Hindustan Photo Films Manufacturing Company Ltd. के अकाउंट के लिये नोट

Mar 31, 2011

1. Contingent Liabilities

i. Demands against the Company not acknowledged as debts since the same are Under appeal. Municipal Tax for prior years Rs. 5.34 Lakh (Rs. 5.34 Lakh)

ii. others: Rs.in lakh

a) Sales tax on silver purchase from Govt of 297.46 (297.46) India Mint

b) Claim by Kanj Biheri Sangli stockist not 160.49 (160.49) acknowledged as Debt

c) OD Interest - Govt. Mint 1634.17 (1545.76)

d) OD Interest - Hindustan Zinc 2722.38 (2578.41)

Total 4814.50 (4582.12)

iii. Against the Claim of Rs. 569.06 Lakh by Blue Star Ltd, and the Company's counter claim of Rs.248.36 Lakh, the Arbitration Award settlement was for Rs. 569.06 Lakh payable to Blue Star Ltd and Rs. 25.91 Lakh receivable from Blue Star Ltd. The net amount payable by the Company was Rs. 543.15 Lakh as on 31.03.07.The appeal against the order by the company to the Madras High court and Supreme Court were dismissed. Further claim based on the order has not been made on the Company yet.

2. Estimated amount of contracts remaining to be executed on Capital Accounts and not provided for Rs. Nil (Rs. Nil).

3. As per the guidelines / terms for issue of bonds the Company has to create Bond Redemption Reserve equivalent to 50% of the amount of bonds issued before redemption commences. In view of losses incurred, the Company could not comply with creating the required Reserves.

4. The Company holds 173.16 acres of land transferred by the Government of Tamilnadu free of cost. In addition, the Company has also taken 28.01 acres of land on rent-free lease from the Government of Tamilnadu up to 1989 and the Company has filed necessary application with the Government of Tamilnadu for renewal of lease on rent free basis. In addition, the Company has also taken 90 acres (approximately 36 hectares) of land leased out by the Government of Tamilnadu in lieu of 120 acres surrendered for setting up of expansion Project vide order No. G.O. Ms. No.95 dated 12.02.1987. The transferability of free hold / leasehold land to any third party is subject to the approval of the Government of Tamilnadu.

5. Material-in-transit (Stores, Spare Parts, Raw Materials and Finished Goods) Rs. 230.06 Lakh (.Rs. 21.03 Lakh) comprises of materials:

23. NOTES ON ACCOUNTS (Continued)

6. The Silver content in silver bearing materials like sludge etc., included under "Reclaimable Scrap Materials" is assessed by the Quality Control Laboratory of the Company by applying SOX Techniques is reflected in the inventory.

7. Balances under unsecured loan from Government of India, Inter Corporate Deposits, Sundry Debtors, Loans & Advances, Sundry Creditors and Current Liabilities are subject to confirmation.

8. The 13% Secured Redeemable Non-Convertible Bonds ("A" Series) of Rs. 1000/- each issued in terms or the Prospectus dated 6th November 1987 have been secured by mortgage in a form and substance satisfactory to the Trustees M/s. Canara Bank over all the immovable properties of the Company, wherever situate including fixed Plant and Machinery and first charge by way of hypothecation of all moveable assets of the Company (save and except book debts), both present and future.

Provided, the mortgage /charge shall be subject to prior charges created and/or to be created in favour of Company's Bankers on the stock of raw materials, semi-finished goods, consumable stores for securing the borrowing for working capital requirements in the ordinary course of business.

The Trustees to Bond Holders namely Canara Bank have ceded a first charge to State Bank of India, Overseas Branch, Chennai, Guarantor towards the loan obtained from State Bank of India, Singapore, on the Plant and Machinery acquired out of the Foreign Currency Loan together with pari-passu charge on the other fixed assets along with Trustees. The Foreign Currency Loan had been converted into DPG Loan.

The Bond amounts of Rs. 88 Crores were collected from the Public and Rs. 40 Crores through private placement with Unit Trust of India, under the consent of the Controller of Capital Issues. The Bonds are to be redeemed at par after the expiry of 7 years from the date of allotment i.e.30-01-1988 and the Unit Trust of India had extended the date of redemption up to 30-01-1998 with interest, at a rate of 18% p.a. for the extended period for rs. 45 Crores.

Pending arrangements with Financial Institutional Bond holders/UTI, for rollover, the interest on these bonds amount were charged at 13% /18% of original contract rate beyond the maturity date as the case maybe.

Since the validity of HPF Bonds "A" Series expired on 29-01-95, the company proposed to redeem the individual Bond holders to the extent of Rs. 6.08 Crores. Out of this, Rs. 5.88 Crores(Rs. 5.88 Crores) was redeemed upto 31st March 2011. No redemption was made in the recent past.

8. Employee cost for the year ended 31st March 2011 includes Rs. 444.57 Lakh (f 622.77 Lakh) incurred towards compensation and other related payments under Voluntary Retirement Scheme.

9. The Company has been referred to BIFR in terms of the provisions of Sick Industrial Companies (Special provisions) Act, 1985 on 14.10.1995. The BIFR has confirmed its opinion for winding up the Company under Section 20(1) of the SICA vide order dated 30.1.2003. The Company's appeal to the AAIFR against the order of the BIFR was dismissed confirming the BIFR opinion for winding up of the Company. The Company has obtained a stay in the Madras High Court against the order of AAIFR in orders No: 21816 of 2005 dated 27.06.2005.

The case came up for hearing during October 2009 and the High Court of Madras granted eight weeks time to report about the Revival status of the company. The Revival proposal/Business Plan based on the report of consultants M./s.Ernst & Young was considered by DHI through an Inter Departmental Committee and recommended to the BRPSE for approval. The BRPSE recommended release of rs.30 crores towards Working Capital in February 2010 to meet pending orders and the amount was received in the same month. The BRPSE finally recommended the Restructuring proposal of HPF favorably in its 5th meeting held on 5.3.2010. The BRPSE has advised DHI to obtain sanction of the Government at the earliest and the proposal to CCEA in this regard is in progress.

A CCEA note was circulated by DHI and the recommendations were putup to the Cabinet for consideration. The Cabinet Secretariat has reviewed the note and referred it to a Committee of Secretaries for their views. The company now awaits final nod of the Cabinet to the Restructuring Proposal as approved by BRPSE.

10. The petition filed by Maruti Udyog Ltd., in Madras High Court against the Company under Sec 433(e) & (f) of The Companies Act, 1956 has been suspended by the High Court because the Company has been referred to BIFR

11. Employee benefits: Gratuity liabilities of the company are provided on the basis of Actuarial Valuation done by LIC of India as per AS 15 revised.

a) Gratuity : The desired level of the fund for the LIC Group Gratuity Policy of the Company as at 31st March 2011 as per actuarial valuation works out to Rs. 919.11 Lakh (Rs. 810.68 Lakh). The fund available as on 31.3.2011 with LIC is Rs. 1127.57 Lakh (Rs. 828.20 Lakh). Provision of AS15{R) has been complied. Actuarial assumptions:

12. The annual Insurance Premium on major fixed assets could not be paid and consequently the major assets remained uncovered against risks. However stock at Branches, Ambattur plant & machinery, money in transit, finished goods stock in transit have been covered by insurance.

13. An amount of Rs. 49.79 Crores being the total value of various Central Excise refund claims filed by HPF for the period 1975 to 1992 on the ground that cutting, slitting and perforation of Duty paid jumbos would not amount to a process of manufacturing u/s 2(f) of the CE Act 1944 and which is allowed on merits. The High Power Committee constituted by Government of India (Gol) for clearance of appeals between Government bodies i.e. the Committee of Disputes (COD), after having heard the case had vide their order no. COD/55/2007 on minutes dated 09.01.2008 allowed the company to pursue the case before CESTAT. The company has filed the required papers on the question of unjust enrichment and the case is presently high on board and listed for final hearing before CESTAT (bench) Chennai. The case was heard by CESTAT on 10.02.2011 and orders passed dismissing company's claim on 4.3.2011 vide Order No.395-398/11. The company has filed an appeal at the Madras High Court on 27.09.2011 vide SR No.25131.

The refund claim amount is due and expected from the Government, as Doctrine of Unjust Enrichment is not applicable to the amount due. From the time of filing the refund claim the company has firmly considered that the amount is due and receivable from the Government of India. An amount of Rs. 5.6 crores was sanctioned and received by the company against other refund claims under similar grounds vide Order in Appeal No.145/97 dated 30.09.1997 of the Central Excise Department.

14. (a) A sum of Rs. 14.78 Lakh (Rs. 8.65 Lakh) being the book value of certain Plant and Machinery included in the fixed assets which are no longer required and kept for disposal for which realisable value is not determinable.

b) Steels, valves and pipe fittings value of which is Rs. 20.72 Lakh (Rs. 21.38 Lakh) relating to Polyester Plant, were identified as surplus and held for disposal. The realisable value is not yet determinable. -

Accordingly the loss if any which may arise on disposal cannot be assessed at this stage and hence not considered in the accounts.

15. Photographic goods manufacturing being the only main segment and there being no other reportable segments, there is no segment reporting as per Accounting Standard 17 issued by the Institute of Chartered Accountants of India.

16. a)For Current Tax: The Company is not liable for payment of Income tax for Current Year considering the current year and carried forward losses and allowances available for setoff and hence no provision is ' made for current year tax.

b) In view of the losses incurred by the Company and the rehabilitation program pending before the Central Govt., deferred tax liability as per Accounting Standard 22 issued by Institute of Chartered Accountants of India has not been considered.

17. Income tax deducted at source (TDS) and related interest provided in the Books of Accounts in respect of inter-corporate loans from NMDC, KIOCL, BEL, PHL aggregate of Rs. 1186.47 Lakh and Rs. 546.10 Lakh respectively, have been reversed during the year 2001 - 02 consequent to revision order u/s 154 of the Income Tax Act 1961 dt. 28.11.2001 for the assessment year 1994-95. In respect of loan from Maruti Udyog Ltd., as no TDS was accounted during the assessment year 1994-95 and as there was no rectification order for the same for the subsequent years, the TDS deductible in respect of MUL is retained in the Books of Accounts.

18. As part of the incentive package for Revival of HPF the Government of Tamilnadu has waived the accumulated Forest Lease Rent up to 31.03.2010 amounting to Rs. 920.53 Lakhs and also issued G.O. that the accumulated consent fee for Air & Water due to TNPCB of Rs. 23.13 lakhs will not be insisted upon. Based on the G.O. the amount has been reversed as prior period income.

19. The company had initiated proceedings before the Estate Officer on recovery of outstanding License fees from Hotel Siddarth Nilgiris (HSN), for occupying the Guest House from 1998 to 2004. The proceedings was completed and order passed by Estate officer in favour of the company that HSN is directed to pay the outstanding licence fee amounting to Rs. 56.50 lakhs within 3 months of the order.

20. Disclosure on related party transactions as per Accounting Standard 18 issued by Institute of Chartered Accountants of India

21. The names of the Small Scale Industrial Undertakings to whom the Company owes a sum which is outstanding for more than 30 days: NIL

22. a. Disclosures under the Micro, Small and Medium Enterprises Development Act 2006. The due outstanding to suppliers at the end of the accounting year on account principal and interest respectively is not ascertainable in the absence of relevant information.

b. The amount paid towards interest during the year is not ascertainable in the absence of relevant information.

c. The amount payable towards interest during the year is not ascertainable in the absence of relevant information.

d. The amount of interest accrued and unpaid at the end of the account ing year is not ascertainable in the absence of relevant information.

23. A suit has been filed by Hindustan Photo Films Officers Association for wage Revision ref. WP15060 of 1996 and WMP 20654 of 1996 and the matter is pending before the Supreme Court. The amount is not quantifiable at this stage.

24. Loans and advances - Others includes Rs. 10.84 Crores (Rs. 9.18 Crores) paid to the employees of the company. This represents the advance recoverable from the employees who are continuing in service as on 31.3.2011.

25. The company has been sick for many years with capacity utilization below 5%. The company is unable to assess the loss due to impairment of fixed assets in view of the high cost involved for such an exercise. Hence loss due to impairment of assets has not been assessed as per AS 28.

NA Not Applicable

* Revised as per re-endorsed license

** Represents total integrated/conversion capacity of the plant as re-assessed and approved by the Board in

1981 [including the capacity of the additional Coating Plant for X-ray which needs to be assessed technically after stabilization of production].

@ Includes licensed capacity of refined silver of 81 MT as supporting facility

@(5) Includes job order conversion of 0.331 M.Sq.m. [0.023 M.sq.rn] imported jumbo rolls.

# Installed Coating capacity in New Polyester based project as per approved RCE-II is Medical X-ray 15.03 M.Sq.m., Graphic Arts 2.25 M.sq.rn., Industrial X-ray 0.51 M.Sq.m. [ie., Total of 17.79 M.sq.rn. p.a.], but constraint factor for these products is given below:

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Mar 31, 2009

1. Contingent Liabilities

i. Demands against the Company not acknowledged as debts since the same are Under appeal. Sales Tax for earlier years Rs. 78.32 Lakh (Rs. 82.70 Lakh) Municipal Tax for prior years Rs.5.34 Lakh (Rs.5.34 Lakh)

ii. Others: Rs. in Lakh

a) Sales tax on silver purchase from Govt of India Mint 297.46 (297.46)

b) Claim by Kanj Biheri Sangli stockist not acknowledged as Debt 160.49 (160.49)

c) OD Interest - Govt. Mint 1457.35 (1368.94)

d) OD Interest - Hindustan Zinc 2434.43 (2290.46)

TOTAL 4349.73 (4117.35)

iii. Against the Claim of Rs.569.06 Lakh by M/s Blue Star Ltd, and the Companys counter claim of Rs.248.36 Lakh, the Arbitration Award settlement was for Rs.569.06 Lakh payable to M/s Blue Star Ltd and Rs.25.91 Lakh receivable from M/s Blue Star Ltd. The net amount payable by the Company was Rs.543.15 Lakh as on 31.03.07.The appeal against the order by the company to the Madras High court and Supreme Court was dismissed. Further claim based on the order has not been made on the Company yet.

2. Estimated amount of contracts remaining to be executed on Capital Accounts and not provided for Rs.Nil (Rs.Nil).

3. As per the guidelines / terms for issue of bonds the Company has to create Bond Redemption Reserve equivalent to 50% of the amount of bonds issued before redemption commences. In view of losses incurred, the Company could not comply with creating the required Reserves.

4. The Company holds 173.16 acres of land transferred by the Government of Tamilnadu free of cost. In addition, the Company has also taken 28.01 acres of land on rent-free lease from the Government of Tamilnadu upto 1989 and the Company has filed necessary application with the Government of Tamilnadu for renewal of lease on rent free basis. In addition, the Company has also taken 90 acres (approximately 36 hectares) of land leased out by the Government of Tamilnadu for setting up of expansion Project vide order No. G.O. Ms. No.95 dated 12.02.1987. The transferability of free hold / leasehold land to any third party is subject to the approval of the Government of Tamilnadu.

5. Material-in-transit (Stores, Spare Parts, Raw Materials and Finished Goods) Rs.221.14 Lakh (Rs. 242.59 Lakh) comprises of materials:

i. In Transit: Rs. 18.90 Lakh (Rs. 24.88Lakh), ii. Pending Inspection/Acceptance: Rs. Nil Lakh(Rs. NIL Lakh) iii. In Bonded Warehouse: Rs.202.24 Lakh (Rs: 217.71 Lakh)

6. The Silver content in silver bearing materials like sludge etc., included under "Reclaimable Scrap Materials" is assessed by the Quality Control Laboratory of the Company by applying SQC Techniques is reflected in the inventory.

7. Balances under unsecured loans from Govt, of India, Inter Corporate Deposits, Sundry Debtors, Loans & Advance, Sundry Creditors and Current Liabilities are subject to confirmation.

8. The 13% Secured Redeemable Non-Convertible Bonds ("A" Series) of Rs.1000/- each issued in terms of the Prospectus dated 6th November 1987 have been secured by mortgage in a form and substance satisfactory to the Trustees M/s. Canara Bank over all the immovable properties of the Company, wherever situate including fixed Plant and Machinery and first charge by way of hypothecation of all moveable assets of the Company (save and except book debts), both present and future.

Provided, the mortgage / charge shall be subject to prior charges created and/ or to be created in favour of Companys Bankers on the stock of raw materials, semi-finished goods, consumable stores for securing the borrowing for working capital requirements in the ordinary course of business.

The Trustees to Bond Holders namely Canara Bank have ceded a first charge to State Bank of India, Overseas Branch, Chennai, Guarantor towards the loan obtained from State Bank of India, Singapore, on the Plant and Machinery acquired out of the Foreign Currency Loan together with pari-passu charge on the other fixed assets along with Trustees. The Foreign Currency Loan had been converted into DPG Loan.

The Bond amounts of Rs. 88 Crores were collected from the Public and Rs.40 Crores through private placement with Unit Trust of India, under the consent of the Controller of Capital Issues. The Bonds are to be redeemed at par after the expiry of 7 years from the date of allotment i.e.30-01-1988 and the Unit Trust of India had extended the date of redemption upto 30-01-1998 with interest, at a rate of 18% p.a. for the extended period for Rs.45 Crores.

Pending arrangements with Financial Institutional Bond holders/UTI, for rollover, the interest on these bonds amount were charged at 13% /18% of original contract rate beyond the maturity date as the case may be.

Since the validity of HPF Bonds "A" Series expired on 29-01-95, the company proposed to redeem the individual Bond holders to the extent of Rs.6.08 Crores. Out of this, Rs.5.88 Crores(Rs.5.88 Crores) was redeemed upto 31st March 2009. No redemption was made in the recent past.

9. Employee cost for the year ended 31st March 2009 includes Rs.357.90 Lakh (Rs. 1388.66 Lakh) incurred towards compensation and other related payments under Voluntary Retirement Scheme.

10.The Company has been referred to BIFR in terms of the provisions of Sick Industrial Companies (Special provisions) Act, 1985 on 14.10.1995. the BIFR has confirmed its opinion for winding up the Company under Section 20(1) of the SICA vide order dated 30.1.2003. The Company in turn has preferred an appeal to the AAIFR against the order of the BIFR. The AAIFR has also confirmed its opinion for winding up of the Company. The Company in turn, has obtained a stay in the Madras High Court against the order of AAIFR in orders No: 21816 of 2005 dated 27.06.2005.

11. The petition filed by M/s. Maruti Udyog Ltd., in Madras High Court against the Company under Sec 433(e) & (f) of The Companies Act, 1956 has been suspended by the High Court because the Company has been referred to BIFR.

12. Employee benefits: Gratuity liabilities of the company are provided on the basis of Actuarial Valuation done by LIC of India as per AS 15 revised.

a) Gratuity: The desired level of the fund for the LIC Group Gratuity Policy of the Company as at 31st March 2009 as per actuarial valuation works out to Rs.786.69 Lakh (Rs. 716.68 Lakh). The fund available as on 31.3.2009 with LIC is Rs.713.03 Lakh (Rs. 475.83 Lakh). The shortfall on this account is Rs.73.66 Lakh (Rs. 240.85 Lakh). Due provision has been made as per AS15 revised.

13. The annual Insurance Premium on fixed assets could not be paid and consequently the assets remained uncovered against risks.

14.a) A sum of Rs.26.57 Lakh (Rs. 34.88 Lakh) being the book value of certain Plant and Machinery included in the fixed assets which are no longer required and kept for disposal for which realisable value is not determinable

b) Steels, valves and pipe fittings value of which is Rs.21.69 Lakh (Rs. 21.94 Lakh) relating to Polyester Plant, were identified as surplus and held for disposal. The realisable value is not yet determinable. Accordingly the loss if any which may arise on disposal cannot be assessed at this stage and hence not considered in the accounts.

15. Photographic goods manufacturing being the only main segment and there being no other reportable segments, there is no segment reporting as per Accounting Standard 17 issued by the Institute of Chartered Accountants of India.

16.a) For Current Tax: The Company is not liable for payment of Income tax for Current Year considering the current year and carried forward losses and allowances available for set off and hence no provision is made for current year tax.

b) In view of the losses incurred by the Company and the rehabilitation program pending before the Central Govt., deferred tax liability as per Accounting Standard 22 issued by Institute of Chartered Accountants of India has not been considered.

17. Income tax deducted at source (TDS) and related interest provided in the Books of Accounts in respect of inter-corporate loans from NMDC, KIOCL, BEL, PHHL aggregate of Rs. 1186.47 Lakh and Rs. 546.10 Lakh respectively, have been reversed during the year 2001 - 02 consequent to revision order u/s 154 of the Income Tax Act 1961 dt. 28.11.2001 for the assessment year 1994-95. In respect of loan from MUL, as no TDS was accounted during the assessment year 1994-95 and as there was no rectification order for the same for the subsequent years, the TDS deductible in respect of MUL is retained in the Books of Accounts.

18.HPF has filed suit against M/s.Anu Enterprises for the recovery of Rs.213 Lakhs due from them in the year 1996 (Inclusive of interest). During the year the company has received Rs. 122.27 Lakhs consequent upon the encashment of the Bank Guarantee given by the company based on Courts order. This amount has been credited to parties account.

19.Disclosure on related party transactions as per Accounting Standard 18 issued by Institute of Chartered Accountants of India

(i) Key Management Personnel - Shri P.Jagadeeswaran,

Director Finance &Chairman cum Managing Director(Addl. Charge)

Anil Kumar - Chief Vigilance Officer upto 08.01.2008

A. Gnanasekaran - Chief Vigilance Officerfrom 12.09.2008

(ii) Details of transactions with Key Management Personnel Remuneration - Rs.4.25 Lakh

21 .The names of the Small Scale Industrial Undertakings to whom the Company owes a sum which is outstanding for more than 30 days: NIL.

22. a. Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006. The due outstanding to suppliers at the end of the accounting year on account principal and interest respectively is not ascertainable in the absence of relevant information.

b. The amount paid towards interest during the year is not ascertainable in the absence of relevant information.

c. The amount payable towards interest during the year is not ascertainable in the absence of relevant information.

d. The amount of interest accrued and unpaid at the end of the accounting year is not ascertainable in the absence of relevant information.

23.A suit has been filed by Hindustan Photo Films Officers Association for wage Revision ref. WP 15060 of 1996 and WMP 20654 of 1996 and the matter is pending before the Supreme Court. The amount is not quantifiable at this stage.

24. Loans and advances - Others includes Rs.9.61 Crores (Rs. 8.83 Crores) paid to the employees of the company. This represents the advance recoverable from the employees who are continuing in service as on 31.3.2009.

25.The company has been sick for many years with capacity utilization below 5%. The company is unable to assess the loss due to impairment of fixed assets in view of the high cost involved for such an exercise. Hence loss due to impairment of assets has not been assessed as per AS 28.

26. Figures for the previous year have been regrouped/reclassified wherever necessary.

27. Figures in the brackets in accounts reflect negative balance.