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Notes to Accounts of Ambuja Cements Ltd.

Dec 31, 2015

1. Material Demand and dispute considered as "remote" by the Company

One of the Company's Cement manufacturing plants located in Himachal Pradesh was eligible, under the State Industrial Policy for deferral of its sales tax liability arising on sale of cement manufactured in the said plant. The Excise and Taxation department of the Government of Himachal Pradesh, disputed the eligibility of the Company to such deferment on the ground that the Company is manufacturing & using a product covered under the negative list and raised a demand of Rs, 66.94 crores (previous year Rs, 66.94 crores). The Company has filed a writ in the High Court of Himachal Pradesh against the demand which has been admitted and arguments completed. The Company believes its case is strong and the demand shall not sustain under law.

2. The Competition Commission of India (CCI), in 2012 had imposed a penalty of Rs, 1,163.91 crores for alleged contravention of the provisions of the Competition Act, 2002. On Company's appeal, Competition Appellate Tribunal (COMPAT), vide an interim order, had stayed the penalty with a condition to deposit 10% of the penalty amount. The Company had deposited the said amount in compliance of the condition of the order. Penalty of Rs, 1,163.91 crores was disclosed as a contingent liability in the financial statements upto the previous year ended December 31, 2014. The COMPAT, vide its final order dated 11th December, 2015, while disposing off the said appeal, set aside the order of the CCI and remanded the matter to CCI for fresh adjudication and for passing a fresh order. Further, in terms of order, the Company has received the refund of deposit, along with accumulated interest.

3. Related party disclosure (As per Accounting Standard 18 specified under Section 133 of the Companies Act, 2013)

1 Name of related parties

(A) Names of the related parties where control exists Nature of Relationship

(I) Lafarge Holcim Limited (Formerly known as Holcim Limited), Switzerland Ultimate Holding Compa

(II) Holder fin BV, Netherlands Intermediate Holding Company

(III) Hold rind Investments Limited, Mauritius Holding Company

(IV) Kakinada Cements Limited (Refer note 52) Subsidiary

(V) M.G.T. Cements Private Limited Subsidiary

(VI) Chemical Limes Mundwa Private Limited Subsidiary

(VII) Dang Cement Industries Private Limited, Nepal Subsidiary

(VIII) Dirk India Private Limited Subsidiary

(IX) Wardha Vaalley Coal Field Private Limited Joint Venture

(X) Count Micro fine Products Private Limited Joint Venture

(XI) One India BSC Private Limited (Refer note 53) Joint Venture (w.e.f.13.08.2015)

(B) Others-with whom transactions have taken place during the year

(I) Names of other related parties Nature of Relationship

(a) ACC Limited Fellow Subsidiary

(b) Holcim (India) Private Limited (Refer note 49) Fellow Subsidiary

(c) Holcim (Lanka) Limited, Sri Lanka Fellow Subsidiary

(d) Holcim Group Services Limited, Switzerland Fellow Subsidiary

(e) Holcim Technology Limited, Switzerland Fellow Subsidiary

(f) Holcim Philippines, Inc., Philippines Fellow Subsidiary

(g) Holcim Services (South Asia) Limited Fellow Subsidiary

(h) Holcim Services (Asia) Limited, Thailand Fellow Subsidiary

(i) Holcim Trading FZCO, UAE Fellow Subsidiary

(j) Holcim Trading Pte Limited, Singapore Fellow Subsidiary

(k) PT Holcim Indonesia Tbk., Indonesia Fellow Subsidiary

(l) Holcim Cement (Bangladesh) Limited, Bangladesh Fellow Subsidiary

(m) Holcim (Romania) S.A. Romania Fellow Subsidiary

(n) Holcim Technology (Singapore) Pte Limited, Singapore .. Fellow Subsidiary

(o) Lafarge India Private Limited Fellow Subsidiary (w.e.f.10.07.2015)

(p) Siam City Cement Public Company Limited, Thailand.... Joint Venture of Fellow Subsidiary (upto 30.03.2015)

(II) Key Management Personnel

Name of the related parties Nature of Relationship

(a) Mr. Ajay Kapur Managing Director & CEO (w.e.f. 25th April, 2014)

Deputy Managing Director & CEO (upto 24th April, 2014)

(b) Mr. Onne van der Weijde Managing Director (upto 24th April, 2014)

b) Defined Benefit Plans - as per actuarial valuation

Funded plan includes gratuity benefit to employees who have completed five years or more of service on departure, at 15 days salary (on last drawn basic salary) for each completed year of service.

Other non funded plan include death & disability benefit, non-funded gratuity and post employment healthcare benefits to certain employees.

c) Amount recognised as expense in respect of compensated absences is Rs, 12.02 crores (previous year - Rs, 20.29 crores).

d) Provident fund managed by a trust set up by the Company The Company has contributed Rs, 7.29 crores (previous year - Rs, 7.34 crores) towards provident fund liability. Deficit of Rs, Nil (previous year - deficit of Rs, 2.13 crores) in the accumulated corpus fund is recognised in the Statement of profit and loss. Further, considering net surplus in the accumulated corpus fund, liability of Rs, 2.13 crores provided in the previous year, has been written back.

4 Basis used to determine expected rate of return on assets :

To develop the expected long-term return on assets assumption, the Company considered the current level of returns declared on its insurance policy. This resulted in the selection of the 8.50 % assumption for gratuity (funded) plan.

5.X The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The weighted average share price at the date of exercise for stock option was Rs, 242.29 (previous year Rs, 208.29) The weighted average share price for the period over which stock option were exercised was Rs, 228.84 (previous year Rs, 205.45)

6. (a) Other income includes Rs, Nil (previous year Rs, 35.79 crores) written back towards interest on income tax relating to earlier years.

(b) Tax expense for earlier years represents write back upon completion of assessments and change in estimate of allow ability of certain deductions.

7. The Company has incurred Rs, 40.98 crores towards Social Responsibility activities. It is included in different heads of expenses in the Statement of Profit and Loss. Further, no amount has been spent on construction / acquisition of an asset of the Company and entire spent is on cash basis.

The amount required to be spent under Section 135 of the Companies Act, 2013 for the year 2015 is Rs, 34.64 crores i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act, 2013.

8. During the year 2013, the Board of Directors and members have approved the Scheme of amalgamation of Holcim (India) Private Limited (HIPL) with the Company with effect from 1st April 2013, wherein the Company will acquire HIPL from Hollering Investments Ltd., Mauritius for a cash consideration of Rs, 3,500.00 crores and issue of 58.44 crores equity shares of Rs, 2 each at a premium of Rs, 187.66 per share. During the previous year, Hon'ble High Courts of Gujarat and New Delhi have approved the above scheme. Pending fulfillment of certain conditions precedent specified in the Scheme, no impact of amalgamation has been given in the financial statements.

9. During the year, the Board of Directors has approved the amalgamation of Dirk India Private Limited, a wholly owned subsidiary, with the Company w.e.f. 1st April, 2015, in terms of the scheme of amalgamation. Pending regulatory approvals, no effect of the proposed amalgamation has been given in the financial statements.

10. Pursuant to the enactment of the Companies Act, 2013 ('the Act'), the Company has, effective 1st January, 2015, reviewed and revised the estimated useful lives of fixed assets, as per the life indicated in the Act. Accordingly, as per the transition provisions of the Act, the Company has adjusted Rs, 106.63 crores (net of tax of Rs, 54.90 crores) in opening balance of "Surplus in the statement of profit and loss" as on 1st January, 2015, in respect of assets, whose useful life is exhausted as at 1st January, 2015. Further, as a result of this change, depreciation for the year ended 31st December, 2015 is higher by Rs, 107.79 crores.

11. Kakinada Cements Limited (KCL), a 100% subsidiary of the Company has applied for liquidation with Registrar of Companies, Gujarat under the Companies Act, 2013, and accordingly a provision of Rs, 0.10 crores, being Company's investment in KCL, has been recorded as diminution in value of investment.

12. During the year, the company has subscribed for Rs, 2.50 crores in equity shares of One India BSC Private Limited (OIBPL). OIBPL is a joint venture company, with an equal equity participation with ACC Limited, a fellow subsidiary Company, created with aim to provide business shared services.

13. During the year, the Company has made provision of Rs, 52.08 crores towards contribution to District Mineral Foundation and National Mineral Exploration Trust as per The Mines and Mineral (Development and Regulation) Amendment Act, 2015.

14. Figures below Rs, 50,000 have not been disclosed.

15. Figures of the previous year have been regrouped / rearranged wherever necessary to conform to the current year's presentation.


Dec 31, 2014

1. Basis of Preparation of Financial Statements :

i. The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956, read with General Circular No.8/2014 dated 4th April 2014, issued by the Ministry of Corporate Affairs.

ii. Financial statements are based on historical cost and are prepared on accrual basis.

iii. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

iv. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual result could differ from these estimates.

As at As at 31.12.2014 31.12.2013 Rs.in crores Rs.in crores

2. Contingent liabilities and commitments (to the extent not provided for)

(I) contingent liabilities and claims against the company not acknowledged as debts related to*

(i) Labour 20.74 21.74

(ii) Land 58.86 60.30

(iii) Royalty on Limestone1 119.97 102.87

(iv) Sales tax 2. 266.27 19.63

(v) Excise and Customs 67.94 59.55

(vi) Demand from Competition Commission of India3. 1,163.91 1,163.91

(vii) Others. 140.24 115.85

* In respect of items above, future cash outflows are determinable only on receipt of judgements / decisions pending at various forums / authorities.

1 Royalty on limestone represents additional royalty, consequent to the order passed by Madhya Pradesh State Mining Department, based on the ratio of 1.6 tonnes of limestone to 1 tonne of cement produced at its factory in Chhattisgarh. The Company holds the view that the payment of royalty on limestone is correctly made based on the actual quantity of limestone extracted from the mining area. The matter is pending before the Hon''ble High Court of Bilaspur.

2 Includes a matter relating to 75% exemption from sales tax granted by Government of Rajasthan (GOR). However, the eligibility of exemption in excess of 25% was contested by the State Government in a similar matter of another Company. In the current year, pursuant to the unfavourable decision of the Supreme Court in that similar matter, the sales tax department has initiated proceedings for recovery of differential sales tax and interest thereon on the ground that the Company had given an undertaking to deposit the differential amount of sales tax, in case the Supreme Court''s decision goes against the matter referred above. Against the total demand of Rs. 247.97 crores (including interest of Rs. 134.45 crores), the Company has deposited an amount of Rs.123.52 crores towards sales tax under protest and filed a Special Leave Petition in the Supreme Court with one of the grounds that the tax exemption was availed by virtue of the order passed by the Board for Industrial & Financial Reconstruction (BIFR) during the relevant period. Subsequent to the balance sheet date, on Company''s petition, the Hon''ble Supreme Court has granted an interim stay on interest, subject to deposit of Rs. 20 crores. Based on the advice of external legal counsel, the Company believes that, it has good grounds for a successful appeal. Accordingly, no provision is considered necessary.

3 The Competition Commission of India issued an Order dated 20th June, 2012, imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002 and imposed a penalty of Rs.1163.91 crores on the Company. The Company had filed an appeal against the said Order with the Competition Appellate Tribunal (COMPAT). Pending final disposal of the appeal, the Hon''ble Tribunal, vide its order dated 17th May, 2013, has stayed the penalty with a condition to deposit 10% of the penalty amount, which has been deposited in the form of bank fixed deposit with lien in favour of COMPAT. The fixed deposit has been renewed along with interest of Rs.14.71 crores. Based on the advice of external legal counsel, the Company believes that it has good grounds for a successful appeal. Accordingly, no provision is considered necessary.

(II) Guarantee given on behalf of joint venture company 7.14 6.60

(III) commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 419.82 647.73

4. Material Demand and dispute considered as "remote" by the Company

One of the Company''s Cement manufacturing plants located in Himachal Pradesh was eligible, under the State Industrial Policy for deferral of its sales tax liability arising on sale of cement manufactured in the said plant. The Excise and Taxation department of the Government of Himachal Pradesh, disputed the eligibility of the company to such deferment on the ground that the company is manufacturing & using a product covered under the negative list and raised a demand of Rs.66.94 crores (previous year Rs.66.94 crores). The Company has filed a writ in the High Court of Himachal Pradesh against the demand which has been admitted and arguments completed. The company believes its case is strong and the demand shall not sustain under law.

IX Basis used to determine expected rate of return on assets :

To develop the expected long-term return on assets assumption, the Company considered the current level of returns declared on its insurance policy. This resulted in the selection of the 8.50 % assumption for gratuity (funded) plan.

X The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

c) Amount recognised as expense in respect of compensated absences is Rs. 20.29 crores (previous year Rs.8.30 crores).

d) Provident fund managed by a trust set up by the Company.

The Company has contributed Rs.7.34 crores (previous year Rs.7.16 crores) towards provident fund liability. Deficit of Rs.2.13 crores (previous year Rs. Nil) in the accumulated corpus fund is recognised in the Statement of profit and loss.

3. Operating lease :

The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.

4. (a) Other income includes Rs.35.79 crores (previous year Rs.32.19 crores) written back towards interest on income tax relating to earlier years.

(b) Tax adjustments for earlier years represents write back of tax provision (including Deferred Tax reversal of Rs.39.99 crores debited; previous year Rs.14.23 crores credited) upon completion of assessments and change in estimate of allowability of certain deductions.

5. During the previous year, the Company had credited Rs.0.02 crore in ''Cost of raw materials consumed'', Rs.24.54 crores in ''Power and fuel'' and Rs.4.56 crores in ''Stores and spares consumed'', due to change in estimate in respect of recognition of certain CENVAT credit relating to earlier years.

6. During the previous year, the Board of Directors and members have approved the Scheme of amalgamation of Holcim (India) Private Limited (HIPL) with the Company with effect from 1st April 2013, wherein the Company will acquire HIPL from Holderind Investments Ltd., Mauritius for a cash consideration of Rs.3,500 crores and issue of 58.44 crores equity shares of Rs.2 each at a premium of Rs.187.66 per share. During the year, Hon''ble High Courts of Gujarat and New Delhi have approved the above scheme. Pending fulfilment of certain conditions precedent specified in the Scheme, no impact of amalgamation has been given in the financial statements.

7. The Hon''ble Supreme Court vide its Order dated 24th September, 2014 has cancelled number of coal blocks allotted to various companies, including a coal block at Dahegaon, in the State of Maharashtra, allotted to the Company jointly with other parties, the activities in respect of which has not yet commenced. Cancellation of the aforesaid coal block does not have any material impact on financial statements.

8. Figures below Rs.50,000 have not been disclosed.

9. Figures of the previous year have been regrouped / rearranged wherever necessary to conform to the current year''s presentation.


Dec 31, 2013

A) Fixed Assets :

i. Fixed Assets are stated at their original cost of acquisition / installation (net of Modvat / Cenvat credit availed), net of accumulated depreciation, amortisation and impairment losses, except freehold non-mining land which is carried at cost less impairment losses,

ii. Capital work in progress is stated at the amount expended up to the date of Balance Sheet,

iii. Machinery spares which can be used only in connection with a particular item of fixed asset and the use of which is irregular, are capitalised at cost net of Modvat / Cenvat.

iv. Expenditure during construction period (including financing cost relating to borrowed funds for construction or acquisition of qualifying fixed assets) incurred on projects under implementation are treated as Pre-operative expenses, pending allocation to the assets, and are included under Capital work-in-progress. These expenses are apportioned to fixed assets on commencement of commercial production.

b) Depreciation and Amortisation :

I. Tangible Assets :

i. Premium on leasehold land is amortised over the period of lease.

ii. Depreciation on assets, other than Vehicles and Captive Power Plant related assets consisting of Building, Plant & Machinery and Electric Installation (CPP assets), is provided on the "Straight Line Method" in accordance with the provisions of Section 205(2)

(b) of the Companies Act, 1956, and on Vehicles and CPP assets on the "Written Down Value Method" in accordance with the provisions of Section 205(2)(a) of the Companies Act, 1956, in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956, except in respect of certain assets at higher rates consequent to management estimate of useful life, Continuous process plants are identified based on technical assessment and depreciated at the specified rate as per Schedule XIV to the Companies Act, 1956. Depreciation on additions to fixed assets is provided on a pro-rata basis from the date of acquisition or installation,and in the case of a new project, from the date of commencement of commercial production,

Depreciation on assets sold, discarded, demolished or scrapped, is provided upto the date on which the said asset is sold, discarded, demolished or scrapped.

In respect of an asset for which impairment loss is recognised, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

iii. Machinery spares, which are capitalized, are depreciated over the useful life of the related fixed asset. The written down value of such spares is charged to the statement of profit and loss,on issue for consumption.

iv. Cost of mineral reserve embedded in the cost of freehold mining land is depreciated in proportion of actual quantity of minerals extracted to the estimated quantity of extractable mineral reserves.

v. Fixed assets, constructed by the Company, but ownership of which vests with the Government / Local Authorities :

a) Expenditure on Power lines is depreciated over the period as permitted in the Electricity Supply Act, 1948 / 2003 as applicable.

b) Expenditure on Marine structures is depreciated over the period of agreement,

c) Expenditure on other fixed assets is depreciated at the rate of depreciation specified in Schedule XIV to the Companies Act, 1956.

II. Intangible Assets :

i. Expenditure to acquire Water drawing rights from Government / Local Authorities / other parties is amortised on straight line method over the period of rights to use the facilities ranging from ten to thirty years.

ii. Expenditure on Computer software is amortised on straight line method over the period of expected benefit not exceeding five years.

c) Impairment of Assets :

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the assets. A previously recognised impairment loss is increased or reversed depending on changes in circumstances.

d) Investments :

i. Recognition and Measurement

Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long-term investments and are carried at cost. However,provision for diminution in value of investments is made to recognise a decline, other than temporary, in the value of the investments. Investments other than long-term investments being current investments are valued at cost or fair value whichever is lower, determined on an individual basis.

ii. Presentation and Disclosure

Investments, which are readily realisable and intended to be held for not more than one year from balance sheet date, are classified as current investments. All other investments are classified as non-current investments.

e) Inventories :

Inventories are valued as follows

i. Coal, fuel, packing materials, raw materials, stores and spares :

Lower of cost less provision for slow and non-moving inventory, if any, and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a moving weighted average basis.

ii. Work-in-progress, finished goods, stock in trade and trial run inventories :

Lower of cost and net realisable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on a monthly moving weighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

f) Provisions / Contingencies :

A provision is recognised for a present obligation as a result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date. A contingent liability is disclosed, unless the possibility of an outflow of resources is remote.

h) Revenue recognition :

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

i . Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Accordingly, domestic sales are accounted on dispatch of products to customers and Export sales are accounted on the basis of date of Bill of Lading. Sales are disclosed net of sales tax / value added tax, discounts and sales returns, as applicable. Sales exclude self- consumption of cement.

ii. Sales include the amount of subsidy due in accordance with the respective incentive schemes,

iii. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable, Dividend income is recognised when right to receive is established by the Balance Sheet date.

i) Mines Reclamation Expenses :

The Company provides for the expenses to reclaim the quarries used for mining. The total estimate of reclamation expenses is apportioned over the estimate of mineral reserves and a provision is made based on the minerals extracted during the year.

Mines reclamation expenses are incurred on an ongoing basis and until the closure of the mine. The actual expenses may vary based on the nature of reclamation and the estimate of reclamation expenditure.

j) Employee Benefits :

i. Defined Contribution Plan

Employee benefits in the form of contribution to Superannuation Fund, Provident Fund managed by Government Authorities, Employees State Insurance Corporation and Labour Welfare Fund are considered as defined contribution plan and the same is charged to the statement of profit and loss for the year when the contributions to the respective funds are due.

ii. Defined Benefit Plan

Retirement benefits in the form of gratuity, post-retirement medical benefit and death & disability benefit are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the balance sheet. Actuarial gains / losses, if any, are recognised in the statement of profit and loss.

Employee Benefit, in the form of contribution to Provident Fund managed by a Trust set up by the Company, is charged to statement of profit and loss as and when the contribution is due. The deficit, if any, in the accumulated corpus of the trust is recognised in the statement of profit and loss based on actuarial valuation.

iii. Other long-term benefits

Compensated absences are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the balance sheet.Actuarial gains / losses, if any, are immediately recognised in the statement of profit and loss.

k) Employee Stock Compensation cost :

The Company measures compensation cost relating to employee stock option using the fair value method. Discount on Equity Shares as compensation expenses under the Employee Stock Option Scheme, is amortised in accordance with Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999 issued by the Securities and Exchange Board of India and the Guidance Note on Accounting for Employee Share-based payments, issued by the Institute of Chartered Accountants of India,

l) Borrowing Costs and Share Issue Expenses :

i. Borrowing cost attributable to acquisition and construction of assets that necessarily takes substantial period of time are capitalised as part of the cost of such assets up to the date when such assets are ready for intended use.

i i. Expenses on issue of Shares, Debentures and Bonds as well as Premium on Redemption of Debentures are adjusted to Securities Premium Account in accordance with Section 78 of the Companies Act, 1956.

iii. Borrowing cost such as discount or premium and ancillary costs in connection with arrangement of borrowings are amortised over the period of borrowings.

iv. Other borrowing costs are charged as expense in the year in which these are incurred,

m) Taxation :

Tax expense comprises of current income and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

Deferred income taxes reflect the impact of current year''s timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain that sufficient future taxable income will be available.

n) Leases :

Where the Company is the lessee :

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.

Where the Company is the lessor :

i . Assets given under finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest on the internal rate of return method. The principal amount received reduces the net investment in the lease and interest is recognised as revenue. Initial direct costs such as legal costs, brokerage costs, etc, are recognised immediately in the statement of profit and loss.

ii. Assets subject to operating leases are included in fixed assets. Lease income is recognised in the statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation, are recognised as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the statement of profit and loss.

o) Segment Reporting Policies :

i. Identification of segments

The Company has only one business segment ''Cementitious Materials'' as its primary segment. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

ii. Segment Policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

p) Cash and Bank Balances :

i. Cash and Bank balances in the Balance Sheet comprise cash at bank including fixed deposits, cheques in hand and cash on hand,

ii. Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank, cash on hand and short-term investments with an original maturity of three months or less.

q) Government Grants and Subsidies :

i. Grants and subsidies from the Government are recognised when there is reasonable certainty that the grant / subsidy will be received and all attaching conditions will be complied with.

i i. When the grant or subsidy relates to an expense item, it is recognised as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate.

iii. Where the grant or subsidy relates to an asset, its value is deducted from the gross value of the asset concerned in arriving at the carrying amount of the related asset.

iv. Government grants in the nature of Promoters'' contribution are credited to capital reserve and treated as a part of Shareholders'' Funds.

r) Earnings Per Share :

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares,

b) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a par value of '' 2 per share. Each shareholder is entitled to one vote per equity share, The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the equity shareholders are eligible to receive remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.

As per the records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represent both legal and beneficial ownership of shares.

e) Outstanding employee stock options exercisable into 6,381,625 (previous year - 10,165,025) equity shares of '' 2 each fully paid up (Refer note 32 (b)).

f) Outstanding tradable warrants and right shares kept in abeyance exercisable into 186,690 (previous year - 186,690) and 139,830 (previous year - 139,830) equity shares of '' 2 each fully paid-up respectively.

* Secured by bank guarantee and is repayable on 27th February 2020,

** Sales tax deferment loan is interest free and payable in 10 annual installments starting from April 2007 to April 2016 of varying amounts from '' 1.52 crores to '' 13.23 crores.

(a) Includes :

i) Premises on ownership basis of Rs. 101.10 crores (previous year - Rs. 102.91 crores) and Rs. 13.12 crores (previous year - Rs. 11.17 crores) being the depreciation thereon upto 31 st December, 2013 and cost of shares in co-operative societies are Rs. 12,630 (previous year - Rs. 12,630).

ii) Rs. 23.54 crores (previous year - Rs. 23.81 crores) being cost of roads constructed by the Company ownership of which vests with the Government / Local Authorities and Rs. 2.73 crores (previous year - Rs. 2.12 crores) being the depreciation thereon upto 31 st December, 2013.

(b) Cost incurred by the Company ownership of which vests with the State Maritime Boards.

(c) Includes Rs. 38.38 crores (previous year - Rs. 34.55 crores) being cost of bulkers and tippers used as material handling equipment, which are being depreciated under the "written down value method" at the rate applicable to vehicles and Rs. 29.35 crores (previous year - Rs. 26.40 crores) being the depreciation thereon upto 31 st December, 2013.

(d) Includes Rs. 12.18 crores (previous year - Rs. 10.08 crores) being cost of railway sidings constructed by the Company, ownership of which vests with the Railway authorities and Rs. 3.88 crores (previous year - Rs. 3.31 crores) being the depreciation thereon upto 31 st December, 2013.

(e) Railway wagons given on lease to the railway under "Own Your Wagon Scheme".

(f) Cost incurred by the Company ownership of which vests with the State Electricity Boards.

(g) i) Include Rs. 0.30 crore (previous year - Rs. 0.44 crore) capitalised as pre-operative expenses and exceptional item of Rs. Nil (previous year - Rs. 279.13 crores).

ii) Depreciation expense includes credit of Rs. 10.84 crores for the year ended 31 st December, 2013 and includes a charge of Rs. 27.91 crores for the year ended 31 st December, 2012 in respect of earlier years.

As at As at 31.12.2013 31.12.2012 '' in crores '' in crores

29. (A) Contingent liabilities and commitments (to the extent not provided for)

(I) Contingent liabilities

(a) Claims against the Company not acknowledged as debts

(i) Labour matters........................... 21.74 18.9

(ii) Land matters......... ................. 60.30 67.03

(iii) Others............................ 60.94 31.36

(b) Other matters for which the company is contingently liable

(i) Tax matters

(a) Income tax demands (including interest) - matter under appeal ............................. 10.70 5.37

(b) Sales tax demands (including interest and penalty)............. 19.63 16.24

(c) Excise demands under appeal............................ 26.10 27.81

(d) Customs demands........................... 33.45 -

(e) Land tax demands........................... 14.86 14.38

(f) Others................... ........ 16.30 0.80

(ii) Relating to railway freight on cement - matter once decided in favour of the Company by the Honourable High Court of Gujarat was remanded back by the Honourable Supreme

Court pursuant to a Special Leave Petition filed by the railways................ 7.92 7.65

(iii) Relating to coal claims - matter pending in the Honourable High Court of Calcutta

(a) Railway freight on coal............................... 1.60 1.60

(b) Penal freight on excess weight of coal.............................. 0.24 0.24

(c) Interest on premium on coal.............................. 3.29 3.29

(iv) The Competition Commission of India issued an Order dated 20th June, 2012, imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002, and imposed a penalty of '' 1,163.91 crores on the Company. The Company had filed an appeal against the said Order with the Competition Appellate Tribunal (COMPAT). Pending final disposal of the appeal, the Hon''ble Tribunal, vide its order dated 17th May, 2013, has stayed the penalty with a condition to deposit 10% of the penalty amount, which has been deposited in the form of bank fixed deposit with lien in favour of COMPAT. The fixed deposit has been renewed along with interest of '' 4.36 crores. Based on the advice of external legal counsel, the Company believes that it has good grounds for a successful appeal. Accordingly, no

provision is considered necessary............................... 1,163.91 1,163.91

In respect of items above, future cash outflows are determinable only on receipt of judgements / decisions pending at various forums / authorities.

(II) Guarantee given on behalf of joint venture company ........................................ 6.60 3.67

(III) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)....................... 647.73 680.85

(B) The Honourable High Court of Himachal Pradesh had passed an order in favour of the Company for its claim in respect of power subsidy in the form of Power Tariff Freeze (PTF) and Peak Load Exemption Charges (PLEC). Against this, Government of Himachal Pradesh had issued 296, 5.13% H P Infrastructure Development Bonds of face value of '' 1,000,000 each, having a value of '' 29.60 crores and balance of '' 0.08 crore was refunded to the Company

The Government of Himachal Pradesh has filed Special Leave Petition in the Honourable Supreme Court against the decision of the Honourable High Court of Himachal Pradesh. The Company has given an undertaking to refund '' 29.68 crores paid by the State Government together with interest thereon up to the date of final judgment in time bound manner, in the event that the matter is decided against the Company....................... 29.68 29.68

(C) The Government of Rajasthan has granted 75% exemption from Sales Tax in respect of Rabriyawas unit.

However, the eligibility of exemption in excess of 25% has been contested by the State Government in a similar matter of another Company. The matter is pending before the Honourable Supreme Court. The Company has given an undertaking to the Government of Rajasthan that the Company will deposit the differential amount of Sales tax, in case the Supreme Court''s decision goes against in the matter referred above......................... 82.16 82.16

(D) Writ petition filed against the order of Madhya Pradesh State Mining Department demanding '' 4. 76 crores excluding interest '' 1.13 crores towards payment of additional royalty on limestone based on the ratio of 1.6 tonnes of limestone to 1 tonne of cement produced at its factory in Chhattisgarh. The matter is now pending before Honourable High Court at Bilaspur................................. 102.87 85.02

Notes :

1 Related party relationship is as identified by the Company on the basis of available information.

2 The Company carries its Corporate Social Responsibility (CSR) activities through Ambuja Cement Foundation (ACF) and runs schools at plant locations through Ambuja Vidya Niketan Trust (AVN), a charitable organisation registered under Bombay Public Trust Act, 1950. The Company has contributed '' 32.50 crores (previous year - '' 35.00 crores) to ACF and '' 5.70 crores (previous year - '' 4.80 crores) to AVN during the current year.

IX Basis used to determine expected rate of return on assets :

To develop the expected long-term return on assets assumption, the company considered the current level of returns declared on its insurance policy. This resulted in the selection of the 8.50 % assumption for gratuity (funded) plan.

X The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

XI The Company expects to contribute '' 7.50 crores (previous year - '' 7.50 crores) to gratuity fund in the next year.

c) Amount recognised as expense in respect of compensated absences is '' 8.30 crores (previous year - '' 18.59 crores).

d) Provident fund managed by a trust set up by the Company

The Company has contributed '' 7.16 crores (previous year - '' 6.33 crores) towards provident fund liability. Deficit of '' Nil (previous year - '' 0.15 crore) in the accumulated corpus fund is recognised in the Statement of profit and loss.

* Includes 111,150 options in tranche 2 granted on 1st July 2008 @ '' 82 per option.

# Includes 113,850 options in tranche 2 granted on 19th June 2009 @ '' 96 per option.

The weighted average share price at the date of exercise for stock options was '' 179.36 (previous year '' 188.56)

The weighted average share price for the period over which stock option were exercised was '' 185.01 (previous year '' 177.49)

41. Sale of products includes Sales tax / Value added tax subsidy of '' 7.34 crores (previous year - '' 33.48 crores).

43. Operating lease :

The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.

45. Dirk India Private Limited''s (DIPL) (a subsidiary company) contract for procurement of key raw material is sub-judice and the supply has been discontinued by the supplier. Based on advice of external legal counsel, the Company believes that DIPL has good case of appeal, hence no adjustment is considered necessary in respect of its investment of '' 21.81 crores and loans & inter corporate deposits of '' 35.68 crores.

46. "Provision for doubtful debts and advances (net)" for the previous year includes '' 31.84 crores pertaining to the period upto 31st December,

2011, towards claims in respect of certain incentives receivable from the government, where there exists an uncertainty with respect to its full recoverability due to government''s contention of non-fulfillment of certain conditions.

47. During the current year, the Company has credited '' 0.02 crore in ''Cost of raw materials consumed'', '' 24.54 crores in ''Power and fuel'' and '' 4.56 crores in ''Stores and spares consumed'', due to change in estimate in respect of recognition of certain CENVAT credit relating to earlier years.

49. (a) Other income includes '' 32.19 crores (previous year '' Nil) written back towards interest on income tax relating to earlier years,

(b) Current tax relating to earlier years represents write back of tax provision upon completion of assessments and change in estimate of allowability of certain deductions.

50. Exceptional item for the previous year, represents additional depreciation charge on account of change in method of providing depreciation on fixed assets pertaining to its Captive Power Plants from the ''Straight Line'' to the ''Written Down Value''.

52. During the year, the Board of Directors and members have approved the Scheme of amalgamation of Holcim (India) Private Limited (HIPL) with the Company with effect from 1st April 2013, wherein the Company will acquire HIPL from Holderind Investments Ltd., Mauritius, for a cash consideration of '' 3,500 crores and issue of 58.44 crores equity shares of '' 2 each at a premium of '' 187.66 per share. Pending regulatory approvals, no impact of the Scheme of amalgamation is given in financial statements.

53. Figures less than '' 50,000 have been shown at actuals, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lakh.


Dec 31, 2012

1. (A) Basis of preparation of financial statements :

i. The financial statements have been prepared in compliance with all material aspects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956.

ii. Financial statements are based on historical cost and are prepared on accrual basis,

iii. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year and except for the changes in accounting policy stated in 1(B).

iv. The preparation of financial statement in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual result could differ from these estimates.

v. During the year ended 31st December 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. Previous year figures have been reclassified and regrouped in accordance with the requirements applicable in the current year.

(B) Change in accounting policy :

During the year, the Company has retrospectively changed its method of providing depreciation on fixed assets pertaining to its Captive Power Plants from the ''Straight Line'' to the ''Written Down Value'' at the rates prescribed in Schedule XIV to the Companies Act, 1956. This change results in more appropriate presentation and gives a systematic basis of depreciation charge, representative of the time pattern in which the economic benefits flow to the Company. Accordingly, the Company has recognized additional depreciation charge of Rs. 320.14 crores. Amount relating to earlier years of Rs. 279.13 crores has been disclosed as exceptional item.

Had the Company continued to use the earlier method of depreciation, profit after tax for the year ended 31st December, 2012 would have been higher by Rs. 216.27crores.

b) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a par value of Rs. 2 per share. Each shareholder is entitled to one vote per equity share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the equity shareholders are eligible to receive remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.

As per the records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represent both legal and beneficial ownership of shares.

e) Outstanding employee stock options exercisable into 10,165,025 (previous year - 18,591,025) equity shares of Rs. 2 each fully paid up (Refer note 32 (b)).

f) Outstanding tradable warrants and right shares kept in abeyance exercisable into 186,690 (previous year- 186,690) and 139,830 (previous year- 139,830) equity shares of Rs. 2 each fully paid-up respectively.

* As on 31.12.2011, equity shares were held by erstwhile Ambuja Cement India Private Limited, subsidiary of HIL, since amalgamated with HIPL. HIL and HIPL are subsidiaries of Holcim Limited, Switzerland, the ultimate holding company (Refer note 40).

Notes :

1 Related party relationship is as identified by the Company on the basis of available information.

2 During the previous year, the Company became a subsidiary of Holderind Investments Limited, Mauritius (HIL), Holderfin BV, Netherlands and Holcim Limited, Switzerland (Holcim group companies) and accordingly all other Holcim group companies have been reported as fellow subsidiaries.

3 The Company carries its Corporate Social Responsibility (CSR) activities through Ambuja Cement Foundation (ACF) and run schools at plant locations through Ambuja Vidya Niketan Trust (AVN), charitable organization registered under Bombay Public Trust Act, 1950. The Company has contributed Rs. 35.00 crores (previous year - Rs. 28.10 crores) to ACF and Rs. 4.80 crores (previous year - Rs. 4.38 crores) to AVN during the current year.

b) Defined benefit plans - as per actuarial valuation

The Company has defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India.

The Company has also agreed to provide certain additional post-employment healthcare benefits to senior employees. These benefits are unfounded.

The following tables summaries the components of net benefit / expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans :

c) Basis used to determine expected rate of return on assets :

To develop the expected long-term return on assets assumption, the company considered the current level of returns declared on its insurance policy. The fund manager is weighing the expected return for each asset class to determine the actual return on asset for the portfolio. This resulted in the selection of the 8.50 % assumption for gratuity (funded) plan and 8.52% assumption for provident fund plan managed by a trust set by the company.

d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e) The Company expects to contribute Rs. 7.50 crores (previous year - Rs. 6.00 crores) to gratuity fund in the next year.

g) Amount recognized as an expense in respect of compensated absences is Rs. 18.59 crores (previous year - Rs. 14.02 crores).

h) Provident fund managed by a trust set up by the Company

The Company has contributed Rs. 6.33 crores (previous year - Rs. 6.66 crores) towards provident fund liability. During the year, in accordance with guidance issued by the Actuarial Society of India for measurement of interest shortfall of provident fund liabilities, interest shortfall of Rs. 0.15 crore is charged to Statement of profit and loss. During the previous year, Rs. 0.76 crore was recognized towards deficit of provident fund liabilities.

2. During the previous year, the Company became a subsidiary of Holderind Investments Limited, Mauritius and Holcim Limited, Switzerland, the ultimate holding company.

3. Capital work in progress includes (a) machinery in transit Rs. 10.38 crores (previous year- Rs. 11.29 crores) and (b) expenditure during construction for project Rs. 10.97 crores (previous year - Rs. 5.82 crores).

4. Sale of products includes Sales tax / VAT remission and subsidy of Rs. 33.48 crores (previous year - Rs. 47.49 crores).

5. Excise duty on sales amounting to Rs. 1,264.74 crores (previous year - Rs. 1,073.81 crores) has been reduced from sales in the Statement of profit and loss and excise duty on change in inventories of finished goods and work-in-progress amounting to Rs. 10.96 crores (previous year - Rs. 2.49 crores) has been considered as other expenses.

6. Loss on assets sold, discarded and written off includes preoperative expenses and capital work in progress incurred on certain capital projects written off during the year amounting to Rs. Nil (previous year - Rs. 8.92 crores).

7. During the year, the Company through its fraud risk management mechanism, has detected certain instances of misappropriation in the nature of receiving undue benefit by employees in collusion with vendors / others which has resulted in a loss to the Company of Rs. 0.73 crore in one instance and amount is not determinable in other instances, which the management believes are insignificant to the size and operations of the Company. Investigations relating to these matters have completed and appropriate actions have been taken by the Company,

8. In the previous year, prior period expenses amounting to Rs. 3.81 crores and Rs. 7.78 crores are included in Miscellaneous expenses and Legal and professional fees respectively.

9. During the previous year, the Company had changed (with retrospective effect) its method of measurement of compensation cost relating to employee stock options from intrinsic value method to fair value method for all outstanding unvested employee stock options at the beginning of the year. Accordingly the Company had recognized an additional expense of Rs. 33.12 crores. Amount relating to earlier years of Rs. 24.25 crores had been disclosed as exceptional item in the previous year.

10. "Provision for doubtful debts and advances (net)" includes Rs. 31.84 crores pertaining to the period upto 31st December, 2011, towards claims in respect of certain incentives receivable from the government, where there exists an uncertainty with respect to its full recoverability due to government''s contention of non-fulfillment of certain conditions.

11. Figures less than Rs. 50,000/- have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lakh.

12. Figures of the previous year have been regrouped / rearranged wherever necessary to conform to the current year''s presentation.


Dec 31, 2010

1. (A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS :

(i) The financial statements have been prepared in compliance with all material aspects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956.

(ii) Financial statements are based on historical cost and are prepared on accrual basis.

(iii) Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(iv) The preparation of financial statement in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the results of operations during the reporting period end. Although these estimates are based upon managements best knowledge of current events and actions, actual result could differ from these estimates.

As at As at 31.12.2010 31.12.2009 Rs. in Crores Rs. in Crores

2. a) Contingent liabilities not provided for in respect of :

(i) Bank Guarantee given to Mines & Geology Dept. Government of Rajasthan for setting up of Cement plant - 2.00

(ii) Claims against the Company not acknowledged as debts

(a) Disputed liability relating to labour matters 38.46 44.09

(b) For acquisition of land 50.25 51.39

(c) For Non Agriculture Assessment Tax - 2.65

(d) Others 4.18 23.38

(iii) Tax matters

(a) Disputed liability in respect of Income-tax demands (including interest) - matters 57.53 60.78 under appeal

(b) Disputed Sales-tax demands (including interest and penalty) 12.26 25.96

(c) Disputed Excise demands - matters under appeal (Deposit with Excise Department 7.61 26.66 Rs. 0.21 crore; Previous year Rs. 0.21 crore)

(d) Disputed Customs demands - matters under appeal 0.52 1.43

(e) Disputed liability of RTO Tax on Mining Machinery 0.80 0.62

(iv) Disputed liabilities relating to Railway Freight on Cement - matter once decided in favour of the Company by the Honourable High Court of Gujarat was remanded back by the Honourable Supreme Court pursuant to a Special Leave Petition filed by the railways. 5.51 5.51

(v) Disputed liabilities relating to Coal claims - matter pending in the Honourable High Court :

(a) Railway freight on Coal 1.60 1.49

(b) Penal freight on Excess Weight of Coal 0.24 0.24

(c) Interest on Premium on Coal 3.29 3.29

In respect of items above, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgements / decisions pending at various forums / authorities.

b) The Honourable High Court of Himachal Pradesh has passed an order in favour of the Company for its claim in respect of power subsidy in the form of Power Tariff Freeze (PTF) and Peak Load Exemption Charges (PLEC). Against this, Government of Himachal Pradesh on 1st May, 2004 has issued 296 5.13% H P Infrastructure Development Bonds of face value of Rs.10 lacs each, having a value of Rs.29.60 crores redeemable after 10 years and balance of Rs.0.08 crore is refunded to the Company.

The Government of Himachal Pradesh has filed Special Leave Petition in the Honourable Supreme Court against the decision of the Honourable High Court of Himachal Pradesh. The Company has given an undertaking to refund Rs.29.68 crores paid by the State Government together with interest thereon up to the date of final judgment in time bound manner, in the event that the matter is decided against the Company. 29.68 29.68

c) The Government of Rajasthan has granted 75% exemption from Sales Tax in respect of Rabriyawas unit. However, the eligibility of exemption in excess of 25% has been contested by the State Government in a similar matter of another Company and the matter is pending before the Honourable Supreme Court. The Company has given an undertaking to the Government of Rajasthan that the Company will deposit the differential amount of Sales Tax, in case the Supreme Courts decision goes against in the matter referred above. 82.16 82.16

d) Writ petition filed against the order of Madhya Pradesh State Mining Department demanding Rs. 4.76 crores and interest Rs. 1.13 crores towards payment of additional royalty on limestone based on the ratio of 1.6 tonnes of limestone to 1 tonne of cement produced at its factory in Chhattisgarh. The matter is now pending before Honourable High Court at Bilaspur. 56.25 52.51

VIII Provident Fund managed by a Trust set up by the Company

Pending the issuance of the Guidance Note from the Actuarial Society of India, the Companys actuary has expressed his inability to reliably measure the provident fund liability. The Company has recognised an expense of Rs. 0.43 crore (31.12.2009 Rs. 0.17 crore) towards the deficit in the fund.

3. Capital Work in Progress includes (a) machinery in transit Rs. 10.50 crores (31.12.2009 - 8.93 crores) and (b) expenditure during construction for project - Rs.14.13 crores (31.12.2009 - Rs. 110.86 crores).

4. During the current year, the Company has sold its investment in ING Vysya Life Insurance Company Limited and has recognised profit of Rs. 72.63 crores.

5. During the current year, the Company has estimated provision for slow and non moving spares based on age of the inventory. Accordingly, the Company has recognised a provision of Rs.61.03 crores as at December 31, 2010. The provision based on such parameters applied to spares inventory at the beginning of the year amounting to Rs.46.10 crores has been disclosed as an exceptional item in the profit and loss account.

6. During the year, the Company has subscribed to 6.50% Cumulative Redeemable Preference Shares amounting to Rs.15 crores in M/s. Counto Microfine Products Private Limited, India, a joint venture company. As per the Supplementary Share Subscription Agreement, the Company has agreed to buy 4,010,002 equity shares representing 50% equity stake in the Company at an average price of Rs.24.94 per share amounting to Rs.10 crores from the existing shareholders of the joint venture company. The Company has given an advance of Rs.7.50 crores for purchase of the said 50% stake which is included in Advances recoverable in cash or in kind.

7. Excise duty on sales amounting to Rs. 866.82 crores (31.12.2009 Rs.644.55 crores) has been reduced from sales in profit & loss account and excise duty on increase/decrease in stock amounting to Rs.4.92 crores (31.12.2009 Rs.(3.27) crores) has been considered as (income)/ expense in Schedule N of financial statement.

8. During the previous year the Company had prepaid deferred sales tax loan at one of its unit and had recognised discounting income of Rs.46.16 crores.

9. Figures less than Rs. 50,000/- have been shown at actuals, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lac.

10. Figures of the previous year have been regrouped wherever necessary to conform to the current years presentation.

 
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