Andhra Paper Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018
Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018
1. The above unaudited financial results were reviewed by the Audit Committee and approved by the Board of Directors of the Company at their meetings held on January 30, 2019. The statutory auditors have carried out a limited review of these financial results.
2. The Company is engaged in the business of manufacture and sale of pulp, paper and paper boards, which in the context of Indian Accounting Standard (Ind AS) - 108 - Operating Segments, is considered as the single operating segment of the Company.
3. During the previous quarter ended September 30, 2018, the production and earnings were impacted owing to the Planned Annual Outage at the manufacturing facility of Rajahmundry conducted for 10 days which was executed on time without any safety incidents.
4. In the year ended March 31, 2017, the Hon'ble High Court for the State of Teiangana and the State of Andhra Pradesh upheld the validity of levy of electricity duty @ 25 paisa per unit by the State Government on consumption of electricity by captive generating units relating to earlier years. The Company (along with other petitioners) filed a Special Leave Petition in the Hon'ble Supreme Court, which in the interim, directed the petitioners to pay partial amount without prejudice to the rights and contentions of the petitioners, pursuant to which the Company had paid Rs. 1,502.05 lakhs under protest in the year ended March 31, 2017. The matter is pending hearing.
In view of the inherent uncertainty in predicting the final outcome of the above litigation, the Management has, on grounds of prudence and abundant caution, made a provision amounting to Rs. 2,357.43 lakhs during the year ended March 31, 2017 towards the potential liability in the event of an unfavourable verdict in this matter. Additionally, an amount of Rs. 1,571.62 lakhs has been disclosed as a contingent liability. On the basis of the legal advice obtained, in the opinion of the Management no further provision would be required in relation to this disputed matter.
5. The Government of India introduced the Goods and Services tax (GST) with effect from July 01, 2017. Accordingly, in compliance with Indian Accounting Standards (Ind AS), Revenue from operations for the period beginning July 01, 2017 to December 31, 2018 is presented net of GST. Revenue from operations of earlier periods included Excise duty which now is subsumed in GST.
6. Exceptional items:
a) During the year ended March 31,2018:
The Management on evaluation of the performance and usefulness of all the fixed assets in use, determined to de-commission certain fixed assets which are not required for the continued or future business operations of the Company. Consequently, the net book value of these assets (net of its fair value less costs to sell) has been re-classified in the Balance Sheet as 'Assets classified as held for sale' and Rs. 836.56 lakhs representing the write-down of the net book value was disclosed as an Exceptional Item in the Statement of Profit and Loss.
b) During the quarter ended December 31,2018:
In respect of a disputed matter which is pending resolution, the Management has, considering the developments in the case and based on grounds of prudence, made a provision towards the interest demand amounting to Rs. 542.61 lakhs. The Company has already paid the related duty amount in the earlier years.
7. This Statement is as per Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as modified by Circular No. CIR/CFD/FAC/62/2016 dated July 05,2016.