clause is not applicable.

11. In our opinion and according to the explanations given to us and based on the records of theCompany, the Company has not defaulted in the repayment of dues to banks.

33

12. The Company has not granted any loans and advances on the basis of security by way of pledge ofshares, debentures and other securities.

13. In our opinion the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society. Therefore theprovisions of clause 4(xiii) of the Companies (Auditor’s Report ) Order 2003 are not applicable tothe Company.

14. In our opinion and according to the information and explanations given to us, the Company is notdealing in or trading in shares, securities, debentures or other investments. Accordingly the provisionsof clause 4(xiv) of the Companies (Auditor’s Report ) order 2003 are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has notgiven any guarantee for loans taken by others from banks or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanations given tous, the company has not availed any term loans during the year and as such the said clause isnot applicable.

17. According to the information and explanations given to us, no funds raised on short term basis havebeen used for long term investment and vice-versa.

18. The Company has not made any preferential allotment of shares during the year to parties andCompanies covered in the register maintained under section 301 of the Companies Act 1956.

19. The company has not issued any debentures during the period covered by our report.

20. During the period covered by our audit the Company has not raised money by public issues.

21. According to the information given to us, no fraud on or by the company has been noticed or reportedduring the course of our audit.



FRN 000624S

Kottayam5th Sept., 2013

34

BALANCE SHEET AS AT MARCH 31, 2013 ( in Lakh)

I. EQUITY AND LIABILITIESShareholders' Funds

Share Capital 2 9,999.99 9,999.99Reserves & Surplus 3 8,093.57 9,902.92

Non-Current LiabilitiesDeferred Tax Liability (Net) 4 2,656.06 2,663.71Other Long Term Liabilities 5 1,485.77 1,172.46Long Term Provisions 6 76.64 54.96

Current LiabilitiesShort Term Borrowings 7 7,453.87 3,835.15Trade Payables, etc. 8 4,548.72 2,404.39Other Current Liabilities 9 692.79 483.28Short Term Provisions 10 85.40 308.17 TOTAL 35,092.82 30,825.03

II. ASSETSNON-CURRENT ASSETS

Fixed Assets Tangible Assets 11 13,886.98 13,706.82 Intangible assets 11 446.13 - Capital Works in Progress 12 35.48 39.05Long Term Loans and Advances 13 1,754.07 1,624.44

CURRENT ASSETSInventories 14 9,276.26 7,203.46Trade Receivables 15 2,656.91 2,746.66Cash and Cash equivalents 16 493.63 406.39Short term Loans and Advances 17 3,577.28 2,692.14Other Current Assets 18 2,966.07 2,406.07

TOTAL 35,092.82 30,825.03Significant Accounting Policies 1The accompanying notes 2 to 29 are an integral part of the financial statements

AS AT 31-03- 2012NoteNo.

AS AT 31-03- 2013

L.R. EKANATH AIR CMDE P.K. MUKHERJEE, VSM M.V. NARASIMHA RAOCompany Secretary Director (Finance) Chairman cum Managing Director

Kottayam05/09/2013

As per our report dated 5th Sept., 2013

Kottayam



FRN 000624S

35

FOR THE YEAR FOR THE YEARNote ENDED ENDED No. 31-03-2013 31-03-2012

I Revenue from operationsSale of Newsprint (Net of usual trade discounts) 32,363.75 31,508.96Less: Excise Duty 5.28 4.64Net Sales 32,358.47 31,504.32

II Other Income 19 436.60 2,488.54III Total Revenue (I + II) 32,795.07 33,992.86IV Expenses :

Cost of Materials consumed 20 10,253.01 10,280.65Changes in inventory 21 33.90 (56.51)Employee benefits expense 22 5,446.46 5,925.46Finance Costs 23 704.79 368.26Depreciation and amortisation expense 1,022.21 1,154.29Other Expenses 24 17,343.24 15,959.70Total Expenses 34,803.61 33,631.85

V Profit before prior period adjustments, exceptionaland extraordinary items and tax (III - IV) (2,008.54) 361.01

VI Prior Period adjustments (Net) 25 191.54 43.36[(expense) / income]

VII Profit before exceptional and extraordinaryitems and tax (V + VI) (1,817.00) 404.37

VIII Exceptional Items [(expense) / income] - -IX Profit before extraordinary items and tax (VII + VIII) (1,817.00) 404.37X Extraordinary items - -XI Profit before tax (X - XI) (1,817.00) 404.37XII Tax expense : 26

Current tax - 68.36 Deferred Tax (7.65) (7.65) (353.07) (284.71)

XIII Profit for the period (XI - XII) (1,809.35) 689.08XIV Earnings per equity share

Basic (2.00) 0.65Diluted (1.81) 0.69

Significant Accounting Policies 1The accompanying notes 2 to 29 are an integral part of the financial statements


Ernakulam05-09-2013As per our report dated 5th Sept., 2013Kottayam



FRN 000624S

STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED MARCH 31, 2013 ( in Lakh)

36

1. Cash flows from operating activitiesNet profit / loss before tax - 1,817.00 404.37

Current depreciation 1,022.21 1,154.29Prior period Depreciation - 3.45Provision for wealth tax 0.07 0.11Interest Paid (Considered separately in Financing activities)

Total interest 704.79 368.26Less: interest on income tax - 704.79 - 368.26

Increase / Decrease in InventoryOpening balance 7,203.46 6,909.34Closing balance 9,276.26 2,072.80 7,203.46 294.12

Profit/Loss on sale of Fixed Assets(Considered inInvesting activities) - 42.95 6.72 -Interest received (Considered separately inFinancing activities) 40.55 157.85Less: Interest on income tax - 40.55 - 157.85

Income tax paid / refund (net) 58.23 66.74

Increase / decrease in Trade ReceivablesOpening balance 2,746.66 2,867.76Closing balance 2,656.91 89.75 2,746.66 121.10

Increase/Decrease in Non-Current and Current Assets(Other than Fixed Assets, Trade Receivables,Inventories and Income Tax paid in Advance)

Opening balance 6,361.95 3,586.33Closing balance 7,874.99 - 1,513.04 6,361.95 - 2,775.62

Lease rent received(Separately considered in Investing Activity) 30.22 22.25

Increase/Decrease in Non-current and Current liabilities(Other than Deferred Tax Liability,Short Term Borrowings, Provision for Income Tax,Proposed dividend and dividend tax)

Opening balance 4,423.26 7,893.21Closing balance 6,889.32 2,466.06 - 4,423.26 - 3,469.95

Total 4,282.88 5,574.79 Total 2,058.30 6,786.53 Net flow 1,291.90 Net flow 4,728.23

2. Cash flows from investing activitiesSale proceeds of fixed assets (net of cost of fixed assets held for disposal) 42.95 26.35Net book value of Assets transferred to Assets for disposal 1.98 5.83Lease rent received 30.22 22.25Interest received 40.55 157.85Addition to fixed assets (net) 1,700.43 216.48

Less: Allocation of Depreciation to intangible assets 49.94 1,650.49 Total 115.70 1,650.49 Total 212.28 216.48

Net flow 1,534.79 Net flow 4.20

3. Cash flows from financing activitiesInterest paid 704.79 368.26Addition to Share Capital

Opening balance 9,999.99 9,999.99Closing balance 9,999.99 - 9,999.99 -

Dividend and Corporate Dividend Tax paid - 464.89Increase/Decrease in borrowings

Opening Balance 3,835.15 1,367.46Closing Balance 7,453.87 3,618.72 - 3,835.15 2,467.69 -

Total 3,618.72 704.79 Total 2,467.69 833.15 Net flow 2,913.93 Net flow 1,634.54

Particulars 31st March 2013 ( in lakh) 31st March 2012 ( in lakh)

Inflow Outflow Inflow Outflow

CASH FLOW STATEMENT

37

SUMMARY

Cash Flow from operating activities - 1,291.90 - 4,728.23

Cash Flow from investing activities - 1,534.79 - 4.20

Cash Flow from financing activities 2,913.93 - 1,634.54 -

Total 2,913.93 2,826.69 1,634.54 4,732.43

Net cash inflow/ (outflow) 87.24 (3,097.89)

Opening balance of cash and cash equivalents 406.39 3,504.28

493.63 406.39

Add: Net Foreign exchange gain

Foreign exchange gain - -

Foreign exchange loss - - - -

Closing balance of cash and cash equivalents 493.63 406.39

Note: (1) Cash and Bank Balances shown in the Balance Sheet (Note No. 15) are treated as cash and cash equivalents

(2) While preparing this cash flow statement dividend and corporate dividend tax are reckoned only at the time of actual payment

(3) Previous year's figures have been re-grouped wherever necessary to conform with this year's classification


Kottayam05-9-2013


Kottayam



FRN 000624S

38

Notes forming part of the Financial Statements

NOTE 1 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

1. Land

Land is capitalized on the basis of actual cost of acquisition, including establishment charges of landacquisition agency and legal expenses incurred for acquisition. The cost of leasehold land is writtenoff over the period of lease.

2. Capitalization of Assets and Charging of Depreciation

i) Fixed Assets are stated at cost. The cost of acquisition of Fixed Assets is inclusive of freight,duties, taxes, incidental expenses and the cost of installation/erection as applicable.

ii) a) Depreciation is provided for in the Accounts on Straight Line Method as per the provisionsof Section 205(2)(b) of the Companies Act, 1956 and in accordance with Schedule XIV ofthe Companies Act, 1956 and in accordance with the Guidance Note on Accounting forDepreciation in Companies issued by Institute of Chartered Accountants of India.Continuous Process Plants as defined in Schedule XIV of the Companies Act, 1956 areascertained on technical assessment by the Management.

b) In the case of assets added /sold/discarded/transferred depreciation is charged onpro-rata basis.

iii) Fixed Assets identified for disposal are stated at Net Block Value or Net Realizable valuewhichever is lower and are shown separately in the financial statements under OtherCurrent Assets.

iv) Cost of Machinery Spares which can be used only in connection with an item of fixed assetand the use of which is expected to be irregular is allocated to the fixed assets and depreciatedto the extent of 95% within a period not exceeding the useful life of the respective fixed asset.Individual spare parts costing 10 lakh and above only are capitalized and depreciated asmentioned above.

v) Borrowing cost relating to the acquisition/construction of qualifying assets are capitalized untilthe time all substantial activities necessary to prepare the qualifying assets for their intendeduse are complete. The qualifying asset is one that necessarily takes substantial period of time toget ready for its intended use. All other borrowing costs are charged to revenue.

3. Intangible Assets

Intangible Assets including Computer Software grouped under the head Fixed Assets in the Balancesheet are amortised over the useful life of the respective assets.

4. Valuation of investments

All investments are valued at cost.

39

5. Income from LeaseIncome from Assets given on lease is accounted for as the finance income on accrual basis.

6. Valuation of Current Assetsa) Stores, Spares, Materials under Inspection, Materials in Transit, Materials Issued on Loan and

Raw Materials are accounted for at lower of the cost on Weighted Average Method or NetRealisable Value.

b) Finished Goods are accounted for at lower of the cost on Weighted Average Method (excludingInterest and Administration Expenses) or Net Realisable Value.

c) Semi-finished Goods (Work-in-Process) are valued at variable cost on Weighted Average Method.

d) Standing Plantation grown on leasehold lands belonging to the Government of Kerala which areintended for captive use as raw materials included in the inventories are valued at cost representingmaterials, labour, insurance premia and other expenses that are incidental for the developmentand maintenance of the said plantations. Abnormal loss of plantations, if any, is charged to theProfit and Loss Account of the respective year. In the case of eucalyptus, at the time of firstextraction, 60% of the expenditure incurred for raising the plantation during the first two yearsalong with the maintenance expense incurred during the remaining years will be charged toRevenue and the balance 40% of the said expenditure will be charged to Revenue at the timeof extraction of the 2nd and 3rd rotation of shoots in equal proportion.

e) Loose Tools are written off over a period of 5 years (20%) and accounted for atdepreciated cost.

7. Prepaid ExpensesExpenses up to 5,000/- in each case paid in advance for the following year(s) are charged off asexpenses of the Current Year.

8. Income and Expenses relating to prior periodAll incomes and expenses relating to prior period up to 5,000/- are being accounted for directly tothe respective heads of account instead of Prior Period Adjustment Account.

9. Retirement/Terminal Benefits/Bonus/Leave encashmenta) Company’s liability towards employee benefits such as gratuity, leave encashment, terminal

benefits etc. is provided for on the basis of actuarial valuation. Company makes gratuitycontribution to the approved gratuity fund under the Group Gratuity cum Life Assurance Schemeand leave encashment to Group Leave Encashment Scheme of the Life Insurance Corporationof India. The liability towards terminal benefits is un-funded.

b) Expenditure incurred on short term employee benefits including bonus, production incentive,medical benefits and other perquisites etc. are charged to the Profit and Loss Account at undiscounted amounts in the year in which services are rendered.

c) Expenditure on employee benefits in the nature of contributions to Provident Fund, FamilyPension Scheme, Employees State Insurance, Labour Welfare Fund etc. are charged to theProfit and Loss Account as and when contributions to the respective funds are due.

d) Liability for bonus is provided for as per the provisions of the Payment of Bonus Act 1965.

40

e) Ex-gratia paid to employees under Voluntary Retirement Scheme is treated as Deferred Revenueexpenditure and charged off to revenue in 5 equal instalments from the year of incurringthe expenditure

f) Actuarial gains or losses, as the case may be, in respect of valuation of employee benefits arecharged to the Profit and Loss Account.

g) Leave Travel Concession is considered as a short term employee benefit; hence the LTCbenefits are not accounted for on accrual basis.

h) The company has introduced Post Retirement Medical Benefit Scheme. As the company iscontributing equal amount of premium as paid by the ex-employee concerned in advance, thereis no additional liability in this regard recognized in the accounts.

10. Miscellaneous Expenditure (to the extent not written off or adjusted)Intangible items like VRS compensation paid, Expenses on Research phase of Internal Projectsincluding Project feasibility studies are written off in the Profit & Loss Account in the year in whichthey are incurred as required by the Accounting Standard 26 issued by the Institute of CharteredAccountants of India and other clarifications and guidance notes issued by the said Institute.

11. Classification of Expenditurea) Stores and Spares consumed

The cost of Stores and Spares used on repairs and maintenance is shown under Repairs &Maintenance Account classifying the same as under:

i) Plant & Machinery,

ii) Building,

iii) Vehicles,

iv) Other Assets,

v) Loose Tools written off.

b) Salaries and Wages

The expenditure on Salaries and Wages incurred for repairs and maintenance of Plant &Machinery, building, etc. is charged directly to “Salaries and Wages Account” and a foot noteindicating the amount thereof is given separately.

12. Claimsa) The claims for capital subsidy are accounted for on cash basis.

b) Claims against Railways/Insurance Companies are stated at the amount for which claims areexpected to be settled.

13. Foreign Currency Transactionsa) Realised gains or losses on foreign exchange transactions are recognised in the Profit &

Loss Account.

b) Foreign Currency liabilities are stated at foreign exchange rates prevailing at the year end.

41

14. Provisions, Contingent Liabilities and Contingent Assetsa) Provisions (other than trade payables and accruals) as mentioned in the Accounting Standard

29 issued by the Institute of Chartered Accountants of India are accounted for and disclosed tothe extent practicable in the manner laid down in the said Accounting Standard.

b) Contingent Liabilities disclosed in the Notes forming part of the Accounts comply with AS 29 tothe extent practicable.

c) Company has not recognized any Contingent Asset.

15. Basis of Accountinga) The Accounts of the Company are prepared under the Historical Cost Convention as a going

concern on accrual basis except for Scrap, Interest on Income Tax and Rent & ElectricityCharges received from Township which are accounted for on cash basis.

b) Income from Sale of Newsprint is accounted net of Excise Duty, Cess, Sales Tax and Discounts.

c) Accounting Policies not referred to otherwise are consistent with generally acceptedAccounting Principles.

42


NOTE 2SHARE CAPITAL As at 31-03-2013 As at 31-03-2012

Authorised :

10,00,00,000 (10,00,00,000)Equity Shares of 10/- par Value 10,000.00 10,000.00

Issued, Subscribed & Paid Up :9,99,99,900 (9,99,99,900) Equity Shares of 10/-par value fully paid up 9,999.99 9,999.99

Total 9,999.99 9,999.99

Rights, Preferences and Restrictions attached to equity SharesThe Company has only one class of shares referred to as 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 dividend in Indian Rupees. The dividend when proposed by the Boardof Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company the holders of equity shares shall be entitled to receive any ofthe remaining assets of the company after distribution of all preferential amounts. However, no suchpreferential amounts exists currently. The distribution will be in proportion to the number of equityshares held by the shareholders.

During the year there was no change in the number of shares outstanding at the beginning and at the endof the year.

The details of shares held by the holding company Hindustan Paper Corporation Ltd as on March 31,2013 is as under:

9,99,99,900 Equity Shares of par value Rs.10/- each (Previous Year 9,99,99,900 Eq Shares of Rs.10/)The following shareholders hold more than 5% of the shares

Name Percentage of holding As at 31-03-2013 As at 31-03-2012

Hindustan Paper Corporation Ltd. 100 9999.99 9999.99

NOTE 3RESERVES & SURPLUS As at 31-03-2013 As at 31-03-2012

Capital Reserve 11.22 11.22General Reserve 1,187.23 1,187.23Surplus:

Opening balance 8,704.47 8,015.39Add : transfer from Profit & Loss Account (1,809.35) 689.08

6,895.12 8,704.47Less : Proposed Dividend - -Less : Corporate Dividend Tax - -Surplus Closing balance 6,895.12 8,704.47

Total 8,093.57 9,902.92

( in Lakh)

( in Lakh)

( in Lakh)

43


NOTE 4

DEFERRED TAX LIABLITIES (Net) As at As at31-03- 2013 31-03- 2012

The major components of Deferred Tax Asset/Liability arising on account of temporary timing differenceis given below:Deferred Tax LiabilitiesDepreciation 2,768.52 2,847.07

2,768.52 2,847.07

Deferred Tax AssetProvision for Employee Benefits 50.07 117.82Provision for Doubtful Debts/Claims 62.39 65.54

112.46 183.36 Total 2,656.06 2,663.71

NOTE 5

OTHER LONG TERM LIABILITIES As at As at31-03- 2013 31-03- 2012

Advance from customers - -Security deposits 1,485.77 1,172.46

Total 1,485.77 1,172.46

NOTE 6

LONG TERM PROVISIONS As at As at31-03- 2013 31-03- 2012

Provision for Employee benefits 76.64 54.96

Total 76.64 54.96

NOTE 7

SHORT TERM BORROWINGS As at As at31-03- 2013 31-03- 2012

Secured

From Banks

Cash Credit Accounts 7,453.87 3,835.15

Total 7,453.87 3,835.15

The cash credit from banks is secured by hypothecation of Sundry Debtors, Stock of Raw Materials,Stock in Process, Finished Goods and Stores and Spares.

( in Lakh)

( in Lakh)

( in Lakh)

( in Lakh)

44


NOTE 8

TRADE PAYABLES As at As at31-03- 2013 31-03- 2012

Payable to Micro Medium & Small Enterprises 52.01 20.88

Other Trade Payables 4,496.71 2,383.51

4,548.72 2,404.39

Disclosure under Micro, Small and Medium Enterprises Development Act:Amount due to Micro, Small and Medium enterprises included under Trade payables is 52.01 lakh(Previous year 20.88 lakh). This amount is identified by the Management and relied upon by theAuditors.No interest had become payable either in the current year or in the previous year under Section 16 of theMicro, Small and Medium Enterprises Development Act, 2006 or under any contractual obligation.

NOTE 9

OTHER CURRENT LIABILITIES As at As at31-03- 2013 31-03- 2012

Salaries and Other Benefits 300.04 352.81Statutory Dues Payable 58.05 46.51Other Payables 49.68 28.50Advance from Customers 285.02 55.46Related Parties

Holding Company - - 692.79 483.28

NOTE 10SHORT TERM PROVISIONS As at As at

31-03- 2013 31-03- 2012Provision for Employee Benefits

Leave Encashment 68.74 266.57Incentive - -Terminal Benefits 16.66 41.60

Other ProvisionsDividend - -Corporate Dividend Tax - -

85.40 308.17

The Provisions for Gratuity, Leave Encashment and Terminal benefits to employees are made basedon the actuarial valuation on 31.3.2013.Liability for Leave Encashment as on March 31, 2013 as ascertained by the Actuary is 408.47 lakh(Previous year 826.14 lakh). The funded balance as on 31.03.2013 is 345.57 lakh (Previous year

559.58 lakh). The balance amount of 62.90 lakh (Previous year 266.57 lakh) has been providedfor and shown under Provision for Leave Encashment.

( in Lakh)

( in Lakh)

( in Lakh)

45

Not

es fo

rmin

g pa

rt o

f the

Fin

anci

al S

tate

men

ts

NO

TE

1

1-

FIX

ED

A

SS

ET

S G

R O

S S

B

L O

C K

( A

T C

O S

T )

D

E P

R

E

C I

A

T

I O

N

N

E T

B

L O

C K

SL

. P

AR

TIC

UL

AR

SA

S A

TA

DD

ITIO

NS

SA

LES

/ T

RS

FR

.A

S A

TU

P T

OFO

R T

HE

SA

LES

/ T

RS

FR

.U

P T

OA

S A

TA

S A

T

NO

.31

/ 03

/ 20

12D

UR

ING

YE

AR

AD

JUS

TME

NTS

31 /

03 /

2013

31 /

03 /

2012

YE

AR

AD

JUS

TME

NT

31 /

03 /

2013

31 /

03/ 2

013

31 /

03 /

2012

A. T

AN

GIB

LE A

SS

ETS

(i) P

LAN

T &

OFF

ICE

1La

nd 48

2.08

482.

08 48

2.08

482.

082

Bui

ldin

gs 4,

813.

56 11

8.63

4,93

2.19

2,31

9.29

50.8

9 2,

370.

18 2,

562.

01 2,

494.

273

Roa

ds 11

1.59

111.

59 53

.90

1.90

55.8

0 55

.79

57.6

94

Rai

lway

Sid

ing

136.

87 4.

31 14

1.18

129.

72 0.

08 12

9.80

11.3

8 7.

155

Plan

t & M

achi

nery

31,1

74.0

8 1,

035.

20 32

,209

.28

22,1

70.8

3 93

3.96

23,1

04.7

9 9,

104.

49 9,

003.

256

Con

struc

tion

Equi

pmen

t 49

.85

49.8

5 42

.05

0.97

43.0

2 6.

83 7.

807

Oth

er E

quip

men

t 81

1.24

8.81

820.

05 57

7.26

22.6

5 59

9.91

220.

14 23

3.98

8D

urab

le T

ools

34.0

3 34

.03

22.9

4 1.

45 24

.39

9.64

11.0

99

Fans

& E

lect

rical

s 49

7.24

497.

24 43

1.97

11.9

8 44

3.95

53.2

9 65

.27

10C

oolin

g App

arat

us 95

.48

95.4

8 60

.04

3.10

63.1

4 32

.34

35.4

411

Offi

ce E

quip

men

t 42

2.64

16.3

7 43

9.01

341.

73 7.

58 34

9.31

89.7

0 80

.91

12Ve

hicl

es 24

1.97

(5.4

3) 23

6.54

208.

14 6.

56 (3

.45)

211.

25 25

.29

33.8

313

Wat

er S

uppl

y 37

7.96

377.

96 35

5.81

1.16

356.

97 20

.99

22.1

514

Dra

inag

e & S

ewag

e Sys

tem

78.0

6 78

.06

74.1

5 74

.15

3.91

3.91

15Fu

rnitu

re &

Fix

ture

s 10

7.30

107.

30 93

.85

1.27

95.1

2 12

.18

13.4

516

Efflu

ent T

reat

men

t 89

6.04

896.

04 61

3.80

7.39

621.

19 27

4.85

282.

24TO

TAL

40,3

29.9

9 1,

183.

32 (5

.43)

41,5

07.8

8 27

,495

.48

1,05

0.94

(3.4

5) 28

,542

.97

12,9

64.9

1 12

,834

.51

(ii) T

OW

NS

HIP

1La

nd 16

7.98

167.

98 16

7.98

167.

982

Roa

ds 27

.50

50.7

2 78

.22

13.3

4 0.

73 14

.07

64.1

5 14

.16

3B

uild

ings

1,09

8.69

20.0

9 1,

118.

78 43

2.21

18.1

1 45

0.32

668.

46 66

6.48

4Fu

rnitu

re &

Fix

ture

s 36

.79

36.7

9 29

.73

0.72

30.4

5 6.

34 7.

065

Fans

& E

lect

rical

s 93

.33

0.17

93.5

0 85

.49

0.60

86.0

9 7.

41 7.

846

Air-

Con

ditio

ners

& C

oole

rs 21

.02

21.0

2 19

.49

0.12

19.6

1 1.

41 1.

537

Wat

er S

uppl

y 39

.26

39.2

6 34

.02

0.82

34.8

4 4.

42 5.

248

Dra

inag

e & S

ewer

age

13.7

5 13

.75

13.0

7 13

.07

0.68

0.68

9H

ospi

tal E

quip

men

t 9.

01 9.

01 8.

20 0.

10 8.

30 0.

71 0.

8110

Can

teen

Equ

ipm

ent

9.45

9.45

8.92

0.02

8.94

0.51

0.53

TOTA

L 1,

516.

78 70

.98

- 1,

587.

76 64

4.47

21.2

2 -

665.

69 92

2.07

872.

31To

tal T

angi

ble A

sset

s 41

,846

.77

1,25

4.30

(5.4

3) 43

,095

.64

28,1

39.9

5 1,

072.

16 (3

.45)

29,2

08.6

6 13

,886

.98

13,7

06.8

2

L

ess:

Dep

reci

atio

n ca

pita

lised

49.9

5 1,

022.

21B

. IN

TAN

GIB

LE A

SS

ETS

1C

ompu

ter S

oftw

ares

69.0

8 69

.08

69.0

8 69

.08

2O

ther

s - D

evel

opm

ent o

fN

ew P

rodu

ct (W

PP)

446.

13 44

6.13

446.

13To

tal I

ntan

gibl

e Ass

ets

69.0

8 44

6.13

515.

21 69

.08

69.0

8 44

6.13

GRA

ND TO

TAL

41,9

15.8

5 1,

700.

43 (5

.43)

43,6

10.8

5 28

,209

.03

1,02

2.21

(3.4

5) 29

,277

.74

14,3

33.11

13,7

06.8

2

PREV

IOU

S YEA

R 41

,959

.91

216.

48 (2

60.5

4) 41

,915

.85

27,2

72.9

4 1,

154.

29 (2

18.2

0) 28

,209

.03

13,7

06.8

2 14

,686

.97

( i

n L

akh)

46

Notes forming part of the Financial StatementsNOTE 11 (Continued)

1. Fixed assets taken over from Hindustan Paper Corporation Ltd. have been accounted for at OriginalCost to Hindustan Paper Corporation Ltd. along with accumulated Depreciation. Depreciation onthese assets has been charged on the Original Cost.

2. Fixed Assets given on Lease:

a) Out of the land and buildings, 20 acres of land has been given to a Private Party on LicenseBasis for setting up of a Cement Plant and 9.51 acres of land including School Building hasbeen given to a Private School on Lease Basis.

b) Right to use a portion of the Railway Siding has been given to a Private Party on Leave andLicense basis.

3. The Fixed Assets do not include 62.19 lakh towards Desilication Plant on which the Companydoes not possess ownership but has right to use and for which a contribution of 58 lakh wasreceived from CPPRI. However operating cost, if any, is being borne by the company. During theyear the cost so incurred is Nil (Nil)

4. Estimated amount of Capital Commitments remaining to be executed and not provided for is 519.67 lakh (Previous Year 175.52 lakh).

5. On the basis of technical evaluation conducted by qualified, skilled trained and experienced personnelof the Company, the Management is of the view that during the financial year 2012-13 there existedneither any internal indication nor any external indication suggesting that any of the assets belongingto the Company are impaired as mentioned in the Accounting Standard 28 issued by the Institute ofChartered Accountants of India. Based on the above, the Company has not made any provision inits accounts for the year ended 31st March 2013 towards impairment of assets.

6. During the year an amount of Nil (Previous year 2.59 lakh) paid to Ex-landowners hasbeen capitalized.

7. The intangible assets include the cost of developing a new product i.e. Writing & PrintingPaper (WPP). The cost includes the variable costs incurred for the trial production and the fixed costapportioned on the basis of time used for the same. This cost 446.13 Lakh is net of amount

657.67 realised from the sale of production during the development phase. This assets will becharged to the profit and loss over the period of 10 years starting from the financial year 2013-2014.

47


NOTE 12

CAPITAL WORKS IN PROGRESS As at As at31-03- 2013 31-03- 2012

EDP WorksCapital Goods in Stock 14.16 14.07

Other WorksCapital Goods in Stock-Others 21.32 24.98Total 35.48 39.05

NOTE 13

LONG TERM LOANS AND ADVANCES As at As at31-03- 2013 31-03- 2012

Unsecured considered goodEDP WorksAdvance for Capital Expenditure 779.77 745.32Interest During Construction 102.48 102.48Other WorksAdvance for Capital Expenditure 7.05 4.05Security Deposits 727.38 570.16Employee advances and interest due thereon 137.39 202.43Unsecured Considered DoubtfulSecurity Deposits 30.56 30.56

1,784.63 1,655.00Less: Provision for doubtful deposits 30.56 30.56Total 1,754.07 1,624.44

The Provsion for doubtful deposit represent the following:

Deposits with Customs 10.24 10.24Advance to KFDC 20.32 20.32Total 30.56 30.56

NOTE 14

INVENTORIES As at As at31-03- 2013 31-03- 2012

Raw Material 3,923.35 3,460.14Stores & Spare Parts 5,189.57 3,516.09Stores & Spare Parts - In Transit 9.77 26.11Stores & Spare Parts - Under Inspection - 13.64Works in Progress 153.57 187.47

Total 9,276.26 7,203.46

( in Lakh)

( in Lakh)

( in Lakh)

48

Raw Material Inventory includes Stock of Plantation in Progress 1,317.49 lakh ( 1,315.06 lakh)

Normal wastage in inventories if any, within the parameter fixed by the management are charged to theconcerned heads of expense as and when it is consumed.

Physical verification in respect of Hardwood, Reeds, Bamboo, Other Forest Raw materials, Waste Paperand Coal was conducted by estimating the quantity of each stack/heap as physical weighment was notpractical.

The value of Plantation in Progress of 1314.79 lakh (Previous year 1315.06 lakh) is after transfer of 3.88 lakh (Previous year 3.39 lakh) to Claims Recoverable (Note 18 – Other Current Assets), which is

the amount of loss due to fire as estimated by the Surveyors of the Insurance Company, subject to finalsettlement of the claims.

Out of total area of 3625.173 hectares under Captive Plantation (land taken on lease from Government ofKerala), there is threat of diminution in the effective area as detailed below:

Location

( in Lakh)

Nature of ThreatArea in

HectaresValue

disclosed1 Suryanelly / Munnar Encroachment by Local people and

litigations365.480 82.00

2 Marayoor Sandal Division Proposed site for National Park andSanctuary

327.291 141.22

NOTE 15

TRADE RECEIVABLES As at As at31-03- 2013 31-03- 2012

Exceeding Six MonthsUnsecured - Considered Doubtful 50.74 50.74OthersUnsecured - Considered Good 2,656.91 2,746.66

2,707.65 2,797.40Less: Provision for Doubtful Debts 50.74 50.74

Total 2,656.91 2,746.66

The provision of 50.74 lakh relates to the following parties:

( in Lakh)


Name of the Party

Punnyabhoomi 9.96

Janamadhyama Prakasan 14.29

Vijayanand Printers 0.04

Nav Bharat Press 22.74

Express-Thrissur 3.71

Total 50.74

( in Lakh)

49

NOTE 16

CASH AND CASH EQUIVALENTS As at As at31-03- 2013 31-03- 2012

Cash on Hand 1.20 1.63Stamps on Hand 0.09 0.07Balance with Banks

In Current and Deposit Accounts 332.50 255.20Earmarked balances 159.84 149.49Total 493.63 406.39

The Earmarked balance of 159.84 Lakhs (Fixed Deposit of 149.49 Lakhs and Interest Accrued of 10.35 Lakhs ) relates to the amount invoked against Bank Guarantee from M/S IMR Metallurgical

Resources AG (Supplier of Imported Coal) on account of non- fulfillment of contractual obligation withregard to quality. The original amount deposited in June 2006 was 93.36 lacs. The deposit has been madebased on the direction given by the Hon'ble High Court of Kolkata. The matter is subjudice.The corresponding liability is accounted for and grouped under Note 5–'Other Long Term Liabilities' asSecurity Deposit.

NOTE 17

SHORT TERM LOANS AND ADVANCES As at As at31-03- 2013 31-03- 2012

Unsecured Considered GoodAdvances to employees 480.56 347.17Advances to suppliers 893.21 1,251.08Related Parties 1,115.01 579.20Other Advances 113.93 114.95Cenvat Credit 516.66 -Tax Advance (Net of Provisions) 457.91 399.74

Total 3,577.28 2,692.14

( in Lakh)

Particulars As at As at31-03-2013 31-03-2012

Holding Company- Hindustan Paper Corporation Ltd. 1,040.07 513.37

Nagaland Pulp and Paper Company Ltd 74.94 65.83

Materials issued/received on loan to and from HPC group Companies have been adjusted by routing themthrough Current Accounts. The details of advances with related parties is as under:

Advance due from Employees include due from Directors 18,000 ( Nil)Advance to employees includes 467.73 lakh paid as salary advance - suspense against ProductivityLinked Gain Sharing Scheme and Performance related schemes which are pending finalisation.

( in Lakh)

( in Lakh)


50

NOTE 18

OTHER CURRENT ASSETS As at As at31-03- 2013 31-03- 2012

Interest Accrued and Due 21.97 21.55Prepaid expenses 50.84 56.86Fixed Assets for Disposal 112.39 8.98Claims recoverable 1,789.62 1,334.32Other Advances 1,111.87 1,105.03

3,086.69 2,526.74Less : Provision for doubtful claims 120.62 120.67

Total 2,966.07 2,406.07

Assets for disposal include 0.34 lacs relating fixed assets held for disposal.

Gratuity liability as on March 31, 2013 as ascertained by the Actuary is 2173.62 lakh (Previous year 2781.57 lakh) of which amount funded with the Life Insurance Corporation of India is 3285.49 lakh

(Previous year 3886.60 lakh). The amount paid to the Fund in excess of the obligation amounting to 1111.87 lakh (Previous year 1105.03 lakh) is shown under Other Advances under Note 18 – Other

Current Assets. The amount of Other Advances recognized in the balance sheet is after giving effect oflimit as per para 59(b) read with para 61(g) of AS 15 (Revised) is Nil (Previous year Nil).

The following items classified under Other Current Assets are considered doubtful of recovery and henceprovision is made:

Particulars Amount

Claim from Railways towards electrification charges 61.25

Customs Duty on Imported Coal 36.53

Others 22.84

TOTAL 120.62

( in Lakh)

( in Lakh)


51


NOTE 19

OTHER INCOME As at As at31-03- 2013 31-03- 2012

Interest Income 40.55 157.85Profit/(loss) on sale of Fixed Assets 42.95 (6.72)Other Sales 107.69 124.35Lease Rent 30.22 22.25Other Non Operating Income 208.40 2,136.64Provision not required written back 6.79 54.16

Total 436.60 2,488.54

NOTE 20

COST OF MATERIALS CONSUMED As at As at31-03-2013 31-03-2012

Wood 3,696.74 3,223.32Reeds 560.73 836.12Bamboo 744.37 1,144.94Waste Paper 5,251.17 5,076.26Purchased Pulp - -Other Raw Materials - -

Total 10,253.01 10,280.65

NOTE 21

CHANGES IN INVENTORY As at As at31-03-2013 31-03-2012

Stock as on 1st AprilWork in Process 187.47 130.96

Stock as on 31st MarchWork in Process 153.57 187.47Total 33.90 (56.51)

NOTE 22

EMPLOYEES BENEFIT EXPENSE As at As at31-03- 2013 31-03- 2012

Salaries, Wages & Allowances 4,642.26 5,085.26Contribution to PF & Other Funds 480.30 476.39Productivity Linked Incentive - -Employees Welfare Expenses 323.90 363.81

5,446.46 5,925.46

( in Lakh)

( in Lakh)

( in Lakh)

( in Lakh)

The Employee benefit expense includes 1765.10 ( 1912.13 lakh) being remuneration and benefit forrepairs and maintenance

52

NOTE 23

FINANCE COSTS As at As at31-03- 2013 31-03- 2012

Interest on Cash Credit Account / Overdraft 653.95 354.93Interest - Others 50.84 13.33

704.79 368.26

NOTE 24

OTHER EXPENSES As at As at31-03- 2013 31-03- 2012

Stores and Spares Consumed 4,415.57 4,490.65Power and fuel 10,947.42 8,953.13Rent 6.07 5.61Repairs and maintenance

Buildings 73.64 117.89Plant & Machinery 748.40 1,270.10Others 106.58 128.95

Insurance Premium 45.19 35.24Rates and Taxes 43.61 40.33Payment to Labour Contractors 393.07 332.54Other Expenses 563.69 585.27

17,343.24 15,959.70

Stores and Spares includes transit loss 88.70 lakh (previous year 12.85 lakh) and relating to coal.

NOTE 25

PRIOR PERIOD EXPENSES As at As at31-03- 2013 31-03- 2012

Income - DebitsOthers 5.00 -

5.00 -Expenditure - Debits

Depreciation - 3.45Others - 3.97

- 7.42Income - Credits

Others - - - -

Expenditure - CreditsSalary - 50.79Raw Material 84.49Repairs & Maintenance 112.05

Adjustments -Debit(-)/Credit(+) 191.54 43.36

( in Lakh)

( in Lakh)

( in Lakh)


53

NOTE 26

CURRENT TAX As at As at31-03- 2013 31-03- 2012

Income Tax - 68.36Deferred Tax (7.65) (353.07)

(7.65) (284.71)

( in Lakh)


54

ANNEXURE TO NOTES ON FINANCIAL STATEMENTSFOR THE YEAR ENDED MARCH 31, 2013

NOTE 27 – Origin and brief historyThe Company was incorporated as a Private Limited Company on 7th June, 1983, as a whollyowned subsidiary of Hindustan Paper Corporation Limited, with the main objective of taking overand acquiring the business of the Kerala Newsprint Project, a unit of Hindustan Paper CorporationLimited, on a going concern basis in accordance with the directive of the Government of India.

NOTE 28 – Contingent Liabilities

Particulars

Current PreviousYear Year

a) Suits for enhancement of compensation filed by ex-landowners whose lands were acquired forKerala Newsprint Mill. 20.00 20.00

b) Disputed Liability in respect of Sales Tax 1393.42 1393.42c) Value of Bills Discounted and Letters of Credit issued by Bankers 1707.98 936.03d) Claims against the Company not acknowledged as debts

1 Claim for Service Tax by Service Providers 495.13 484.772 Claims made by Forest Department, GoK towards Lease rent 9.49 44.203 Others 242.08 247.01

e) Contingent Liability for Income Tax 251.48 151.87f) Disputed liability to KFDC 70.87 70.87g) Contingent Liability in respect of Bank Guarantees issued

favouring KSEB and Mahanadi Coalfields Limited. 271.86 242.21

( in Lakh)

b) Service Tax pertaining to different contracts (other than specific claims amounting to 495.13lakh stated above) are not ascertainable as there is no specific claim against the Company ason 31.3.2013.

c) Contingent Liability on all other pending civil, criminal, arbitration and quasi judicial proceedingsare not disclosed as the same is not quantifiable until final orders are received.

a)

55

NOTE 29 – Additional Information

Particulars

Current PreviousYear Year

a) Salaries & allowances 13.33 15.56b) Contribution to Provident Fund 1.54 1.87c) Other benefits – including medical reimbursement and

leave travel concession 0.44* 0.01*

( in Lakh)1. Details of Directors’ remuneration and perquisites:

* Excluding facilities provided in Company hospital, the value of which is not readily ascertainable.The Directors’ has been allowed the use of Company Car for private journey up to a ceiling of9000 KMs per annum on payment as prescribed by Government of India.

2. Opening and Closing Stock of Goods produced for sale

Particulars Opening Stock Closing Stock Closing Stockas on 1-4-2011 as on 31-3-2012 as on 31-3-2013

Qty Qty Qty

(MT) Lakh (MT) Lakh (MT) Lakh

Newsprint NIL NIL NIL NIL NIL NIL

3. Sales by class of goods sold

2012-13 2011-12

Value ValueQty (MT) ( in Lakh) Qty (MT) ( in Lakh)

Newsprint 101597 * 32358.47 * 102450 31504.32

* does not include 1685 MT of Writing and Printing Paper produced on trial basis.

56

4. Indigenous and Imported Raw Materials, Components and Spare parts consumed

2012-13 2011-12

Value ValueParticulars ( in % ( in %

Lakh) Lakh)

a) Value of Raw materials consumed

i) Indigenous 9682.13 94 9646.96 94

ii) Imported 570.88 6 633.69 6

10253.01 100 10280.65 100

b) Value of Chemicals, Stores andSpare Parts consumed.

i) Indigenous 12420.81 99 11298.64 97

ii) Imported 145.50 1 354.56 3

12569.60 100 11653.20 100

2012-13 2011-12Particulars in Lakh in Lakh

a) Value of Imports on CIF Basisi) Raw Materials & Consumables 2881.20 885.84ii) Components and Spare Parts 258.67 359.03iii) Capital Goods 300.26 72.53

3440.13 1317.40

b) Other Expenditure in Foreign Currencies(on cash basis)

i) Expenses on Foreign travel 7.31 0.00ii) Books, Periodicals, & Subscriptions 0.16 0.39iii) Expenses towards Technical Services 0.00 3.67

7.47 4.06

c) Value of Exports on FOB Basis 0.00 0.00

5. Information on Imports, Exports & Foreign Currency / Exch. Transactions.

57

6. SOCIAL AMENITIES – EXPENDITURE & INCOME

2012-13 2011-12 Particulars ( in Lakh) ( in Lakh)

1. Medical facilities including reimbursement ofMedical Expenses and Salaries and Wages. 322.20 334.74

2. Maintenance of School & Educational facilities 21.95 20.273. Subsidies for Cultural & Social Activities 3.96 3.614. Repairs & Maintenance of Township

(including Salaries & Wages) 93.64 119.525. Electricity for Township 18.36 lakh KWH

(Previous Year 18.65 lakh KWH) 84.46 68.826. Water Supply to Township 20.05 lakh Cubic Metre

(Previous Year 21.19 lakh Cubic Metre) 80.20 73.317. Canteen Expenses 165.54 168.398. Depreciation of Fixed Assets used for Social Amenities 21.22 21.329. Community Welfare Expenses 0.88 4.60

Total 794.05 814.58

Income - Township 99.17 97.96

Net Expenses 694.88 716.62

7. EXPENDITURE ON RESEARCH & DEVELOPMENT:

Sl. 2012-13 2011-12 No. Particulars ( in Lakh) ( in Lakh)

1. Employees Remuneration and benefits 36.22 33.26

2. Other items of expenditure 7.57 7.91

Total 43.79 41.17

8. AS PER ACCOUNTING STANDARD 15 "EMPLOYEE BENEFITS", THEDISCLOSURES OF EMPLOYEE BENEFITS AS DEFINED IN THE ACCOUNTINGSTANDARD ARE GIVEN BELOW.

Defined Contribution Plan:Contribution to “Defined Contribution Plan”, 2012-13 2011-12recognized as expense for the year as under: ( in lakh) ( in lakh)

Employer’s Contribution to Provident Fund 436.01 428.88

Employer’s Contribution to Superannuation Fund 43.15 47.40

58

Defined Benefit Plan:The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The presentvalue of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.In this method the present value of the accrued service benefits is calculated after taking into accountthe usual decrements such as death, withdrawal etc. before normal retirement date and projectingthe qualifying salary upto the expected date of cessation of service as assumed in the probabilitydistribution of decrements stated above using actuarial techniques based on multiple decrement tableand related commutation functions. The obligation for leave encashment and terminal benefits arealso recognised in the same manner as gratuity.

Fair value of plan assets at the beginning of the yearExpected Return on plan assetsActuarial Gain / (loss) on plan assetsEmployer contributionBenefits paidSettlement costFair value of plan assets at year endActual Return on plan assets

Funded Funded Funded Funded2012-13 2011-12 2012-13 2011-12

lakh lakh lakh lakh

Gratuity Leave Encashment

3,886.60 4,056.03 559.58 205.32 323.22 357.30 40.88 34.58 (7.51) (4.98) 0.31 (12.94)

- 100.00 300.00 700.00 (916.81) (621.74) (555.19) (367.39)

- - - - 3,285.50 3,886.61 345.58 559.57 315.71 352.31 41.18 21.64

Gratuity Leave Encashment Terminal Benefits

At the beginningof the yearCurrent Service CostInterest CostActuarial (gain)/lossBenefits PaidDefined benefit obliga-tion at the year end

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12

lakh lakh lakh lakh lakh lakh

Funded Funded Funded Funded Unfunded Unfunded

2,781.57 3,918.15 826.14 1,122.06 96.56 81.1770.43 88.68 59.28 139.14 - -

186.56 289.06 44.31 75.35 7.55 5.41 51.88 (892.59) 39.76 (143.03) (6.25) 16.45

(916.81) (621.74) (555.19) (367.39) (4.56) (6.47)2,173.63 2,781.56 414.30 826.13 93.30 96.56

(i) RECONCILIATION OF OPENING AND CLOSING BALANCES OF DEFINEDBENEFIT OBLIGATION:

(ii) RECONCILIATION OF OPENING AND CLOSING BALANCES OFFAIR VALUE OF PLAN ASSETS

Description

Description

59


Fair value of plan assetsPresent value of obligation

Funded Funded Funded Funded Unfunded Unfunded2012-13 2011-12 2012-13 2011-12 2012-13 2011-12


3,285.50 3,886.60 345.57 559.58 - - 2,173.62 2,781.57 414.31 826.14 93.30 96.56

(1,111.87) (1,105.03) 68.74 266.57 93.30 96.56

- - - - - -

(1,111.87) (1,105.03) 68.74 266.57 93.30 96.56

Funded status at the end of theFinancial year

Effect of limit as per para 59(b) readwith para 61(g) of AS-15 (Revised)

Amount recognised in Balance sheet

(iii) RECONCILIATION OF FAIR VALUE OF ASSETS AND OBLIGATIONS

Description

Investment in Group Gratuity Scheme of LIC of India

Funded Funded Funded Funded2012-13 2011-12 2012-13 2011-12

Percentage Invested Percentage Invested100% 100% 100% 100%100% 100% 100% 100%

Gratuity Leave Encashment

(v) INVESTMENT DETAILS

Description


2012-13 2011-12 2012-13 2011-12 2012-13 2011-12


Current Service Cost

Interest Cost

Expected return on Plan assets

Actuarial (gain)/loss on benefit obligationActuarial (Gain) / Loss on planassetsNet Cost

70.43 88.68 59.28 139.14 - - 186.56 289.06 44.31 75.35 7.55 5.41

(323.22) (357.30) (40.88) (34.58) - - 59.38 (887.60) 39.76 (130.08) (6.25) 16.45

- - (0.31) - - - (6.84) (867.16) 102.18 49.83 1.30 21.86


(iv) EXPENSES RECOGNISED DURING THE YEAR

Description

60

9. DISCLOSURE AS PER AS 18 - RELATED PARTY DISCLOSURE:

IHindustan Paper

Corporation LimitedNagaland Pulp & Paper

Company Limited1. Name

2. Relationship Holding Company Fellow Subsidiary

3. Sale of output of trial production 294.85 lakh (P.Y. Nil) Nil (P.Y. Nil)

4. Purchase of Raw Materials 86.75 lakh (P.Y. Nil) Nil (P.Y. Nil)

5. Amount outstanding as on thedate of Balance Sheet

1040.07 lakh (Dr.)P.Y. 513.37 lakh (Dr.)

74.94 lakh (Dr.)P.Y. 65.83 lakh (Dr.)

6. Amount written off or writtenback in respect of debts duefrom or to related party

Nil Nil

II Amount paid to Directors1. Salary 13.33 lakh (Previous Year 15.56 lakh)2. Provident Fund Contribution 1.54 lakh (Previous Year 1.87 lakh)3. Other benefits 0.44 lakh (Previous Year 0.01 lakh)

10. Disclosure as per AS 20Basic earnings per share is computed by dividing the net profit after tax by the weighted averagenumber equity shares outstanding during the period. Diluted earnings per share is computed bydividing the profit after tax by the weighted average number of equity shares considered forderiving basic earnings per share and also the weighted average number of equity shares thatcould have been issued upon conversion of all dilutive potential equity shares.


2012-13 2011-12 2012-13 2011-12 2012-13 2011-12IALM (2006-

2008) Ult


Mortality Rate

8.00% 8.00% 8.00% 8.00% 8.00% 8.00%

8.30% 8.80% 7.30% 16.80% - -

5.00% 5.00% 5.00% 5.00% 5.00% 5.00%

Discount rate (per annum)Expected Rate of Return onplan assets (per annum)

Rate of escalation in salary(per annum)

LIC 1994-96Mortality Rates

IALM (2006-2008) Ult

LIC 1994-96Mortality

Rates

IALM (2006-2008) Ult

LIC 1994-96Mortality

Rates

(vi) ACTUARIAL ASSUMPTIONS

Description

61

11. DISCLOSURE FOR AS 22 ( in lakh)

(A) Deferred Tax Liabilities: 2012-13 2011-12

Tax Impact of difference between book value 2,768.52 2,847.07of Depreciable Assets as per Books of Accountsand Written Down Value for Tax purposes

(B) Deferred Tax Assets:

Tax impact of expenses/ provisions charged toProfit and Loss Accountbut allowance under Tax laws deferred. 112.46 183.36

(C) Net Deferred Tax Liability (A) – (B) 2,656.06 2,663.71

CALCULATION OF DEFERRED TAX LIABILITY

Closing WDV of Fixed Assets as per Accounts 14,333.11 13,706.82

Less: Closing WDV as per Income Tax Act 5,330.54 4,944.33

Timing Difference of WDV 9,002.57 8,762.49

Add: Permanent Difference in the above difference

a. Loss on sale of Fixed Assets debited to P&L Account (42.95) 6.72

b. WDV of Assets transferred to Assets for disposalbut not required to be reduced from IT Block - 5.84

Timing Difference in assets 8,959.62 8,775.05

Tax effect of Timing Difference @ 32.445% (DTL) 2,768.52 2,847.07

Earnings per Share (EPS) 2012-13 2011-12

(a) Net profit/(loss) after tax but before considering Prior Period items andexcess/short provision for tax of earlier years ( lakh) (2000.89) 645.72

(b) Prior Period adjustments ( lakh) 191.54 43.36

(c) Excess/short provision for tax of earlier years ( lakh) 0.00 0.00

(d) Net profit/(loss) attributable to Equity Shareholder (a)+(b)-(c)( lakh) (1809.35) 689.08

(e) Weighted average number of Equity Shares 99999900 99999900

(f) Basic & diluted Earnings per Share (a)/(e) ( ) (2.00) 0.65

(g) Basic & diluted Earnings (considering taxation for Previous Years andPrior period items) per Share (d)/(e) ( ) (1.81) 0.69

(h) Face Value of Equity Share ( ) 10.00 10.00

62

CALCULATION OF DEFERRED TAX ASSETS

Balance as on 31st March :

1. Provision for Leave encashment 68.74 266.57

2. Provision for Terminal benefits 93.29 96.56

3. Provision for Doubtful Claims:

(a) Railway Electrification 61.25 61.25

(b) Customs Duty on Coal 36.48 36.52

(c) Provisions created against miscellaneous claims 22.84 22.89

4. Provision for Doubtful Deposits:

(a) Deposit with Customs 10.24 10.24

(b) Advance with KFDC 20.32 20.32

5. Provision for Doubtful Debts 50.74 50.74

Total of expenses/ provisions charged to Profit andLoss Account but allowance under Tax laws deferred. 363.90 565.10

Tax effect of Timing Difference @ 32.445% (DTA) 112.46 183.36

( in lakh)

2012-13 2011-12

Employee Benefits 50.07 117.82

Provision for Doubtful Debts/Claims 62.39 65.54

63

12. Segment ReportingThe Company operates only in one business segment of Paper comprising Newsprint and Writingand Printing Paper and has one Geographical segment i.e. in Newsprint Nagar, Kottayam, Kerala.

13. There are no Debts, Advances or Loans due by directors or other officers of the company or any ofthem either severally or jointly with any other person or debts, advances or loans due by firms orprivate companies respectively in which any director is a partner or a director or a member.

14. General14.1 Set off has been made to the extent debit balances could be linked with corresponding

credit balances.

14.2 The amounts in the financial statements are presented in rupees unless otherwise stated.

14.3 Personal balances are subject to confirmation

14.4 No Provision has been made for Share of Expenses of the Holding Company based onconfirmation received.

14.5 Previous year figures have been regrouped and reclassified wherever necessary to correspondto the current year’s classification/disclosure.


Kottayam05-09-2013


Kottayam



FRN 000624S

Date post:	24-Jun-2018
Category:	Documents
Upload:	vuongquynh
View:	217 times
Download:	0 times

CONTENTS Page · 2018-02-14 · P.B.No.43, Kallarackal Buildings Baker Hill Kottayam ... g)...

Documents