Macmillan India

I.  Balance Sheet
 
                                               As at          As at
                                          31.12.2008     31.12.2007
                                         Rs. In lacs    Rs. In lacs
 
 1.   a Issued, subscribed and 
      paid-up share capital:
 
      Of the 1,68,22,668, equity shares
     (previous year 1,68,22,668 shares),
      1,68,22,666 shares (previous year 
      1,68,22,666 shares) were allotted as
      fully paid up pursuant to contracts
      without payments being received in
      cash which includes 1,63,52,636 
      shares (previous year 1,63,52,636
      shares) issued as Bonus Shares.
 
      Of the above 1,03,39,980 shares 
     (previous year 1,03,39,980 shares)
      are held by HM Publishers Holdings
      Ltd, U.K. the Holding company.
 
 b.   Advance Subscription towards 
      equity shares:
 
      Advance Subscription of Rs 1,767.52 
      lacs (USD 3,600,000) represents the
      proposed investments made in the 
      equity capital of ICC Macmillan 
      Inc, USA.
      The shares are yet to be allotted
 
 2.   Estimated amount of contracts 
      remaining to be executed on
      Capital Account                           189.36          148.47
      and not provided tor
 
 3.   During the year, the Company has 
      adopted the accounting policy of
      capitalizing software purchases of 
      the Publishing Solutions division to
      be amortised over the estimated useful 
      life based on the future economic
      benefits as determined by the management. 
      Accordingly, software expenses
      of the Publishing Solutions division to
      the extent of Rs. 186.51 lacs have
      been capitalized. Due to the change in
      policy, the profits, reserves and the
      intangible assets for the year is 
      higher by Rs. 1 44.03 lacs.
 
 4.   The book debts and inventories of the 
      Company are hypothecated for the
      overdraft facilities sanctioned by a 
      bank amounting to Rs.50 lacs, which is
      yet to be availed.
 
 5.   Bank Balance includes:
 
 a)   With Scheduled Banks on Dividend Account         3.78        4.45
 
 b)   Fixed deposits with bankers held as 
      margin money for guarantees issued               6.90        0.90
 
 c)   Lien with Excise Authorities                     1.30           -
 
 6. Contingent Liability: 
 
 a. Disputed Demands:
 
 Name of the Statute     Nature of Dues        Rupees (in lacs)
 
 Income Tax Act,         Income Tax                 1.80
 1961                    Demands                    (Nil) 
 
 Income Tax Act,         Income Tax                24.36 
 1961                    Demands                    (Nil)
 
 Section 66A of          Service Tax              227.77
 Finance Act             demands                    (Nil)
 
 Period            Forum where dispute is pending
 
 Asst Year         Commissioner of Income Tax
 2005-06          (Appeals), Chennai
 
 Asst Year         Commissioner of Income Tax
 2005-06          (Appeals), Chennai
 
 July 2003 to            
 Dec 2006          CESTAT, Bengaluru
 
 b. No provision has been considered for service tax amounting to Rs. 1
 85.34 lacs on overseas commission paid for the period from January 2007
 to December 2008, as the demands raised by the Authorities for the
 earlier periods is being contested by the management. In the opinion of
 the management, the demand is not sustainable.
 
 7.  a. Under the Micro and Small Enterprises Development Act, 2006,
 certain disclosures are required to be made relating to Micro and Small
 Enterprises (SME). The Company is in the process of compiling relevant
 information from its suppliers about their coverage under the said act.
 Since the relevant information is not readily available, no disclosures
 have been made in the accounts. However, in view of the management, the
 amounts due to the suppliers are paid within the mutually agreed credit
 period and therefore, there will not be any interest that may be
 payable in accordance with the provisions of this act.
 
 b. Lease advance secured by deposit of title deeds relating to Patullos
 Road, Chennai Property under lease. (Transferred the title deeds to -
 48.80 Macmillan Publishers India Limited on de-merger)
 
 8.  Although the net worth of ICC Macmillan Inc., USA, a subsidiary,
 has eroded, the Company (MIL) has committed to extend continued
 financial and operational support based on which the investments
 amounting to Rs. 1,562.74 lacs, advance subscription towards share
 capital of Rs. 1,767.52 lacs, receivables of Rs. 797.14 lacs and loans
 of Rs. 629.72 lacs are considered good and therefore no provision is
 considered necessary.
 
 9.  Repairs to Plant and Machinery include stores consumed.
 
 10.  a) The changes to the terms of appointment of Mr. Rajiv Kumar Seth
 as the Whole-time Director and the remuneration were approved by the
 Remuneration Committee at its meeting dated 21st April 2008 and by the
 shareholders at the Annual General Meeting of the Company held on 20*
 June 2008. Consequent to the approval for the demerger of the
 Publishing Division received vide order from the Madras High Court, and
 a resolution passed by the Board of Directors at their meeting dated
 22nd October 2008, Mr. Rajiv Beri ceased to hold the office of Managing
 Director effective from 22nd October 2008 and was re-designated as
 Non-Executive director. Mr. Rajiv Kumar Seth, Whole time Director was
 appointed the Managing Director by a resolution passed by the Board in
 the above meeting without any changes in his remuneration and other
 terms of appointment.  Accordingly, the below mentioned details include
 the remuneration of Mr. Rajiv Beri, Managing Director upto 11th May
 2008 (from 12th May 2008, he has been appointed as the Managing
 Director of the fellow subsidiary, MPIL and remuneration is paid by
 MPIL) and the remuneration of Mr. Rajiv Kumar Seth for the entire year.