Andhra Pradesh Paper Mills

Rs.Lakhs
                                                     2007-08     2006-07
 
 1.  Estimated amount of contracts remaining to 
 be executed on Capital Account and not provided 
 for (net of advances & Letters of Credit opened)
 
 a.  Mill Development Plan                           5464.60     6571.00
 
 b.  Others                                            53.75      132.39
 
 2.  Contingent Liabilities
 
 a.  Unexpired Bank guarantees and Letters of Credit
 
 - Mill Development Plan                                   -      611.58
 
 - Others                                            1314.55     1564.51
 
 b.  Corporate guarantee given to Forest Department 
 of State Government of Andhra Pradesh (net of Rs.100 
 lakhs deposited under protest)                            -     1472.09
 
 c.  Claims against the Company not acknowledged as 
 debts                                                239.15      223.22
 
 d.  Demands raised for surplus Power supplied by 
 APGPCL and                                            68.07       67.67
 EPDC of AP Ltd. disputed by the Company. An amount of
 Rs.61.64 lakhs paid under protest, (Previous Year 
 Rs.59.87 lakhs) is grouped under Loans & Advances.
 
 e.  Demands of statutory authorities disputed by the 
 Company in appeals with higher authorities in 
 respect of:
 
 i.  Income Tax                                       565.62      433.92
 
 ii.  Central Excise & Service Tax                    667.51      396.36
 
 iii.  Sales Tax                                      216.25      170.38
 
 iv.  Vacant Land Tax                                 210.88      210.88
 
 As against above demands an amount of Rs.946.73 lakhs (Previous Year
 Rs.168.83 lakhs) paid under protest is included in Loans & Advances.
 In respect of items (b), (c), (d) & (e), the Company has been advised
 by the Counsel that the demands are not sustainable in law.
 
 3.  Employee benefits:
 
 Defined Benefit plans
 
 i.  Gratuity is applicable to all permanent and full time employees of
 the Company. Gratuity paid out is based on last drawn basic salary and
 dearness allowance at the time of termination or retirement. The scheme
 takes into account each completed year of service or part thereof in
 excess of six months. The normal age of retirement is 60 for executives
 & 58 for workers and the entire contribution is borne by the Company
 
 4. Provision for income tax has been made in accordance with Section
 115JB of the Income Tax Act,1961. However, management expects that it
 would be in a position to pay normal tax within the period specified
 under the Income Tax Act,1961 and hence MAT credit has been recognised.
 
 5.  Previous years figures have been regrouped wherever necessary.