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Page 1: View Document - The India Government Mint , Kolkata
Page 2: View Document - The India Government Mint , Kolkata

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Page 3: View Document - The India Government Mint , Kolkata

1

CONTENTS

1. Board of Directors 2

2. Senior Management 3

3. Statement to Shareholders by CMD 4

4. Notice of AGM 10

5. Directors Report 11

6. Auditors’ Report 68

7. Balance Sheet 80

��� �������� ����������� ��

9. Cash Flow Statement 82

Page 4: View Document - The India Government Mint , Kolkata

2

BOARD OF DIRECTORS

(As on 27th September, 2012)

Shri M.S. Rana Chairman and Managing Director

Shri K. Skandan Additional Secretary,

Ministry of Home Affairs

Shri H. Pradeep Rao Joint Secretary and Financial Adviser,

Ministry of Finance

Smt. K.J. Udeshi Director (RBI Nominee)

����������������������� �������������������������!����"���#!����$�Ministry of External Affairs

Smt. Meera Handa Deputy Director General (Philately),

Department of Posts

Shri Ashwini Kumar Director (Technical)

Dr. Manoranjan Dash Director (HR)

Page 5: View Document - The India Government Mint , Kolkata

3

SENIOR MANAGEMENT

(As on 27th September, 2012)

Shri B. Burman General Manager,

Bank Note Press,

Dewas

Shri Sudhir Sahu General Manager,

Security Paper Mill,

Hoshangabad

Shri Ajay Kumar Srivastava General Manager,

Indian Government Mint,

Hyderabad

Shri N.J. Sunny General Manager,

Security Printing Press,

Hyderabad

Shri M.C. Bylappa General Manager,

India Government Mint,

Kolkata

�������%�� ����� ����!�&����'���(��$India Government Mint,

Mumbai

Shri K.K. Prasad General Manager,

India Security Press,

Nashik Road

Shri T.R. Gowda General Manager,

Currency Note Press,

Nashik Road

Shri S.P. Verma General Manager,

India Government Mint,

Noida

Shri Ramakant Dixit General Manager (Information Technology)

Shri A.K. Ray CVO (In-charge)

STATUTORY AUDITORS

M/s. Serva Associates

Chartered Accountants

New Delhi

ASSISTANT COMPANY SECRETARY

Shri Sachin Agarwal (FCS)

Page 6: View Document - The India Government Mint , Kolkata

4

STATEMENT TO SHAREHOLDERS BY

M.S. RANA, CHAIRMAN AND MANAGING DIRECTOR

DURING THE 7TH AGM HELD ON 27TH SEPTEMBER, 2012

Ladies and Gentlemen,

On behalf of the Board of Directors and on my behalf, I would

like to extend a very warm welcome to all of you to the 7th

Annual General Meeting of the Security Printing and Minting

���"������ �!� )���� �*���� �����) ��� +��� ������ �!��&�$�Directors Report and Audited Accounts for the year ended

31st March, 2012 are already with you and with your permission,

I take them as read.

OPERATIONAL PERFORMANCE

Its my pleasure to inform that production achieved by India Government Mints in

2011-12 of 6282 mpcs of circulating coins is the highest ever in the history of Mints. Your

Company’s two Bank Note Presses produced 6541 mpcs of Bank Notes during 2011-12

which is 19.5% higher than last year. The Security Paper Mill, Hoshangabad produced

2925 MT of CWBN paper during 2011-12 which is ever highest. ISP Nashik has produced

SPUs of 49822 mpcs which is 31.2% higher than the last year.

FINANCIAL PERFORMANCE

Your Company’s sales turnover for the year increased to ` 3422.68 crore as against

` 3134.57 crore last year. PAT during the year increased to ` 582.46 crore as against

` 577.19 crore during the previous year. The PAT per employee has increased to ` 4.54

lakh resulting into an increase of 6% over the last year.

DEBT FREE COMPANY

Your Company has paid during March 2012 the last instalment of ` 175 crore of the

working capital loan of ` 700 crore taken from Ministry of Finance during corporatisation.

%�;�����) ����<���*�����<�!������*"����+�����*"�����������������=����!�` 2370.33 crore as on 31st March 2012.

MOU PERFORMANCE

Your Company had achieved for the 2nd time the “Excellent” rating in MoU for the year

2010-11. The Company has met maximum of the MoU targets for 2011-12 and its

performance is poised for achieving “Excellent” rating for the third year in succession.

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5

DIVIDEND

+�������������=������**���������'���=������>?AB��!�"���C�"������!������*"���for the year 2011-12 aggregating to ` 116.49 crore. In the year 2010-11 your Company

had paid the maiden dividend of ` 115.44 crore.

AWARDS

Your Company has been awarded Performance Excellence Award-2011 in Golden

Enterprise category by Indian Institution of Industrial Engineering (IIIE), Mumbai for its

�����'�����"�����'�"��!��*�����D���%��������$�E�;�����<����;��������National Safety Award for the performance year 2010 by Directorate General of Factory

��=�������=������� <����)������$����������!� <������F*"'��*��$�&�=���*����!�India.

India Security Press, Nashik has been declared winner in Maharashtra Safety Awards

competition-2011 for longest accident free period in the group of light engineering

industries (Factories working over one million man-hours), by National Safety Council,

Maharashtra Chapter, Mumbai. SPM, Hoshangabad has been awarded the 1st Prize by

Nagar Rajbhasha Karyanvyan Samiti, Hoshangabad for the outstanding work done in

Hindi. BNP, Dewas bagged the 2nd�"��G���!�����'�H������I�(����!��*�+�;��#!���'� �(�(��)*"'�*��������**�����+# )���D��"'$�����*"'�*�������!����IJ<����for the year 2009-10.

MODERNISATION / INDIGENISATION

Your Company has a capex plan of ` 2500 crore out of which your Company has spent

about ` 130 crore during the year. After completion of phase–I modernization of Mints at a

cost of ` 200 crore, phase-II modernisation of Mints has been taken up at an approximate

cost of ` 80 crore. The modernisation has resulted in increased capacity and quality of

the coins being produced.

One new Bank Note printing line in place of the old printing line has been commissioned in

BNP Dewas. With this, the Bank Note printing capacity and capability for anti-counterfeiting

of the Bank Notes has improved considerably.

The foundation stone of a new CWBN Paper machine at SPM, Hoshangabad has been

laid during the year. The combined capacity of Joint Venture Paper Mill at Mysore and that

of SPM Hoshangabad when commissioned in 2014, will lead to indigenous production of

major requirement of CWBN paper as against major portion being imported at present.

A new Bank Note processing system BPS-2000 has been installed in CNP, Nashik leading

to improvement in the quality of the Bank Notes. State-of-art CAD and CTOP system

has been installed in the Currency Presses, thus, enhancing the capability in designing

��K�!K�����������%�����#�����;���*���"��������(�����������(�'�������<����installed in SPP, Hyderabad for on line numbering of printed stock.

Page 8: View Document - The India Government Mint , Kolkata

6

CORPORATE SOCIAL RESPONSIBILITY

����) � ��� �"��� ` 4.36 crore during the year on various CSR projects as against

the MoU target of ` 3.00 crore. A MoU with Bharti Foundation was signed to promote

education in the rural areas with special focus on the girl child. About 1000 students are

studying in these schools comprising about 51% girls. This is a unique CSR initiative of

����) ���������������������;��������<����=�����������!�'����"�"�'����������

MoEF while granting Environmental Clearance for the New CWBN Paper line in SPM

Hoshangabad has put a condition that 5% of the total cost of the project shall be earmarked

towards CSR based on local needs. A reference to MoEF through MoF will be made to

reconsider the above condition as it will increase the project cost substantially.

)��������$�����) ���������"�=��������I�"��J���������������!�!*�'��;�'!��$�health, rain-water harvesting, sanitation, renewable energy, roads, water supply and skill

enhancement of the MSME personnel etc. All the CSR projects mentioned above have

gone through the process of baseline survey and were duly monitored and evaluated by

independent consultants.

STRENGTHENING OF VIGILANACE SET UP

Due to systematic institutional improvements carried out as part of strengthening of the

vigilance set-up, there has been a discernible improvement in following rules, procedures

���(����'�������'��(���"������*����+�����(��!��!���'�����=�(�'�����!!����<����taken-up to enhance their capacity in implementation of CVC guidelines. The net result

of preventive vigilance initiatives has been reduction in complaints, increased follow up

�!�����*���"��������������<���(��(����*�������"�����$������*������!���������������) L���"�������

INCREASED TRANSPARENCY

A new Procurement Manual examined by CVC and approved by the Board was released

by the then Hon’ble Union Finance Minister in May 2011. This manual wherever possible,

adapted and expanded upon the best practices from existing Public Procurement

���'�������C����=�������(����<�����������������������!���'�� ��=�'=��� ��� ���procurement of raw materials & machinery. The adoption of this Procurement Manual

���<���(����(������ �*"��=�*��� ���"������*���"����������+���"��'��!� )��(����Monitors after security clearance from MHA has been approved by CVC. The integrity

pact will be implemented in future contracts beyond the threshold value.

CUSTOMER SATISFACTION

In pursuit of achieving excellence in the delivery of its products and services, your

Company has conducted customer satisfaction survey through independent consultant

!����������;�����;��'��������!�����(��"�*������!���M�<�;��������) ����

Page 9: View Document - The India Government Mint , Kolkata

7

MoF. As per the survey, the overall customer satisfaction rating for the six major security

product categories is ‘Excellent’. It shall be our endeavour to further improve the customer

satisfaction in the years to come.

ECO-FRIENDLY OPERATIONS

����) L��''���������)�#�NAAA��������������C�������=��'����<�����)�#��OAA��!���better environment management of their operations. These six units have implemented

F������������"����������"��J���!�������'�G�����!�������!P����;�����������Q����reduction in intake of fresh water from Narmada river for SPM, Hoshangabad is under

advanced stage of commissioning. Rain water harvesting projects have been taken up

in ISP Nashik and BNP Dewas. Replacement of existing tube lights and mercury lamps

;���+KR� �<�� '�(��� ��� �S �� �=�� <���� ���� <�� ���$� T����<�� ��� )&�$� %�������"���=�'���D%��E�;��������������"����������(�������*"����<��*����������!����existing air conditioning system.

CORPORATE GOVERNANCE

All the information as required to be placed as per DPE guidelines on corporate governance

were placed before the Board. Your Company has duly constituted Audit Committee &

I�*����������**�����������<�����)���"������E��������+�����*"'�������������has been obtained from the practicing Company Secretary regarding compliance of the

(����'�����������"����&�=�������<������) �!����������?A��K�?$�;�����������C��������E��������I�"����S�������������������������$���&�����������%) ���**����!���review of the Annual Accounts of the Company.

NEW PRODUCTS

New series of coins with ` symbol and having better designs and lustre have been

launched during the year. New Bank Notes with ` symbol are being gradually introduced.

SPP, Hyderabad has taken up printing of excise labels for Delhi Government and D-patta

!��*�$� '��� �'�(�<�'��� ����$� ���� !��� ����� &�=���*���� )��$� %����� ��� "������ ���I�=����� ��������$� ������� U�+� ��������� ��� #����� �����"�� !��� ������"'�Corporation Nashik.

R&D

During the year the Company has spent ` 4.63 crore on R&D activities against the MoU

target of `�V�WR��������X������*"�����������"�""'����I�E�"��J��� ��� �����'���!�security paper, security printing, Bank Note printing & coin metallurgy. The Company is

setting up R&D centres across all production verticals. It will help the Company to bring

*��������(���������������"�����������!��������������"���������"���������

Page 10: View Document - The India Government Mint , Kolkata

8

ERP

X������*"��� ��� �*"'�*����(����KFI��������''� ��������������!�����) ���� !�''��!������'�+���KV�E������� ����"����(�� )&�$�%���������) � ���'�������(��"��E������I���=�����������)&�$�T����<��;�������������'��(����!�����(��������testing. As on date, the ERP system has been nearly implemented across all the units and

�������<�'������"�����+����;�''������'������������"�����$��!����������������*��but will also help in achieving the desired goals with relative ease and simplicity.

HUMAN RESOURCE

The overall industrial relations scenario during the year was cordial and peaceful. Training

of the workmen, supervisors & executives has been taken as a thrust area. The elections

to the EPF Trust has been conducted successfully during the year 2011-12. Employee

strength as on 31st March, 2012 has come down to 12818 as against about 18000 at the

time of corporatisation in 2006.

BUSINESS SCENARIO

RBI in its latest forecast has indicated enhanced indents for Coins and Bank Notes in

�����C��=��������+����;�''���Q�������������(�����"�����!�������������!����D���Note Presses by replacing old machines and also purchasing new machinery wherever

required. The printing capacity of Currency Presses may be required to be further

increased as and when new security features are introduced.

)�������!�FK"��"��$�����) �������''���*��������<�����"��J��������'���"�!���Q����some time due to delay in security clearance of vendors. This segment has potential for

��������� ��=����� ������) ������ ���"��J��� �����!!��+�����*��� !��� "��'� ���NJSP products is decreasing due to technological changes. To diversify, ISP Nashik and

SPP, Hyderabad have ventured into new security products as mentioned earlier.

+�����'�������'�������!��'��"�������!������$�D���%���$�������'�"��������������(�������<'���������������"�'��*"'�����������) ���*����������!����������+���payment of `��?AAK�RAA�������<����S�������) ���"��������"����(���*����!�?AA�$�in the form of equity or any other form is still due.

However, it is mentioned that with the initiative already taken for modernisation/

indigenisation, your Company, is ready to meet the requirements of Currency, Coins

and other Security Products required by the Central and State Governments & other

organisations.

ACKNOWLEDGEMENTS

I would like to acknowledge with deep sense of appreciation the cooperation received from

the Government of India, particularly from the Ministry of Finance, Reserve Bank of India,

Ministry of External Affairs, Ministry of Home Affairs, Department of Posts, Department

Page 11: View Document - The India Government Mint , Kolkata

9

�!� ��<'��� F���"�����$� �������� �!� <���$� E�"�*��� �!� �������� ��� S*�'�� H�'!���and various State Governments. I am also thankful to my colleague Directors for their

valuable inputs and laudable support. I would also like to acknowledge with thanks the

constructive suggestions received from Comptroller & Auditor General of India and the

��������������� �'�$�)�;��'��'���'������"'������������������������""���������!�the devotion and commitment of all executives and employees of the Company.

Jai Hind.

Sd/-

Place: New Delhi (M.S. Rana)

Date: 27th September, 2012 Chairman & Managing Director

Page 12: View Document - The India Government Mint , Kolkata

10

SECURITY PRINTING AND MINTING CORPORATION OF INDIA LIMITEDREGD. OFFICE: 16TH S ##I$���H�T�I�UX���I�DT�H�%$���%��+T$�%FH�EF T)�Y���A�AA�

NOTICE

Notice is hereby given that the 7th� ���=����� �%%M� � &F%FI� � �FF+)%&� �!� �����*<���� �!� �������� ������(� ��� �����(� ���"������ �!� )���� �*���� ;�''� <�� ��'��on Thursday, the 27th�����!���"�*<��$�?A�?���ZAA�"*��I�(�������#!�����!� ���Company situated at 16th Floor, Jawahar Vyapar Bhawan, Janpath, New Delhi–110 001

to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance Sheet as at March 31, 2012

������������� �����������!�������������������������(�����;������Reports of the Directors’ and the Auditors’ thereon.

?�� +��""��=�����"�*����!�E�=������>�?AB��!�����+C��������!������*"���!�����������'�����?A��K�?�

V�� +���C������*���������!�������������!������*"���""������<�������*"��''���and Auditor General of India for the year 2012-13.

By Order of the Board of Directors

Sd/-

(SACHIN AGARWAL)

Asstt. Company Secretary

Date: 27th September, 2012

Place: New Delhi

NOTES:

��� ���F�DFI�F%+)+ FE�+#��++F%E��%E�U#+F�)��F%+)+ FE�+#����#)%+����I#[X�+#��++F%E��%E�U#+F�)%�+F�E�#S�T)��F S���M�T��I#[X�%FFE�%#+�DF����F�DFI�#S�+TF��#���%X��+TF��I#[X�S#I��)��F%� #�FE�

2. Member/Proxy holder must bring the attendance slip to the meeting and hand it

over, at the entrance of Meeting Hall, duly signed.

Page 13: View Document - The India Government Mint , Kolkata

11

DIRECTORS REPORT

TO THE MEMBERS

On behalf of the Board of Directors, it is my privilege to present the 7th Annual Report of

�����*"�����������������'���������!�����������'�����������V�st March, 2012

together with the report of the Statutory Auditors and Review of the Comptroller & Auditor

General of India thereon.

FINANCIAL RESULTS

X������*"����������=����C��''��������'�����'����"���������'��(�=���<�'�;Z

(` in crores)

Particulars 2011-12 2010-11

Sales 3422.68 3134.57

Gross Income 3662.45 3456.89

Expenditure 2788.07 2616.57

�����D�!����FC���������)�*����+C��� 874.38 840.32

���Z��������������)�*��\�FC���������)�*���%F+� (0.49) 23.38

�����!���FC���������)�*�����������������)�*$�before Taxation

874.87 816.94

���Z� +C�FC"����

Provision for Current Tax 268.65 267.04

Provision for Deferred Tax 20.07 (23.59)

Taxes of Earlier Year 3.69 (3.70)

������!���+C��� 582.46 577.19

Proposed Dividend & Tax 135.39 134.61

Transferred to General Reserve 58.25 57.72

D'�������!���������� ��\� 388.82 384.86

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12

` `

`

`

The Annual Accounts for FY 2011-12 have been prepared in compliance of revised �������� � � ��� � ������� ���� ����� ��� ������ ! ���"� �� #��� ��"� $������� ����%����������&����"����������#�

CORPORATE PROFILE

��������������(��������(����"�������!�)���� ��������) ���������������(���K)�CPSE wholly owned Schedule ‘A’ Company of Government of India, incorporated on

13th������$�?AA]�;������I�(�������#!�����%�;�E�'��������) $������((���������manufacture / production of Currency and Bank Notes, Security Paper, Non-judicial Stamp

Papers, Postal Stamps & Stationery, Travel Documents viz. Passport and Visa stickers,

�������� ��������$� ���Q���$� D����$� H����$� �"���'� ��������� ;��� ��������S�����$� �������� )���$� �����'���� �� ��**�*���=�� �����$� ���''����$� I�����(� �!�Gold, Silver and Assay of Precious Metals, etc. The Company has achieved Excellent

rating in its Memorandum of Understanding (MoU) evaluation again for 2010-11 and

poised for excellent rating in 2011-12.

ACTIVITIES AT A GLANCE

Broadly, your company is operating through nine units of four production verticals i.e. India

Government Mints, Currency Printing Presses, Security Printing Presses and Security

Paper Mill. A brief introduction of these verticals along with review of operational activity

during 2011-12 is as follows:

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13

1. CURRENCY PRINTING PRESSES

There are two Currency Printing Presses

i.e. Currency Note Press, Nashik and Bank

Note Press, Dewas which are engaged in

production of Bank Notes for our country as

well as for foreign countries using state of

art technology. More than 40% of Currency

Notes circulated in India are printed by

your company. These units are equipped

with designing, engraving, complete

Pre-printing and Offset facilities, Intaglio

Printing machines, Numbering & Finishing

machines etc. Both the Currency Printing Presses are

)�#�NAA�Z?AA����)�#��OAA�Z?AAO���������������=��(�fool-proof accounting of security items, stringent security

����*��;����'�K*���������K!�����'���!��������*���facilities and complemented by a service department to

ensure maximum in-transit security. These units have

captive railway treasury wagons/carriages for transporting

the treasury consignments.

(a) Currency Note Press (CNP), Nashik

Currency Note Press (CNP) became a separate Unit from ISP in 1958-59 and it started

printing and supply of currency banknotes in all denominations from the year 1961. The

"����������!�����M���!�����������'����������(�V�st March, 2012 is 4430.44 million

pieces against the 4133 mpcs in the year 2010-11 of different denomination of bank

notes. CNP has supplied 4481 million pieces of banknotes during the year 2011-12 as

(����OVA��*�''����"�������!�<������������(����'�������'�����?A�AK�����ID)����Nepal Rashtriya Bank.

Administrative Block of CNP, Nashik

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14

(b) Bank Note Press (BNP), Dewas

Currency Printing: Bank Note Press, Dewas

was established in the year 1969 and the

production commenced in 1974. This press

also manufactures different types of security

Inks for various security organizations.

Its banknote production during 2011-12 is

2110.98 mpcs against the 1339.40 mpcs in

the previous year.

Ink Factory: Its annual installed capacity

of Inks is likely to be enhanced to 1160

MT. BNP manufactured Quickset Intaglio

Inks departmentally for use on Super Orlof

Intaglio printing machines. During the year

2011-12, Ink Factory has manufactured

around 272.622 MT Inks.

2. SECURITY PRINTING PRESSES

Your company’s Security Printing Presses

have glorious history of more than 80

years employing specialised technology

and multiple printing processes to produce

security products under secure operating

procedures and manufacturing protocols.

These presses have the latest technological

facilities for Designing, Pre-printing and

Post-Printing.

Your Security Printing Presses have the

capability of incorporating security features

like chemically reactive elements, various

Guilloche patterns, micro lettering, designs

;��� MU� ����$� <�KP��������� ����$� �"��'�variable inks, micro perforation, adhesive/glue, embossing, die-cutting and personalization

etc.

Administrative Block of BNP, Dewas

Printing Press at SPP, Hyderabad

Page 17: View Document - The India Government Mint , Kolkata

15

(a) India Security Press (ISP), Nashik:

India Security Press, Nashik was

��<'������ ��� ��������N?R�����������as commercial industrial unit under the

administrative control of Govt. of India,

Ministry of Finance. It is an ISO 9001:2001

��� )�#� �OAAAZ?A��� �������� ����� )���prints and supplies judicial/non-judicial

stamp papers, all types of postal & non

postal stamps & stationery, passports, visa

& other travel documents, MICR & Non-

MICR Cheques in continuous Stationery

form, Identity Cards, Railway Warrants,

Income Tax Return Order Forms, Saving

Instruments, commemorative stamps etc.

It has entered into other markets which

require documents incorporated with

security features and is developing new

"���������"���!���=����������

A specialized Forgery Detection Cell

also caters to the demand of various law

enforcement agencies and RBI.

)����������������FK���"���!����������time in India by undertaking production

�!� �!���'� ��� ��"'�*��� FK"��"���� ��latest version of E-Passport Manufacturing

System has also been installed in Passport

Section.

During the year under review, ISP also

�������!�''��"�����������""'������� ���I�=����� ��������$� ))++�� ��������$���;J��M��=��������������$��������U�+���������$�M+)�D������������� ��$�����*��������� ������ !���������'�(��'�Survey of India and CDC Stickers.

During the year 2011-12, ISP has made the ever highest production in SPU i.e. 49822.50

mpcs as against 37971.40 mpcs during the last year i.e. 2010-11 an increase of about

31.2% over last year.

Setting-up of New Passport Machine at ISP, Nashik

Postal Stamps

Passports manufactured by ISP, Nashik

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16

(b) Security Printing Press (SPP), Hyderabad:

Security Printing Press, Hyderabad was

established in the year 1982 to cater

to the needs of the Central and various

State Governments by printing and

supplying security documents such as

Postal Stationery items, Central Excise

Stamps, Non-Judicial Stamps, Court

Fee Stamps, Indian Postal Orders and

Saving Instruments etc. It is an ISO

NAA�Z?AA�� ��� )�#� �OAA�Z?AAO� ��������unit and is equipped with modern pre-

press plate-making systems and post-

printing techniques with processing facility

for Perforation, Numbering, UV Print

+�����'�(�$�#�'������=�'�"��*���($�)�'��� ����$�����(�*�$����'������������

E����(����������������=��;$�������;����*������������(���S�������(�������� ����has been installed for online numbering and packing of printed stock at SPP. This will help

in augmentation of processing of numbered items with reduced manpower.

E����(����������������"��$��������'����������!�''��"�����������""'������� ���F'�(�<�'��� ���$� D��� �������� �!� I�=����� ���=����� ����� ��=�$� EK�� S��*� ���Advocate Welfare Fund Stamps for A.P. Government, Transport Permit and Import Permit

for Govt. of N.C.T. of Delhi and Warehousing Development Regulatory Authority Receipt

Books.

3. SECURITY PAPER MILL

Security Paper Mill (SPM), Hoshangabad was established in 1967 is an ISO 9001:2008 and

)�#��OAA�Z?AAO����������������"����<'��!���*��!�����(��!���!!������"����!���������

Security Paper Mill, Hoshangabad

Security Printing Press, Hyderabad

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17

Papers. Papers manufactured by this unit are used for printing of Currency Notes by CNP

& BNP and for Non-Judicial Stamps being printed by ISP & SPP. SPM, Hoshangabad

has the distinction of incorporating numerous security features in paper viz Fluorescent

Fibres, Multi-tonal three Dimensional Watermark, Electrotype Watermark, various types

of Security Threads, Taggants, etc. At SPM, the eco-friendly process and the energy

conservation aspects are assigned the utmost importance. In order to indigenisation and

to meet the increasing demand of Security Paper, a new BIVIS Pulp Plant having pulping

�"�����!�?R��+�"���������<�������''������������������"��������!���'���'�����

During the year 2011-12, SPM has made the ever highest production of security paper of

2924.89 MTs as against 2857.79 MTs during the last year.

4. MINTS

Your Company’s four Mints at Mumbai, Hyderabad,

Kolkata and Noida have rich minting heritage and

legacy of producing quality products. These mints

are carrying out minting of all coins circulated in

the country. India Government Mints (IGM) offer

comprehensive range of services covering every

stage of the minting process– from planning to

��� �������� "�������� M�'�G���� �!� �=�����technology, innovation, quality and reliable

delivery methods are some of the components of

strength of these mints. IGMs have made a niche

in the minting world – with excellence in design,

expertise in minting precious metals, and above

all, a long tradition of craftsmanship.

Circulating Coins

The manufacturing process for circulating coins in these

mints constitutes a perfect symbiosis between the centuries-

old art of engraving, the minting process and the most

advanced industrial processes, world class technology and

*���'�*�(�*��$� ���<�'��$���*���������������coins adhering to extreme quality and security norms.

Mints are equipped with Computerized Numeric Control

Engraving Machines which are used for manufacturing

master punches / matrix / dies for coins. India Government

Mints are having more than 60 Coining Presses including 18

'���������(����������D'����(� ��������'���=�'<'��!���in-house production of coin blanks. Mints are having Pickling

�����'�����(� �����!���"�'�����(��!������<'�����E����(���������'� ���� ?A��K�?� ��� !���� *���� �=�� "�������� �=��� New series of coins

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18

��(���������!�]?�?�*"����!������'��(�������(����]AW��*"��������(����'�������'�year.

Commemorative Coins

The Commemorative/Collectors’ coins are anybody’s

prized possession. Minting of these coins starts

with developing the designs and engraving by deft

hands. Then begins the mechanical exercise of

manufacturing master punch/dies on CNC machines

followed by stamping with Automatic Multi-Strike

Medal Presses, ensuring the top-notch quality. These

commemorative coins are manufactured in Proof and

Un-circulated variety. During the year 2011-12, the

following commemorative coins were released by the

Mints:-

1. 100 years of Civil Aviation

2. 100 years of Indian Council of Medical

Research (ICMR)

3. 150 years of Comptroller and Auditor General

of India

4. 60 years of India Government Mint, Kolkata

5. 60 years of Parliament of India

Medallion and Bullion Activity

Apart from circulation coins minting, IGMs are also a trusted name in minting of items

like Medallions and various bullion activities. Manufacturing of Medallion starts with

steps of creating a perfect design, followed

by quality minting which culminates into a

"�����'�G��� �C*������ �!� ��� �������product. The dies are put to an exceptional

care in terms of cleanliness and inspection

to generate output of optimum quality.

I�����(����T''*����(��!������������'��are also undertaken at Mumbai, Kolkata

and Hyderabad Mints. IGMs set benchmark

��� ��������������������� ����*�� ���emulated by other players as industry norm.

Commemorative Coins

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19

Offerings of precious metals made to

various temples, religious places, trusts,

���� ��� ������� � )&��� ��� *��'�� ���minted from them as per design and

�"����������!�����*����

a) India Government Mint, Noida

This Mint was established in the year

1988 to take care of requirements

of Coins in the country. It is an ISO

9001:2008 and ISO 14001:2004

�������� ���� ��� ��� !��'����� !���conversion of blanks into coins. This

is one of the most modern mints in

the country. During the year 2011-12,

IGM, Noida has produced circulating

coins of 1872.97 mpcs as against

1617.95 mpcs in the year 2010-11.

b) India Government Mint, Mumbai

This Mint was established in the

year 1829, is one of the oldest Mints

of the country, where coins of all

denominations of non-ferrous alloys

and ferritic stainless steel material

are minted and made available for

circulation. It is an ISO 9001:2008

�������� ����� +���� ���� ��� '��� (��the capacity of minting medals and

������(��!�(�'���E����(��������?A��K12, the mint produced 1640.04 mpcs

as against 1655.61 mpcs in 2010-11 of circulating coins.

c) India Government Mint, Hyderabad

India Government Mint, Hyderabad was originally started in the year 1903 under

the rule of Nizam. However, after integration of the erstwhile Hyderabad State with

the Union of India, the Mint was taken over by Govt. of India. This Mint came to be

known as India Govt. Mint, Hyderabad. In the year 1997 the new Mint at Cherlapalli

;����<'�������)������)�#�NAA�Z?AA����������*�����������(�M����������������having facility to mint coins, medals and medallion. This mint produced 1948.12

mpcs of blanks in 2011-12 vis-à-vis 1889.20 mpcs last year and produced 1224.80

mpcs of circulating coins vis-à-vis 1213.25 mpcs last year.

������������ ���������������������������������

India Government Mint, Noida

India Government Mint, Mumbai

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20

d) India Government Mint, Kolkata

Originally different minting facilities

were created in and around Kolkata in

the 18th Century. One of the Mints was

modernized in the year 1952 and it was

known as Alipore Mint. Old mint at Strand

Road is popularly known as Silver Mint.

������&�=���*����!�)�������*�����as India Government Mint, Kolkata. It is

an ISO 9001:2008 and ISO 14001:2004

�������������=��(�''�!��'������!�*����(�coins and manufacture of medals and medallions. During the year the mint produced

1544.55 mpcs of circulating coins vis-à-vis 1584.31 mpcs last year. IGM, Kolkata also

produced coin blanks of 1911.51 mpcs in 2011-12 as against 1914.40 mpcs in 2010-

11. The Mint celebrated its Diamond Jubilee on 31st March, 2012.

MODERNISATION AND CAPACITY AUGMENTATION

����) ����""��=�����"�'� ��=��*���"'���!�` 2474 crore w.e.f. 2009-10. This will

enhance capacity, capability in production of raw materials like Banknote Paper, Security Inks,

etc. for printing of state of the art currency notes and minting of coins of advanced designs.

Currency Presses

� Installation and commissioning of the one new latest state of the art Banknote

Printing line has been successfully completed at BNP, Dewas and production has

'���������������*���+����;�''������������"��������"<�'����!�����) �in printing state of the art Banknotes with new security features. Under one-line

*������"��(�**�$��"K(�������!���*<�����F!P������;(��+��*����'��and Treatment Plant (ETP-Ink) has been completed for protecting the environment.

� The regular production on BPS-2000

(Bank Note Processing System)

installed at BNP, Dewas and CNP,

Nashik has been started from April,

2011. These machines are equipped

with banknote examination and online

shredding of the spoil notes, as well as

banding and shrink wrapping. With the

introduction of this machine, there will

be substantial saving of manpower and improvement in quality of the Bank Notes.

�� I������(��!�F'�������($�%�*<����(�����������(�����*����%�*����*�������has been completed at BNP Dewas. Further, the work order has been placed for

overhauling of two Superorlof and Intaglio machine at BNP Dewas.

India Government Mint, Kolkata

Bank Note Processing System

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21

� CAD and CToP System: Installation of one CAD and CToP System each for CNP

Nasik and BNP Dewas. This will lead to latest software & hardware in designing

and pre-printing of the state of the art currency notes.

� Varnish Coating Machine: Varnish coating machine has been installed and

commissioned at CNP Nasik. The machine is capable of coating both the sides of

the banknotes in sheet form in single pass. This will help in prolonging the life of

the bank notes.

Ink Factory

�� )�������� ��*��������$� ����(���������������� ����"�����!� )���S����$��=��Triple Roll Mills (SDV 1300) have been installed and separate Heating and cooling

system of Varnish coating plant has been completed. With this, the capacity of the

ink factory will increase to about 1160 MT inks. This will take care of the complete

��Q����*����!��!!��$���('�������*<����(������!�������) ���;�''���DID%�� �

Security Presses

� During the year under reporting, the following machines/ equipment have been

procured and commissioned at India Security Press, Nashik:-

� Three number of Guillotine machines

� One CTOP System

�� I���K���(� !��� S������ ���� �� M%#� ��� �M& FI� "��"��� *��!�����(�machines.

� One Digital Video Spectral Comparator

� One HP make Indigo Press 5500

� Two Atlas Copco make Centralized Air Compressor each having capacity fo

]AAA� �����A�<��;�����������������������=�������

� One HMT make universal tool & cuter grinding machine.

� In order to modernise SPP, Hyderabad One new Automatic Processing & Finishing

�������''���!�����'������*<����(����"����(��!�"������������+����*������;�''�help in augmentation of processing of numbered items with lesser manpower.

Security Paper Mill

In order to modernise SPM, Hoshangabad, the following machines/equipment have

been procured, installed and commissioned. After modernisation the capacity of SPM,

Hoshangabad shall increase to about 9000 MT from 3000 MT at present.

� In order to meet the increasing demand of security paper, a new BIVIS Pulp Plant

having a pulping capacity of 25 MT per day (approx) has been installed and trial

runs are underway.

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22

� A R&D centre for Paper, Pulp and

thread related matter has been

��<'������ � ��� ����� ���testing equipments & machinery

has been procured and installed

successfully in the R&D Center at

SPM, Hoshangabad.

� Order for import of Video Spectral

Comparator (VSC) and, Quality

Control Device (QCD) 200 MAG Premium have also been placed.

� R&D Cell has been setup and earmarked the location for housing the above

instruments. However, further renovation of existing building is in progress.

� NEERI Nagpur has been engaged for providing consultancy services for

modernisation & upgradation of existing yellow/black liquor plant at SPM

T����(<�� �� !�'�'� �����=����*��'���*"'������!���''����������'�D�����The work is likely to be completed by October, 2012.

Bank Note Paper Mill

+�����;��U���*"��� ��� ����*���!�D���%����"�����''� )�������=�� �*����;���RAZRA� �Q���� ��'���(� <�� ����) � ��� D����� I����=�� D��� %��� ������ �=�� ����DID%�� �����<���������"���������V��A�?A�A�������I�(�������#!�������'������Bangalore and Works are at Mysore. The Paper Mill will have a capacity of 12000 MT per

year to be commissioned in two phases.

With the commissioning of these two lines at JV Paper Mill and one new line at SPM,

Hoshangabad, major requirement of CWBN paper of the country shall be met indigenously

as against major requirement being imported at present.

Mints

RBI has given an enhanced indent of coins

over the last few years which necessitated

upgradation of capacity at IGMs. Following

new Machines were added under

replacement plan/upgradation of capacity

during the last two years.

a) Coining Presses: 18 Coining

Presses have been procured and

commissioned at all the Mints. With

Installation of these presses, the coin

minting capacity has increased to about 6000 mpcs with two shifts of 9 working

hours in each shift. Replacement of 8 new coining presses has been taken up.

BIVIS Pulp Plant

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23

b) Blanking Lines: Mints at Hyderabad, Mumbai and Kolkata have procured one

number each of latest blanking lines with higher productivity and capacity to

accommodate greater width of coils.

c) Fully Automatic Integrated Sachet Packaging Line: Four Fully Automatic

)��(������������(��(� ��������!�������*������<������*�����*����!�RBI for supply of coins in Sachets.

d) Three nos. of pickling and polishing lines are being procured.

HUMAN RESOURCE MANAGEMENT

An Overview

� At the time of Corporatization, employee strength was nearly 18,000 which as on

31.03.2012 has reduced to 12,818.

� About 85 Executives in areas of Technical, Finance, HR, Marketing, IT and

Materials Management were recruited in the year 2011-12 keeping the long-term

requirements of the Company in view.

� An objective Performance Management System (PMS) has been introduced for

the Executives and Supervisors commencing from the year 2011-12.

Training and Development

Knowledge and skill development has become a continuous process in your Company.

� During the year 2011-12, three Executive Development Programmes (EDP)

were conducted in association with National Institute of Financial Management,

S���<��;������O�FC����=���!��*���������������M����������"����#!����were exposed to various functional areas.

� Altogether Company has trained 241 Executives (84.85%) out of Executives strength

in various training programmes

including at NIFM during the year

2011-12.

� India Govt. Mint, Hyderabad has

<���������������%��'��������"'��and execute the training programme

for Supervisors in technical and

soft-skill areas in consultation with

��� ���"���� #!����� #�� �!� �'�1,101 numbers of Supervisors, 517

numbers of Supervisors (46.96%)

have been trained.�������� '� ������ � ()�� &����� *�� ���# ����� �#)��� #��� �� �'*��+ $# ,� &����� �������. �� �/*�3#����$��

Page 26: View Document - The India Government Mint , Kolkata

24

� 9 Units of your Company are accountable for training and developmental needs of

���)������'�H�������<����(���������"�����'���Q����*�����E����(��������2011-12, out of total numbers of 10979 Industrial Workmen, 1278 nos. of Workmen

were trained by the Units.

� Training of minority employees and a two days “Knowledge Update Programme”

was conducted for the Employees belonging to SC/ST/OBC category during the

year 2011-12.

Industrial Relations

� The overall industrial relations scenario in your Company during the year 2011-12

was cordial and peaceful.

�� �!������"�������$������'������;�����������;��� ����<J���=�� ���'�����C�F*"'��������"������=���!��*����������%����M����������"����#!���������+��������!�����) �F�S�+�����������S�����NR?��NNAV�*�*<�����!�F�S�+����!��*�''�%����M����������"����#!������������=�������'����(���C�+�����������!��W��������� ��� ���!����S��� ������� �*��!������"���G��������'�������!�F�S�+����;��������������(�''� ���M����������"����#!���������('�������������;�����;��������'���'��*����=��������(�?A��K�?�

Connecting with Employees

� There is continuous endeavour to keep the Inter-Unit involvement of employees

through various sports/cultural programmes.

� Inter-Unit Football tournament was

conducted in Kolkata in the month

of February 2012 where all the 10

teams which include Nine Units and

���"����#!����"����"���

� Company has since introduced

Awards to the Employees and also

to the Units for functional excellence.

� The best performing Units are

awarded with Running shield in the

following categories: (i) Environment

& Safety (ii) Energy Conservation (iii) Productivity (iv) Training and Development

(v) Rajbhasha (vi) Vigilance.

�� ����) � ��'�<���� S�������� E�� � )���� &�=���*��� ���$� %���� ��� �A��February, 2012 where the Secretary, Department of Economic Affairs, Ministry of

Finance addressed the Employees which was motivating and inspiring.

4�� *�� ���5�� 4���� 4����� � 6378 ��������������� ��� �� ����� 9��� : �$��� � ��������;<=�< $#>��>������! �$���

Page 27: View Document - The India Government Mint , Kolkata

25

� Diamond Jubilee Celebration of India Government Mint, Kolkata was celebrated

on 31st March, 2012 where the then Hon’ble Union Finance Minister and other

West Bengal Ministers graced the occasion to commemorate the occasion.

CORPORATE SOCIAL RESPONSIBILITY

����) �������������=��������I������=��������(��������?A��K�?�!������;�'!���of the people as per the DPE guidelines. An amount of Rs. 4.36 crore was spent during

the year on various CSR initiatives.

� A Memorandum of Understanding with Bharti Foundation was signed on

19.10.2010 to promote Education in the backward areas with special focus on

(��'����'������"�����M$�'���;��"��=�����<��D����S���������������) ����already constructed nine primary schools in Murshidabad District of West Bengal.

These schools are being run by Bharti Foundation which is successfully running

more than 242 schools all over India. 995 students are studying in the schools in

pre-primary, class-I and class-II comprising 51% girls and 49% boys.

� A sum of Rs. 4.68 lacs was spent in Rajasthan through Jansankhya Sthirta Kosh.

41 ,���� �>�� '���� have been distributed to the eligible couples who have

undergone sterilization after having one or two children.

�� V?W�"�����;����"��=����������'�'�*<��;��'���AR�"�����;����"��=������''�"����at a cost of Rs. 10 lacs during the year 2011-12 through Mahavir Viklang Sahayata

Samiti.

� The work of improvement of road side amenities for road connecting U.S. Gymkhana

with Nashik Pune Highway and Jail Road side in Nashik at a cost of Rs. 88.63 lacs

through State Government during the year 2011-12.

� Rain water harvesting system and sanitation projects were undertaken at cost of

Rs. 19.29 lacs through Indian Red Cross Society, Mumbai during the year.

� Solar lamps were provided in Dewas Vridhashram, Hoshangabad village and

Nashik during the year at a cost of Rs.10 lacs.

�� D'������������*"���=��<������(�������������!�''��<������) �������M�����ISP, Nashik, IGM, Kolkata and BNP,

Dewas during the year 2011-12.

�� E����(� ��� ���� ?A��K�?$� ����) �conducted a Training programme

in National Institute for Micro, Small

& Medium Enterprises, Hyderabad

for 101 MSME personnel working

in various Micro, Small & Medium

Enterprises providing products and

services to the different Units. ��������'� ������ ��������$#�'*��+��?��� ������������! �*�*)�3#����$��

Page 28: View Document - The India Government Mint , Kolkata

26

All the projects mentioned above undertaken by the Company during 2011-12 have gone

through the process of baseline survey. The projects were duly monitored and evaluated

by independent consultants.

IMPLEMENTATION OF OFFICIAL LANGUAGE

�� ����) � �������!�''�� �<���=��� T����H���� ��� ������"����#!���������(� ���month of September, 2011. A compilation

�!� #!���'� �(�(�� I�'��� �*�'��‘Rajbhasha Ready Reckoner’ was

released on this occasion. Diglot chart

(laminated) was also provided to all the

#!������

� Bank Note Press, Dewas & Security

Paper Mill, Hoshangabad were the

���=������ �!� ��� +�;�� #!���'� �(�(�� )*"'�*������ ��**���� �"����(�from Dewas & Hoshangabad respectively. Besides it, Bank Note Press, Dewas

has been publishing “Banoprin” a quarterly in-house journal continuously for the

'��V?����������*(G�����*���^&����=`�!��*�+# )��E�;��!������'��16 years without fail and both above magazines have also won many laurels.

� Further, Currency Note Press, Nashik, India Security Press, Nashik, Security

Paper Mill, Hoshangabad, India Govt. Mint, Kolkata and India Govt. Mint, Mumbai

bring out their respective house-journals named “Mudra Bharti”, “Prati Mudran”,

“Pratika”, “Kalarth” & “Mumbai Mint Patrika” respectively.

� During the year, India Govt Mint, Hyderabad has also published ‘Taksal Jyoti’ a

unique magazine in four languages viz. Hindi, English, Telegu, & Urdu.

�� +������"����#!���$�%�;�E�'��� ��� )����&�=���*������$�T����<���=��been honoured with ‘Karyalaya Deep Shield’ by Rajbhasha Sansthan, New Delhi

!����C�*"'���;������������'���!�#!���'� �(�(��

� “Shree Shankar Dayal Singh Rajbhasha Shield” was introduced during the year

?A��K�?� ��� �����;��� ��� (���� �� )���� &�=���*��� ���$� T����<�� !��� ����������(� "��!��*���� ��� ��� ��� �!� #!���' �(�(��� )���=���'� ;���;��(�=�����E������*�����=���$��������(����# �$� )&�$���*<��!������������<�������������'���!�#!���'� �(�(��

�� ����) �������<'������*�����!�������=������*"������&�=��E�"�*����;�������<J���=����"��*�����������!�T���������!���'�;����

� MOU with Department of Economic Affairs, Ministry of Finance was signed

bilingually by the Corporation for the year 2012-13.

3����@ �>�� � ��������$#�'*��+� �� ����B!���

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27

� Bank Note Press, Dewas and India Government Mint, Hyderabad successfully

organised two joint Hindi Workshops during the year 2011-12 under the aegis of

���"����#!����

�� ���������!�S���������"�����������"����#!�����!������*"����%�;�E�'���and India Government Mint, Mumbai during the 2011-12 to ensure progressive use

�!�T���������!���'�;����

����) ����"����=�'����**����!����*"'�*�������!�&�=���*�����'�������=������#�������������<�����E�"�*����!�#!���'� �(�(��!��*��*�����*��

VIGILANCE ACTIVITIES

1.1 Vigilance set upZ�+���D�����!�E���������!�����) ����""��=��������������!�?R�"����!������U�(�'����E�"�*����!�����) ������!�����\�!!����;�����(�������"�����!������;�''����������������'����!���U�(�'����H�����#����"��������������''��(��"�

1.2 The work of Preventive Vigilance has been given primary importance. Vigilance

E�"�*������<��������(�����*"����;�����!�����'�������'�U����������!�security items in the units. CTE type inspections are being conducted regularly.

There is a substantial improvement in online payment to the suppliers. Tenders and

tender award details are being uploaded by the units in a regular manner. A system

of online registration of complaints has been started. Various initiatives have been

made in this period to undertake effective Vigilance work as summarized below.

2. Impact/Achievement of Vigilance functions:

i) There has been a discernible improvement in following of rules, procedures

and guidelines relating to procurement, tendering and other vigilance activities.

Important circulars from Central Vigilance Commission have been compiled

and explained to senior staff in the units by Vigilance Department.

���� +��������<������(�������"����<��'���(�*��(���!!�;�����(����=�(�'���$�"������*���;�������������!��������

����� �=��(��(��!���!��*���������'�(�����<�����C����=�'�������<��!��������(�of tenders and post award details on web sites, increasing e-payment and

providing Vigilance Department with the facility of registering complaints

online.

iv) A new Procurement Manual approved by the Board and vetted by CVC has

been released by the then Hon’ble Union Finance Minister on 23.05.2012.

Vigilance Department was associated in framing this unique Procurement

���'��+�������<���(����(�������*"��=�*�������"������*���"�������

vi) On the basis of observations made by Vigilance Department in CTE type

inspections, recoveries have been made in some cases from suppliers.

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28

3.1 Dissemination of information pertaining to important CVC guidelines: Amongst

others, information on monthly basis is collected on the subject of negotiations with

K�����������$�;������*"'�������''���'��(�;���������$��"'����(��!��������in downloadable form in websites, publishing of post award details on websites,

�*"'�*�������!��K"�*���$������!������"��!���*"'����������"����#!����and in units etc. This has the desired effect and yielded good results due to closer

monitoring & supervision and also improving transparency in decision making.

3.2 Integrity Pact: Initiative has been taken for adoption of Integrity Pact (IP) in major

�������*�����=������������) ��+����*����=��<����""��=���<���������'�Vigilance Commission on the panel of Independent External Monitors (IEM’s)

!�������) ��+���������'��='����!����"������*�����<����������������������Integrity Pact has been approved by the Ministry. The IP shall be introduced in

future tenders above the threshold value.

4.1 Intensive Training of staff involved with procurement: It was felt that training of

all procurement staff along with other staff involved in procurement work needs to be

taken up. This training was conducted at different units wherein procurement staff/

�!������!��*�''�����������������'����(����"�����!�����=��(�=�����*"�������=�����������=����"�����������<J���*���������=��$��������=�(�'�����!���'���=���!������������������*����(�;������"������*����!!\��!�������!���������to clarify the procurement issues including related CVC guidelines.

���� ������������������� ���� ����Z�E����(�������$�U�(�'�����!���'��;������"����rotationally for the various training programs/Seminars like Ethics, Accountability

��������"�������=�����j��������*������'��!�����) �����������*����!�consultancy & other services. In all, 42 man-days of training were imparted during

the year.

5. Conduct of CTE type inspections by CVO: Four CTE type inspections were

������������'����;����U��������=������������(����+�����**���\�'���������received from the concerned authorities on the Intensive Examination Reports

were scrutinized. Based on the

observations of the CTE type

inspection reports, guidelines were

issued for future compliance to

��*�=�� ������������ ������� ��� ���system.

6. Activities during Vigilance

Awareness Week: The Vigilance

Awareness Week was celebrated

from 31st October to 5th November

2011. During the Vigilance Awareness

Week, in addition to other activities

like Interactive sessions with the

+������ � C'��������� !?������D������E$#4��*�� ���5��4����4����� �6378 ���� ����� � !���������&�������Week-2011

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29

�C����=��$� H������"�$� ������\��*����� <�� "��*����� !��'�$� =������\suppliers meet, slogan writing/debate/painting/ drawing/quiz competitions etc were

conducted for increasing awareness in the company.

�� !��"��������������#��$������#��� ���%���� ������&$%'������ "�( As per the

decision of DEA, MoF, this work is now being done by the Vigilance Department of

����) �;���!��A��AO�?A�A��E����(��������?A��K�?��������U��;������'��������������!�����) ��D�����������<���=�������������������(������=���������$�four guidelines were issued for system improvement.

)�� *��������� +������ $������ ����� ���� ����� �� �� ���� �� ,������� ���������: In

compliance of the Instructions of CVC, the sensitive posts in the company have

<������������������!��*������U���TI�E�"�*������<�����=���������������!������;�����(���������"����!����'��(��*���E����(�������$�?����������!���orders were issued by the management. Preparation of Agreed list and the list of

�!�������!�E��<!�'�)��(����;������*"'����;������*�������������'�U�(�'����Commission.

9. Annual Property Returns: As a surveillance measure, Annual Property Returns

���I��� �!� ��� �!���'�� ;���� ��<J��� �� �������� ��� �'��������� ;���� ���(��wherever necessary. During the year, 216 numbers of APRs have been scrutinized.

10. Disposal of Complaints: Upto 31st March 2012, 93 complaints have been received

in the Vigilance Department since its inception and 79 numbers of complaints have

been disposed off/closed and remaining 14 complaints are in process and under

various stages of investigation. The following are some of the few important actions

taken on the complaint during the year:-

��� +;����(���(� �������;�������""����� ��KP����;���*���*����<�� ���units after initiation of action by the Vigilance Department on receipt of a

complaint.

ii) A major penalty charge sheet has been issued to a supervisor for submitting

!�����������

����� �� *J��� "��'�� "��������(� ��� � ��*"����� ���� ��=�'=��(� !���� �!���'��including GM of the unit is in process which was picked up for investigation by

U�(�'����E�"�*����!�����) �!����+F����"������<���U��

iv) Disciplinary Authority imposed a minor penalty of censure in a composite case

��=�'=��(�!�����!���'��<�������������'�������������**���������������(����������=���(���������!����'��(��!����*"'���

v) It has also been decided by the Disciplinary Authority to issue a written

;����(�������*"�����������=�'=��(�������!���'��<���������������(���!�an investigation done following a complaint.

vi) An advisory warning has been issued to a supervisory level staff based on

��������(���!�����=���(���������<�����U�(�'����E�"�*���!�''�;��(��complaint.

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30

11. Review of Performance: Performance of Vigilance Department was reviewed

��(�'�'�� <�� ��� ��E� �� D���� �!� E�������� �!� ����) � ��� ������� �� ��������=��;�����������<������U#$�����) ���"���"������<������*��

ERP BASED INTEGRATED INFORMATION SYSTEM

Your company is implementing SAP-ERP, most widely used ERP solution in the world,

������ ''� ����� ����� �!�����) ��+���� ;�''� ��'"� ����) � �� ���(��� ''� ��� ����� �����;������"�����!�����%�;�E�'����������''���!��*����"��������(��!������"���������within each unit would be automated. The implementation of SAP will not only enhance

���"�����$� �!�������� ��� �����*�� <�� ;�''� ��'"� ��� ����=��(� ��� �������� (�'� ;���relative ease and simplicity.

������������KFI�����<���� �*"'�*�����������''�������!�����) ���� ��� ��� ���stabilization phase. So far SAP-ERP core modules i.e. MM, PP, SD, FICO and PM, have

been implemented and the remaining modules i.e. EP, BI, ESS etc., shall be implemented

����������K)U����!�''��!������'�+����V$�)�#\)F��?WAA�Z?AAR���������E��������E�������"����(��)&��%���������) ����'�������(��"��E������I���=�����������EI����)&��T����<�$�;�������������'��(���!�����(�������������($�!�����**��������(�it will provide world-class secure IT infrastructure. With the implementation of SAP-ERP

the objective are to bring transparency and synergy in the operations of the Company and

ensure better services to the customer and ultimately to citizens of India.

PROMOTIONAL ACTIVITIES

Honorary Sponsor of 10th Asian High Security Printing Conference-2011

The conference was held at Gurgaon

during 7th to 9th December, 2011. Around

230 delegates from 35 Countries have

"����"��� ��� ��� ���!�������� ����) �was made honorary sponsor of the event

by the organizers. The conference was

��'�� ��� )���� !��� ��� ���� �*�� ��� �� ;��inaugurated by Shri Ashwini Kumar,

E������� �+������'�$� ����) �� E����(�the conference one exhibition was also

organized for companies in security printing

industry to show case their products, new

�����'�(��'�����=�*���$�"���������������) ����'������"'���������������"������$���!��*������(����(�"���������!��'������"�����''��!��*�)������������������%����\��������"�����(�������T����<�������) �<���$������(������������'��(��C��<����$�has witnessed numerous business visitors from India and abroad who have shown keen

����������"�������\�!��'������!�����) �

����� ! �'*��+ �� &��� ��� �������# �� �����%��! ����� �����������=th����3����������#'�������� �!�������<=��

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31

Participation in Stamp Exhibition titled SIPEX 2011 at Chennai

��� ����) � "��*����'� �����=�� ���reaching out to its customers particularly

�*"� ��''�����$� )��� � ���� �!� ����) �has participated in the SIPEX held at

Chennai during 7th to 9th October 2011.

ISP has mounted various Stamps, Original

Artwork, and Miniature Sheet etc in four

frames in invitation class category during

the exhibition. Visitors particularly school

going children have praised the display of

collection over the frame and evinced keen

interest in printing process of the postal

stamps.

INITIATIVES FOR IMPROVEMENT IN OPERATIONAL EFFICIENCY

Capacity Assessment Study

����) ������((���������=������!��\��)�����)���������!�)������'�F�(�������(��)))F�$�E�'�����"��� �� ����''�������� ��� ���''����"�����!�����) �����������((���measures to ensure optimum utilization of capacity. IIIE has submitted its report in June

2011 and supplementary reports on Commemorative Coins, Medals and Medallions in

December 2011. The study was also part of MoU targets for the year 2011-12. Committee

�����<'���M�������(���#�M��������I�"������'�������**����������) �����������rational assessment and optimum utilization of installed capacity.

Study of Supply Chain Management of Cotton Comber

Cotton Comber is a important raw material for production of security paper at SPM,

T����(<���+�����""'�� ����\����������!���""'�����!��������*<��������(��(��������������=�������(��G���*�����+����!���$�����) ������((�����(�*���Development Institute (MDI), Gurgaon to carry out the study on supply chain management

of Cotton Comber. The study was primarily based on secondary data, published reports

data and discussions. The institute has submitted its report in February, 2012. The study

has provided a deep insight into various facets of supply chain of cotton comber.

CUSTOMER ORIENTATION

Customer Satisfaction Survey for Passports

During 2011-12, achievement of Customer Satisfaction Index (CSI) for Passports

produced by India Security Press, Nashik with rating of 7.50 on 10 points scale was

�C��������M��(���+�����)�!���"��"����;����������<������"�����������'��

4�����#������� ������ ���������!�������$#�'*��+�����������')G<=��

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32

�\��� ����� ������ )���� ���=�� �*���� ���)� �� ��'����� ����(�� �"��� �������(�process. The consultant has submitted its report in May, 2012 after completing customer

survey of different customer category comprising Consular Passport Visa (CPV)

E�=�����$��F�$�I�(���'����"����#!������I�#��$����"���#!�������#��$�)**�(��������������$� <�������$�S��������)�����$�S��(����E���������''�� )���%�������������) ��������=�������*������!������������!���A��������"�������(���'����"���������������������<���\����)� �

Workshop on delivering Customer Satisfaction at ISP Nashik

Indian Institute of Management (IIM)

�����;� �%���� �*"���� ��� �������out Customer Satisfaction Survey of

=����������) �"������������(�?A��K�?��To communicate the salient features of

customer survey, feedback received during

the survey and measures to be taken for

maintaining and improving the customer

satisfaction index, a workshop was held

at ISP Nashik on 18th October 2011. The

workshop was coordinated by Prof. Rajiv

Kumra from Indian Institute of Management

�))��$� �����;��%�����*"�����+���;������"�;�����(�����<����������;������*�$�E��������+������'�$�����) ����������<��<���VA��*"'��������"�������(���!!�����������!�����) ����'����(����"����#!����

EVENTS

Payment of Maiden Dividend for the Year

2010-11

����) � ��� "��� � *����� ��=������ �!�` 115.44 crores to Govt. of India for the

�����'� ���� ?A�AK���� ����� ����� I�$���E$� ����) � "�������� ��� *�����dividend cheque to the then Hon’ble Union

Minister of Finance, Shri Pranab Mukherjee

on 10.08.2011 at Delhi.

Laying the Foundation Stone of Bank Note Paper Line at SPM, Hoshangabad on

17th December 2011.

S�������(���������!�D���%����"��$����;�D���%����"��� ��������$�T����(<��is being set up. Foundation stone of the Mill was laid by the then Hon’ble Union Minister

of Finance, Shri Pranab Mukherjee on 17th December, 2011. The new bank note paper

�������&���,�����4����� �6���������8 ����������������@ �>�� � ����� ��������!���� ����"�#����'�?����>

�*4� �'*��+� ���� *��� 7��� ���������� ��� ������dividend cheque of ` ����HH �� ��� � ���� 3 �E$�� 9�� �*������� !:����������'����$*�>���5��

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33

line at SPM, Hoshangabd is part of the

modernisation plan of the Company. By

���''���� �!� ���� D��� %��� �"��� ���$�the annual capacity of Security Paper Mill

Hoshangabad will increased by 6000 MT.

This new line is to be commissioned by mid

2014.

Commissioning of New Bank Note

Printing Line at Bank Note Press, Dewas

The Commissioning of New Bank Note

������(� ���� � D��� %��� �����$� E�;��was inaugurated by the then Hon’ble Union

Finance Minister Shri Pranab Mukherjee

on 7th January 2012. The One line Printing

��� �������(� �Q��"*���� ��� ��K�!K��with higher speed and have the capability

for incorporation of sophisticated print-

based security features which will help in

reducing counterfeiting of currency notes.

This machine will also result in improved

productivity as well as optimization in the

consumption of raw materials specially ink

and manpower requirement.

SPMCIL Celebrates Foundation Day

����) � S�������� E�� ;�� ��'�<����on 10.02.2012 at a function held at India

Government Mint, Noida. Shri R. Gopalan,

the then Secretary, DEA, MoF was the

Chief Guest and the programme was

presided over by Shri M.S. Rana, CMD,

����) �� ����� T�� �����"� I�$� ��� �� S�$�Ministry of Finance, Ms. Meera Handa,

DDG (Philately), Department of Post were

the distinguished guests at the function. On

this occasion, the best performing units of

����) �;����;�����<���������!�(����

SPMCIL Becomes Debt-Free Company

The Government of India had given an interest free working capital loan of ` 700 crores

�� ����) � ��� ��� ���� ?AAWKA���+��� ��*"��� ��� ��"��� ��� ;��'�� *���� '��� ��the Government in four yearly equal instalments starting from the F.Y. 2008-09 and the

���������� � !?�&I��>? ��'�������+�����I?'�4�&��$# ��� ����3 �E$��9�� �*������� !:�����������'����$*�>���5��

+�#��� ! : ������ � �� �� ! ��& I��> ? �� '���� +����� �'*� 3 ������$�� $# ���� 3 �E$�� 9�� � *������� !:�����������'����$*�>���5��

�&��� 4�����$��� � ������ �'*��+ : ������ � 4�#����$���� � �� �/*� ? ��� $# ���� 7� / ������ ���� ���#�4)��* :

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34

last installment of ` 175 crores was paid by

��E$�����) $�����������I�����������'�Secretary (Budget), Shri Shaktikanta Das

��� ?V�AV�?A�?� ���� *���(� ����) � �Debt-Free Company.

MoU with Ministry of Finance

Your company has signed a Memorandum of

Understanding (MoU) with the Department

of Economic Affairs (DEA), Ministry of

Finance, setting an ambitious sales target

of `�VARA��������!���������'�?A�?K�V��+���MOU is based on the premise of a growth

charter in a globally competitive environment

��� !��;��� '�����(� ""����� �!� ����) �and incorporates new parameters and

weightages for evaluation of performance

;��� !����� ��� "���<�'��$� ��;� ����*��$�*���� �� "������ ��=���������� �� ;�''�as optimization of its various resources.

DPE has prescribed new parameters in

the areas of Research and Development,

Sustainable Development, Corporate Social

Responsibility, Corporate Governance and

Human Resources Management which

have been duly incorporated in MoU for 2012-13. The MoU also contains commitments in

the areas of customer satisfaction, adoption of innovative practices, project implementation,

participation in international tenders, Environment safety, etc.

Diamond Jubilee Celebration of India Government Mint, Kolkata

India Government Mint, Kolkata, a unit of

����) � ��'�<���� ��� E�*���� ��<�'���Celebration on 31st March, 2012 at Alipore,

Kolkata. Shri Pranab Mukherjee, the then

Hon’ble Union Minister of Finance was the

Chief Guest of the programme along with

other dignitaries.

Besides coinage production, Kolkata Mint

has produced different commemorative

coins for last six decades. During recent

years India Govt. Mint, Kolkata has

produced several commemorative coins

���� *��� 7���� �*4� �'*��+ ���������� ��� ���J�� !`�K��� ���! ���������������� !& �>����������� ��!� �* :� �������>��>����4������������������#�6I�����8

)L�������� !* 9<=�<;�M$��&�������*���7�����*4��'*��+�������7�/ ���������������������#�4)��* :

7������ !� ���� ����"�� �� �4��� ��D�$���� !�/*�, �>��� $# ��� ���� 3 �E$�� 9�� � *������� ! :�����������'����$*�>���5��

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35

on various themes like 150th Birth Anniversary of Shri Rabindra Nath Tagore, Mother

Teresa Birth Centenary, Commonwealth Games, 150 years of Income Tax in India, 150

years of Comptroller & Auditor General of India etc. This Mint has also produced medals

of various types like the highest civilian medals viz. Bharat Ratna, Padma Vibhushan,

Padma Bhusan, Padmashri, Gallantry medals viz. Paramvir Chakra, Mahavir Chakra, Vir

Chakra Sena medals for Defence, Medals for Ministry of Home Affairs, Commonwealth

Games, Educational Institutions, Social Services etc. Productions of Medallions for

National and International Film festivals are also the pride of Kolkata Mint.

AWARDS

� Your company has been awarded

Performance Excellence Award-2011

in Golden Enterprise Category

from Indian Institution of Industrial

Engineering (IIIE), Mumbai for its

�����'� ��� �"�����'� ����(���The award was received by Dr.

Manoranjan Dash, Director (HR) of

the Company on 15.06.2012 during

16th CEOs Conference on the theme

“India 2025: Industrial Perspective”

organized at Udaipur by Indian

Institution of Industrial Engineering, Navi Mumbai. This award recognises the growth

and performance excellence shown by the Company during 2010-11.

� One of the unit of your Company, India Security Press, Nashik had participated in

the Safety Award Competition during the year 2011-12 conducted by the National

Safety Council (NSC), Maharashtra Chapter, Mumbai. ISP has won prizes in both

�����(������=�G�� ��(�����������S�������������� �;����=��(����������Frequency Rate.

� Bank Note Press, Dewas has achieved ‘National Safety Award’ for the performance

year 2010. This achievement manifests continued best practices adopted by BNP

in industrial safety.

HIGH SECURITY MANAGEMENT SYSTEMS

������������������������'��!������(�������Y�����*����������������) ���$�where there is no compromise on Security under any circumstances. Each and every

product made at its various units is exceptionally sensitive in nature and of high value,

meeting all norms of Security and Audit Control. This is achievable through a network

of highly sophisticated system of monitored logistics, check and control mechanisms at

different areas, physical control barriers, security procedures and processes.

4��*�� ���5��4����4����� � 6378��'*��+ �����"��� ���'��! ������)L���������&���;<=��!� ����)�*��$��

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36

Our security experts ensure that this

sophisticated vigilant security system works

perfectly round-the-clock to make sure that

the products we produce for our customers

are always under vigilant eyes. At present

CISF is looking after security arrangements

of 6 units and security of remaining three

units is entrusted to State Police Guards/

Departmental Security. Induction of CISF in

these units is also under process. State of

Art IP based security surveillance system is

being installed in six units.

ECO FRIENDLY OPERATION AND ENERGY CONSERVATION

� In pursuance to the Government Policies and Guidelines to reduce expenditure

���"��*�����;���� ����;<'������(�� ���������$�����) ���((���%���'�Productivity Council (NPC) to carry out an exhaustive energy audit at all Units.

Majority of the recommendations of NPC have been implemented.

�� I�K��'�G�����!�������!P��������������������;��������*"�������������������Paper Mill, Hoshangabad was taken as a project for research studies as MPPCB

Bhopal has been emphasizing time and again to bring down the consumption of

water to zero level as per the norms set by the MPPCB. Accordingly, M/s Mascat

Chemengers & Consultants were engaged to study the reutilization of treated

�!P��������������������;��������*"����������$�T����(<���+���<�=��"��J���;�����'����������M�"��J���<������) ��+����������������**��������(�;�������<������*"'������� ��'� �����!� ����'���������;������������+���plant is to be made operational soon after the completion of laying of pipelines to

different sections of the mill and construction of overhead tank, which is likely to be

completed by October 2012

� The Tree plantation is being carried out regularly by the units of your Company for

protection and conservation of environment. During the year under review, ISP,

Nashik, BNP, Dewas & SPM, Hoshangabad planted 500, 200 & 400 nos. of trees

respectively.

� The units of your Company have been complying with all the environmental

obligations pertaining to pollution matters. One of the units SPM has been granted

authorization under Hazardous Waste (Management, Handling and Trans-boundary

*�=�*�����I�'�$�?AA��!����=�������!��*�?O�AN�?AA����A?�AV�?A�V�!��*�����D$�Bhopal. Also the Consent under Section 25/26 of the Water (Prevention & Control

of Pollution) Act, 1974 for Water and Consent under Section 21 of Air (Prevention

& Control of Pollution) Act, 1981 for Air have been provided to SPM by MPPCB,

Bhopal for a period of three years from 01.01.2011 to 31.12.2013.

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37

� India Security Press Nashik has taken up the work of Rain water harvesting project

in its Godavari Guest House, CSP Guest House and in ISP Estate Nashik Road.

ISP has also taken up the work for providing turboair ventilators and transparent

polycarbonate sheets in various sections in ISP. Total 62 turboair ventilators have

been provided in factory premises.

�� )&�$�%������"'����''������������U"��� *"���?RAH�����������"�P������������'�(���(�;�������(���!�������S ���RH������$�T����<��'�����"'�����RA�%�����!��C����(�R]A�;��<��'�(�����(�;�������(���!������?��H�+�R��<��'�(�����(�

�� D�� ��������(� ��� �!�������� �!� ���� ����������(� ����*$� D%�� E�;�� ���������"����������(�������*"����<��*����������!����=�������Q��"*���������*�$�BNP also reduced electricity tariff for residential colony from 1550 KVA to 1250

KVA.

� Six units of your Company i.e. CNP, ISP, SPM, IGM (Noida, Kolkata & Mumbai) has

implemented an “Environment Management System (EMS)” in compliance to the

International Standards ISO 14001:14004 for better environmental management.

COMMITMENT TO QUALITY MANAGEMENT SYSTEMS

Retaining its commitment to produce cost effective quality products, all nine units had got

)�#�NAA�Z?AAA����������������C�������=��'���(��)�#��OAA�Z?AAO�����������

DIVIDEND

+��� E�������� �=�� ����**������ � S��'� E�=������ >� ?AB� �!� "��KC� "����� �!� ���Company for the year 2011-12 aggregating to ` 116.49 crores plus Dividend Distribution

Tax of ` 18.90 crores in compliance of DPE’s O.M. No. 15(10)/2004-DPE(GM) dated

18th October, 2004 read with O.M. No.7(5) E-Coord/2004 dated the 24th September,

2004 of Department of Expenditure, Ministry of Finance bearing the subject– ‘Guidelines

on Expenditure Management—Fiscal Prudence and Austerity’ for compliance by the

"�<'�������"�������+������'���=������!�����������'�����?A��K�?���''�<��"���<�����Company after approval of shareholders in the forthcoming 7th Annual General Meeting

of the Company.

PARTICULARS OF EMPLOYEES

There was no employee of the Company who received remuneration in excess of the

limits prescribed under Section 217(2A) of the Companies Act, 1956.

ENERGY CONSERVATION

The Company is not required to furnish information in Form ‘A’ of Annexure to Rule 2 A of

the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

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38

pertaining to disclosure of particulars with respect to Conservation of Energy as it falls

outside the list of Industries prescribed for furnishing said information.

RESEARCH & DEVELOPMENT

The information as required under the Companies (Disclosure of Particulars in the Report

of Board of Directors) Rules, 1988 with respect to R&D and technology absorption is

given in Annexure-I to this Report.

FOREIGN EXCHANGE EARNINGS & OUTGO

Sl.

No.Foreign Exchange Earnings/Outgo

2011-12

(` in Cr)

2010-11

(` in Cr)

1. Foreign Exchange Earnings 7.96 19.38

2.. Expenditure on Payment basis incurred

on Foreign Travel, Material Supply,

Capital Goods and Spares & Stores

0.38 0.59

3. Value of imports based on CIF basis (on

Accrual basis)

457.65 523.72

BOARD OF DIRECTORS

� Pursuant to Article 13(3)(a) of Articles of Association of the Company,

Smt. Meera Handa, DDG (Philately), Department of Posts has appointed as part-

�*��E���������� ���D�����!�����) �;���!����th August, 2011 in place of Smt.

Devika Kumar, DDG (Philately), Dept. of Posts.

� Shri Madan Mohan ceased to be Director (Finance) of the Company with effect

from 13th October, 2011 consequent upon his repatriation to his parent cadre by

virtue Order No. 2/2/2011-SPMC dated 13.10.20111 of Department of Economic

Affairs, Ministry of Finance.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with

���"�����E�������L�I��"����<�'�����*��$����������<�������*��Z

(a) That in the preparation of the Accounts, all the applicable Accounting Standards

have been followed along with proper explanation relating to material departures.

(b) That the directors have 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 the state of affairs of the company as at 31st

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39

�����?A�?�����!�"�������'����������!����������������V�st March 2012.

���� +�� �������������=�� ����"��"��������!���������� !��� ���*���������!�adequate accounting records in accordance with the provisions of the Companies

Act, 1956 for safeguarding the assets of the company and for preventing and

detecting fraud and other irregularities.

(d) That the directors have prepared the Accounts on a going concern basis.

STATUTORY AUDITORS

M/s. Serva Associates, Chartered Accountants, New Delhi were appointed as Statutory

���������!��������*"���!�����������'�����?A��K�?�<�������*"��''�������������General of India (C&AG of India) in terms of Section 619 (2) of the Companies Act, 1956.

Further 9 Branch Auditors were appointed by Comptroller and Auditor General of India

!��������(������������!������������!������*"���!�����������'�����?A��K�?��+���Statutory Auditors have audited the annual accounts of the Company for the year ended

31st March, 2012.

AUDITORS’ REPORT

+����������L�I�"������������'���������!������*"���!�����������'�����������31st March, 2012 and the Management’s Replies thereon and the Review on annual

accounts for the year ended 31st March, 2012 by the Comptroller & Auditor General of

India under Section 619 (4) of the Companies Act, 1956 along with the Management’s

Replies thereon are enclosed to the Directors’ Report as Annexure II and III.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report forms part of this Directors’ Report

as per the requirements of Corporate Governance as stipulated in the Guidelines on

���"���� &�=������� ������� <�� ��� E�"�*��� �!� ��<'��� F���"�����$� &�=���*���of India in this regard. The Management Discussion and Analysis Report is enclosed as

Annexure-IV to this Report.

CORPORATE GOVERNANCE

Your Company has been complying with the requirements of Corporate Governance as

��"�'���������&����'�����������"����&�=��������������<�����E�"�*����!���<'���Enterprises, Government of India in this regard. The Corporate Governance Report is

enclosed as Annexure-V�������I�"����+�����*"�������<��������������!��*�the M/s. AGB & Associates, Faridabad regarding compliance of conditions of Corporate

Governance.

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40

ACKNOWLEDGEMENTS

The Board of Directors acknowledges with deep sense of appreciation the cooperation

received from the Govt. of India, particularly the Ministry of Finance, Reserve Bank of

India, Ministry of External Affairs, Department of Posts, Department of Public Enterprises,

�������� �!� T�*�� �!!���$� �������� �!� <���� �� F*"'��*��$� E�"�*��� �!� ��������and Family Welfare, various State Govts and also from Banks. The Board of Directors

acknowledge with thanks the constructive suggestions received from C&AG and the

Statutory Auditors. The Board of Directors also place on record their sincere appreciation

of the devotion and commitment of all employees of the Company.

For and on behalf of the Board of Directors

Sd/-

Date: 27th September, 2012 (M.S. Rana)

Place: New Delhi Chairman and Managing Director

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41

ANNEXURE-I

FORM-B

(Pursuant to section 217 of the Companies Act, 1956

and the Rules framed there under)

RESEARCH AND DEVELOPMENT (R & D)

-�� *+� �� ����������.#� #�/�0�,� ���������������#��1��+���

During the year under review, the Company has taken-up R&D projects in the

��'����!���������""��$���������"�����($����������"�����(���������*�''��(���+���Company is setting-up R&D centres across all production verticals.

��� �������������������������������#��������/�0�,

The Company would be able to produce critical raw materials indigenously and

thus bring more indigenisation in its operations.

3. Future plan of action

� +��<���(�*�����!���������������(�������$�"���������"'����(����*��!�����(�processes.

4. Expenditure on R & D expenditure as a percentage of total turnovers

� E����(���������'�����?A��K�?$� �����*"������ ������������C"���������!�` 4.63 crores towards Research & Development activities. The percentage of R&D

Expenditure over total turnover is 0.13%.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts, in brief, made towards technology absorption, adaptation and innovation

The major efforts made towards technology absorption, adaptation and innovation

are as follows:

�� ����(K�"��!���;�D���%����"��� ��������������"�����''$�T����(<��including stock preparation plant.

b) Commissioning of one line of Bank Note Printing at Bank Note Press, Dewas.

��� �����U�������������*���!�D���%����"�����''�)�����=�� ���!���"���������of Bank Note Paper setup at Banglore/Mysore.

d) Implementation of SAP/ERP across all the units.

��� �������������������������������#�������������������+���� ����+����������cost reduction, product development, import substitution etc.

Technology absorption, adaptation and innovation have resulted in indigenisation,

capacity enhancement and bringing more security and synergy in the operations

and also import substitute of critical raw materials.

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42

3. In case of imported technology (imported during the last 5 years reckoned

���� �#�� ���������� �� �#�� ���� ���� ����'� ����.���� ����������� ���� ���furnished:

(a) Technology imported : D���%����"��� ���

(b) Year of import : 2011-12

(c) Has technology been fully absorbed? : Under Erection

(d) If not fully absorbed, areas where this has not taken place, reasons

therefore and future plant action. : N.A.

For and on behalf of the Board of Directors

Sd/-

Date: 27th September, 2012 (M.S. Rana)

Place: New Delhi Chairman and Managing Director

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43

ANNEXURE-II

MANAGEMENT REPLIES TO AUDITOR’S REPORT

+�����������=��(�=�����������I�"��������"�������������������!�''�;��(��'����points emerged:-

1. The proper books of accounts as required by law have been kept by company

so far as appears from audit examination of those books. For preparation of

Company’s accounts, the branch auditor’s report have been considered. As per

the requirement of the Companies Act, 1956 the accounts are giving true and fair

view and are in conformity with the accounting principles generally accepted in

India.

2. The Para-wise comments on the Audit Report are as follows:

Para D(i) & Para I(e)(ii)

Suitable notes to account has been incorporated to disclose the provisional nature of

receipt of amount of Coins from Ministry of Finance and the increase/decrease in the price

�!���������qq���Q����������*�������!���'�"�������''�<���������������<��Q����years.

Para D(ii)

The contingent liability which may arise on account of pending employee claims & indirect

C�*������<�������;����Q��'��<��;���!�%���VW�����������'���*����

Para D(iii)

+�����*"������������"��������!�������������!�=��������(����������������FE���$�2006 at all units.

Para F(i),(ii) & (iii)

As per Ministry of Finance O.M. dated 10th February, 2006, all assets and liabilities

have been taken at the book value. Proforma Accounts of all these units are still under

��'��������������(���������!����^S�����!��*�&�=���*����!�)������J��<'��`�����"�'����������!������*"������<���(���P��������"��=�����'�<����������<������!����������!��������) ���������'��J��*��\��'�*����!�������������;�''�<��made on completion of proforma Accounts.

Para I(a)(i)

Company is following laid down accounting policies as well generally accepted accounting

������"'����&�����""'��<'�����)����������"��"������!������'���*������������are no major deviation except non-compliance of AS2 for valuation of inventories at SPM,

Hoshangabad and IGM, Kolkata units and few items of income & expenses are recorded

in books of accounts on cash basis.

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44

Para I(a)(ii)

The company is generally following the Accrual System of Accounting however in few

cases pertaining to employees, insurance & income from forgery detection charges

entries are being made on cash basis. Amount is nominal and not material.

Para I(b)(i) & (ii)

The company values its inventories on budgeted cost and makes it reconciliation with

actual cost on completion of statutory audit for costing purpose. IGM, Kolkata is valuing

the inventories of commemorative coins & medals at 91% of last sales price as necessary

cost records will be completed on completion of statutory audit.

Para I(b)(iii)

+���������������!�����!�*���'��<��(��������;�''��=������*"��������"������'�����!������*"������;��'������*"�����P����<�������'�����"������������!����������transfers, however the same will have some marginal impact on inventories valuation in

�����"���!�����'�����"����;�����������*���'�

Para I(b)(iv)

�������<����;�������ID)�!���<'���������*�����M������;���(����"�����!��*�ID)�

Para I(c)(i)

In earlier years all units were under Government control and accounting entries are being

*����������<������!������"�������$�����) ���"�������'�����*��!��������($�however in initial period after corporatisation there were few entries which have not been

accounted on accrual basis due to late understanding of concept of accrual by old staff.

However, these problems have been addressed now.

Para I(c)(ii)

In earlier years some entries relating to consumables have been created twicely in tally

which has now been corrected. There was no separate details available for the period

01.04.2011 to 30.06.2011 and therefore entire amount was charged to prior period

adjustments.

Para I(d)(i)

As per the Ministry of Finance OM dated 10th February, 2006 all assets and liabilities have

been taken at the book value. Being commercial entity, the units have been maintaining

����������(�����<����������(�����<'����������'�!���!��������;���C����������('���Therefore, the assets have been taken in the books of company at net block (gross

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45

block less depreciation). However, for the depreciation purpose the value is being shown

at gross block so that same technical life could be continued. This will facilitate easy

�'��'�����!���"��������;�������K��C�����!����'�!���!��������

Para I(d)(ii)

At SPM, Hoshangabad some of the machine have worked on triple shift basis during the

year 2011-12, however there is no authentic records of shift wise working at unit and in

the absence of the same, depreciation has been charged on single shift basis during year

2011-12. However, depreciation amount on machineries worked on triple shift basis is

nominal and not material.

Para I(e)(i)

During the course of last PPM held in June, 2011, it was deliberated that RBI will submit

a report to Government after studying balance sheets of all the units through independent

consultants. However the same study is still pending and RBI is releasing payment of

currency notes on provisional basis. The same has been duly disclosed by way of a note

�������'���*����

Para I(e)(iii)

The impact of any change in postal rates will be accounted for in subsequent years when

��'�����!�"��'���*��;�''�<�������'�G����+���!�����<������'������'�����<��;���!�������������'���*����

Para I(e)(iv)

In case of coins, passports and postal stationery the risk & reward is transferred to

customers at the time of sale as customers take delivery at the time of sale. However in

case of sale of currency note the risk & reward is passed to customers only at the time

of receipt and acceptance of the same by RBI. Company is initiating necessary steps

to recognise revenue in the books of accounts only at the time of passing risk to the

customers.

Para I(f)(i)

���"�����=�����������'��U)$���;$���*"����������Q�����������;���'�����<'�����!��C���assets in the Balance sheet and therefore question of overstatement of gross value of

�C����������������'�=��

Para I(f)(ii)

S�C��� ����� !����� ��� �C����� �����(� "�����''�� =��������� � )&�$� ��*<�� �� ���$�T����(<���=��<������P������I���\K�='�������������"��"��*������������!�these assets in company books.

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46

Para I(f)(iii)

Any liability arising on account of stamp duty payable on title deeds of immovable properties

shall be recoverable from Govt. of India and therefore no provision for the same has been

made in the books of accounts.

Para I(f)(iv)

+����"��$� ��'������������� !�''�� ���(��� ��"������ '���������� !�''�;��(�"������accounting policies as it is not feasible to identify/ co-relate it separately with machine and

capitalize along with machine value.

Para I(f)(v)

���"�����������(������K�A������������(�!����C�������$��C������������'��<��capitalised when they are ready for use or have been put to use. As on March 31, 2012,

ERP project was either at implementation stage or stabilisation stage at all units and

therefore shown in books as ERP-W.I.P. However hardware comprising of computer

terminals at units, data centre and Disaster recovery centre have been capitalised as

they have been put to use.

Para I(g)(i)

������(���'��'��'���$�)&�$�%�������*����"��=�������!�I��OR�A?�'�������������!�arrears of anomaly in VI pay commission in terms of HO circular No 10/02/2011-EIII/A dated

19.03.2012, however the provision was made on the basis of all available information and

on estimated basis. The actual amount may differ from these estimates and difference if

any will be recognised in the period in which the same will be crystallized.

Para I(h)(i)

The land at sector 1 & 23 held by IGM, Noida are taken on long term lease, however in

initial years of lease no amortisation was done. Now in term of AS-119 the basic premium

paid for acquiring the lease is written off over the balance period of lease starting from

10.02.2006 i.e. date on which all assets and liabilities transferred to corporation and

ending on the date of termination of lease as per lease deed.

Para I(i)(i)

�����$�T����(<�������(�������� ���������=��<���� ���������!��� �*"��*���by an outside agency however necessary provision for impairment could not be made in

accounts due to difference in valuation of realisable value of some machine.

��)&�$�T����<�$�����C�����������!<��'�����������������<'����������$�<��their realisable value is more than book value and therefore no provision for impairment

is required in books of accounts in year 2011-12.

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47

Para I(j)(i)

Company has made no provision for land revenue tax for SPP, Hyderabad unit based

on the legal opinion obtained. As per opinion only service charges are payable to the

Municipal Authorities and no land revenue tax is payable. Therefore no provision has

been created in SPP, Hyderabad books of accounts except for service charges payable

to Municipal Authorities. At all other units necessary provision has been made.

Para I(j)(ii)

Company has shown the liability which may arise on account of VAT or CST at ISP, Nashik

�������(���'�<�'���<��;���!�%���VW��������'���*�����������!���������������deviation of provision of AS29.

Para I(j)(iii)

Provisions are being made at units on the basis of latest available information at the time

�!���'�������!�<������!���������+�����'�*����*����!!���!��*���������*���and difference if any will be recognised in the period in which the same will be crystallized.

Para I(j)(iv)

Self explanatory & needs no comment.

Annexure to the Auditor’s Report

Para I

+�����*"������*������(�Q����=�����'�������������!�''��C���������Q������except to those assets where particulars were not available at the time of Corporatisation

i.e. 10.02.2006. In case of assets acquired after corporatisation full quantitative details

��� ������� ��� =�'<'��� E����(� ��� ���� ����������� �!� �C��� ����� ��� <������*"'��������"����#!��������*��M���������������!����������������������"��������!�''�������!� �����������*�����+�����*"��� ���'�������(�����(� �������*��!�"�����'�=����������!��C���������������������'�����;���<������!��������

Para II

+�����*"����������(�����(����"����������!�"�����'�=����������!���=���������'����(�stores & packing materials.

Para IV

The Company is strengthening its internal control system with respect to personnel

�������$� �������'����� �!� ��<���$� ��������� �� �=����$� ����������� ��� ='������!� ��K��������=�'�"�������$��C����������*���'�"������*��$��"���� ��"'��*���procedures & guidelines with regard to perquisites and business promotion expenses.

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48

Para VII

E����(������'�����?A��K�?$� �����'���������"�����!�������''���������<����carried out through external Agencies, Audit Committee of the Board of Directors requires

the reports and as per its recommendations, internal audit is being improved. Internal

audit set up of company is also getting revamped and necessary follow up measures

have been initiated.

Para VIII

The Company has started maintaining cost records at all units as required by Central

&�=���������������?AN����<���!���*"�������$��NR]�!�����������'�����?A��K�?���necessary compliance.

Para IX(a)

Necessary provision has been made for a sum of Rs. 145.60 lacs towards leave salary

contribution & pensionary charges relating to IGM, Noida, VAT of Rs. 36.88 lacs relating

to ISP, Nashik and pensionery chages of Rs. 1182.24 lacs relating to SPM, Hoshangabad

which have not been paid as on balance sheet date.

For and on behalf of the Board of Directors

Sd/-

Date: 27th September, 2012 (M.S. Rana)

Place: New Delhi Chairman and Managing Director

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49

ANNEXURE-III

Management’s Replies to the Comments of the Comptroller and Auditor General of

India Under Section 619(4) of the Companies Act 1956 of the Accounts of Security

Printing and Minting Corporation of India Ltd. for the Year Ended 31st March 2012.

Comments Management’s Reply

+���"��"������!������'���*�����!���������������(���������(����"�������!�)���� �*����!����������������31st�����$�?A�?����������������;�����������'���"����(�framework prescribed under the Companies Act, 1956 is

the responsibility of the management of the company. The

statutory auditors appointed by the Comptroller and Auditor

General of India under Section 619(2) of the Companies Act,

�NR]�������"����<'��!����C"������(��"�������������������'�statements under Section 227 of the Companies Act, 1956

based on independent audit in accordance with the auditing

and assurance standards prescribed by their professional

body, the Institute of Chartered Accountants of India. This

is stated to have been done by them vide their Audit Report

dated 30.07.2012.

I, on the behalf of the Comptroller and Auditor General of

India, have conducted a supplementary audit under Section

]�N�V��<�� �!� ��� ��*"����� ��$� �NR]� �!� ��� �����'�statements of Security Printing and Minting Corporation

�!� )���� �*���� !��� �������������V�st March, 2012. This

supplementary audit has been carried out independently

without access to the working papers of the statutory auditors

and is limited primarily to inquiries of the statutory auditors

and company personnel and a selective examination of some

of the accounting records. On the basis of my audit nothing

��(�����������*����*�����;'��(��;�����;��'��(�=�������to any comment upon or supplement to Statutory Auditors’

report under section 619(4) of the Companies Act, 1956.

As per audit conducted

by C&AG, nothing

has come to its notice

which would give rise to

any comment upon or

supplement to Statutory

Auditor’s report under

Section 619 (4) of the

Companies Act, 1956.

For and on behalf of the Comptroller For and on behalf of Board of Directors

����������&����'��!�)���� �!�����)

Sd/- Sd/-.

(Naina A. Kumar) (M.S Rana)

Principal Director of Commercial Audit & Chairman and Managing Director

FCK#!�������*<��$������D���K)U$�%�;�E�'���

Place: New Delhi Place: New Delhi

Dated: 07, September, 2012 Dated: 27th September, 2012.

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50

ANNEXURE-IV

MANAGEMENT DISCUSSION AND ANALYSIS

HISTORY

�������� ������(� ��� �����(� ���"������ �!� )���� �*���� �����) �� ��� � �������Category-I Central Public Sector Enterprise wholly owned by Government of India.

����) ������((���������*��!�����(�\�"����������!�D���%���$����������"��$�%��Kjudicial Stamp Papers, Postal Stamps & Stationery, Travel Documents viz. Passport and

U��$�����������������$����Q���$�D����$�H����$��"���'����������;�����������S�����$� �������� )���$� �����'���� �� ��**�*���=�� �����$� ���''����$� I�����(� �!�Gold, Silver and Assay of Precious Metals, etc. The Company has nine units, i.e. two

Security Presses at Nashik and Hyderabad, two Currency Presses at Dewas and Nashik,

four Mints at Mumbai, Kolkata, Hyderabad and Noida and one Security Paper Mill at

Hoshangabad. All the 9 units headed by General Managers are industrial organizations

and are regulated in accordance with the labour laws and directions of Government of

India issued from time to time.

GLOBAL ECONOMIC CONDITION

Financial Year 2011-12 was a challenging year. The global economy, barely a year after

recession, witnessed lower economic growth, resulting primarily from the Euro Zone debt

crisis and high oil prices, which were fuelled by uncertainties of supply. Rising unrest in

the Middle East and North Africa (MENA) resulted in unprecedented levels of crude oil

volatility. The European economies stagnated and the US witnessed a downgrade in

its credit rating, while the growth engines of the global economy, China and India were

!������ �� �(���� '�Q������ �� *�� �����(� ��P����� )�� ������$� ��=�'� ������ ��� �<�� ���the tsunami in Japan posed further challenges. The year 2011-12 was abetted by the

continuing global volatility and challenges. These uncertainties led to widespread risk

=�����������=����'��!!������"�'�P�;������;�"��J�����+�����*"������!���'�*����opportunities led to socio-political tensions, increasing protectionism, reassessment of

regulation and more importantly, heightened competition for scarce natural resources.

OVERVIEW OF THE INDIAN ECONOMY

With increasing global integration, the Indian economy was impacted by global

����������$�;��'�������*���*��!������(��������*�������''��(����!�"�������������(����P���$��(��*���������������$�'�;���=��*��������'�����"�'����*���(��The slowdown in 2011-12 was seen in all the major sectors of the economy as compared

with the previous year. The service sector grew by 8.9%, Industry by 3.4 % and Agriculture

by 2.8% as compared with 9.3%, 7.2% and 7% respectively in 2010-11. Industrial growth

remains unchanged due to supply–side bottlenecks, particularly in the mining sector

and moderation in investment demand. The most dismal picture has been presented by

�"�'�(�������(*���;��������<����������(�=���������������(�������'����(�������'�;��;�� ;�� ;�������� ��� �"���� ������� �� ������ <�� �"�'� !��*���� ;�����decreased to 5.5% in 2011-12 as against 7.5% achieved in 2010-11.

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51

INDUSTRY OVERVIEW

����) ���������������(*����!������*�����������������������"�����(����*����(�requirement of Government of India. The customers of the Company include Reserve

Bank of India for currency notes, Department of Economic Affairs, Ministry of Finance for

coins, Ministry of External Affairs for Passports, Ministry of Home Affairs for Visa stickers,

Department of Posts for Postal Stationary, State Governments for Non-Judicial Stamp

Papers, other CPSEs and autonomous bodies, etc.

SWOT ANALYSIS

Strength

�� ����) �����"<�'������������!�''�������������������'�����"����������!�security products.

· The Company has expertise in printing of Banknotes, minting of coins, production

of CWBN Paper, Ink and printing of all types of security documents.

� The Company has taken the initiative for indigenization of security paper by setting-

�"��!��U���*"����������*���!�D���%����"�����''�)�����=�� ������RAZRA�"�������"�;����\���DID%�� �

�� ����) �����=��(��"�'��C"��������"'��!���I���?OWO��������!����=�������!��*�2009-10 for modernization of its units and indigenization of security products.

����) � ��� ��*"'���� ����K)� �!� *������G���� �!� *����� �������G���� �!��������� ��� �"��� ��''� ��� ��K"��(������ ����) � ��� <���� ���!������ ���������(���K)�����<�����������!�S������;�����"��=������������������'����decision making powers to the Company.

�� �''� ���������!� �����*"������ )�#�NAA��������������C��������� )�#��OAA����������

�� ����) � �����'��"��=������!������'��(������**�*���=�������$�%���$����'�Stationary, Passport & Travel documents, etc.

Weaknesses

� The Turnover of the Company depends on indents given by RBI/Government

departments. It leads to uncertainty in taking strategic investment decisions.

� The historical manpower cost is high and plant & machinery being old require

replacement/upgradation. The working capital cost is also high due to Govt.

debtors.

Opportunities

� Export potential for coins and currency particularly in SAARC region.

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52

�� )��������"����'����<�''����"�������\���**�*���=������������������=��������security products.

�� E�=���������� ��� ����*���� ��� ��� !��*� �!� ��������� ��Q����*��� �!� =������Ministries, PSUs and Independent bodies for security products.

Threats

� Reduction in indent of Postal Stationary, Non-Judicial Stamp Papers.

� Demand for currency and coinage products from RBI is variable.

� High Security cost due to deployment of CISF personnel.

� Metal prices are highly volatile.

� Increased competition from other players in retail bullion items.

FUTURE OUTLOOK

����) �<�'��=��� �� ����� �������(������ !���*������G��������"�����C"�������The Company is diversifying to new security products so that its spare capacity in security

"������� ��� <�� ��'�G��� !��� "��������� �!� ��=�������� "�������� +��� ��*"��� ��� '�������=����(���('�<''���C"�������"������������<��������) ��������(��G������only in India but also in third world countries.

RISKS AND CONCERNS

����) � ��''�� ��� "������� *��'�� �� &�=���*��� �!� )���$� ��� &�=���*���$� �����Governmental Authorities and Public Sector Undertakings. As far as core business of

��� ��*"��� ��� ���������$� ID)L�� ��<������$� �\��� DID%�� � ��� �"��� �"���� !���printing of banknotes thus creating a business risk. The other areas of concern are local

��!�������� '���� ������\<���$� �������L�� ��'������ �� !�'�''� ������ �<'�(����� ���risk of abnormal increase in cost of metals and other inputs, which may adversely affect

��=������!�����) �� )�������� ��*��(������������$�����(���'�����;��� '��'�"��J���staff/ unions and local administration are being developed and maintained. The costing of

the products includes latest raw material prices.

To strengthen security surveillance latest state of the art security system is being installed

in few units.

The Company has Central Industrial Securities Force (CISF) and State Para-Military

forces deployed to take care of the security of the units. CISF is being deployed gradually

���''�����������"�����������������!��T�����EF���)��''�(�����D������)D���!���'�����posted in the Security Presses and Security Paper Mill.

The Company’s Management is committed to further strengthen its risk management

capabilities in order to protect and enhance shareholders value. Considering the planned

efforts, monitoring by top management and participation of all employees in the decision

*���(�"������$����������������������;�''�;��������""�����!������*"���

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53

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a comprehensive system of internal control to safeguard the assets

(���� '���� !��*� �������G��� ���� ��� ������� "��"��� �����G���� �!� �����'�����������+�������*���=����(�''������'�����"����(�!����������������*"���is designed to provide a high degree of assurance regarding the effectiveness and

�!�������� �!� �"������$� ��� ��'�<�'��� �!� �����'� �����'�� ��� ��*"'����� ;��� ';�������(�'�������""'��<'�� ��� ���=��������'��� ���;����� �����*"����"������+��*��� ��� �����'� �����'� *���� �!!���=�� ��� "��J��� �"�����$� ��*"�������=�� �����'�audit manuals and accounting manuals are being continuously updated. The Company

has also implemented suitable control measures to ensure that all resources are utilized

�"�*''�$������'���������������"�����;�������������''�""'��<'��';�����regulations are strictly complied with.

The management of the Company duly considers and takes appropriate action on

the recommendations made by the Statutory Auditors, Internal Auditors and the Audit

Committee of the Board of Directors. The Company has continued its efforts to align its

process and controls with global best practices. To make the internal control more effective

and transparent, the then Hon’ble Union Finance Minister Shri Pranab Mukherjee had

released the new procurement manual of the Company to enhance transparency in the

operations of the Company to the highest level. SAP/ERP will be fully operationalised by

?A�?���������<���(����"�����$��!������������������*���������"�������

��*����(������!�������!������'������'�����*���Z

� Preparation and monitoring of annual budgets for all major activities.

� A well-established internal audit team reviews and reports to management and

Audit Committee and corrective measures are taken in time for continuous

improvement.

DISCUSSION ON FINANCIAL PERFORMANCE

Sales of the company increased by 9.19%, to `� VO??�]�� ������� �����(� �����'� ����?A��K�?�!��*�V�VO�RW����������������'�����?A�AK����#��������*����!������*"���decreased 26.56% to `��]W�]R������������(������'�����?A��K�?�!��*�` 228.29 Crores

��������'�����?A�AK���

+����"����(�"������DE)+���!������*"������������<��O�]WB�!��*�` 940.50 crores

���"��=����������'�������`�N�O�OO����������������'�����?A��K�?��%��"����!���C�also rose to ` 582.47 crores in 2011-12 from ` 577.19 crores in 2010-11, registering an

increase of 1%. The Company has repaid loan amount of ̀ 700 crores taken from Ministry

�!�S�����$�&�=���*����!�)�����+��������'�����?A��K�?�'���;����������������=���reaching of `�?VWA���������X����D���� !��'���""�� ��"��"�������'���=������ !���S�X��?A��K�?��!�?AB��!�"��KC�"������!������*"���((��(��(���` 116.49 crores plus

Dividend Distribution Tax of ` 18.90 crores.

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54

HUMAN RESOURCE DEVELOPMENT

It is the Human Resource which is an invaluable asset during the phase of transition in our

Company and various measures are being taken for welfare of the Employees including

Socialization programmes, Community activities, Cultural functions, Games and Sports

which are slowly getting momentum in the corporate life.

During the year 2011-12, an extensive exercise on manpower planning covering

employees across all regions has been carried out. For optimization project reallocation

has been done on geographical basis and job description of all executives across all

'�=�'�����!������'������=��<��������������+�������������*"������'�=�'��!����executives in a better way a new performance appraisal system has been introduced in

line with DPE guidelines.

In the area of training and development, your company has been focusing on emerging

corporate trends such as Corporate Governance, Gender Concerns, Quality Control in

products, E-Procurement, Global Competitive Technology Strategy etc.

��� !�� TI� ��''��(��� ��� ����) � ��� ���������$� ;�� ��� ''� ���(��''�� "'����(� ���eagerly looking forward to the mission of changing from the era of General Administration

��T�*��I����������(�*���<����(� �� ���<���"���������"��='��� �����<'���Enterprises in India.

ENVIRONMENT PROTECTION AND CONSERVATION

Environment Protection and conservation has commanded due attention as a result

environment management system has been developed as integral part of Company’s

��=��������<��'���������������"��������*��'��!�"�����������+����"��������"��taken at the various work sites in compliance with such procedural requirements covers:

1. Engagement of National Productivity Council (NPC) for carrying out exhaustive

energy audit.

?�� I�Y������������*����������!�'�����!��������'�"'��$����������

3. Tree plantation at factory sites & measures for restricting cutting of trees.

O�� �=������� �!� ���� �G���� <�� ��"��(� ���� "��=������ ����*� ��� *���\���''��C���������!������(���(���������"��"�����������(�������������

R�� S������"�������*��(�����"��"��������

6. Installation of necessary safety measures at factory premises.

The Company has continued its efforts to conserve the energy to highest possible

level. The Company has formulated a long-term vision for embracing new technologies

covering use of renewable form of energy. The Company is also developing the concept

of environment friendly green building in all its upcoming projects.

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55

REPORT ON CORPORATE SOCIAL RESPONSIBILITY

The Company has been discharging its social responsibility by participating in various

social welfare schemes. In order to provide a complete framework and platform for greater

participation and to align it to DPE guidelines and other International standards such as

United Nations Global Compact Principle, the Corporate Social Responsibility policy and

plans have been framed and designed.

As part of its CSR initiative, a sum of ` 4.68 lacs has been spent in Rajasthan through

Jansankhya Sthirata Kosh (JSK) for bringing awareness among the people about

population stabilization. Kisan Vikas Patras (KVPs) have been distributed to the eligible

couples who have undergone sterilization after having one or two children. Another CSR

initiative was taken-up through Bhagwan Mahavir Viklang Sahayata Samiti (BMVSS) for

��'"��(����<'���"�����������(���*�<�'��������(����<��"��=����(���*������'�'�*<�$��'�"����������������V?W�"�����;����"��=����������'�'�*<��;��'���AR�"�����;����provided calipers at a cost of ` 10 lacs during the year 2011-12.

����) ����'���������������;�����!��*"��=�*����!����������*�������!�������connecting U.S. Gymkhana, ISP with Nashik – Pune Highway and Jail Road side at

Nashik (Maharashtra) at cost of ` 89.68 lacs through Divisional Commissioner, Nashik

during 2010-11 and 2011-12. An additional amount of ` 19 lacs has been sanctioned for

this project during the current year.

����) ����������������C"���������!�` 294.66 lacs towards construction of 9 primary

schools in Murshidabad District of West Bengal during the year 2011-12. CSR programme

for rain water harvesting system and sanitation project was undertaken at cost of ` 20

lacs through Indian Red Cross Society, Mumbai during year. Blood donation camps were

��(��G����������!�''��<������) � ��� ���M����� )��$�%����$� )&�$���'�����D%�$�Dewas during year 2011-12.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the company’s

objectives, projections and expectations may be ‘forward looking statements’ within the

meaning of applicable laws and regulations. Actual results might differ substantially

or materially from those express or implied. Important developments that could affect

��*"��L�� �"������� ���'����� ��(������ ���(��� ��� �����*��� ��=����*��� ��� )���$��C���(�����P�������$�C�';�$�'��(��������'<������'�����

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56

ANNEXURE-V

REPORT ON CORPORATE GOVERNANCE

1. THE COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

Corporate Governance refers to set of laws, regulations and good practices that enable

�����(��G������"��!��*��!�����'���������''��(������'��(���*�;�'����������='��� !��� ''� ��� �����'������ �������� ������(� ��� �����(� ���"������ )���� �*����(‘SPMCIL’ or ‘Company’) believes in the principle of sound corporate governance. At

���) ����"����(�=�����������*�������"���$����"����=�$�����Q��<'����������while taking care of stakeholders. It consistently endeavors to achieve high standards

of corporate governance for enhancement of long term stakeholder’s value. As a good

corporate citizen, the Company is committed to sound corporate practices based on

����������$��"������$�!������$�"��!������'��*���������<�'������<��'���(�����������*��(�''���������'�����!�������=��(������<'��'��(���*�(��;�����"���<�'���

2. BOARD OF DIRECTORS

Composition of BOD:����"������"��=��������!�����'����!������������!�����) $����Board consists of ten members, of whom four are functional directors, including Chairman

and Managing Director, three are Nominee representing various government departments,

and three are independent directors. As per articles of association, the power to appoint

Directors vests with the President of India. In terms of the articles of association, the

strength of Board shall not be less than three Directors and not more than ten Directors.

Category, attendance at Board Meeting, AGM & number of other Boards or Board

Committees in which directors hold position as a member or chairperson during the year

2011-12 are as under:

Name Meeting

held during

respective

tenures of

Directors

No. of

Board

Meetings

attended

Attendance

at the

last AGM

(held on

10.08.2011)

No. of other

directorship

held as on

31.03.2012

(a) Functional Directors

Shri M. S. Rana

Chairman & Managing Director

DIN – 01174242

8 8 Yes 1

Shri Ashwini Kumar

Director (Technical)

DIN – 01488057

8 8 Yes 1

Shri Madan Mohan*

Director (Finance)

DIN – 01467408

5 5 Yes %)

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57

Name Meeting

held during

respective

tenures of

Directors

No. of

Board

Meetings

attended

Attendance

at the

last AGM

(held on

10.08.2011)

No. of other

directorship

held as on

31.03.2012

Dr. Manoranjan Dash

Director (HR)

DIN – 02071641

8 8 Yes %)

(b) Govt. Nominees

Shri Bimal Julka

Director General,

Directorate of Currency,

Ministry of Finance,

DIN – 03172733

8 8 Yes 1

Shri H. Pradeep Rao

Joint Secretary & FA,

Ministry of Finance,

DIN – 03042828

8 7 Yes 1

Shri K. Skandan

Additional Secretary,

Ministry of Home Affairs,

DIN – 01945013

8 6 Yes 1

(c) Independent Directors

Smt. K.J. Udeshi

Director (RBI Nominee)

DIN – 01344073

8 7 Yes 3

Shri Muktesh K. Pardeshi

Joint Secretary (PSP) & CPO,

Ministry of External Affairs,

DIN – 03366751

8 7 Yes %)

Smt. Devika Kumar**

DDG (Philately),

Department of Posts,

DIN - 02769069

3 1 No %)

Smt. Meera Handa***

DDG (Philately),

Department of Posts,

DIN – 03623187

5 4 No %)

*����*����* ������"��������� !��� ��M��=�<=������ ���������� �� ���������������NN*��4�"�>�,�������"��������� !��� ��O�=O�<=������ �����J�������� !�������NNN*��*����3�������$���� ���������44/6'�������#8�4����� !' �� ��O�=O�<=�� ������� !*��4�"�>�,�����

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58

Number of Board Meetings & Dates: The Board of Directors met (8) eight times

during the year 2011-12 (27.04.2011, 29.06.2011, 10.08.2011, 09.09.2011, 11.10.2011,

05.12.2011, 26.12.2011 & 22.03.2012) and all the information as required to be placed as

per the DPE Guidelines was placed before the Board.

Appointment / re-appointment in the Board: During the year 2011-12, Mrs. Devika

��*�$�EE&�����'�'��$�E�"�*����!�����=���� ����!�����!�E��������!�����) �on 18.08.2011 due to relinquishment of charge of DDG (Philately), Deptt. of Post. Shri

��������$�E��������S�������'���=��������!�������S������'�E�����������to repatriation to his parent cadre on 13.10.2011. Mrs. Meera Handa, DDG (Philately),

Department of Posts J���������D�����!�����) ����"'����!�����E�=�����*�������(�the year 2011-12 on 18.08.2011.

��<���!�"���'���!����E�����������!������������������Z

� Shri M. S. Rana, Chairman & Managing Director

Mr. Rana aged 53 years is a graduate in Civil Engineering from Thapar Institute of

Engineering and Technology, Patiala, being overall topper and gold medalist. He

has also been awarded the Chancellor’s Medal of Excellence for the best student

of the University. Mr. Rana has also done Post graduation in Project Planning and

Management from The University of Bradford, UK in 1999-2000 with scholarship

from the World Bank. Mr. Rana has been awarded the outstanding Alumni award

by Thapar institute of Engg. and Technology Patiala in 2006.

� ����� I�� ��� ;������ ��� F�(������� )���� ��� !��*� ��'�� �N��� �� ����� �N�O��Thereafter, he served in Indian Railways in various capacities from Asstt. Engineer

to Chief Engineer (SAG) for 21 years. He has completed a number of mega

projects on Indian Railways. From August 2005 to March 2009, Shri Rana worked

as Director/Works, Konkan Railway, wherein he was instrumental in carrying out

geo safety works in tunnels & cuttings for safe train operations. He was also in

���(���!�����I�'����J���������I�������=�������E$�����) ���������?AAN�������I�����'�������*���!����D���%����"�����''�)�����=�� ����D%��)� ���Shri Rana has published a number of articles on infrastructure.

� Shri Ashwini Kumar, Director (Technical)

Shri Ashwini Kumar, Director (Technical), a Post Graduate (Electronics) Gold

Medallist from BITS, Pilani is having experience of 35 years in diverse technical

��'���� �!��� <���(� ��'����� ����(�� )����� F�(�������(� ���=����� �F'���������$��NWO��C*���)�����%='���**������=����������#!����$�������<�������th General Manager, Naval Armament Depot, Alwaye, Kerala. He is NDC Alumini

(36 Course, 1996-97) & was awarded Chief of Naval Staff Commendation for

induction of Aerial Dropped Torpedo in Indian Navy capping technical competence

as Guided Weapon Specialist of various Missiles, Mines etc., besides other Naval

Armaments. He had established Naval Armament Depot, Sunabeda, Orissa as

���� E&�� \� T�E� �!� ��� E�"�� �����(� �N�]K�W�� T�� �*�� ��� ��"����� �����(���'�$� ?AA?� �� �������� �!� S������ ��� ��� ������� ����) � ������ ��� ����"�����

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59

A Performance driven, versatile and analytical with practical hands on approach

always perseveres to achieve immaculate results with swiftness. He has worked as

General Manager of Security Paper Mill, Hoshangabad, Bank Note Press, Dewas

���)����&�=���*������$�%����<�!����J�����(�����) ������(��$�?AA]�

� T������E�������������D�����!�D%��)� $�D�('���$�;���������RAZRA��U���*"����!�����) ����DID%�� ����<��������!�ID)��

� Dr. Manoranjan Dash, Director (HR)

� E���E�����������L����(������� <����H�'!���!��*�M�'�M��=������������E��in Manpower Policy and Practices in Petroleum Industry of India. He was deputed

<��E�"�*����!���<'���F���"�����$�&�=���*����!�)�������U�% �!�����������Executive MBA in Europe conducted by International Centre for Public Enterprises

�)��F��'�������� J�<'J����'�=�������������J�����(�������D�����!�����) $�E���E���;�����FC����=��E��������TI��!����R�*��������T�+� �*���$�D�('�����T��;������������&����'���(����TI�����U������������%�(*� �*�����U�% �����"���� #!���$� ��*<�� "����� �� ���(��� �����=��*��� �!� ���+�'���*� (���;�����;���%=�����M��E���E������;���������U�% �!���*�����������������'����(���������'!������;���+�&���"��;����U�% ��T��;��'��������(�as a Professor in ICFAI Business School, Mumbai and had immensely contributed

towards the human resource aspect of business to multifarious Industries as a HR

���!������'��������������������'��VA������<������ <������*�����������������������!� <���$�&�=���*����!�)�������;����'���(��*"����"�����������Delhi & Mumbai as Assistant Commissioner, he also served as a regular Faculty

��*<����!�U�U�&����%���'� <����)���������E�'����)������'�I�'��������)���������;����"��������=��(���!�����������"�<'������<��&'�<'�D��������Press is one of the important publications of Dr. Dash.

Dr. Dash was conferred with the honour and distinction of “Most powerful HR

professionals in India” by Employer Branding Institute in Singapore on 23rd July,

2010.

� Shri Bimal Julka, (Govt. Nominee, Ministry of Finance)

Shri Bimal Julka did his MA in Psychology from Delhi University. He was awarded a

fellowship at the Queen Elizabeth House, Oxford University and wrote a thesis on

Small and Medium Enterprises (SMEs). Belonging to the 1979 batch of the IAS, Shri

Julka has held many prestigious positions in Government. He was Director, Ministry

of Industrial Development, Government of India (1989-94), Private Secretary to

Union Minister for Human Resource Development (1995-96), Director, Ministry

of Civil Aviation (1996-98), Commissioner, Gwalior Division (2000-03), Secretary

(G/Air), Ministry of Defence (December 2004-09) and Resident Commissioner,

Government of Madhya Pradesh (2009-10). He is currently holding charge of

Additional Secretary and Director General, Directorate of Currency, Department of

Economic Affairs, Ministry of Finance, Govt. of India. He is also Nominee Director

������D�����!�#�'���%��'�&�����"������ ����#%&���������%�=�*<���A�$�2010.

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60

� Shri H. Pradeep Rao, (Govt. Nominee, Ministry of Finance)

Shri H. Pradeep Rao has been appointed as Government Nominee Director on the

D�����!�����) �<�����&�=���*����!�)����;���!��N������$�?A�A��������'�$�Shri H Pradeep Rao is the Joint Secretary and Financial advisor to Goverment of

)���$����������!�S�����$�%�;�E�'����T������D�$��������)�����������)����'����������T�� ����� )�����������������������=���� �)������#!������!� ����N���batch. He has held key positions, including Accountant General of the State of

�**�������*��$�������"'�E��������I�"���$�����'�$�#!�����!������*"��''���& Auditor General of India, New Delhi, Director of External Audit, World Health

Organisation (WHO), Geneva, Switzerland, Member Audit Board and Principal

Director of Commercial Audit, Chenai, Principal Accountant General West Bengal

and Director General of Audit (Central Expenditure), New Delhi. He is also a

Director on the Board of Syndicate Bank.

� Shri K. Skandan, (Govt. Nominee, Ministry of Home Affairs)

Born in December 1956, Shri K. Skandan has done Masters in Political Science,

D� ��!��*������M��=�������������&����������I��'�E�=�'�"*����'����(�from University of East Anglia, United Kingdom. Joined IAS in 1982 and allotted

to Tamil Nadu Cadre, he has held several senior positions in the State, including

that of Collector, Nagapattinam, Director-Agriculture, Commissioner-Industries,

Registrar, MGR Medical University, Principal Secretary-Industries, Government of

+*�'�%��j���E$�+*�'�%���%�;�"���� ��$�����*�$�+*�'�%���F'��������D���$� FC�� #!����� ����*�� +��� ��$� �EKH�*��� E�=�'�"*��� ���"�����$�etc. Presently Shri Skandan is Additional Secretary in Ministry of Home Affairs and

���&�=����*�����E�������!��*��T��������D�����!�����) �

� Smt. K.J. Udeshi, (Independent Director)

Smt. Kishori Jayendra Udeshi has M.A. Degree in Economics from Bombay

University. She had been the Deputy Governor of the Reserve Bank of India

from June, 2003 to October, 2005 and was on the Board of SEBI, NABARD and

Exim Bank. She has also functioned as Chairman of Bhartiya Reserve Bank Note

�������=�� ����DID%�� �$�D�('�����������*���!����E�"����)��������and Credit Guarantee Corporation. She had also been the Chairman of the

Banking Codes and Standards Board of India, set up by RBI to evaluate, oversee

and enforce the observance of Banking Codes. She is a member of the Court of

Governors of the Administrative Staff College of India, Hyderabad, a nominee of

the Government of Maharashtra on the Board of the Indian Red Cross Society,

��*<������������"�������(�ID)������*�����*������������D�����!�����) �

� Shri Muktesh K. Pardeshi (Independent Director)

Shri Muktesh K. Pardeshi has been appointed as customer nominee Director on

���D�����!�����) �<��������������!�FC���'��!!����;���!��V�%�=�*<���?A�A��Born in 1966, Shri Pardeshi holds a Master of Arts degree in Sociology from the

E�'��������'��!�F����*��������E�"'�*�����"����� �(�(��!��*����%���'�Autonomous University of Mexico. He joined Indian Foreign Services in 1991.

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61

������'�$������������������������"�����=����J�����������!����"���#!�����in the Ministry of External Affairs, Government of India. Earlier, He served as

Minister/Deputy Head of Mission at the Embassy of India in Jakarta (2007-10) and

Counselor at the Permanent Mission of India to the Conference on Disarmament

in Geneva (2004-07). During 1993-01, he worked with Indian Missions in Mexico,

Colombia and Nepal (where he also held the position of the Secretary of B. P.

Koirala India-Nepal Foundation). In 2001-04, he was Deputy Secretary (South

F�������������������������������!�FC���'��!!���$�%�;�E�'���

� Smt. Meera Handa, (Independent Director)

� �*�������T��$�E�"���E�������&����'�����'�'��$�������!������!�����N�?�batch of the Indian Postal Service. She has served the Department of Posts in

various capacities in Uttar Pradesh, Rajasthan and Delhi Circles and also as Director

(Philately), Deputy Director General (Postal Operations & Corporate Planning).

She has been appointed as a Customer Nominee Director from the Department

�!������������(����� )���"������E���������� ���D�����!�����) �;���!��18.08.2011.

3. AUDIT COMMITTEE

Brief description of Terms of Reference

1. Discussion with Auditors periodically about internal control systems and the scope

of audit including observations of the auditors.

?�� I�=��;��($� ;��� ��� *�(�*��$� ��� Q����'�� �����'� ��*���� <�!����submission to the Board for approval.

3. Ensure Compliance of Internal Control Systems.

O�� #=����(���!� �����*"��L�������'� ��"����(�"���������� �������'�������!� ��������'���!��*�����������������������'���*������������$���!���������credible.

R�� %���(�""���*��������*�='��!��C���'���������I���**�����(�����C����of audit fee of external auditors and also approval for payment for any other

services.

]�� I�=��;��($� ;��� ��� *�(�*��$� ��� ���'� �����'� ��*���� <�!����submission to the board for approval, with particular reference to:

a. Matters required being included in the Director’s Responsibility Statement to

be included in the Board’s report in terms of clause (2AA) of section 217 of the

Companies Act, 1956;

b. Changes, if any, in accounting policies and practices and reasons for the

same;

c. Major accounting entries involving estimates based on the exercise of judgment

by management;

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62

��� ��(������ �J��*���� *��� ��� ��� �����'� ��*���� �����(� ��� �!� ���������(�j

��� ��*"'�����;���'�('���Q����*������'��(��������'���*���j

f. Disclosure of any related party transactions;

(�� v�'����������������!�������"���

7. Reviewing, with the management, performance of statutory and internal auditors, the

adequacy of internal control systems and suggestion for improvement of the same.

8. Reviewing the adequacy of internal audit function, including the structure of the

�����'�������"�*��$��!��(��������������!�����!���'������(������"�*��$�reporting structure coverage and frequency of internal audit.

N�� I�=��;��(� ��� �����(�� �!� ��� �����'� ��=���(����� <�� ��� �����'� ������� ����matters where there is suspected fraud or irregularity or a failure of internal control

systems of a material nature and reporting the matter to the Board.

10. Discussion with statutory auditors before the audit commences, about the nature and

scope of audit as well as have post-audit discussion to ascertain any area of concern.

11. Review of Observations of C&AG including status of Government Audit paras.

�?�� )�=���(�����������*��������'�����������*���"�������<�=�������!����������by the Board.

13. To review the follow up action taken on the recommendations of Committee on Public

Undertakings (COPU) of the Parliament.

14. Provide an open avenue of communication between the independent auditors,

internal auditors and the Board of Directors.

Composition as on 31.03.2012: The Audit Committee was constituted in accordance with

the Guidelines on Corporate Governance issued by Deptt. of Public Enterprises. The terms,

reference, role & power are in accordance with prescribed Guidelines.

Name, category & attendance:

Name Designation Category Meeting attended

Smt. K.J. Udeshi Chairperson Independent 5/5

Shri H. Pradeep Rao Member Nominee, JS & FA,

Ministry of Finance

5/5

Shri Muktesh K. Pardeshi Member Independent 3/5

Smt. Devika Kumar* Member Independent 1/3

Smt. Meera Handa** Member Independent 2/2

Shri Ashwini Kumar Member Executive 5/5

x� �*�� E�=��� ��*�� ��� =���� ��� �!���� ��� ���A��?A��� ���� �� ��'��Q����*��� �!� ���(�� �!� EE&�(Philately), Deptt. of Post.

xx� �*�������T������<����""��������E��������!�����) �������A��?A������"'����!��*��E�=�����*��

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63

Meetings and Date of Meetings: +����=��*����(���!������**���������������'�����2011-12 have been held on 27.04.2011, 28.06.2011, 09.08.2011, 05.12.2011 & 22.03.2012.

4. REMUNERATION COMMITTEE

Brief Description & Composition: The constitution, tenure, remuneration of the

functional directors is decided by the President of India. In compliance of the mandatory

guidelines on Corporate Governance issued by DPE, a Remuneration Committee of the

Board of Directors of the Company is constituted by the Board in its 21st meeting held on

15th May, 2009 for Performance Related Pay (PRP) of the Executives of the Company.

Further, the Remuneration Committee has been reconstituted from time to time and as per

last reconstitution in the 41st Board meeting held on 9th September, 2011, the committee

comprises the following Directors:

Name Designation Category Meeting attended

Smt. K.J. Udeshi Chairperson Independent 1/1

Shri H. Pradeep Rao Member Nominee, JS & FA,

Ministry of Finance

1/1

Shri Muktesh K. Pardeshi Member Independent 1/1

Smt. Devika Kumar* Member Independent 0/1

Smt. Meera Handa** Member Independent -

N ���� 4�"�>� ,���� ��� "������ ��� !��� � �O�=O�<=�� ��� � �����J�������� ! ������ ! 44/6'�������#8�4����� !' ���

NN ����*����3�������$������ �������4����� � ��O�=O�<=��������� !*��4�"�>�,�����

Meetings and Attendance: During the year 2011-12, one meeting of remuneration

committee was held on 24.08.2011 and the members were present as above in that meeting.

The details of gross remuneration paid to the Functional Directors of the Company during

the year 2011-12 and 2010-11 are as follows:

(Amount in `)

Particulars 2011-2012 2010-2011

Salary and Allowances 10,484,910 9,708,971

Contribution to PF/ Pensionery Charges 441,062 606,940

�=��F����*�� 1,471,913 249,389

����I�����#��������� 4,167,635 3,941,427

Gratuity 553,555 589,785

Total 17,119,075 15,096,512

No remuneration is paid to the non-functional Directors of the Company.

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64

5. GENERAL BODY MEETINGS

Venue, Date and Time of Company’s AGM of last 3 years with Details of Special

Resolutions passed:

Particulars 2008-09 2009-10 2010-11

Date September 15, 2009 August 25, 2010 August 10, 2011

Time 12.00 noon 12.30 pm 1.00 pm

Venue 16th Floor, Jawahar

Vyapar Bhawan,

Janpath,

New Delhi-110 001

16th Floor, Jawahar

Vyapar Bhawan,

Janpath,

New Delhi-110 001

16th Floor, Jawahar

Vyapar Bhawan,

Janpath,

New Delhi-110 001

Details of Special

Resolutions

passed in the AGM

None None None

Details of Annual General Meeting in the current year:

Year Date and Time of AGM Venue

2011-12 September 27, 2012

at 1:00 pm

16th Floor, Jawahar Vyapar Bhawan, Janpath,

New Delhi-110 001

6. DISCLOSURES

(i) The Company does not have any material related party transactions, which have

"����'����P���;��������*"����'�(���E���'���������(����(����������;���the related parties are given in the Notes to Accounts of the Financial Statements

for the year ended 31st March, 2012.

(ii) There were also no instances of non-compliance on any matter during the last

�����������)������!��*��������"��'�����*"�����������������"�����(����the Company by the statutory authorities except the cases mentioned in notes to

�������!��*��(�"���!���������'���*����������"��'��!�����*�������''�pending with the judicial and quasi – judicial authorities.

(iii) Company has reiterated the Whistle Blower Policy of CVC and no person has

been denied access to the Audit Committee.

(iv) The company is complying with all the requirement of the Guidelines on Corporate

&�=�������!������F���������<�����E�F�������C�����P������������

(v) No Presidential Directives issued during the year and last three year.

(vi) During the year, no expenditure is debited to the books and accounts which are not

for the purpose of business expenditure.

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65

(vii) During the year, no expenses which are of personal nature have been incurred for

the Board of Directors and Top Management.

�=����� +���"�����(���!���*������=������!�����C"���������"�����(���!� �'��C"���������R�W]B���������'��C"���������"�����(���!��'��C"���������%�'�������������������'�����

7. MEANS OF COMMUNICATION

Quarterly Results / Annual Results: +�����*"�����(�'�'�����*��������������'�����'�$� �**����'��!�������������������������\""��=����+����������'�����'��are published in the leading English and vernacular dailies having wide circulation.

News Release, Presentation etc.: +����!���'���;����'����$�"���������$������'�results etc. are displayed on the Company website www.spmcil.com

Website: The Company’s website www.spmcil.com������'���!��*���$�������!��������and other related information is also available on the website.

8. AUDIT QUALIFICATIONS

The comments on accounts for the year ended on 31st March, 2012 by the Comptroller &

Auditors General of India under Section 619(4) of the Companies Act, 1956 and Statutory

Auditors of the Company are given in the addendum to the Directors Report along with

the comments of the company.

9. TRAINING OF BOARD MEMBERS

The Company has applied informal training of Board members by way of providing regular

updates about the performance of the company, Governments directions, Corporate

Governance guidelines from time to time.

10. WHISTLE BLOWER POLICY

The Company is committed to conduct its business in accordance with highest standards

of business ethics and ensure compliances of all applicable laws, rules and regulations.

The Board of Director has laid down the Code of Business Conduct and Ethics for the

Board members and Senior Management of the Company. The copy of the Code has

been displayed on the Company’s website www.spmcil.com. All members of the Board

������������(�*����=�������*�����*"'������!�������!�������� !��� �������?A��K�?������) ���� �������� ���H���'��D'�;�����'�����!� ����U��=���� '����%�������) \U�(\V\AN\AW\R�WR������]�AV�?A�A�

11. COMPLIANCE CERTIFICATE

This Report duly complies and covers all the suggested items as mentioned in Annexure–

VII��!� ���&����'������+������������<����� !��*� ���"������(���*"�����������regarding compliance of conditions of Guidelines of Corporate Governance of CPSEs

has been annexed to the Report.

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66

DECLARATION BY CHAIRMAN-CUM-MANAGING DIRECTOR REGARDING COMPLIANCE WITH THE CODE OF CONDUCT BY BOARD MEMBERS AND SENIOR MANAGEMENT DURING THE FINANCIAL YEAR 2011-12.

C�� * � 7���� ��������;���;*������� 4����� � ! �������# '������� ��� *������� �� ���� � ! ����� +������ ����$# � ���� ���� ��� � ����# ��� $������ !� � ������$��� !���I ���������� �*������������!������ ��������#��"�� ������&������� �� !� �����! �4����� ��������� �*������������������ !�����������#���<=��;�<�E

Sd/-

Date: September 27, 2012 (M.S. Rana)

Place: New Delhi Chairman & Managing Director

DIN – 01174242

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67

AGB & ASSOCIATESCOMPANY SECRETARIES

==========================================================================

CORPORATE GOVERNANCE CERTIFICATE

To

The Members,

Security Printing and Minting Corporation of India Limited

16th Floor, Jawahar Vyapar Bhawan,

Janpath, New Delhi-110 001

We have examined the compliance of the conditions of Corporate Governance by Security Printing

and Minting Corporation of India Limited, (hereinafter referred as ‘the Company’) for the year

ended on 31st March, 2012 as stipulated in ‘Guidelines on Corporate Governance for Central Public

������F���"�����$�?A�AL�=����%��������%�����%��������\?AARK&�����(��''������������??�A]�?AAW������=�����(����'�����=�����!����*�*�����*������O����$�?A�A�<�����E�"�*����!���<'���Enterprises, Ministry of Heavy Industries and Public Enterprises, Government of India and annexures

mentioned there under (hereinafter referred as ‘Guidelines’).

The compliance of conditions of corporate governance is the responsibility of the Management. Our

examination was limited to procedures and implementation thereof, adopted by the Company for

ensuring the compliance of the conditions of corporate governance as stipulated in abovementioned

(����'������ )� ��� ������� �� ���� ���� �� �C"�������� �!� �"������ ��� ��� �����'� ��*���� �!� ���Company.

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

we hereby certify that the Company has complied with the conditions of corporate governance as

stipulated in the abovementioned Guidelines.

We further state that such compliance is neither an assurance as to the future viability of the Company

��������!���������!�����!!���=������;���;����������(�*������������������!!�����!����Company.

Place: New Delhi

Date: August 23, 2012

For AGB & Associates

Company Secretaries

Sd/-

(Nitin Rawat)

ACS: 28809; CP: 10554

�������� : 1st Floor, 970, Sector-21D,

Faridabad-12001, NCT of Delhi)������Z�(�(J�?O>����������

(<�������>��������Tel – 0129-4080970, 9811386723, 9873186723

==========================================================================Branch Off: D-93, Rosewood City, Sohna Road, Sector-49-50, Gurgaon-NCT of Delhi

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68

AUDITORS’ REPORT

To,

The Members,

��������������(���������(����"�������!�)���� �*���16th Floor, Jawahar Vyapar Bhawan.

Janpath, New Delhi-110001.

A. We have audited the attached Balance Sheet of M/s Security Printing & Minting

���"�������!�)���� �*�������V�st�����$�?A�?����'��������*����!�������� �����������!�������������������������+����������'���*����������responsibility of the Company’s Management. Our responsibility is to express an

�"�������������������'���*����<���������������

B. We conducted our audit in accordance with auditing standards generally accepted

in India. Those standards require that we plan and perform the audit to obtain

�����<'����������<���;��������������'���*�������!�����!�*���'�mis-statement. An audit includes examining, on a test basis, evidence supporting

��� *����� ��� ����'������� ��� ��� �����'� ��*�������� ���� '��� ���'������������(� ��� �������(� "�����"'��� ����� ��� ��(������ ���*��� *��� <�� ���*�(�*��$���;�''����='���(�����=��''������'���*���"����������H��believe that our audit provides a reasonable basis for our opinion. Our report has

taken into consideration the audited accounts and Branch Auditors Report of 9 units

(Bank Note Press, Currency Note Press, Security Printing Presses, Government

Mints and Paper Mill) appointed by the Comptroller & Auditors General of India.

C. As required by the Companies (Auditor’s Report) Order, 2003 as amended by

Companies (Auditor’s Report) (Amendment) Order, 2004 issued by the Central

Government of India in terms of sub-section (4A) of section 227 of the Companies

Act, 1956 and on the basis of such checks as we considered appropriate and

according to the information and explanation given to us and reports of branch

������$� ;�� ���'���� ��� �������C���� � ������� ��� ��� *���� �"������� ���paragraph 4 and 5 of the said order.

D. Further to our comments in the annexure referred to above, we report that:

(i) During the year the company has revised the sale price of coins sold to Ministry

of Finance. However, the Ministry of Finance has decided the payment to be

released provisionally at the rates different from the selling price billed by the

company.

(ii) Some cases relating to the employee claims as well as indirect tax matters are

pending in different courts relating to the period prior to the incorporation of the

company (10th February, 2006) & thereafter also. In the absence of complete

SERVA ASSOCIATESCHARTERED ACCOUNTANTS

����������� ���������������������������������������������� ��!��"��!��##$$$%�&!��$##'(�%$��((���%)��*�����+��,���++���-�+.�*�����*�����+�-���///�+��,���0

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69

���'�$���� �<�'������'����(������(��� �<�'��������*���!�����������'��(�to the Company as well as Government account cannot be ascertained.

(iii) Trade Payable to vendors registered under MSMED Act, 2006 have been

�����������'���)&��%�������%��%����$���;�=��������<������!��*�����there is no major delay in outstanding payment to the same. In the absence of

��!���������'��"'����<�!������$�;�������<'������**����������*��

E. In our opinion proper books of accounts as required by law have been kept by the

company so far as appears from our examination of those books and proper returns

adequate for the purpose of our audit have been received from the branches not

visited by us.

S�� D�����������=��������������������;���;�������������*���������Z

a. Business Takeover w.e.f. 10th February, 2006

i. That as per the Takeover Agreement dt. 10-02-2006, all the assets &

liabilities of 9 Government Units were taken over by the company at their

Book Value subject to Finalization of the Transfer Value within 6 Months,

however even after more than 6 Years, the same have not been Finalized

resulting into the uncertainty in the value of the business transferred to

the Company appearing under the Head “Funds from Government of

India (Adjustable)” amounting to Rs. 28,79,66,99,342 thus the Performa

������� ��P����(� ��� *���� "�<'�� �� (�=���*��� �!� )���� �������(������!���������� �<�'����� ��'��(� �� ����Q�������� !��*� ���Government of India are subject to Finalization and Audit.

���� +�$����^S���L��!��*�&�=���*����!�)�������J��<'��������`��(����taken initially as on 09th�S�<����$�?AA]�������(�����(�����'������to adjustments entries passed during the last 6 years. The slow process

�!�"�����'�=����������!� ��=��������;�''���S�C���������"�� !��*�=����������!�������������'�<�'�����!������"������"��������Ath February

2006 and also due to unclear demarcation as to the liability arising for

the earlier period not provided and short/excess provision made in earlier

years etc. and thus number of adjustment entries have been passed since

takeover. The adjustment/settlement of the Final Account will also affect

the Capital Structure of the Company.

iii. In the absence of the determination of the nature of the amount (Share

�"�'\ ��\&���� ���� �� ��� &�=���*��� �!� )���$� ��� ^S����� !��*�Government of India (Adjustable)” Account has been shown as a separate

line item on the face of the Balance Sheet between the Share Holders

S�������%��K������� �<�'�����

&�� H���=�������=�����"��������������!�<������!�����������<���������������and the same have been dealt with by us in our report.

T�� +���D'��������$���*����!��������� �����������������S'�;���*���dealt with by this report are in agreement with the books of accounts and with the

�����������'��!��*����<�������

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70

)�� )�������"�����$����D'��������$���*����!��������� �����������������Flow Statement dealt with by this report comply with the accounting standards

referred to in sub-section (3C) of section 211 of the Companies Act, 1956 except for:

a. �������������� !��� ��������������� �4���� ���� !��� ������' ������

i. Based on the reports received from the Branches, we are of the opinion

that there is a need for greater uniformity in the Accounting Policies as

;�''��������'�����'������"�����!�''�;���<�����D�������

ii. The Company is generally following the Accrual System of Accounting

except for Accounting for income from forgery detection charges, ex-gratia,

recoveries from employees for use of amenities, insurance, other claims

and last pay of employees. Further for the purpose of salary payment,

the company is following Financial Year period from March to February.

However suitable disclosure of the same and consistency throughout the

units could not be reported.

b. �������������� !��� ��������������< ������� � !��"��� �#

i. The Inventory of Work in Progress and Finished Stock has been valued

at the Budgeted Cost and the same is subject to reconciliation with the

Actual Cost of Production.

ii. Valuation of commemorative coins & medals is based on last sales price

less 9%, which is not as per the Accounting Standard 2.

iii. All the Inter Unit transfers are made at the Budgeted Cost only & hence

valuation of inventory pertaining to same has also been made at Budgeted

Value.

�=�� +���&�'����'������!����������!�ID)������<J����������*����!��*����Ministry and RBI.

c. �������������� !��� ��������������� �?��'� �� �+ ��! ����'��� ��'�� �'��� ��������������������� ������' �������

i. Provision towards accrued income/expenditure is not being made properly

resulting into amount being shown over the years as prior period income/

expenditure. As per the provisions of income tax unless it is proved that

the liabilities crystallized in the subsequent year, the same cannot be

allowed as expenditure. Similarly any income pertaining to previous Year,

results into reopening of the case for the related previous year. Since

proper adjustment have not been made in the computation of income

in the previous income tax returns the same may result into additional

income tax & penalties for which no provision is made.

ii. Consumable stock in case of SPM Hoshangabad, has been charged

to Prior Period Expenses for Inventory Adjustments amounting to

`2,44,25,287 pertaining to the period 10-02-2006 to 30-06-2011. However

the expenses pertaining to the period 01-04-2011 to 30-06-2011, being

������������C"�����������<�����������������������"��'��

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71

d. ����� �� ������� ! ��� ������ �������� � � ������� � ��� ������ ! �Depreciation

i. The Gross Block & Accumulated Depreciation of Fixed Assets has been

shown at the Historical Cost of Purchase and Accumulated Depreciation

up to the date of transfer from the Government of India as appearing

in the Books of the Vendor as against cost to the company. Since the

E�"�������� ��� <���(� �'�*��� ��� ���(�� ���� ������ ��� ��� &�����cost of the Asset to the previous vendor instead of cost to the company

meaning thereby that the remaining life of the asset was not disturbed. In

the absence of determination of the useful life the amount of depreciation

�'�*�������\�C��������'�����<��Q�������

ii. The unit SPM Hoshangahad is working on triple shifts but charging

depreciation as per the rates given for single shifts operations under the

Companies Act 1956. This has resulted in understatement of depreciation

& overstatement of the Fixed Assets to the extent of difference in the

rates of depreciation. In the absence of the details the amount of shortfall

in the depreciation charged could not be ascertained.

e. �������������� !��� ��������������� ���� ������! �7�"����7�� ����� �

i. The Sale Price of the Currency Notes sold to RBI is subject to approval

by them. As informed to us, till date the RBI has been releasing payments

���"��=�����'�<������������'��'���"�����*��!!������"�����!������*"����)�����<�������!�����'�������$�����*"���!�����*�����'��not be ascertained.

ii. The Sales Price of Coins sold to Ministry of Finance, Government of India

was only approved up to Financial Year 2007-08. As informed to us, till

date the Ministry of Finance has been releasing payments on provisional

<������� �����'��'���"�����*��!!��� ���"�����!� �����*"���� )����� <������ �!� ��� �'�������$� ��� �*"�� �!� ��� �*�� ���'�� ��� <��ascertained.

iii. The Sales Price of Postal Stationary, is different from the rates determined

by the Cost Accounting Branch, Ministry of Finance, Government of India

in the Financial Year 2006-07. As informed to us, the amount receivables

!��*�������'����������������<J����������������*���������"�����The value of Sales of postal stationary may undergo change, in case the

"���������������"��\�����*���<��������'������������)�����<�������!�����'�������$�����*"���!�����*�����'�����<�����������

iv. Further the Sales is recognized at the time of dispatch of the Goods,

however as per the terms of sale, the risk & reward is transferred at the

time of receipt and acceptance of the same by the Customer.

f. �������������� !��� ���������������= ���� ������! �:�L��������

i. The Gross Block & Accumulated Depreciation on Fixed Assets has been

shown at the Historical Cost of Purchase and Accumulated Depreciation

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72

up to the date of transfer from the Government of India as appearing in

the Books of the Vendor as against cost to the company. To that extent

the Gross Value of Fixed Assets are overstated.

���� E����(�"�����'�=����������!��C��������������"��=�����������)&��Mumbai and SPM Hoshangabad, the excess Assets found which were

stated to be acquired at the time of takeover have been valued at Nominal

Value of ` 1 only.

iii. The Title Deeds of the Immovable Properties taken over are yet to be

���!������ ��� ��� %*�� �!� ��� ��*"���� +��� �<�'��� ��� ������ �!�Stamp Papers etc estimated at ` 500 crores may accrue to the company

in future.

�=�� +����"���$���'������������!�''�����(�����"�������'����������

v. The ERP (SAP) System has been implemented and handed over at all

units except ISP Nashik, BNP Devas, CNP Nashik & SPP Hyderabad.

However till date the same is stated to be at stabilization stage and

accordingly. The hardware comprising of computer terminals only have

been capitalized as computers. Remaining expenses are shown as work

in progress and other incidental expenses including internet connectivity

etc and other in house expense have been charged off to the revenue

expenditure.

g. ����� �� ������� ! ��� ������ �������� �� � ��� ������ ! � )��� #��I������

i. Provision for arrears for anomaly in VI Pay Commission has been made

on adhoc basis (Noida)

h. �������������� !��� ���������������� ���� ������! �+�����

��� +��� ��������������������?V���'��<��)&��%�������'��(���*�'�����!�99 years w.e.f. 3rd May, 1985 & 90 years w.e.f. 12th May, 1993 respectively

from Noida Authority has been amortized over the remaining period of

lease starting from 10-02-2006, instead from the date of commencement

�!� '�����S������ ��� ����"��*��*�"����� ���AKA?K?AA]�������<����adjusted from the “Fund from Government of India (Adjustable) Account.”

i. �������������� !��� ��������������<O ���� ������! ����������� !Assets

��� +�$����S�C����������=��<�����������������*"������=�����������in all the units except for SPM Hoshangabad & that IGM Hyderabad has

discontinued operations at Saifabad Unit w.e.f. 01-11-2009. However, the

��������������*"��*����!����S�C���������������������''�"�����(�

j. ����� �� ������� ! ��� ������ �������� <� � ��� ������ ! � '� "��� ��� �����������$�������Q� ��������������R

��� ��'����<���(�!�''�;���;����������*"���!���"��=�������(��!� �����=�����taxes etc. in respect of immovable properties acquired are not identical.

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73

)�����<�������!���!���������'�����Q���*��!�'�<�'������'�����<��determined.

ii. In case of Unit at ISP Nashik, the management is following the practice

of not charging Value Added Tax or Central Sales Tax on transactions of

sales. The practice followed is in contravention to the provision of MVAT/

CST Act. Further the company is showing VAT/Sales Tax Receivable &

MVAT Refund Receivable separately under current assets for the purpose

�!��'�*��(�)�"��U�+�������(�������#�"��U�+� �<�'���;�����""������ <�� ������������ �('� �"������ �<����� <�� ��� ��*"��� ��� '��������*������'�<�'����)�������"���������������"���<�������*"���is a deviation from the provisions of Accounting Standard 29.

iii. Only IGM Noida, has created a provision of ` 45.02 lacs on account of

arrears for anomaly in VI Pay commission that too on adhoc basis. Similarly

provision for compensation in lieu of compassionate appointment of

` 20 lacs in case of SPP Hyderabed, ` 5 lacs in IGM Noida, ` 10 lacs in

BNP Devas have been made on ad hoc basis. Further IGM Kolkata has

made an adhoc provision of ` RA�'����;����������*"'�����<�������Security Expenses payable at IGM Noida of ` 3.50 lacs has been made

on adhoc basis instead of provision to be made on actual basis.

�=�� E��"���������"�����(������'�*����!���'��������\���"����<��the company have been disclosed as contingent liability.

In our opinion the Financial Position of the company should be analyzed considering

the provisions of Accounting Standards as mentioned above

J. That, further to our comments in the Annexure in Paragraph “C” above, attention is

invited to the facts stated in the following paragraph:

1. That, a sum of ` 98.10 crores was credited on account of debit advise sent to

Ministry of Finance on 31st March, 2011 on account of rate difference in the

selling price of minted coins. Similarly a sum of ` 121.45 crores was credited

��������� �!� ��<�� �=���� ���� ��I�D�)�� !��� ��� �����'� ���� ?A��K�?����account of rate difference in selling price of currency notes. However both the

advices have not yet been accepted by them.

2. That, advances include a sum of ` 58.23 lacs, made for supply of spares

since Financial Year 2006 onwards, which have not been settled as yet. The

company has stated having initiated settlement process with the vendors and

the spares already received but not accounted for shall be accounted for in

subsequent year.

3. That, the Company does not have any policy of taking Transit Insurance or

the insurance for Assets owned by the Company. The company is contingently

liable to contingencies.

4. That, the balance appearing under the head Sundry Debtors, Sundry Creditors,

���� ��� ��=����� ��� ��<J��� �� �����*���\�������'������ !��*� ���respective parties.

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74

K. The Department of Company Affairs vide GSR 829(E) dated 21.10.2003 has

�'������ �� �'���� �(�� �!� ��<� ������� ���� �!� �������� ?WO� �!� ��� ��*"�����Act, 1956 shall not apply to a government company.

�� )L���� ! � ���� ������� ������ �$ "�, in our opinion and to the best of our

information and according to the explanations given to us the said accounts read

together with the accounting policies and notes thereon give the information

required by the Companies Act, 1956 in the manner so required and give a true

and fair view in conformity with accounting principles generally accepted in India :-

1. In the case of Balance Sheet of the state of affairs of the company as at

31st March, 2012, and

?�� )����������!���*����!��������� ������������!���������!����������ended on that date,

V�� )����������!�����S'�;���*����!��������P�;�!���������������������date.

For Serva Associates

Chartered Accountants

Firm Reg. No. 000272N

Sd/-

(C.A. Amarjit Verma)

Partner Place: New Delhi

M. No. 083520 Date: 30.07.2012

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75

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph “C” of our report of even date.

)�� �� S�''� "����'��� ���'����(� Q����=�� ���'�� ��� ������� �!� �C��� �����acquired as on 10.02.2006 have not been maintained properly and that the

Fixed Assets purchased/acquired subsequently have generally been recorded

<��������������!�����*��������<������������*�������

� <�� +����C���������=����'��<����"�����''��=�����������������'����?�M�����*�'��)���%�����������T����<����������'�U���������;��'��������at IGM Kolkota & IGM Mumbai but was not reconciled with the books of

��������������'�U�����������������!�����T����(<��;�������<����external agency but we have been informed that the report submitted by them

was not found to be satisfactory & hence not accepted by the management.

T����� ��������"�����$� �� ��''� <�����*��� �����"�����'� =���������;��������������������%��������'�U���������;����������������!�������������������������;������=��<����"�����''��=�������<�����*�(�*���during the year no material discrepancies were stated to be noticed on such

=���������

c. During the year IGM Kolkota has disposed/discarded plant & equipment

having gross cost of ` 19.90 crores and charged ` ���W?���������� �������Sales/discarding of Fixed Assets.

))�� �� +��� )�=������ ��� <���� "�����''�� =������� <�� ��� *�(�*��� � ��(�'��intervals, except incase of IGM Mumbai, for gold lying with Reserve Bank of

India, the possession of which have not been given to the company & with

regard to Commemorative Coins & Metals lying in case of IGM Kolkota .

� <�� +���"����������!�"�����'�=����������!���=������!�''�;���<�����*�(�*���is not adequate considering the size of the company and the nature of its

<���������+����������������!��*'�G�����"��������!�"�����'�=������������respect of all items of inventory including Stores & packing Materials.

c. On the basis of our examination of the record of inventory, we are of the

opinion that company is not maintaining proper records of inventory in some

�!����������E�����"����������������=���������<�;�������"�����'�������and books records in case of IGM Hyderabad & SPM Hoshangabad were not

�������'��\���������E����(����"�����'�=����������)&��%��$��?�WW�'���coins were found short. There is a need to strengthen the inventory valuation

methods and procedures. Further the budgeted cost needs to be periodically

reviewed and updated as per actual.

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76

III. As per information and explanation given to us and audit procedures carried out

by us, the company has neither granted nor taken any loans to/from companies or

other parties to be covered in the register to be maintained under Section 301 of

the Companies Act, 1956.

IV. In our opinion and according to information & explanation given to us, the internal

control system is not commensurate with the size of the company and the nature of

its business w.r.t. reconciliation of Debtors, Creditors and Advances, cash in hand,

�!!� �=���� ��'�*��� ���'����(� )������ ������$� ����������� ��� ='�����of in house developed Dies, Material & Fixed Assets procurement & spares

replacement procedures, guidelines with regard to perquisites and business

promotion expenses etc.

V. a. Based on the Audit procedure applied by us and according to Information

& Explanation provided by the management, we are of the opinion that the

company have not entered into any contract or arrangement referred to in

section 301 of the Companies Act, 1956.

b. The clause is not applicable in view of point V(a) above.

VI. In our opinion and according to the information and explanation given to us, the

Company has not accepted any deposit from public during the period and hence

the directive issued by the Reserve Bank of India and provisions of Section 58A,

58AA or any other relevant provisions of the Companies Act, 1956 and the rules

framed there under are not applicable.

VII. Although, the company has the system of Internal Audit by external agencies at

all the units, yet the same is not commensurate with the nature and size of the

business. There is a need to ensure timely submission of reports & to streamline

the follow-up procedures to all the objections raised during the internal audits.

VIII. That the company has not maintained the cost record at any of the units as required

under Cost Accounting Record Rules by the Central Government u/s 209(1) (b) of

the Companies Act, 1956.

IX. a. According to the records of the company and the information & explanations

given to us, the company is regular in depositing with the appropriate Authority

undisputed Statutory dues including Provident Fund, Employee State

Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,

Excise Duty, Cess and other Statutory dues applicable to it with appropriate

Authorities except the under mentioned:

Page 79: View Document - The India Government Mint , Kolkata

77

Sl.

No.

Nature of Statute Nature of Dues Unit Name O/s Amount

(`)

Period to

which it

relates

1 For Employees on

Deputation

�=���'���Contribution

& Pensionery

Charges

IGM Naoda 14,560,340 1.10.2008 to

31.03.2011

2 Scrap, Tender

Forms & Canteen

Sales

Value Added Tax ISP Nashik 3,688,444 01.02.2006

to

31.03.2012

3 For Employees on

Deputation

Pensionery

Charges

SPM

Hoshangabad

117,242,161 01.10.2008

to 31.03.2011

4 For Employees on

Deputation

Pensionery

Charges

SPM

Hoshangabad

981,947 01.10.2008

to 31.03.2011

x��+���"�*��������!����<�=�������;�����=�'<'��!���=��������

b. According to the records of the company and information & explanation given

to us, the particulars of dues of Sales Tax, Income Tax, Wealth Tax, Service

Tax, Custom Duty, Commercial Tax, Excise Duty & Cess as at 31.03.2012

which have not been deposited on account of dispute are as follows:-

S.

No.

Nature of

Liability

Unit Name Assessment

Year

Amount in

Dispute

(`)

Authority

with whom

the Dispute is

Pending

1 Sales Tax ISP Nashik 2,106,978,903

2 Sales Tax/Entry

Tax/Commercial

Tax

BNP Devas 2006-07

2007-08

96,053,345 High Court of

MP

3 Sales Tax IGM Hyderebad NA 807,201,016

4 Sales Tax SPM

Hoshangabad

2009-10 33,246,523

5 Octroi Penalty CNP Nashik 2,38,79,51,690

6 Income Tax

Penalty

Corporate

#!���2006-07 5,712,718 CIT (Appeals)

7 Central Sales

Tax

IGM Mumbai 2004-05 624,349 Jt. Comm of

Sales Tax

Appls)

8 Central Sales

Tax

IGM Mumbai 2003-04 767,430 Jt. Comm of

Sales Tax

(Appls)

Page 80: View Document - The India Government Mint , Kolkata

78

S.

No.

Nature of

Liability

Unit Name Assessment

Year

Amount in

Dispute

(`)

Authority

with whom

the Dispute is

Pending

9 Central Sales

Tax

IGM Mumbai 2002-03 423,435 Maharashtra

Sales Tax

Tribunal

10 Bombay Sales

Tax

IGM Mumbai 2004-05 216,543 Jt. Comm of

Sales Tax

(Appls)

11 Bombay Sales

Tax

IGM Mumbai 2003-04 420,824 Jt. Comm of

Sales Tax

(Appls)

12 Tax Deducted at

Source

IGM Noida 2007-08 19,000 ACIT

13 Tax Deducted at

Source

IGM Noida 2008-09 96,000 ACIT

14 Tax Deducted at

Source

IGM Noida 2009-10 484,000 ACIT

15 Service Tax SPM

Hoshangabad

178,499 Assistant

Commissioner

of Central

Excise

X. The company has no accumulated losses and has not incurred cash losses during

��������'�������=�����<�� ���������� ��� �**����'��"�������(������'�year.

XI. Based on our audit procedures and on the basis of information & explanations given

by the management, we are of the opinion that the Company has not defaulted in

��"�*����!����������������'�������������<����+�������������<����������the company.

XII. In our opinion and on the basis of information & explanations given by the

management, the company has not granted loan or advances on the basis of

security by way of pledge of shares, debentures and other securities.

XIII. In our opinion and on the basis of information and explanations given by the

management, the company is not chit fund/nidhi/mutual fund/society to which the

provisions of special statute relating to chit fund are applicable.

XIV. In our opinion the company is not dealing in or trading in shares/securities,

debentures and other investment. Accordingly the provision of clause (xiv) of the

companies (Auditors Report) order, 2003 are not applicable to the company.

XV. As explained by the management of the company. The company has not given

(������!���'��������<�������!��*�<������������'�����������

Page 81: View Document - The India Government Mint , Kolkata

79

XVI. According to information and explanations given to us and records of the company

examined by us the company has not taken any term loan.

XVII. According to information and explanations given to us and on an overall examination

of the Balance Sheet of the company, we report that during the year short term

fund have not been used for long term investment.

XVIII. The company has not made any preferential allotment of share during the year.

XIX. The company has not issued any debentures during the year.

XX. The company has not raised money by way of public issue during the year.

XXI. Based upon the audit procedures performed and information and explanations

given by the management, we report that no fraud on or by the company has been

noticed or reported during the course of our audit for the year ending 31st March,

2012.

For Serva Associates

Chartered Accountants

Firm Reg. No. 000272N

Sd/-

(C.A. Amarjit Verma)

Partner Place: New Delhi

M. No. 083520 Date: 30.07.2012

Page 82: View Document - The India Government Mint , Kolkata

80

SECURITY PRINTING AND MINTING CORPORATION OF INDIA LTD.

Balance Sheet as at 31.03.2012 Amount in `

Sl.

No.

Particulars Note

No.

Figures as

at the end of

31.03.2012

Figures as

at the end of

31.03.2011

I. EQUITY AND LIABILITIES

1 Shareholders’ funds

(a) Share capital Note 2 500,000 500,000

(b) Reserves and surplus Note 6 23,703,374,095 19,232,627,510

2 Funds from Govt. of India (Adjustable) Note 3 28,796,699,343 28,797,821,109

3 Non-current liabilities

(a) #���� ��(���*�'�<�'����� Note 7 252,977,697 242,060,604

(b) ��(K��*�"��=������ Note 8 2,620,749,161 2,553,037,399

4 Current liabilities

(a) Trade payables Note 9 1,917,763,361 1,111,996,726

(b) Other current liabilities Note 10 2,240,672,938 4,365,619,542

(c) Short-term provisions Note 11 10,468,371,179 9,422,081,373

TOTAL 70,001,107,774 65,725,744,263

II. ASSETS

1 Non-current assets

(a) Fixed assets Note 12

(i) Tangible Assets 9,008,651,075 8,944,220,291

(ii) Intangible Assets 15,514,573 8,389,933

(iii) Capital Work in Progress 1,660,199,427 2,309,826,419

(b) Non-current investments Note 13 1,000,000,000 500,000

(c) Deferred tax assets (net) Note 53 733,939,055 934,660,212

(d) ��(K��*�'��������=���� Note 14 2,382,304,092 2,159,343,025

(e) Other non-current assets Note 15 1,990,768,353 1,788,589,783

2 Current assets

(a) Current investments Note 16 1,001,034,915 1,017,822,186

(b) Inventories Note 17 9,798,393,827 9,555,548,425

(c) Trade receivables Note 18 12,658,716,701 9,610,107,957

(d) Cash and Bank Balances Note 19 17,905,615,101 18,757,818,441

(e) Short-term loans and advances Note 20 11,199,305,564 10,246,166,521

(f) Other current assets Note 21 646,665,091 392,751,070

TOTAL 70,001,107,774 65,725,744,263

��(��������������(���'������ � ���������������� Note 1

Notes 1 to 89 referred to above form an integral part of the Financial Statements.

As per our report of even date annexed.

For M/s SERVA ASSOCIATES On behalf of Security Printing and Minting

CHARTERED ACCOUNTANTS Corporation of India Ltd.

Firm Registration No. 000272N

Sd/- Sd/- Sd/-

CA. AMARJIT VERMA M.S. Rana Ashwini Kumar

(M.No 083520) Chairman & Managing Director Director (Technical)

Partner & Incharge Director (Finance)

Sd/-

Date: 30.07.2012 Sachin Agarwal

Place: New Delhi (Asstt Company Secretary)

Page 83: View Document - The India Government Mint , Kolkata

81

SECURITY PRINTING AND MINTING CORPORATION OF INDIA LTD.*�����������������������������#�������������2-�32��3-�

Amount in `Sl.No.

Particulars NoteNo.

Figures for the Year ending on

31.03.12

Figures for the Year ending on

31.03.11I. Revenue from operations Note 22 34,948,022,205 32,285,981,895II. Other income Note 23 1,676,507,133 2,282,927,475III. Total Revenue (I + II) 36,624,529,338 34,568,909,370IV. Expenses:

Manufacturing Cost Note 24 17,595,990,043 15,971,737,656���(��������=���������!���������(����$�work-in-progress

Note 25 (201,183,054) (110,161,609)

F*"'�����<�������C"���� Note 26 7,620,964,891 7,327,370,009Finance costsDepreciation and amortization expense Note 12 986,355,428 1,001,894,701Impairment of Assets Note 12 114,172,312Other expenses Note 27 1,606,771,404 1,354,620,929Provisions Note 28 157,680,159 620,234,949Total expenses 27,880,751,183 26,165,696,635

V. ������������������������4 �+�������and extraordinary items and tax (III-IV)

8,743,778,154 8,403,212,735

VI. Prior Period Income / (Expenses) Note 29 4,946,793 (233,796,750)VII. ������������4 �+�����������

extraordinary items and tax (V-VI)8,748,724,947 8,169,415,985

VIII. Exceptional Items 0 0IX. ������������4������������������������4�

(VII - VIII)8,748,724,947 8,169,415,985

X. Extraordinary Items 0 0XI. �������������4�&�565' 8,748,724,947 8,169,415,985XII. Tax expense:

(1) Current tax (2,686,476,050) (2,670,383,980)(2) Deferred tax (200,721,157) 235,911,625(3) Taxes of Earlier Years (36,868,159) 36,979,905

XIII. ����7&����'�����#��+����������continuing operations (XI-XII)

5,824,659,581 5,771,923,535

XIV. ����\�'�����!��*������������(��"������ 0 0XV. Tax expense of discontinuing operations 0 0XVI. ����7&����'�����,�� ����������

operations (after tax) (XIV-XV)0 0

XVII. ����7&����'�����#��+������&5����8�5%�' 5,824,659,581 5,771,923,535XVIII. Earnings per equity share:

(1) Basic Note 52 116,493 115,438(2) Diluted 116,493 115,438

��(��������������(���'������ � ���������������� Note 1

Notes 1 to 89 referred to above form an integral part of the Financial Statements.

As per our report of even date annexed.

For M/s SERVA ASSOCIATES On behalf of Security Printing and MintingCHARTERED ACCOUNTANTS Corporation of India Ltd.Firm Registration No. 000272N

Sd/- Sd/- Sd/-CA. AMARJIT VERMA M.S. Rana Ashwini Kumar(M.No 083520) Chairman & Managing Director Director (Technical)Partner & Incharge Director (Finance)

Sd/-Date: 30.07.2012 Sachin AgarwalPlace: New Delhi (Asstt Company Secretary)

Page 84: View Document - The India Government Mint , Kolkata

82

SECURITY PRINTING AND MINTING CORPORATION OF INDIA LIMITED

(WHOLLY OWNED BY GOVT. OF INDIA)

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012

31st March 2012

Amount in `31st March 2011

Amount in `

A. CASH FLOW FROM OPERATING ACTIVITIES

�������������4����� 8,748,724,947 8,169,415,988

Adjustment for:

Depreciation (Net) 986,355,428 999,189,089

Provision/Adjustment for Impairment of Assets 114,172,312 23,759,685

Provision for Bad Debts 153,390,840 192,707,236

Provision for Obsolete Inventory 4,289,319 1,234,973

��������'���!������ 117,593,312 -

���������'���!������ (516,993) (324,057)

Provisions Written Back (245,334,954) (496,832,145)

Interest Income (1,230,841,434) (1,215,230,045)

Income from Bond Fund - (2,750,421)

Dividend Income (63,212,729) (43,179,170)

1��#� 9�.� ���� �+�������� � ��������� ������ .��"����capital adjustments

8,584,620,048 7,627,991,133

Change in Current/Non Current Assets & Liabilities

(Except Fixed assets & Investment)

Change in Current Investment 16,787,271 (25,929,591)

Change in Inventories (302,407,804) (1,959,955,645)

Change in Trade Receivables (3,201,999,584) (349,853,344)

���(����������+��*� ���������=���� (953,139,043) 56,302,908

Change in Other Current Assets (253,914,020) (691,042,201)

Change in Trade Payables 805,766,636 -

���(�����#����������� �<�'���� (374,946,604) 178,723,480

���(����� ��(�+��*����=������ 73,693,646 -

Change in Short Term Provisions Employees 569,134,114 -

Change in Other Short Term Provision (1,121,328) (997,852,725)

1��#�9�.������+��������� �����������������4�� 4,962,473,332 3,838,384,015

Income Taxes Paid (2,013,499,108) (2,949,396,139)

NET CASH FROM OPERATING ACTIVITIES (A) 2,948,974,224 888,987,876

B. CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (419,971,155) (1,129,057,966)

Page 85: View Document - The India Government Mint , Kolkata

83

31st March 2012

Amount in `31st March 2011

Amount in `

Increase in Capital WIP (753,008,866) (1,343,205,682)

Sale of Fixed Assets 83,672,393 716,692

Increase in Investment (999,500,000) (500,000)

Dividend Income 63,212,729 43,179,170

Income from Bond Fund - 2,750,421

adjustment in Fixed Assets 449,775,139 -

Interest Income 1,230,841,434 1,159,956,007

)���������� ��(�+��*� ���������=���� (222,961,067) -

Increase in Other Non - Current Assets (146,905,486) -

Funds from Govt of India (1,121,767) -

)����������#���� ��(�+��*� �<�'���� 10,917,093 -

NET CASH FROM INVESTING ACTIVITIES (B) (705,049,554) (1,266,161,358)

C. CASH FLOWS FROM FINANCING ACTIVITIES

Payment of Dividend (1,154,384,708) -

Payment of Dividend Distribution Tax (191,743,300) -

I�"�*����!� ��������������!�S����� (1,750,000,000) (1,750,000,000)

NET CASH USED IN FINANCING ACTIVITIES (C) (3,096,128,008) (1,750,000,000)

NET INCREASE/(DECREASE) IN CASH AND CASH

EQUIVALENTS (A+B+C)

(852,203,339) (2,127,173,482)

Cash & Cash Equivalents at the beginning of the year 18,757,818,440 20,884,991,922

Cash & Cash Equivalents at the end of the year 17,905,615,101 18,757,818,440

Note: Cash and Cash Equivalent includes FDR Pledged with bank of Rs. 3,30,00,000/-

For M/s SERVA ASSOCIATES On behalf of Security Printing and Minting

CHARTERED ACCOUNTANTS Corporation of India Ltd.

Firm Registration No. 000272N

Sd/- Sd/- Sd/-

CA. AMARJIT VERMA M.S. Rana Ashwini Kumar

(M.No 083520) Chairman & Managing Director Director (Technical)

Partner & Incharge Director (Finance)

Sd/-

Date: 30.07.2012 Sachin Agarwal

Place: New Delhi (Asstt Company Secretary)

Page 86: View Document - The India Government Mint , Kolkata

84

:���(�-�*����� ����$ ����������� ���

(i) Basis of preparation

� +��������'���*�������"��"��������������������'��������=������������accrual basis of accounting, in accordance with the Indian Generally Accepted

Accounting Principles (GAAP) and comply with the accounting standards as

prescribed by the Companies (Accounting Standards) Rules 2006, to the extent

""'��<'�� �� ��"��� ��������'�� <�� ��� ��*"���� +��� �����'� ��*����have been prepared in Indian rupees. Forgery Detection Charges Recoveries from

employees for use of amenities insurance and railway claims tax and duties and

last pay of employees are accounted for on cash basis.

(ii) Use of estimates

� +���"��"������!������'���*����������!��*���;������)�����&������Q������management to make estimates and assumptions that affect the reported amounts

�!���������'�<�'���������'�������!������(���'�<�'�������������!���������'�statements and the reported amounts of revenues and expenses during the reporting

period. Examples of such estimates include provision for future obligations under

�*"'�����<�����"'��$�"��=�������!������<!�'�����=�����$����*������!�''�'�!���!��C���������������'�����'�����'����!!���!��*���������*�����������(��������accounting estimates is adjusted prospectively in the current and future periods.

(iii) Revenue recognition

Revenue is recognized on dispatch of goods to the customer. Gross sales are

stated inclusive of excise.

Job work income is recognized at the time of completion of task as per terms agreed.

Interest on the deployment of surplus funds is recognized using the time-proportion

method based on interest rates contracted in the transaction.

Dividend Income is recognized in the year of receipt by the company

(iv) Fixed assets

Fixed assets acquired (post acquisition*) have been stated at cost less accumulated

depreciation. Cost is inclusive of freight, non recoverable duties, taxes and other

directly attributeable cost or bringing the assets to the working condition for intended

use.

Fixed assets under construction are disclosed separately as capital work in progress.

� �����'������������������*�����!�'����"��*��*�"��������*���!�(����!� ���$�'����*����*���G���

* For Assets acquired from Government of India (Vendor), the same have been disclosed at the Gross Cost

as appearing in the Books of the Vendor less Accumulated Depreciation up to the date of transfer as against

the Cost of Acquisition of such assets.

Page 87: View Document - The India Government Mint , Kolkata

85

� E���\���'������!�''�����(������������� ������������)���������=�'�"��������are not separately valued or accounted for in the books of accounts. Used/Defaced

dies, being high security items are shown at nil value.

(v) Depreciation

� E�"������������C�����������"��=��������������(�K'����*����������������������*������"�������������������'��[)U��������*"�������$��NR]���applicable for Single and Double Shift Basis. Assets costing less than ` 5,000 per

unit are fully depreciated in the year of purchase.

(vi) Impairment

The carrying values of assets are reviewed at each reporting date to determine

if there is indication of any impairment. If any indication exists, the asset’s

recoverable amount is estimated. For assets that are not yet available for use

the recoverable amount is estimated at each reporting date. An impairment loss

is recognized whenever the carrying amount of all asset of its cash generating

unit exceeds its recoverable amount. Impairment losses are recognized in the

"�������'���������������*"��*���'���������=�������!���������<��������(��in the estimates used to determine the recoverable amount. An impairment loss

is reversed only to the extent that the assets carrying amount does not exceed

the carrying amount that would have been determined net of depreciation or

amortisation, if no impairment loss had been recognized.

(vii) Amortization

a. Amortization of Lease Assets

� ������'����(������*���G����=������"�������!� ����

b. Amortization of Expenditure on Computer Software

Computer Software Purchased, individual value of which is below ` 1 lac

are fully amortized in the year of Purchase and those exceeding ` 1 lac are

amortized over the useful life but subject to a maximum period of 3 years.

(viii) Inventories

Inventories are valued as per AS-2 issued by ICAI is followed which is as under:

Raw materials & components: valued at the lower of cost and net realizable value.

Work in Progress: Valued at Cost based on percentage of completion and Cost is

ascertained on FIFO/Weighted Average Cost Method except at SPM Hoshangabad

where it has been valued at budgeted cost.

Finished Goods: Valued at lower of Cost or net realizable value except at SPM

Hoshangabad where it has been valued at budgeted cost.

Inter Unit Inventory: Valued at budgeted cost.

Page 88: View Document - The India Government Mint , Kolkata

86

Scrap: Valued at Net Realizable Value.

IGM, Kolkata - Commemorative coins and medals has been valued at 91% of the

last sales price: cost has not been ascertained in accordance with Accounting

Standard (AS-2).

(ix) Inter Unit Transfers and Valuation of such Inventory

The units are transferring ink, paper, blank and dies at budgeted cost. Other items

of consumables etc. are transferred at cost of purchase. Such items of inventory

���='�����<��(�������������������'���*����

(x) Operating leases

� ����"�*�������������"����(�'�����������(��G��������C"������������������� ������������������'�<����

(xi) Investments

Investments that are readily realizable and intended to be held for not more than

���������'���������������� ��=��*�����)�=��*�����������������������'���������'��(K��*���=��*�����)�=��*������'��"��*��'����"�����!��'������!�������C��������!�<���������������(���'����������<��'��������� ��(�+��*�Trading Investments and others as non trading investments. Current investments

are carried at lower of cost or fair value determined on an individual investments

<����� ��(K��*���=��*�����������������������=������!�����*����������='���is made to recognize a decline other than temporary in the value of the investments.

(xii) Foreign currency transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the

date of the respective transactions. Realised gains and losses on foreign currency

��������� �����(� ��� ���� ��� ����(��G��� ��� ��� ����� ��� ���� ��������Monetary foreign currency assets and liabilities remaining unsettled at the balance

sheet date are translated at year end rates and resultant gains/losses on foreign

�������������������������(��G����������������� �����������

Exchange gains or losses pertaining to acquisition or Capital Assets are capitalized

to the Cost or such assets.

(xiii) /����������������#�����+�������������

� ,������ ������������+����(�+�����*"��L��"��=�����!��������*������������������<�����"'�����������������<�����"'�� ����"��K�*"'��*���<�����"'��������;������������"����C��������<���������;�''��=������<'�(������"��!������ *������ #<'�(����� !��� �����<������ �� ������� �����<����� "'��� �������(��G��������*"'�����<������C"������������������� �����������;����they are due. Prepaid contributions are recognised as an asset to the extent that a

cash refund or a reduction in future payments is available.

Page 89: View Document - The India Government Mint , Kolkata

87

� ,������ ������� +����(� +��� ��*"��L�� (����� ����*�� ��� � ������� <�����"'������������<�����"'�� ����"��K�*"'��*���<�����"'���+�����*"��L������<'�(���� ������"����!��������<�����"'��� ����'��'���<�����*��(� ���*�����!�!�����<��������*"'������=�����������������!�����������=����������current and prior periods. As per the order of the GOI transferring the Assets and

�<�'������!�M����������) �*����!�����*"'�������!���������;�������!���������deemed deputation for a period of 2 years from the date of transfer i.e. 10/02/2006

;�����;��!�������C������!����������?�*�����������������;���������<��the Government to get absorbed in the company. Options were exercised and

Government accepted absorption of employees in the company on 29th May 2009

but w.e.f. 01/11/2008.

Those employees who decided to remain with Government continue to work in

the company till they are redeployed by Government. Company has to bear their

salary and wages. The provisions for pensionary charges (which includes Gratuity)

��� �=���'��������<�����������"����!�������*"'���������!����������'���(�ex-cadre/in-cadre posts have been made in accordance with the Government Rules.

Those employees who decided to join the company had two options. They have

opted either for “Combined Pension” or “Pro-rata Pension”. Combined pension

optees are eligible to get their pension a Pension Trust constituted by Government

at the time of their superannuation from company. Government shall contribute

for the past services rendered and company shall contribute for the period they

will serve the company. Manner and amount of contribution shall be governed

by rule 37-A of CCS (Pension) Rules. Provision for pensionary charges of these

employees has been made accordingly. This provisions includes Gratuity also.

;�#���<����������������( As per the Company’s policy eligible leaves can be

accumulated by the employees and carried forward to future periods to either be

utilized during the service, or en-cashed. Encashment can be made during the

service, on early retirement, on withdrawal of scheme, at resignation by employee

����"��������!��*"'������+�����'���!�<������ �������*�����<����������seniority and the respective employee’s salary.

(xiv) Prior Period & Extra Ordinary Items

Prior Period Items are incomes and expenses which arise in the current period as

a result of errors and omissions in the preparation of Financial Statements of one

or more prior periods.

Extra Ordinary Items are incomes and expenses that arise from events or

transactions that are clearly distinct from the ordinary activities of the enterprise

and therefore not expected to recur frequently or regularly.

� D��������������������C������������*�������"��'������'����������������'�statements.

Page 90: View Document - The India Government Mint , Kolkata

88

(xv) Research & Development

Capital Expenditure pertaining to Research and development are Capitalized as

S�C�������������������=�������������������(�����"�������'����������

(xvi) Earnings per Share

Basic earning per share is computed using the weighted average number of equity

shares outstanding during the year. Diluted earning per share is computed using

the weighted average number of equity and dilutive equity equivalent shares

outstanding during the year end, except where the results would be anti-dilutive.

(xvii) Taxation

������������!�������L

Income tax expense comprises current tax (i.e. amount of tax for the period

determined in accordance with the income tax law) and deferred tax charge or

������ ���P����(� ��� C��!!����!� �*��(���!!��������<�;�����������(� ����*��and taxable income for the period). The deferred tax charge or credit and the

corresponding deferred tax liabilities or assets are recognised using the tax rates

that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty

that the assets can be realised in the future. Deferred tax assets are reviewed

�����<'���������������;�������;�����;������"�����P������*����that is reasonably/virtually certain (as the case may be) to be realised. Deferred

tax assets or liabilities arising due to timing differences, originating during the tax

holiday period and reversing after the tax holiday period are recognized in the

period in which the timing difference originates.

(xviii) Provisions and Contingent Liabilities

� �� "��=������ �����(� !��*� �'�*�$� '��(���$� �����*��$� ����$� "��'���$� ���� ���recognised when the Company has a present obligation as a result of a past event

��������"��<<'��������P�;��!������������*<�����(������*���<������;�''�<��required to settle the obligation and a reliable estimate can be made of the amount

of the obligation. These are reviewed at each balance sheet date and adjusted

�� ��P����������*�(�*������*���� ������(��� '�<�'������������'����� ���respect of possible obligations that have risen from past events and the existence

�!�;�����;�''� <�������*�����'��<�� ��������������������K������������!��������more uncertain future events not wholly within the control of the enterprise , or is

a present obligation that arises from past events but is not recognized because

��������������"��<<'��������P�;��!������������*<�����(������*���<������will be required to settle the obligation, or a reliable estimate of the amount of

the obligation cannot be made. When there is a possible obligation or present

�<'�(����;��������'���'�������!�����P�;������*��$��������'���������"��=������is made.

Page 91: View Document - The India Government Mint , Kolkata

89

(xix) Provision for Doubtful Debts:

100 % Provision is created for Debts outstanding for a period more than 3 Years.

(xx) Operating Cycle

#"����(����'������������������*��<�;�����Q���������!������!���"��������(�and their realization in cash and cash equivalents. Where the normal operating

���'�������<����������$���������*������=����������!��?�������

In case of BNP and CNP - Normal operating cycle is 8 Months.

In case of Mints - Normal operating cycle is 8 Months for circulation coins and 12

months for other products of mints.

In case of Paper Mill - Normal operating cycle is 4 Months.

In case of Security Presses - As there is no certainty regarding realization of

Debtors in case of Products of these units as most of the customers are Government

��(��G���$����*'��"����(����'�������<����������$�+����!������������*������"����(����'����������!�"��������!������������!�����) �����?������

&44�'� 1������ ���������+���/�������* #������%����1��+������$ ��

As per Revised Schedule VI:

���� ���������''�<���'����������������;�����������������!����!�''�;��(�criteria:

1. It is expected to be realized in, or is intended for sale or consumption in,

the company’s normal operating cycle

2. It is held primarily for the purpose of being traded

3. It is expected to be realized within twelve months after the reporting date

4. It is cash or cash equivalent unless it is restricted from being exchanged

or used to settle a liability for at least 12 months after the reporting date.

� �''�������������''�<���'��������������������

�?�� ��� �<�'�����''�<���'����������������;�����������������!����!�''�;��(�criteria:

1. It is expected to be settled in the company’s normal operating cycle

2. It is held primarily for the purpose of being traded

3. It is due to be settled within twelve months after the reporting date

4. The company does not have an unconditional right to defer settlement

of the liability for at least 12 months after the reporting date. Terms of a

liability that could, at the option of the counterparty, result in its settlement

<������������!��Q���������*����������!!�������'���������

� � �''������ �<�'�������''�<���'��������������������

Page 92: View Document - The India Government Mint , Kolkata

90

B. Raw Materials, stores and components, scrap which are intended for

consumption or sale in the course of the company’s operating cycle shall

<���'����������������

� ��� %��K*�=��(� ��=������ ��''� <�� �'������� �� %��K������� ��'���� �� ���estimated that the same shall be consumed or sold within 12 months

after the reporting date.

� E�� H�)�����''�<���'������������������'��

E. Finished Goods inventory which is being held primarily for purpose of

<���(� �������''�<���'�����������������+�����*��<����'�� !������period of time. That time period has no relevance here so far as it is held

primarily for trade.

F. Trade receivables which are expected to be realized within 12 months

!��*������"����(������''�<���'����������������

G. Trade receivables which are outstanding for more than 1 years as on

31.03.2012 shall be shown as Non Current only unless efforts for its

recovery have been made and it is likely that payment shall be received

within 12 months from the reporting date. A Judicious decision shall be

taken be unit in this regard. For Example: In case payment is pending due

��������'�G�����!�"�����������������(���������'���'���������(���''�<����'�G������"�*�����''�<����'�G���;����������������*����''�be treated as current.

Note 2

Share Capital As at 31st March 2012 As at 31st March 2011

Number Amount (`) Number Amount (`)

Authorised

Equity Shares of

` 10 each 2,500,000,000 25,000,000,000 2,500,000,000 25,000,000,000

Issued, Subscribed

and Paid Up

Equity Shares of

` 10 each 50,000 500,000 50,000 500,000

Total 50,000 500,000 50,000 500,000

Note 3

Funds from Govt of India (Adjustable) As at 31st March 2012

(`)

As at 31st March 2011

(`)

Opening Balance of Funds from GOI 28,797,821,109 28,798,539,115

Adjustments during the Year (if any) (1,121,767) (718,006)

Total 28,796,699,343 28,797,821,109

Page 93: View Document - The India Government Mint , Kolkata

91

Note 4

Reconciliation of number of shares

outstanding at the beginning and at the

end of the year

As at 31st March 2012 As at 31st March 2011

Number Amount (`) Number Amount (`)

Shares outstanding at the beginning of the

year

50,000 500,000 50,000 500,000

Shares Issued during the year – – – –

Shares bought back during the year – – – –

Shares outstanding at the end of the year 50,000 500,000 50,000 500,000

Note 5

Name of Shareholder

holding more than 5%

shares

As at 31st March 2012 As at 31st March 2011

No. of

Shares held

% of Holding No. of

Shares held

% of Holding

President of India ��� ���Sh.Bimal Julka

49,994 99.99 49,994 99.99

Total 49,994 99.99 49,994 99.99

Note 6

Reserves & Surplus As at 31st March 2012

(`)

As at 31st March 2011

(`)

a. Capital Reserves

Opening Balance 41,994,800 41,994,800

(+) Current Year Transfer 0 0

(-) Written Back in Current Year 0 0

Closing Balance (a) 41,994,800 41,994,800

b. General Reserve

Opening Balance 577,192,354 0

(+) Current Year Transfer 582,465,958 577,192,354

(-) Written Back in Current Year 0 0

Closing Balance (b) 1,159,658,312 577,192,354

c. Surplus

Opening balance 18,613,440,356 14,764,837,175

�q��%������\�%�� �����!������Current Year

5,824,659,581 5,771,923,543

(-) Transfer to Reserves 582,465,958 577,192,354

(-) Proposed Dividends 1,164,931,916 1,154,384,708

(-) Dividend Distribution Tax 188,981,080 191,743,300

Closing Balance (c) 22,501,720,983 18,613,440,356

Total (a + b + c) 23,703,374,095 19,232,627,510

Page 94: View Document - The India Government Mint , Kolkata

92

Note 7

Other Long Term Liabilities As at 31st March 2012

(`)

As at 31st March 2011

(`)

(a) Trade Payables-Non Current 16,726,091 5,808,998

(b) Retention against Sales Tax liability 202,228,399 202,228,399

(c) Taxes/Duties Payable 31,075,181 31,075,181

(d) Others-Non Current 2,948,026 2,948,026

Total 252,977,697 242,060,604

Note 8

Long Term Provisions As at 31st March 2012

(`)

As at 31st March 2011

(`)

��� ���=������!���F*"'�����D�����Provision for Gratuity 331,450,601 210,604,254

���=������!��� �=��F����*�� 1,626,507,013 1,717,081,215

Provision for Pensionary Charges

Contribution

433,381,083 395,860,642

���=������!��� �=���'��������<���� 229,410,464 229,491,288

Total 2,620,749,161 2,553,037,399

Note 9

Trade Payables As at 31st March 2012

(`)

As at 31st March 2011

(`)

Trade Payables other than MSMED 1,774,870,094 857,567,387

Trade Payables Principal - MSMED 142,893,268 254,429,339

Total 1,917,763,361 1,111,996,726

Note 10

Other Current Liabilities As at 31st March 2012

(`)

As at 31st March 2011

(`)

Current maturities of long-term debt- Working

�"�'� ���!��*���S0 1,750,000,000

Advances to Employees 488,164 802,838

Advance from Customers 443,010,521 511,238,593

Earnest Money Deposit (EMD) 26,573,702 21,315,587

Security Deposits of Supplier/Vendor 303,479,823 320,795,035

Payable to PAO 7,286,198 23,892,384

TDS Payable 18,667,724 15,472,367

Sales Tax Payable 11,508,808 13,198,966

Excise Duty Payable 1,133 30,676

Service Tax payable 451,306 899,614

Page 95: View Document - The India Government Mint , Kolkata

93

Other Current Liabilities As at 31st March 2012

(`)

As at 31st March 2011

(`)

Octroi Payable 6,002,348 5,353,067

Salaries and Wages and other employees

<��������<'�464,222,604 525,521,278

Recovery from Salaries Payable to concerned

authorities

80,194,161 103,858,534

EPF/GPF Payable 157,749,941 157,849,703

Expenses Payable 170,802,295 168,815,543

�����<�����������) ���������+������<'� 17,000,141 12,702,021

Pensionary Charges Payable 332,332,205 319,536,163

Bank Book Overdraft 23,696,295 178,723,479

Capital Goods Creditors 66,988,852 68,550,995

#������������ �<�'���� 110,216,718 167,062,698

Total 2,240,672,938 4,365,619,542

Note 11

Short Term Provisions As at 31st March 2012

(`)

As at 31st March 2011

(`)

&�'� ������������=�+����������������=������!��� �=���'������Pensionary Charges

488,972,408 366,006,217

Provision for Gratuity 17,350,866 781,910

Provision for Ex-Gratia 5,744,839 5,988,023

Provision for leave encashment 204,620,050 21,120,764

���=������!�����*"���������� �����!�Compassionate Appointment

27,392,874 40,452,581

Provision for ACP Arrear Payable 5,132,234 31,000,000

Provision for VIth Pay Commission 4,502,000 4,312,058

#����F*"'������D�����������+��*�Provisions

52,896,418 7,169,092

(b) Other Short Term Provisions

Proposed Dividend 1,164,931,916 1,154,384,708

Dividend Distribution Tax 188,981,080 191,743,300

Provision for Taxation A.Y 2012-13 2,686,476,050 0

Provision for Taxation A.Y 2011-12 2,670,383,980 2,670,383,980

Provision for Taxation A.Y 2010-11 2,941,429,199 2,941,429,199

Provision for Taxation A.Y 2009-10 0 1,970,375,040

Provision for FBT 0 6,255,909

Other Short Term Provisions 9,557,264 10,678,592

Total 10,468,371,179 9,422,081,373

Page 96: View Document - The India Government Mint , Kolkata

94

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51

,689

5,6

25,1

79

114,1

72,3

12

119,7

97,4

91

8,9

44,2

20,2

91

9,0

08,6

51,0

75

Pre

vio

us

Year

18,3

48,2

16,9

79

1,1

17,8

50,9

84

(131,7

21)

94,7

55,6

77

19,3

71,4

44,0

06

9,4

99,8

54,4

03

995,5

56,6

65

73,8

12,5

34

(2)

10,4

21,5

98,5

36

5,6

25,1

79

0

5,6

25,1

79

8,8

42,7

37,3

96

8,9

44,2

20,2

91

2In

tan

gib

le

Assets

Com

pute

r

softw

are

19,3

28,0

74

16,9

83,3

09

635,8

78

0

35,6

75,5

05

17,5

79,2

92

6,5

52,0

59

35,8

62

613,4

83

23,4

82,0

06

00

0

1,7

48,7

83

12,1

93,5

00

R&

D A

ssets

(Softw

are

)

9,9

61,2

27

00

0

9,9

61,2

27

3,3

20,0

77

3,3

20,0

77

00

6,6

40,1

54

00

0

6,6

41,1

50

3,3

21,0

73

To

tal

29,2

89,3

01

16,9

83,3

09

635,8

78

0

45,6

36,7

32

20,8

99,3

69

9,8

72,1

36

35,8

62

613,4

83

30,1

22,1

60

00

0

8,3

89,9

33

15,5

14,5

73

Pre

vio

us

Year

18,2

35,2

57

11,2

55,6

75

(191,0

12)

10,6

19

29,2

89,3

01

14,1

27,6

83

6,3

38,0

36

433,6

49

0

20,8

99,3

68

00

0

4,1

07,5

74

8,3

89,9

33

3

Cap

ital W

ork

InP

rog

ress

2,3

09,8

26,4

19

753,0

08,8

66

885,3

91,1

22

517,2

44,7

37

1,6

60,1

99,4

27

00

00

00

00

2,3

09,8

26,4

19

1,6

60,1

99,4

27

To

tal

2,3

09,8

26,4

19

753,0

08,8

66

885,3

91,1

22

517,2

44,7

37

1,6

60,1

99,4

27

00

00

00

00

2,3

09,8

26,4

19

1,6

60,1

99,4

27

Pre

vio

us

Year

977,0

62,7

39

1,8

81,4

01,1

15

394,1

91,4

19

154,4

46,0

16

2,3

09,8

26,4

19

00

00

00

00

977,0

62,7

39

2,3

09,8

26,4

19

Page 97: View Document - The India Government Mint , Kolkata

95

Note 13

Non-Current Investments

(Trade Investments)

As at 31st March 2012

(`)

As at 31st March 2011

(`)

Unquoted-Equity Shares of Bank Note

�"�����''� )�����=�� ��� ��U��!���������Printing and Minting Corporation of India

��� ��� D����� I����=�� D��� %��������� �=�� ��� z�$AA$AA$AAA� ������>�`��AA������S�X��AK��$�RAAA�������>�` 100 each)]

1,000,000,000 500,000

Total 1,000,000,000 500,000

Note 14

Long Term Loans and Advances As at 31st March 2012

(`)

As at 31st March 2011

(`)

a. Capital Advances

Secured, considered good 996,948,552 881,037,331

Unsecured, considered good 4,291,006 757,468

Unsecured, considered Doubtful 21,539 21,539

1,001,261,097 881,816,338

���Z����=������!������<!�'��=���� 21,539 21,539

Total A 1,001,239,558 881,794,799

b. Security Deposits

Unsecured, considered good 31,911,626 28,328,124

Total B 31,911,626 28,328,124

c. Employees loans and advances

Secured 116,179,952 132,704,084

Unsecured 160,402,559 94,824,401

Total C 276,582,511 227,528,485

d. Loans and Advances Others

Share Application Money Pending

allotment - Bank Note Paper Mill India Pvt.

�������������''�������VAKARK?A�?�

1,000,000,000 999,500,000

Unsecured 72,570,397 22,191,617

Total D 1,072,570,397 1,021,691,617

Total (A+B+C+D) 2,382,304,092 2,159,343,025

Page 98: View Document - The India Government Mint , Kolkata

96

Note 15

Other Non-current Assets As at 31st March 2012

(`)

As at 31st March 2011

(`)

Long Term Trade Receivables

Unsecured, considered good 1,402,969 1,402,969

Doubtful 1,274,930,061 837,667,420

1,276,333,030 839,070,389

���Z����=������!������<!�'���<� 1,274,930,061 837,667,420

Total (A) 1,402,969 1,402,969

Non-moving Inventory 1,958,333,202 1,768,333,860

���Z����=������!�������*�=��(���=����� 51,123,024 49,284,232

Total (B) 1,907,210,178 1,719,049,628

Deposit with CISF 6,396,600 6,396,600

Deposit with Electricity Board 50,947,686 39,317,165

Deposit with Tax authorities/other

Departments

24,694,920 22,305,421

Advances (others) 116,000 118,000

Total (C) 82,155,206 68,137,186

Total (A+B+C) 1,990,768,353 1,788,589,783

Note 16

Current Investments (Non-Trade) As at 31st March 2012

(`)

As at 31st March 2011

(`)

UTI Liquid Cash Plan

(Short Tem, Valued at Cost)

�NWW�V��W?������>��A�N�OR\K�z�����U'������='�������������31.03.2012 ` 996,853,474]

996,853,474 –

UTI Treasury Advantages Fund

(Short Tem, Valued at Cost)

�O��A�RR������>�` 1,000.21/-)

z�����U'������='�������������31.03.2012 ` 4,181,441]

F.Y. 2010-11

��$A�W$]AO�V�������>�` 1,000.2141/-)

z�����U'������='�������������31.03.2011 ` 1,017,822,186]

4,181,441 1,017,822,186

Total 1,001,034,915 1,017,822,186

Page 99: View Document - The India Government Mint , Kolkata

97

Note 17

Inventories As at 31st March 2012

(`)

As at 31st March 2011

(`)

Raw Materials and Components 4,196,712,652 4,601,138,366

Raw Material in Transit 1,069,522,624 445,088,479

Goods in Transit 1,827,718 71,726

Work-in-Progress 2,564,347,486 2,825,540,119

Finished Goods 1,223,948,386 1,113,660,400

Stores and Spares 337,678,181 375,704,192

Scrap 397,611,139 183,949,519

Other Inventory 6,745,641 10,395,624

Total 9,798,393,827 9,555,548,425

Note 18

Trade Receivables As at 31st March 2012

(`)

As at 31st March 2011

(`)

Trade receivables outstanding for a

period less than six months from the

date they are due for payment

Unsecured, considered good 5,419,298,581 6,899,430,328

Unsecured, considered doubtful 9,106,366 606,841,387

5,428,404,947 7,506,271,715

���Z����=������!������<!�'���<� 9,106,366 606,841,387

Total (A) 5,419,298,581 6,899,430,328

Trade receivables outstanding for a

period exceeding six months from the

date they are due for payment

Secured, considered good 0 0

Unsecured, considered good 7,239,385,667 2,710,645,176

Unsecured, considered doubtful 442,100,424 291,391,395

7,681,486,091 3,002,036,571

���Z����=������!������<!�'���<� 442,067,971 291,358,942

Total (B) 7,239,418,120 2,710,677,629

Total (A+B) 12,658,716,701 9,610,107,957

Page 100: View Document - The India Government Mint , Kolkata

98

Note 19

Cash and Bank Balances As at 31st March 2012

(`)

As at 31st March 2011

(`)

a. Cash and Cash equivalents

Balances with Banks 710,122,573 2,883,095,033

FDR with Banks (Excluding pledged FDRs)

with maturity less than 12 Months from the

Balance sheet date

17,160,477,120 15,840,154,611

Cheques, drafts on hand 44,038 18,939

Cash in hand 694,327 685,940

Postage in Hand 1,277,042 863,917

b. Other Bank Balances

FDR pledged with Bank 33,000,000 33,000,000

Total 17,905,615,101 18,757,818,441

Note 20

Short-Term Loans and Advances As at 31st March 2012

(`)

As at 31st March 2011

(`)

Unsecured Considered Good

��������=�������F*"'����� 51,979,924 82,615,740

Pensionary Charges Receivable - CISF 0 38,982,265

Amount Receivable from EPF Trust 331,804,514 767,789,310

Amount Receivable from Pension Trust 93,857,972 52,047,751

�=��F����*���I����=<'��!��*�Govt of India

1,198,236,515 1,198,236,515

Advances to Supplier 1,507,283,673 251,933,505

Advances to PAO 4,062,268 3,480,428

��=�������D�% ����=�'�H���� 0 445,000

Advances (Others) 610,406 4,464,761

FC�����E���� ��D'��� 241,136 2,900,941

Excise Duty CENVAT 5,167,703 8,062,915

CST Refund Recivable 18,432,232 18,396,409

VAT/Sales Tax Receivable 49,099,097 42,634,361

MVAT Refund Receivable 38,610,503 31,780,165

FBT Advance Tax 0 6,550,000

Page 101: View Document - The India Government Mint , Kolkata

99

Short-Term Loans and Advances As at 31st March 2012

(`)

As at 31st March 2011

(`)

Advance Income Tax A.Y 2012-13 2,210,000,000 0

Advance Income Tax A.Y 2011-12 2,520,000,000 2,520,000,000

Advance Income Tax A.Y 2010-11 2,661,196,139 2,661,196,139

TDS A.Y 2012-13 884,579 0

TDS A.Y 2011-12 55,359,593 55,209,104

TDS A.Y 2010-11 205,233,703 205,274,299

TDS A.Y 2009-10 195,369,005 396,026,620

Prepaid Expenses 8,094,435 6,564,411

Others short term loans and advances 43,790,490 1,891,584,205

Total 11,199,313,887 10,246,174,844

���Z����=������!���E��<!�'���=���� 8,323 8,323

Total 11,199,305,564 10,246,166,521

Note 21

Other Current Assets As at 31st March 2012

(`)

As at 31st March 2011

(`)

Interest Receivable on FDR 306,633,736 353,094,013

Asset Held for Disposal 13,601,459 0

PAO/C&C DEA Ministry of Finance

(EPF)

93,180,787 0

PAO/C&C DEA Ministry of Finance

(GPF)

223,669,980 0

Other receivables 9,579,129 39,657,057

Total 646,665,091 392,751,070

Page 102: View Document - The India Government Mint , Kolkata

100

Note 22

Revenue from Operations For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

Sale of Products (Gross)

Sale of Notes 13,359,511,000 10,065,682,000

Sale (Export) 77,687,735 277,170,771

Sale of Coins 13,669,126,465 14,269,779,101

Sale of Medals and Commemorative

Coins

622,635,285 305,870,442

Sale of Security Paper 5,206,948,124 5,212,370,871

Sales-Others 1,259,460,661 1,166,988,916

Total (A) 34,195,369,270 31,297,862,101

Sale of Services

Job Work 4,549,230 26,909,244

Other Services 26,853,923 20,936,078

Total (B) 31,403,153 47,845,322

Other Operating Revenues

Sale of Scrap 762,975,443 990,879,861

Other Operating Activities 9,496,528 13,374,449

Total (C) 772,471,971 1,004,254,310

Gross Total D (A+B+C) 34,999,244,394 32,349,961,733

���Z�FC�����E�����F� 51,222,189 20,333,773

Total (D-E) 34,948,022,205 32,329,627,960

���Z�I��E�!!��������!��'��D�''� 0 43,646,066

Revenue from Operations 34,948,022,205 32,285,981,895

Inter unit sales during the Year is amounting to ` 3,891,367,255 (F.Y 2010-11

`�V$�]�$O?N$A�V��������'�����������<�=���'����(������ � � �

Page 103: View Document - The India Government Mint , Kolkata

101

Note 23

Other Income For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

Interest Income (Net) 1,230,841,434 1,227,084,239

Dividend Income 63,212,729 43,179,170

Foreign Exchange Fluctuation Gains 48,630,699 30,822,770

���������'���!�S�C�������� 516,993 333,330

Other non-operating income (net of

expenses directly attributable to such

income)

87,970,323 73,748,592

���=������\ �<�'�����H�����D�� 245,334,954 907,759,374

Total 1,676,507,133 2,282,927,475

Note 24

Manufacturing Cost For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

Cost of Raw Materials Consumed 16,522,274,181 15,116,346,273

Consumption of stores, spare parts

and components

390,961,809 243,494,960

Power, Fuel and Water 444,549,544 393,751,146

Repairs & Maintenance to Machinery 71,629,004 49,877,198

Repairs & Maintenance to Factory

Building

25,878,068 16,679,720

Packing Expenses 105,991,364 123,443,396

Other Manufacturing Cost 34,706,072 28,144,962

Total 17,595,990,043 15,971,737,656

Page 104: View Document - The India Government Mint , Kolkata

102

Note 25

Changes in Inventories of

Finished Goods, Work in

Progress and Scrap

For the year ended 31st

March 2012 (`)

For the year ended 31st

March 2011 (`)

Closing Stock

Finished Goods 1,229,210,646 1,119,250,610

Work in Progress 2,698,129,944 2,799,433,737

Scrap 409,329,421 203,576,430

Total (A) 4,336,670,010 4,122,260,777

Opening Stock

Finished Goods 1,119,250,610 1,775,379,995

Work in Progress 2,812,659,917 2,232,783,668

Scrap 203,576,430 3,935,505

Total (B) 4,135,486,956 4,012,099,168

Changes in Inventories of

Finished Goods and Work in

Progress (A-B)

(201,183,054) (110,161,609)

In IGM Noida during the year, the company has accounted for work in progress and accordingly

the WIP as on 31.03.2012 is valued at ` 1069.51 lacs and WIP as on 01.04.2011 amounting

to ` 132.26 lacs is accounted for by crediting to prior period adjustments.

Note 26

=�+��������������=4+���� For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

Salaries, Wages and Allowances 4,401,855,997 4,121,139,835

Overtime 1,042,562,678 943,833,977

Incentive 936,169,365 1,050,194,742

+� 23,126,620 31,763,323

Medical 123,192,189 94,338,257

Employer Contribution to EPF 300,672,139 265,257,394

�=���'������������������(���Contribution

270,370,809 83,921,604

�����<�����������) ���������+��� 18,547,741 21,460,947

�=��F����*�� 176,246,740 325,235,109

Gratutity 137,161,520 202,832,448

Staff Welfare Expenses 21,375,633 7,142,379

#����F*"'�����D����� 169,683,460 180,249,994

Total 7,620,964,891 7,327,370,009

Page 105: View Document - The India Government Mint , Kolkata

103

Note 27

Other Expenses For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

Advertising Expenses 51,993,446 19,891,268

Commission (Auction & Other) 25,376,285 46,485,810

Audit Fees 2,629,112 1,996,407

Bad Debts written off 0 33,579

Bank Charges 423,425 769,139

Canteen Expenses (Net of

Receipts)

14,153,399 12,170,736

Dispensary Expenses 30,499,311 39,268,848

Environmenal Charges 9,840,949 10,547,731

Fees & Honorarium 5,558,068 10,343,642

Freight Outwards 66,353,581 50,484,036

Foreign Exchanges Fluctuation

�����11,386,747 1,538,394

Grants in Aid Expenses 275,930 289,160

��������'�\E�������!������ 117,593,312 9,273

Guest House Expenses (Net of

Receipts)

22,249,421 19,607,367

Hiring of Staff 19,674,424 11,050,230

Horticulture Expenses 5,789,158 4,079,441

Hospitality & Entertainment 13,971,555 9,918,255

�('������!������'����(�� 54,100,218 39,380,377

Meeting Expenses 228,157 214,173

Misc. Expenses 2,747,983 22,941,353

#!����FC"����� 4,794,005 7,329,636

Postage & Courier Expenses 8,007,913 7,469,651

Printing & Stationery Expenses 7,384,114 9,226,235

Research & Development

Expenses

23,493,947 48,994,436

Repair & Maintenance- Building 141,184,617 103,158,706

Repair & Maintenance- Computers 6,418,490 6,560,592

Page 106: View Document - The India Government Mint , Kolkata

104

Other Expenses For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

Repair & Maintenance - Others 28,841,984 27,344,829

Rent 47,741,163 44,388,995

Insurance 2,439,227 1,842,481

Rates & Taxes 15,108,665 23,666,677

Security Charges 604,218,101 556,726,980

Seminar & Training Expenses 12,325,344 10,289,040

Service Tax Paid/ Sales Tax 0 56,716

Subscription, Newspaper, Books &

Periodicals

1,591,489 1,819,949

Telephones & Internet Charges 17,822,520 14,929,808

Travelling & Conveyance Expenses 58,573,830 55,100,441

Travelling Expenses Foreign 5,523,910 7,875,731

M��!��*��� �=����� 3,370,752 4,459,135

Corporate Social Responsibility

Exp (CSR)

43,640,497 38,949,619

Vehicle Hiring/ Maintenance

Charges

18,400,449 16,720,809

Water & Electricity Charges 47,291,505 46,993,237

Others Expenditure 53,754,404 19,698,007

Total 1,606,771,404 1,354,620,929

Note 28

Provisions For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

Provision for Bad Debts/Advances

Opening Balance 1,736,478,360 1,543,190,075

Provision Made during the Year 153,390,840 606,651,598

Provision reversed during the Year 761,439,539 413,363,613

Adjustment During the Year (Due to

diff. in Opening and Closing Balance)

597,704,598 0

Closing Balance (A) 1,726,134,259 1,736,478,060

Page 107: View Document - The India Government Mint , Kolkata

105

Provisions For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

Provision for Obsolete/Non Moving

Inventory

Opening Balance 49,284,232 54,861,149

Provision Made during the Year 4,289,319 13,583,351

Provision reversed during the Year 2,450,528 19,160,268

Closing Balance (B) 51,123,023 49,284,232

Total (A+B) 1,777,257,282 1,785,762,292

Note 29

Prior Period Expenditure For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

MACP Arrears 0 47,791,614

Payment in lieu of

Commpassionate Appointment

0 31,950,597

Incentive Bonus of F.Y. 2009-10 0 14,518,778

Arrears Payment 0 149,512,493

U�+� �<�'�� 1,001,000 0

Gratuity 0 2,140,587

Bonus to Employees 0 3,398,564

Excise Duty paid on demand for

the period 10-02-06 to 28-02-10

0 18,021,644

Interest on Excise Duty on demand

for the period 10-02-06 to 31-08-08

0 4,001,199

EMD Forfeited for 2009-10 0 12,700,029

Prior period Exp. (Units) 29,734,726 0

Insurance Expenses 6,609,536 –

Other Prior Period Expenditures 11,910,930 16,938,698

Total 49,256,192 300,974,203

Page 108: View Document - The India Government Mint , Kolkata

106

Prior Period Income For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

Revision of Provision for Pension

Charges

0 22,703,171

CISF Pensionary Charges excess

payment paid reversal

0 26,936,650

Recievable from CISF 0 13,808,132

�Q������E*(���?AA�K�� 1,534,403 0

Purchase Blanks 18,807,329 0

Opening WIP Adjustment 18,884,708 0

�F���!!��������!�%D����'��transferred by IGM, Mumbai

3,067,929 1,997,347

Prov for Depreciation Written Back 136,880 0

Prior Period Income (Units) 3,783,394 0

Other Prior Period Incomes 7,988,342 1,732,153

Total 54,202,985 67,177,453

Note 30

Payments to the auditor as For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

a. Auditor 1,460,680 1,400,230

b. For taxation matters 503,829 602,514

c. For company law matters 0 0

d. For management services 0 0

e. For other services 631,457 10,000

f. For reimbursement of expenses 144,249 166,113

Total 2,740,215 2,178,857

Page 109: View Document - The India Government Mint , Kolkata

107

Note 31

Consumption of Raw Material

under Broad HeadsFor the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

CWBN Paper 4,810,170,986 4,167,824,508

Security Paper 1,381,207,127 1,099,655,193

Ink 1,750,268,300 1,608,968,153

FSS Coil 3,133,320,718 3,097,030,538

NiBR Coil 3,333,084,543 4,312,499,683

FSS Blanks 1,717,749,970 1,243,859,485

NiBR Blanks 236,399,096 579,651,703

Bi-Matelic ` 10 Blanks 2,843,375,829 1,333,883,822

HAUV Film 95,585,744 92,504,554

Chemicals 62,480,300 63,099,124

Security Fibre 18,369,050 21,713,043

Security Thread 169,383,678 244,386,455

M-Feature 32,732,776 102,377,671

Furnace Oil 156,550,223 65,615,908

D'����������� ���� 62,638,268 103,245,072

Comber 312,526,143 147,657,929

Total 20,115,842,751 18,283,972,840

Note 32

Work in Progress under Broad

HeadsFor the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

W.I.P of Notes 1,131,990,477 1,523,187,694

W.I.P of Coins/Blanks 1,019,770,623 689,601,571

W.I.P of Ink 38,804,367 147,561,202

W.I.P of Security Paper 37,720,405 33,583,180

W.I.P of Postal Items 3,791,957 6,542,038

W.I.P of Non-Postal Items 268,087,135 119,935,242

W.I.P of Travel Documents 2,930,111 87,459,818

Total 2,503,095,075 2,607,870,745

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108

Note 33

Value of imports calculated on

C.I.F. basis by the company during

�#������ ��������� ��� ���+� ���� (�(On Accrual Basis)

For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

1. Raw Materials 4,032,371,722 4,310,858,419

2. Stores, Components and

Spare Parts

156,920,994 88,058,425

3. Capital Goods 387,230,362 838,305,924

Total 4,576,523,079 5,237,222,768

Note 34

Expenditure in foreign currency

������� �#�� ���� ���� ����� ���account of : (On Accrual Basis)

For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

1. Royalty, Know-how, Professional

and consultation fee

655,109 0

2. Conferences 516,031 0

3. Foreign Travel 2,601,316 5,865,511

Total 3,772,456 5,865,511

Note 35

Consumption of Imported raw

material, stores, spare parts and

components as compared to

Indigenious raw material, Stores,

spare Parts and components

For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

(A) Total Value of all imported raw

material consumed

4,884,227,336 4,845,617,417

(B) Total Value of all indigenous

raw material consumed

11,638,046,845 10,270,728,856

Total (A+B) 16,522,274,181 15,116,346,273

% of A to total (A+B) 30 32

% of B to total (A+B) 70 68

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109

Consumption of Imported raw

material, stores, spare parts and

components as compared to

Indigenious raw material, Stores,

spare Parts and components

For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

(C) Total Value of all imported

Stores, Spare parts &

components consumed

119,989,588 76,118,779

(D) Total Value of all indigenous

Stores, Spare parts &

components consumed

270,972,221 167,376,181

Total (C+D) 390,961,809 243,494,960

% of C to total (C+D) 31 31

% of D to total (C+D) 69 69

Note 36

Earnings in foreign exchange

����������������#������.����heads, namely:-

For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

1. Exports of goods calculated on

F.O.B. Basis

79,557,000 193,830,708

Total 79,557,000 193,830,708

Note 37 Contingent liabilities and Committments

Contingent liabilities and

commitments (to the extent not

provided for)

For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

�)�������(��� �<�'����

(i) Claims against the company not

acknowledged as debt (Excluding

legal cases where amounts are

unascertainable)

���������'���<���*"'�����\;������ 2,209,292,630 2,342,064,106

�<��������'���<����""'���� 6,854,970 6,794,458

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110

Contingent liabilities and

commitments (to the extent not

provided for)

For the year ended

31st March 2012 (`)

For the year ended

31st March 2011 (`)

(c) Octroi Penalty 2,387,951,690 238,79,51.690

(d) Demand of VAT on Currency Coins 807,201,016 0

(e) Sales Tax Dispute 2,236,278,771 2,015,735,170

(ii) Bank Guarantees 36,865,000 3,865,000

������ �����!��������������<��D��� 247,803,931 2,818,871,588

(iv) Income Tax Penalty A.Y. 2006-07 5,712,718 0

(iv) Others 193,853,488 326,490,331

Total 8,131,814,214 9,901,772,343

(II) Commitments

(i) Estimated amount of contracts

remaining to be executed on capital

account and not provided for

3,714,069,425 3,157,729,631

(ii) Other commitments 0 0

Total 3,714,069,425 3,157,729,631

Note 38 Deposit against Contingent Sales Tax Liability

Sales Tax was collected under account head named “Deposit against Contingent Sales Tax

�<�'��`��"��S�X�?AAWKA���������'��"�������E����(����S�X�?AA�KAN����������;��������as sales tax is not payable on sales of security items to State and Union Territory government

and therefore the same may not be collected and sales tax collected between 10.02.2006 to

31.03.2008 was credited back to customers Sales tax collected upto 10.02.2006 amounting

to ` 202,228,399 is being shown as liability under the head other long term liabilities.

Note 39 Inter Unit Transfer

Inter Unit Transfer are made at Budgeted value.

Note 40 Assets & liabilities taken over

a) As per the Govt. decision, all the assets and liabilities of above mentioned nine units

������A�A?�?AA]����<�������!������������) �����������'�<�'�����"��=�'��(��� ��� AN�A?�?AA]� ;���� ���� �=��� ��� �A�A?�?AA]� ��� ��� <����� �!� ����) � ���historic cost basis as per books of the Government Units.

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111

b) The proforma accounts were prepared by the units before their corporatization as

a subsidiary account. It was in addition to the Govt. accounts prepared by Ministry

of Finance. In the units, proforma account was not up to date as on 09.02.2006 i.e.

the date of corporatization. It has now been prepared by all units and due for audit

by C&AG in some cases. Finalization/Audit of Proforma Accounts up to 09.02.2006

��;�''���"�����'�=����������!�������!�''������*��!!������*����"�<'��to the government as well as assets and liabilities of the Company.

c) After the transfer of assets & liabilities from government to company, it is required

to take necessary steps to get the title deed changed in the name of the company.

Efforts are being made to consolidate the revenue records pertaining to ownership,

thereafter process will be initiated to transfer the title of immovable properties as

per the guidelines of Department of Public Enterprises.

Note 41 Withdrawn Coins

Withdrawn coins are received in the mints for melting. These are received by Mints from

Government and Mints act as custodian to it. After melting, metal is auctioned on behalf

of Government. Metal value of the stock is given cognizance as credit to government after

levying processing charges of melting etc. Practice being followed in the unit has been

formalized through detailed guidelines.

Note 42 Pricing of Coins/Notes/Postal Items

Coins: The selling price of different denomination of coin for the F.Y 2011-12 has been

worked out based on the actual production cost for the year 2010-11 as calculated by WIRC

of Institute of Cost Accountants of India with adjustment in metal price for the F.Y 2011-12.

The rates at which billing is being made to the Ministry of Finance is subject to settlement

with the Ministry of Finance.

Notes:� ������(� ��'�G���� �!� �����(� �!� %���$� ��''��(� "����� �!� %���� ;���� ���������provisionally by 10% to meet out the increased cost of production during F.Y 2011-12,

however these increased rates are yet to be accepted by RBI.

Postal Items: The rates at which billing is being made to the postal authorities is subject to

settlement with the authority. The revenue from transaction with the postal authorities as well

as receivable from the same are subject to settlement/reconciliation. An outside professional

body has been appointed to carry out the costing of the products and costing report is likely

to be received shortly.

Note 43 Disclosure pertaining to Micro, Small & Medium Enterprises

The management has initiated the process of identifying enterprises which have provided

(����������=����������M�����;�����Q�'�!���������������������!������$��*''��������*�F���"�����$��������������������$��*''��������*�F���"������E�=�'�"*�����$�?AA]��Accordingly the disclosure in respect of amount payable to such enterprises as at 31st March

?A�?� ��� <���� *��� ��� ��� �����'� ��*���� ��� ��� <���� �!� ��!��*���� �����=��� ��available with the company. Further in view of the management, the impact of interest if any

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112

that may be payable in accordance with provision of the Act is not expected to be material,

therefore provision for the same has not been made in books of accounts.

Note 44 Fixed Assets

a. As per the Ministry of Finance O.M. dated 10th February, 2006 all assets and

liabilities have been taken at the book value, Pre-acquisition, the units, being

commercial entity, has been maintaining the assets details at Gross Value and

���!�'�'�!���!������;�����C����������('�������*�'�����"���������������*��as appearing in the books of vendor has been carried forward in the books of

����) ��S������!������"��"�����!���"������������*��������'�'�!�����<���(�continued.

<�� +��� �'�� !��� ��� �**�=<'�� "��"������ �*�'�� ��� ��� D��'���(� ��� ��� �� <��transferred in the name of the company. Efforts are being made to get the title

deed/lease deed transferred in the name of the company.

��� ������'�=����������!�S�C��������������(���������'�����?A��K�?�������<����carried out at CNP Nasik, SPM Hoshangabad, BNP Dewas, IGM Hyderabad and

IGM Noida.

Note 45 Lease Premium (IGM Noida)

The land at Sector-1 and Sector-23 held by IGM Noida are taken on long term lease of 99

year w.e.f 3rd May, 1985 and 90 years w.e.f. 12th May, 1993 respectively from Noida Authority

;����������������<����P���������"��*��*�"���!���'����������&�=���*�������������was not amortized over the period of lease. Now in term of AS-19 regarding accounting of

leases, the basic premium paid for acquiring the lease is written off over the balance period

of the lease starting from 10.02.2006 i.e. date on which all assets and liabilities transferred to

the Corporation and ending on the date of termination of lease as per the lease deeds.

Note 46 Municipal Tax

a) With regard to the amount of ` 122.31 lakhs recoverable from Municipal Corporation

of Hyderabad, being the amount paid by the Unit during the period 2001-06 as

property tax/service tax which in the view of C&AG was not in line with Article No.

285 of Constitution of India read with Supreme Court judgment. As observed during

the audit in the year 2004-05. The matter for getting the amount refund from GI-IMC

is being followed up by SPP.

b) During recent C&AG transaction audit it was observed that the title to the property

���������!������������) $�������������������������"�����*�����"'�C���<��SPP.

c) The GHMC has raised a claim for ` 97.91 lacs as service charges upto the year

2011-12 including arrear. On scrutiny it is found that there are some errors in the

calculation sheet of 2010-11 & 2011-12 which was furnished by GHMC. The amount

�!����=�������(�������C����WRB��!�"��"����C���"���&T���E�#� +�%���W�A\

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113

CTS/MCH/2000. In the year 2010-11 & 2011-12, the amount of property tax should

be ` 3,263,988 and hence the service charges shall be ` 2,447,991 for the year.

So total service charges of ` 7,343,973 are liable upto the year 2011-12 including

arrear. As there is an existing provision of ` 5,743,370, the balance amount of

` 1,600,603 has been provided during F.Y. 2011-12.

d) Mean while Unit has also taken legal advice and accordingly requested GHMC to

adjust, the present claim from ` 122.31 lacs which was made by mistake to GHMC

during the period 2001-06.

Note 47 Precious Metals at Mints

Mints at Mumbai, Kolkata and Hyderabad have limited stocks of gold, silver and other precious

metals. As normal business of the company, small quantity of these metals is accumulated

every year. Metals are required in the medallion/medal business depending upon the type

of medal to be manufactured. There is a sound system of maintaining records and ensuring

"�����'� �!��� �!� ��� *�'��� E��'��� <���K�"� �!� ���� ��(���� �!� *�'� ;��� ��������details are available in the units. Value of these metals has been taken as per book value

which is lower than the market value of the same.

:�����)� =�+�������������Most of the Employees of the company were on deemed deputation from Government of

)�����#���R�AN�?AA�$����"����(���*���;����(����<�;�������(�=���*��$�����) �and the representatives of the various unions. Option was given to employees who were

������*�����"��������"�����) ����&�=����"���I�'��VWK���!�����'���=�'����=��������������� I�'��$� �NW?�� ���*���� <���"���� ��� <���� ������� <�� &�=�� =���� ������%��� �A\�\?AANK����� ���� ?N�AR�?AAN� ;���!�� A�����?AA��� #"���� �� J���� ����) � ;��exercised by 14256 employees.

,������1����������������a) Employee Provident Fund (EPF): For EPF, a trust has been established and

exemption has been granted by Employees Provident Fund Organisation in the

month of December, 2009. This trust became operational w.e.f. April, 2010 and

now all cases pertaining to employees provident fund matter are being looked after

<�����+�����#"����(�<'������!�"�����*"'������;�������!������������) �EPF Trust from PAO of the respective units except in case of 372 employees

�!� ��� ��*"��� ;����� ��� ������ "��(������ ��*"��� "��� �C��� �����<����� ��provident fund at predetermined rates to this trust, which invests the funds in

permitted securities. Contribution to family pension scheme is paid to the EPFO.

+��������<����� ��� ����(��G������C"�������� ������(��� �� ���"������� '����account.

b) General Provident Fund (GPF): For GPF, a trust has been established in the month

of March, 2011. This trust became operational w.e.f April, 2011. From 1st April

2011 employee’s contribution is being made to the trust. Opening balances of the

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114

��*<������"�����*"'������;�������!������������) ��S�+����!��*���#��!����respective units except in case of 139 employees of the company which are under

progress. There is only employee contribution in this fund therefore, no amount is

����(��G������C"��������"�������'����������

,������������������c) Pension:���������;�''�<��"�������*<�������������#"����!��*�����) �F*"'������

Pension Fund Trust constituted by Government of India. Provisions for pensionary

contribution to the trust in respect of the Combined Optees have been made as per

Government Rules.

d) Leave Travel Concession:� �=�� +�=�'� ����������� � +��� <������ �=�� <����dealt with as per norms of Government of India adopted by the company.

e) Gratuity:�+�����*"��������������<�����(�����"'���F=�����*"'�����;����������������������������=�����!��=����������*����������'�����(��(�������R�����salary (15/26 × last drawn basic salary plus dearness allowance) for each completed

year of service subject to a maximum of ` 10 lacs on superannuation, resignation,

termination, disablement or on death. The liability for the same is recognized on the

basis of actuarial valuation.

f) Leave: +��� ��*"��� "��=����� !��� ������ '�=�� <����� ��� �'!� "�� '�=��to the employees of the company which accrue Six monthly at 15 days and 10

days respectively. Earned leaves is encashable up to a maximum of 300 days on

separation. Half pay leave is encashable only on separation but subject to maximum

of 300 days for both earned leave and half pay leave. The liability for the same is

recognized on the basis of actuarial valuation.

(` in crores)

Sl.

No.

Particulars Gratuity Leave

A Net liability recognized in the Balance Sheet

at 31st March, 2012

Present value of unfunded obligation 34.84 198.23

%�� �<�'�� 34.84 198.23

B =4+������� ����>�������#��������������+��������������for the year

Current Service Cost 10.28 5.40

Interest on obligation 1.66 15.06

Net actuarial losses(gains) recognized in the year 2.22 2.96

+�'����'���������*"'�����<������C"���� 14.16 23.42

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115

Sl.

No.

Particulars Gratuity Leave

C 1#����������#��+����������������������������������������representing reconciliation of opening and closing balance

thereof:

#"����(��������<������<'�(��� 20.70 188.27

Service Cost 10.28 5.40

Interest Cost 1.66 15.06

Actuarial losses/(gains) 2.22 2.96

D������"�� (0.02) (13.46)

�'����(��������<������<'�(��� 34.84 198.23

D Changes in the fair value of plan assets representing

reconciliation of opening and closing balances thereof:

Opening fair value of plan assets - -

Expected return

Acturial gains/(1osses)

Contribution by Employer

D������"��

Closing balance of fair value of plan assets (0.02) (13.46)

E Principal actuarial assumptions at the balance sheet date

(expressed as weighted averages)

Discount Rate 8.50% 8.50%

Expected return on plan assets - -

Attrition Rate 1.00% 1.00%

Annual increase in salary costs 7.00% 7.00%

Note: The estimates of future salary increase, considered in actuarial valuation, take account

�!���P���$���������$�"��*���������������'�=��!����$����������""'�������*������employment market.

Note 49 Segment Reporting

In the opinion of management segment reporting as envisaged in AS-17 is not applicable as

risks and returns associated with product categories are not different. Most of the products

are manufactured for and supplied to Government organizations on cost plus basis. Further

����) ������((��������=����(��!��������!�*��!�����(��!���������"�������

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116

Note 50 Provisions

A provision is recognized when the company has obligation as a result of past event and it is

"��<<'���������P�;��!��������������;�''�<����Q����������'������<'�(���$�������"���of which a reliable estimate can be made based on technical valuation and past experience.

Provisions are not discounted to its present value and are determined based on management

estimates required to settle the obligation at the balance sheet date. No provision is recognized

for liabilities whose future outcome cannot be ascertained with reasonable certainties. Such

contingent liabilities are not recognized but are disclosed on the basis of the judgement of

���*�(�*����+����������=��;��������<'����������������J���������P������current management estimate.

Note 51 Related Party Transaction

��� ��� +��������� �!� ��'��� "����� �� "��� ��������(� ������K��� {I�'��� ����Disclosure’ issued by the Institute of Charted Accountants of India:

Name of the Party Relationship

D���%����"�����''�)�������=�� ��� �����U�����

Joint Venture: The company has entered into a Joint Venture Agreement with Bhartiya

I����=�� D��� %��� ������ ���=�� �*���� �DID%�� �$� � ;��''�� �;���� ��<������� �!�Reserve Bank of India to set up a Security Paper Mill at Mysore with 50% participation

in equity by each Joint Venture partners by forming a company under Indian Companies

Act, 1956 on 13.10.2010. The project is under implementation as on 31st March 2012. The

company has contributed a sum of ` 200 crores towards 50% capital contribution. Company

has been allotted 10,000,000 equity shares of ` 100 each aggregating to ` 100 crores till

31.03.2012 and a sum of ` 100 Crore is being shown as share application money pending

allotment as on 31.03.2012 which has been allotted on 30.05.2012. Their accounts are yet

��<����'�G���

(` in lacs)

Transaction: 2011-12 2010-11

Capital Contribution 9995.00 5.00

Conversion of Share Application Money to Capital (9995.00) 0.00

Share Application Money (Pending Allotment) 10000.00 9995.00

Key Management Personnel:

� Shri M.S. Rana, Chairman and Managing Director.

� Shri Ashwini Kumar, Director (Technical).

� Shri Madan Mohan, Director (Finance) upto 13.10.2011

� Dr. Manoranjan Dash, Director (HR).

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117

There are no transactions with Key Management Personnel during the year, except as given

<�'�;��+�������������������������;�����'���"�������������������K���

The gross remuneration to Key Management Personnel who have been the fulltime-Directors

of the Company is as under:

(Amount in `)

Particulars 2011-12 2010-11

Salary and Allowances 10,484,910 9,708,971

Contribution to PF/ Pensionery Charges 441,062 606,940

�=��F����*�� 1,471,913 249,389

����I�����#��������� 4,167,635 3,941,427

Gratuity 553,555 589,785

Total 17,119,075 15,096,512

Note 52 Earnings Per Share

(Amount in `)

Particulars 2011-12 2010-11

������!���+C��`) 5,824,659,581 5,771,923,538

No. of Shares outstanding 50,000 50,000

Basic/Diluted Earnings per share (`) 116,493 115,438

Note 53 Deferred Tax

+�����(��������*"����������'����������!���!������C��������'�<�'���������������!��*"�������!!������������(���������'�����?A��K�?���Z

Particulars (Amount in `)

Opening Balance of Deferred Tax Assets 934,660,212

Add: Deferred Tax Assets (Net) created during the year (200,721,157)

Closing Balance of Deferred Tax Assets 733,939,055

)�� ��� �"������ �!� D���� �!� E�������$� ������� �����$� ��� �� ��=����� �=�� � ='��� ���realization in the ordinary course of business at least equal to the amount at which they are

stated.

Note 54 Transactions in Foreign currencies

Transactions in Foreign currencies are accounted at prevailing rates on the date of transaction.

All exchange rate differences in respect of foreign currency transactions are dealt with in the

������� �����������C��"��������'��(����Q���������!�S�C��������$�;���������J�����in the cost of the assets.

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118

Note 55 Gold lying with RBI

�R$RRR�&*���!�(�'��'���(�;���ID)�����**����!���&�����������'��������!���?AA]KAW���Out of the above, gold weighing 10,336 gms was already accounted for in 2006-07, under

the head Gold with RBI, the possession of which is with RBI. IG Mint Mumbai will be arranging

to take over possession of the same. As regards the balance 75,219 gms. IGM Mumbai has

received a letter from RBI dated 06.06.2008, Ref No By. Cy. No. 5047/01.11.044/2007-08,

�����(�'�������'��<����*����<��'!��!���<'���E�<�#!���$�ID)$���*<���+����!���$�����gold does not belong to the unit, and hence the same has not been considered in the

accounts.

Note 56 Security Deposit Paid

Security Deposits have been made with various Electricity Departments/Boards and

companies by the units to get electricity connections and supply. Most of these deposits have

been made prior to corporatisation.

Note 57 Funds from Govt. of India (adjustable)

As per the Government of India decision, all the assets and liabilities of Govt. of India

Presses, Mints and Mill working under Department of Economic Affairs. Ministry of Finance

�� ��� �A�A?�?AA]� ��� <���� ���!������ �� ��� ����) �������� ��� '�<�'����� �=�� <����taken on book value. Assets and liabilities prevailing as on 09.02.2006 were taken over on

�A�A?�?AA]� ��� ���<������!�����) ���� ���<�����!�=�'<'�� ��!��*�����+�����!!�������between value of all assets and liabilities as on 10.02.2006 represents the amount of funds

!��*�&�=���*��������(�����!������ ���!����!��������� '�<�'�����������'�G���\�����!����!�*����������"��AN�A?�?AA]���;�''���"�����'�=����������!�������!�''������and subsequent developments may affect the amount payable to the government as well as

assets and liabilities of the Company, the amount of Fund from Government is adjustable to

such an extent. There is a net increase of ` 1,161,767 over previous year.

Note 58 Impairment of Assets

(a) As per AS-28, the carrying amounts of assets are reviewed at each balance sheet

date if there are impairment indication an impairment loss is recognized wherever

the carrying amount of an asset exceeds its recoverable amount. The recoverable

amount is the greater of the asset’s net selling price and value in use. In assessing

='���������$�������*���!���������P�;����������������������"������='����the WACC.

(i) After impairment, depreciation is provided on the revised carrying amount of the

asset over its remaining useful life.

(ii) A previously recognized impairment loss is increased or decreased based

on reassessment of recoverable amount, which is carried out if the change is

��(�������T�;�=������������(�='���!�����=���'����������������<������the carrying value that would have prevailed by charging usual depreciation if

there was no impairment.

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119

(b) In the opinion of Management, assets which are impaired by disuse or obsolescence

have not been segregated from the concerned assets category and are not shown

as decommissioned assets.

���� )�������!����$�T����(<��"�����'�=����������!��C��������!������"��"����of determining impaired assets was carried out by an outside agency but the report

has not been accepted by management therefore no provision has been made in

<������!���������+�����������������!����*"��*����=���;�������;��='����!�` 19,161,854 as on 31.03.2011.

(d) In case of IGM Hyderabad, provision for impairment has been made for an amount of

` 77,467,757 for assets where carrying amount of an asset exceeds its recoverable

amount.

���� )�������!�����T����<�$�''� ��*���!��'���������������C��"� ;��) ���%�;����������������������(�������������(������(����K��KP�;��������(��G���������$�����������������������!��*"��*����+���������(�='����!�;��) ���%�;�Machines as on 31.03.2012 is `��OV$�?W�����������=��<'��='����!����;��) ��(New) machines is ` 250,000. The excess of carrying value over recoverable vaue

of machines amounting to `�RNV$�?�����<��������(��G�����)*"��*��� ����

(f) In case of lSP, Nashik during the year the unit has principally approved assets

having gross block at ` 267.56 lacs for the purpose of impairment, the net block of

the assets existing in the books as on 01.04.2011 was at ` 2.30 lacs. Considering

an estimated realizable value of ` 4,409, the remainder of amount of ` 2.26 lacs has

been booked under the impairment loss. Although the assets have been approved

for the impairment, pending the disposal, the values of assets have been disclosed

�������C�������������������*���'������^��������'��!������"��'�\�`�����nominal value which also includes the estimated realizable value of asset.

Note 59 Slow Moving/Non Moving Inventory

Company is holding stock of slow and non moving items like stock of CN Coils, PN cathodes,

stock of pure nickel etc aggregating to ` 147.46 crores. Provision of ` 5.03 crores (Previous

Year ̀ 4.93 crores) has been created against those obsolete/non moving items where market

value is less than the book value.

)�������!�����T����(<�$����������������!�%��K*�=��(\�'�;K*�=��(�����<��'���inventories has been assigned to an external agency. The said agency completed the inventory

=��������������"��������!������<*�����+�����=��������;�����������<'�����������''�$�has been removed from the books by debiting to the respective Consumption account. The

total value of such double created items is ` 24,425,287. The inventory value is thus reduced

by the said amount.

The list of slow and non-moving items is prepared, but no provision is made in the books

!�������*��������*�����<���(�=�������<�����*�(�*����+���"��=������!�������*��

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120

��''�<��*��� ��� ���<����� ��� ������� ���;���������=������������""��='�<�� �������management is obtained. The total value of slow & non-moving item as per report submitted

by the agency is ` 55,273,084.

In case of IGM Mumbai the slow/non-moving items included in inventory were physically

=����������='�������K�=���='��������AN�A?�?AA]��+�����*"'�����;�����K?������*��of basis of valuation is pending ascertainment.

Note 60 House Building Advance

Interest on House Building Advance outstanding as on 31.03.2011 has not been charged for

���"������!��*�A��A��?AAN���V��AV�?A����C��"�!���!�;�TD�� ������*����������<����;��������������������!����������'�*����!�T�����D��'���(� ��������''��������'�����with Ministry of Finance. The company has repaid housing loan to Government on behalf of

the employees which has been granted before corporatisation but the mortgage deed has

not been transferred in the name of the company.

Note 61 Discontinued Operations at Saifabad Unit (Discontinued IG Mint)

IG Mint, Hyderabad has discontinued Minting Operations of its Saifabad Unit, Hyderabad

with effect form 01.11.2009. Net Block of Fixed Assets with the Unit as on is ` 1,782,133

after making Provision for Depreciation of ` 1,966,463 (Previous Year ` 3,748,595 and the

provision for depreciation was ` 2,603,211) for the Current Financial Year. However, it is

��!���'��������������*"���!������������(�����"������$�����"���<������!��������are not being maintained relating to the said Unit.

Note 62 Employer reimbursement for Mobile Hand Set

Mobile Phone Instruments purchased by the staff entitled as per the policy of the company

and reimbursed by the company, have not been capitalized but charged to the revenue.

Note 63 Liability for Property Tax

+���"��"����C�'�<�'��������� �����D��'���(��;����<������������������=���'��(�;���assets and liabilities as on 10.02.2006 is a matter of dispute on which the company intends to

seek legal opinion. Where as provision/payments towards the same has been made at some

����$������������������*��������<��������������������������'��������

Note 64 ERP

During the year company has incurred a sum of ` 11,112,335 on ERP which is shown under

the head “Work in Progress-ERP” besides an opening balance of ` 345,404,493. Out of this

amount a sum of ` 209,664,384 has been capitalized during the year subsequent to the

&�K �=�������*"'������!��<�'������"�����!������V�������+�����*����(�*�����!�` 146,852,444 shall be capitalized on stabilization of SAP in all units.

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121

Note 65 Research and Development

The details of R&D expenses are given below:

Sl. No. Particulars Amount (in `)

1. Capital Expenditure 22,819,417

2. Revenue Expenditure 23,493,947

Total 46,313,364

Note 66 Advances

Advances includes a sum of `��WA����'���*�������(�� ����������$�?AAN�<���(��AB�S#D������!��Q��"*��� ��<����������C����(�*��������!��� �������!�'� ���''�������training the equipment was found defective. The same was brought to the notice of the

vendor and the company has received the replaced equipment after March 2011. Pending

successful handover of the equipment to the company, the same was not capitalised in the

books of accounts.

Similarly a sum of ` 58.23 lacs has been advanced to the same supplier being 95% of cost

of spares in previous years which has not been settled as on balance sheet.

Note 67 Treatment for Non Moving Paper

Inventory Includes stock of paper (Imported) at ` 285,778,081 (430.00 MT) (BNP) and

` 239,393,161 (13376 Reams) (CNP) procured from foreign company. Due to Quality Issue

the same is not being used by the company. The management is of the opinion that the net

realizable value of the paper is equivalent to its carrying cost in books hence no adjustment

is required to be made in books on this account.

Note 68 Accounting Treatment for Shop Floor Inventory

As per the prevalent practice the imported spare parts/stores issued from main stores to

security stores situated at Shop Floor are accounted as consumed irrespective of its actual

consumption in the process of production. The imported spare parts not actually consumed

at the year-end and lying at the Shop Floor have not been returned to the stores and

consequently not reversed to stores inventory. Hence the value of unused/unconsumed

�"��������"�P�����������K������������"�����������H����������(�����

Note 69 Expenditure incurred towards Corporate Social Responsibility

During the year the company has incurred an amount of ̀ 43,640,497 on CSR. CSR activities

include expenses incurred for the purpose of construction of new school building, work related

to road widening etc.

Note 70

+���"��=��������L���(������=��<��������\�����\���'������$�;����=�����������$��������*�������������L���'���������

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122

Note 71

Revenue is recognized net of applicable taxes and levies in respect of: (a) sale of currency

note, coins, passport, postal items, weights, measures & medals etc. is recognized on

dispatch. (b) Job work charges are recognized upon approval of the job by client and dispatch

thereof.

Note 72

In IGM Mumbai, the liability on account of penalty/interest in respect of delayed payment of

employer contribution of EPF for the period 01.11.2008 to 28.02.2010 is pending ascertainment

and has not been provided for in these accounts.

Note 73

In IGM Mumbai, old items of consumables & spares worth ` 1,858,736 have been written off

during the year.

Note 74

In IGM Mumbai, Plant & equipments includes machines having gross block value ̀ 57,171,802

and W.D.V. woth ` 5,118,606 as asset held for disposal as on 31.03.2012.

Note 75

E�"�����������"��=���������'�(�<'��������!��'����������������"�����������"����������Schedule XIV to the Companies Act, 1956 except at SPM, Hoshangabad where depreciation

on single shift basis has been provided even for assets used for triple shift basis.

Note 76

In IGM Hyderabad, value of inventories includes other raw material value to the tune of

` 88.95 crores (previous year ` 91.02 crores) which are not being used in current production

process. (Nominal quantities are used for medal manufacturing activity)

Note 77

In IGM Hyderabad a sum of ` 2,118,367 was paid towards excess custom duty on Import of

%�;�D'����(� ���$������]A������(��������?AANK�A������!�����'�*����<����'��(���;���Customs Authorities, Chennai.

Note 78

In case of IGM Kolkata, Management has carried out technical evaluation of Fixed assets

�����(�������������������������������!���;�����!!��NAB��!�;�������;��='����!������assets amounting to ` 117,238,133 has been written off during the year and the balance 10%

has been disclosed as assets held for sale.

Note 79

)����� �!� )&�� %���� �����(� ��� ���$� ��� ���� ��� ��������� ��� �����=���<'�� "'�� ��machinery of `�]�A��'���������"��=������!�������������C���������!�` 6.01 lacs is shown

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123

under provision for impairment. The total provision for impairment loss at the end of the year

stood at ` 62.26 lacs (previous year ` 56.25 lacs).

Note 80

Incase of IGM Noida, the non-circulation coin lying in IGM, Noida received from other units

is not valued as the same are not held for sale and the revenue shall be recognized only on

disposal.

Note 81

)�������!� )&��%���$� ��� '��������� ������"����!� '�����KVV$������K?V����O�P���Sector-27 are not available.

Note 82

In IGM Noida, during the year, the unit has installed and commissioned fully automatic

integrated sachet packaging machine at a total cost of ` 570.56 lacs. A sum of ` 30.92 lacs

��������������"����!�"���;�����;�����*(��������(���������<�������(������������ �����������+�������������'�*�'��(���<������������"�����(�!�����'�*��$�;�������''�be accounted for on receipt basis.

Note 83

In IGM Noida, during the year, the company has accounted for work in progress and accordingly

the WIP as on 31.03.2012 is valued at ` 1,069.51 lacs and whereas WIP as on 01.04.2011

amounting to ` 132.26 lacs is accounted for by crediting to prior period adjustments.

Note 84

In IGM Noida, Gain/loss due to weight variations was accounted for by the unit by adjusting

the cost of production in the absence of accounting policy.

Note 85

)�� )&��%���$�"�����(���'��'��'���$� ����������*����"��=�������!�` 45.02 lacs on

account of arrears for anomaly in VI pay commission in terms of HO circular No 10/02/2011-

EIII/A dated 19.03.2012 on adhoc basis.

Note 86

In IGM Noida, the unit had retained an amount of ` 542.96 lacs on account of imposition

�!� '�Q�������*(���;�����;�''�<��""��"�����!��� �����'�����������!� �����*"����authority.

Note 87

S������"��"�����!��'���"�*��$���*"������!�''�;��(������'����$��"��������*"�����(�from March to February as followed in erstwhile government regime and tax is deducted

accordingly.

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124

Note 88

In SPM the over time policy is as per Factories Act, 1948. However, on some occasions

�=���*��������;���������"���!�������C������(����*C�*�*�'�*���C�����"���S�������Act, 1948.

Note 89

In ISP Unpaid Land Revenue Taxes for the past several years: An amount estimated

at ` 235 lacs (approximately) towards land revenue taxes upto 31.03.2011 has not

been settled. Although an adhoc provision of ` 210.00 lacs has been made in the year

2009-10, the management does not forsee any further liability.

As per our report of even date annexed.

For M/s SERVA ASSOCIATES On behalf of Security Printing and Minting

CHARTERED ACCOUNTANTS Corporation of India Ltd.

Firm Registration No. 000272N

Sd/- Sd/- Sd/-

CA. AMARJIT VERMA M.S. Rana Ashwini Kumar

(M.No 083520) Chairman & Managing Director Director (Technical)

Partner & Incharge Director (Finance)

Sd/-

Date: 30.07.2012 Sachin Agarwal

Place: New Delhi (Asstt Company Secretary)

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