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Notes to Accounts of Bajaj Hindusthan Sugar Ltd.

Mar 31, 2015

1. Corporate information

Bajaj Hindusthan Sugar Limited ('the Company') is a public limited company incorporated in India. Its shares are listed on Bombay Stock Exchange and National Stock Exchange. The Company is engaged in the manufacture of sugar, alcohol and generation of power.

The name of the Company has been changed from Bajaj Hindusthan Limited to Bajaj Hindusthan Sugar Limited w.e.f. January 30, 2015.

2. Share capital

(i) Terms/Rights of Equity Shares:

The Company has one class of equity shares having par value of Rs. 1/- per share. All equity shares are ranking pari passu in all respects including dividend. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the realised value of the assets of the Company, remaining after payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

(ii) Option on unissued share capital:

Under Master Restructuring Agreement (MRA) lenders would convert 70% of the Funded Interest on Term Loan (FITL) into equity shares in various tranches. (refer note 40)

2. Disclosure as required under AS-18 in respect of related party transactions:

a) Details of related parties

Name of related parties Description of relationship

(i) Bajaj Aviation Private Ltd. Wholly owned subsidiary

(ii) Bajaj Power Generation Private Wholly owned subsidiary Ltd.

(iii) Bajaj Hindusthan (Singapore) Wholly owned subsidiary Private Ltd., Singapore

(iv) FT. Batu Bumi Persada, Indonesia Step down subsidiary

(v) PT. Jangkar Prima, Indonesia Step down subsidiary

(vi) Lalitpur Power Generation Associate (subsidiary up to Company Ltd. January 28, 2014)

(vii) Bajaj Energy Private Ltd. Associate (up to March 26, 2014)

Chairman & Managing Director (Also key management personnel) (viii) Mr. Shishir Bajaj up to October 16, 2014 (ix) Mrs. Minakshi Bajaj Wife of Mr. Shishir Bajaj

(x) Mr. Kushagra Bajaj a) Vice Chairman and Joint Managing Director (Also key management personnel and also son of Mr. Shishir Bajaj). up to October 17, 2014

b) Chairman and Managing Director (Also key management personnel) from October 18, 2014

(xi) Mr. Apoorva Bajaj Son of Mr. Shishir Bajaj

(xii) Dr. Sanjeev Kumar Executive Director (Also key management personnel) up to March 29, 2015

(xiii) Mr. Manoj Maheshwari Director and Group CFO (Also key management personnel) up to March 29, 2015

(xiv) Mr. Ashok Kumar Gupta Director (Group Operations) (Also key management personnel) (xv) Bajaj Capital Ventures Private Ltd.

(xvi) Shishir Bajaj Family Trust

(xvii) Kushagra Trust no. 2

(xviii) Shishir Bajaj, HUF

(xix) Bajaj Power Ventures Private Ltd.

(xx) Bajaj Infrastructure Development Company Ltd. Enterprises over which key management personnel and their (xxi) SKB Roop Commercial, LLP relatives are able to exercise significant influence

(xxii) Bajaj Energy Private Ltd.

(xxiii) Bajaj Resources Ltd.

(xxiv) A.N. Bajaj Enterprises Private Ltd.

(xxv) KNB Enterprises, LLP

(xxvi) Global World Power Projects Private Ltd.

(xxvii) Bajaj International Realty Private Ltd.

4. Contingent liabilities and commitments

(I) Contingent liabilities

(a) In respect of disputed demands/claims against the Company not acknowledged as debts:

(i) Central excise matters 36.45 42.60 (ii) Trade tax matters 73.03 69.73 (iii) Income tax matters 18.49 - (iv) Recompense payable (refer note 40(b)) 17.98 - (v) Other claims 24.94 25.02 170.89 137.35

(b) Guarantees

The Company has furnished guarantees/securities on behalf of subsidiary / associate company 858.99 1 008 33

(c) Erstwhile Bajaj Eco-Tec Products Ltd. (merged with the Company) has procured imported as well as indigenous capital goods under Export Promotion and Capital Goods Scheme (EPCG). The Export obligation pending against such EPCG licenses 4.29 4.50

(d) Interest payable on promoters contribution (refer note 40 (c)) is not determinable

(II) Commitments

Estimated amount of contracts remaining to be 7.13 9.56 executed on capital account and not provided for (net of advances)

5. As required by paragraph 46 inserted vide notification dated March 31, 2009 to the Accounting Standard AS-11 "The Effect of Changes in Foreign Exchange Rates", the Company had already opted to adjust the exchange fluctuations on long-term monetary items to the carrying cost of fixed assets. Further as per paragraph 46A, inserted vide notification dated December 29, 201 1 to AS-11, the Company has adjusted Rs. 8.08 crore being the loss on exchange fluctuation on long-term monetary items for the year ended March 31, 2015 to carrying cost of fixed assets. The unamortised foreign exchange fluctuation capitalised to fixed assets, amounts to Rs. 355.34 crore as at March 31, 2015.

6. a) At the request of the Company, the Joint Lenders' Forum (JLF Lenders) led by State Bank of India has approved the corrective action plan for restructuring of existing credit facilities on December 03, 2014 under JLF route in accordance with the applicable framework and guidelines issued by Reserve Bank of India. Accordingly, a Master Restructuring Agreement (MRA) has been signed on December 30, 2014 among the Company and JLF lenders, by virtue of which the restructured facilities are governed by the provisions specified in the MRA. The cut- off date for restructuring under JLF route is July 31, 2014.

b) The Company and JLF Lenders have executed the MRA during the year. The MRA as well as guidelines of Reserve Bank of India issued on debt restructuring under JLF route give a right to the JLF lenders to get recompense of their waivers and sacrifices made as per corrective action plan. The recompense payable by the Company is contingent on various factors including improved performance of the company and many other conditions, the outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense is treated as a contingent liability. The aggregate present value of recompense till March 31, 2015 payable to the JLF lenders as per MRA is approximately Rs. 17.98 crore for the Company.

c) As per terms of restructuring approved by lenders, the promoters are required to bring promoter contribution amounting to Rs. 200 crore in phased manner till September 2015 in the form of equity capital / preference capital / unsecured loan / other similar instruments. An amount of Rs. 175 crore has been brought by promoters as unsecured loan till March 31, 2015. Interest on the unsecured loan of promoters, if any, payable shall be determined after the restructuring period is completed.

d) As per the terms of MRA, interest payable on the term loan for the period from August 01, 2014 to July 31, 2016 would be converted into Funded Interest Term Loan (FITL). 70% of FITL shall be converted into equity. The shareholders approved the preferential issue of shares to through postal ballot. Part of the FITL, has been converted into equity by allotment of 17,08,41,266 equity shares to lenders on March 30, 2015 at the premium of Rs. 20.77 per share. Company would issue further equity for conversion of balance FITL as and when demanded by the lenders. Since there is uncertainty on the number of shares which shall be issued pursuant to such conversion, the computation of which is dependent on the provisions of applicable guidelines of SEBI, the possible impact of the same on the diluted earnings per share of the company has not been given.

7. Details of loans given, investment made and guarantee given covered under Section 186(4) of the Companies Act, 2013.

- Investment made are given under note 14

- Loans given to subsidiaries are given under note 20

8. The Company holds entire beneficial interest in BHL Securities Trust ("the Trust") that holds equity shares of the Company carried at Rs. 693.72 crore as at March 31, 2015, which were allotted to the Trust pursuant to the Scheme of Amalgamation of its erstwhile subsidiary Bajaj Hindusthan Sugar and Industries Ltd. with the Company as approved by the Hon'ble Bombay High Court. The market value of these shares as at March 31, 2015 is Rs. 44.78 crore, resulting into substantial diminution in its value. The Company also holds unquoted non-convertible Preference Shares at Rs. 350.04 crore and unquoted optionally convertible debentures at Rs. 370.48 crore as at March 31, 2015 in Phenil Sugars Ltd. whose net worth has been substantially eroded. However, based on the likely policy measures for the sugar industry by Central and State Governments, approval of debt restructuring schemes for the company as well as Phenil Sugars Ltd, and their resultant business outlook, the management is of the opinion that diminution in value of investments are temporary in nature and will be recovered in the next few years with improved performance and therefore no provision for the same is made during the year.

9. From April 01, 2014, as per the new Companies Act, 2013, the Company has changed its method of providing depreciation with retrospective effect on tangible fixed assets other than Plant and Machinery and Aircraft, from the 'Written Down Value' method to 'Straight Line' method. Management believes that this change will result in more appropriate presentation and will give a systematic basis of depreciation charge, representative of the time pattern in which the economic benefits will be derived from the use of these assets and will be uniform with the method of depreciation provided for other assets. Accordingly, surplus arising from retrospective computation aggregating to Rs. 294.76 crore for the period upto March 31, 2014 has been accounted as per Accounting Standard (AS-6) and disclosed under exceptional item. Had the Company continued to use the earlier method of depreciation, the depreciation charge for the year would be higher by Rs. 108.38 crore.

10. For the sugar season 2014-15 the cane liability has been provided @ Rs. 280 per quintal (SAP declared by Government of Uttar Pradesh). The "financial assistance" on cane purchased receivable (subject to certain conditions) from the Government of Uttar Pradesh, pursuant to its letter No.2970 CD/46-3-14-3(48)/98-99 dated December 24, 2014, will be recognised by the Company as and when the Company becomes eligible.

11. Exceptional items includes Rs. 294.76 crore written back of depreciation due to change of method, Rs. 148.02 crore impairment of fixed assets of board division and Rs. 142.91 crore written off of current assets.

12. The Indian sugar industry has been adversely affected over past few years due to continuous operational losses incurred by the sugar mills. The wide gap between the high cost of sugarcane and low realisation from sugar particularly in the state of Uttar Pradesh have severely impacted the financial and economic condition of the sugar mills. The surplus production as compared to the domestic consumption year after year coupled with lower international prices has kept the domestic sugar prices subdued. These factors coupled with high interest burden significantly impacted the performance and cash flows of the Company and its subsidiaries.

The Company has incurred cash losses in the current year and also during the immediately preceding financial year. The accumulated losses have resulted into erosion of considerable net worth of the Company. However, with the approval of scheme for restructuring of existing credit facilities by the lender banks of the Company in accordance with RBI's "Framework for Revitalising Distressed Assets in the Economy", during the year and certain key policy decisions and reliefs for sugar mills being contemplated by the governments, the Management expects to improve operating cash flows through cost synergies, revenue management, improved realisations, etc. These measures are expected to result in sustainable cash flows and accordingly the Financial Statements continue to be presented on a going concern basis, which contemplates realisation of assets and settlement of liabilities in the normal course of business.

13. Figures for the current year are of 12 months from April 01, 2014 to March 31, 2015, whereas figures for the previous period are for 18 months for period from October 01, 2012 to March 31, 2014, hence such figures are not comparable. Previous period figures have been regrouped/reclassified whereever necessary to correspond with the current year's classification/disclosures.

14. As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the notes to Consolidated Financial Statements.






Sep 30, 2012

1. Corporate information

Bajaj Hindusthan Limited (''the Company'') is a public limited company incorporated in India under the provisions of the Companies Act, 1956. Its Shares are listed on BSE Limited and The National Stock Exchange of India Limited. The Company is engaged in the manufacture of sugar, alcohol and generation of power.

(i) Detail of shares allotted without payment being received in cash during five years immediately preceding the Balance Sheet date are given below:

3,70,00,000 (3,70,00,000) Equity Shares have been issued, for consideration other than cash to the members of erstwhile Bajaj Hindusthan Sugar and Industries Limited pursuant to Scheme of Amalgamation.

(ii) The reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period:

(iii) Terms / Rights of equity shares:

The Company has one class of equity shares having par value of Rs. 1/- per share. All equity shares are ranking pari passu in all respects including dividend. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the realised value of the assets of the Company, remaining after payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

(v) Option on unissued capital:

FCCB''s of US$ 1.50 crore amounting to Rs.79.04 crore (P.Y. Rs.73.39 crore) (shown under long-term borrowings (refer note 5)) issued in the month of June 2007 and can be converted at the option of the bond holder into one equity share at Rs. 250 per equity share, at a pre determined exchange rate of US$ 1= Rs.42.42 at any time up to 26.04.2014.

(i) Term Loans from Banks (except IDBI Bank term loan of Rs.130 crore) are Secured, on first pari passu charge basis, by hypothecation of certain present and future movable fixed assets and properties including plant and machinery, tools and accessories of the Company and also secured/to be secured, on first pari passu charge basis, by mortgage (by deposit of title deeds) on certain immovable fixed assets and properties and certain term loans are further secured, on second pari passu charge basis, by hypothecation of certain present and future current assets of the Company including inventories, book debts and other receivables. Documentation for mortgage in respect of certain term loans/certain properties is under finalisation.

(ii) Term Loan of Rs.130 crore from IDBI Bank is Secured/to be secured on first pari passu charge basis, by mortgage (by deposit of title deeds) on certain immovable fixed assets and properties of the Company. Documentation for mortgage in respect of certain properties is under finalisation.

(iii) Term loans (ECB) in foreign currency from IFC of Rs.315.42 crore is secured on exclusive first charge basis, by hypothecation of Company''s movable and immovable assets (present and future) together with buildings and structures thereon and plant and machinery attached thereto at its factories at Pratappur, Rudauli, Kundarkhi and Utraula in Uttar Pradesh. Also further secured, on a second pari passu charge basis, by hypothecation of current assets (present and future) related to the factories at aforesaid four locations.

(iv) The Sugar Development Fund loan (SDF) from Government of India is secured/to be secured, on exclusive second charge basis, by hypothecation of the whole of movable fixed assets and properties and by mortgage on the whole of immovable fixed assets and properties of the concerned sugar unit of the Company. The Company has also created security in favour of Government of India for certain other SDF loans aggregating to Rs.24.10 crore, that are yet to be disbursed to the Company, on exclusive second charge basis, by hypothecation of the entire movable fixed assets and properties and by mortgage on the whole of immovable fixed assets and properties of the respective sugar units for which the said SDF loans have been sanctioned.

(v) Term loans from Punjab National Bank of Rs.4.33 crore related with amalgamating company Bajaj Eco-Tec Products Ltd. (BEPL) are secured on first pari passu charge basis by hypothecation of the whole of the present and future movable fixed assets and properties including plant and machinery, machinery spares, tools and accessories and other movables of the Company and also secured / to be secured on first pari passu charge basis by mortgage (by deposit of title deeds) on whole of the present and future immovable fixed assets and properties of the amalgamating company.

(i) Loan from banks (Working capital / Short term loans facilities) except Working Capital / Short term loans of Rs. 1,350.00 crore and Rs.63.99 crore (refer note (ii) to (v) below) are secured, on first pari passu charge basis, by hypothecation of inventories, book debts, other receivables and current assets and further secured / to be secured, on a third pari passu charge basis, by hypothecation of certain movable fixed assets and properties and by mortgage on certain immovable fixed assets and properties of the Company. Documentation for mortgage in respect of certain loans is under finalisation.

(ii) Cash credit limit of Rs. 50 crore from UCO Bank is secured by way of subservient charge on fixed assets (excluding land and building) and current assets of the Company.

(iii) Short term loans of Rs.400 crore is secured by subservient pari passu charge on the entire asset both present and future, short term loan of Rs.450 crore is secured by subservient pari passu charge on the entire fixed assets both present and future and Short term loan of Rs. 200 crore is secured by subservient pari passu charge on the entire asset (excluding Land & Building) both present and future.

(iv) Short term loan of Rs.250 crore from Bank of Maharashtra is secured by way of residual charge on the assets of the Company by way of hypothecation.

(v) Working capital loans of Rs.63.99 crore from banks in respect of amalgamating company i.e. (BEPL) are secured on first pari passu charge basis by hypothecation of present and future Inventories, book debts and other receivables and further secured on a second pari passu charge basis by hypothecation of the whole of present and future movable fixed assets and properties and also secured on a second pari passu charge basis by mortgage on whole of present and future immoveable fixed assets and properties of the amalgamating company.

* These figures do not include any amount due and outstanding to be credited to Investor Education and Protection Fund.

* Includes statutory dues, security deposits, advances from customer and other liabilities.

* The Company had recognised liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on 30th September, 2012 of Rs.16.30 crore (P.Y.Rs. 20.00 crore) as per the estimated pattern of dispatches. During the year, Rs.20.05 crore was utilised for clearance of goods. Provision recognised under this class for the year is Rs. 17.41 crore which is outstanding as on 30th September, 2012. Actual outflow is expected in the next financial year. Other class of provisions where recognition is based on substantial degree of estimation relates to supplier/ service provider/ customer/ third party claims, rebates or demand against the Company.

Notes:

(i) Loans and Advances shown above, to subsidiaries fall under the category of "Short Term Loans and Advances" in the nature of Loans where there is no repayment schedule and are repayable on demand.

(ii) The above loans and advances (outstanding) are interest bearing except advance against share application money.

(iii) Loans to employees as per Company''s policy are not considered above.

a. Provident Fund

The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered interest rates on an annual basis. These administered rates are notified by the Government annually. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the year ended September 30, 2012. The actuary has accordingly provided a valuation based on the below provided assumptions and there is no shortfall as at September 30, 2012.

Notes:

1. Related Party relationship is as identified by the Company based on the available information and relied upon by the Auditors.

2. No amount has been written off or written back during the year in respect of debts due from or to related parties.

3. Purchase of Capital Goods includes Rs. NIL (P.Y. Rs. 28.83 crore) from Bajaj Infrastructure Development Company Ltd.

4. Sale of Goods Includes Rs. 21.00 crore (PY. Rs. 280.75 crore) to Bajaj Hindusthan (Singapore) Pvt. Ltd., Singapore and Rs. 23.84 crore (P.Y. Rs. 48.84 crore) to Bajaj Eco-Tec Products Ltd.

5. Interest received includes Rs. 11.72 crore (P.Y. Rs. 12.47 crore) from Bajaj Eco-Tec Products Ltd. And Rs. 45.46 crore (PY. Nil) from Bajaj Power Generation Private Limited on loan given to them.

6. Remuneration includes Rs. 1.91 crore (PY. Rs. 2.18 crore) to Mr. Shishir Bajaj, Rs. 1.38 crore (PY. Rs. 1.44 crore) to Mr. Kushagra Bajaj and Rs. 2.00 crore (P.Y. Rs. 1.22 crore) to Dr. Sanjeev Kumar.

7. Advance Given (Project) includes Rs. NIL (P.Y. Rs. 50.00 crore) to Bajaj Infrastructure Development Company Ltd.

8. Advance Given (Project) repaid includes Rs. NIL (P.Y. Rs. 50.00 crore) from Bajaj Infrastructure Development Company Ltd.

9. Advance given (Against allotment of Shares) includes Rs. 250.00 crore (P.Y. NIL) to Lalitpur Power Generation Company Ltd. and Rs. 234.00 crore (P.Y. Rs. 26.00 crore) to Bajaj Energy Pvt. Ltd.

10. Advance given (Against allotment of Shares) refunded of Rs. 122.00 crore (P.Y. Nil) from Bajaj Energy Private Ltd.

11. Rent received includes Rs. 0.63 crore (PY. Rs. 0.63 crore) from Bajaj Energy Pvt. Ltd.

12. Rent paid includes Rs. 0.72 crores (P.Y. Rs. 0.72 crores) to Bajaj Capital Ventures Pvt. Ltd.

13. Investment made includes Rs. 66.00 crore (P.Y. NIL) in Bajaj Energy Pvt. Ltd. and Rs. NIL (P.Y. Rs. 234.98 crore) in Lalitpur Power Generation Company Ltd.

14. Investment brought back of Rs. NIL (PY. Rs. 4.55 crore) of Bajaj International Participacoes Ltda., Brazil.

15. Loans given includes Rs. 93.75 crore (P.Y. Rs. 243.28 crore) to Bajaj Eco-Tec Products Limited and Rs. 1,413.25 crore (P.Y. Nil) to Bajaj Power Generation Pvt. Ltd.

16. Loans given repaid includes Rs. 50.00 crore (P.Y. Rs. 109.36 crore ) from Bajaj Eco-Tec Products Ltd and Rs. 720.00 crore (P.Y. Nil) from Bajaj Power Generation Pvt. Ltd.

17. Guarantees Given includes Rs. 2,483.93 (PY. 1,824.00 crore) to Lalitpur Power Generation Company Ltd.

18. Dividend received includes Rs. Nil (PY. 0.60 crore) from Bajaj International Participacoes Ltds., Brazil.

2. Contingent Liabilities and Commitments

2011-2012 2010-2011 Rs. Crore Rs. Crore

(I) Contingent liabilities

(a) In respect of disputed demands/claims against the Company not acknowledged as debts:

(i) Central excise matters 33.28 32.04

(ii) Trade tax matters 29.49 8.50

(iii) Other claims 33.21 46.24

95.98 86.78

(b) Guarantees

The Company has furnished guarantees / securities on behalf of subsidiary / associate company 3,040.04 2,409.33

(II) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 15.44 4.09

(c) Erstwhile Bajaj Eco-Tec Products Ltd. has procured imported as well as Indigenous Capital Goods under Export Promotion and Capital Goods Scheme (EPCG). The Export obligation pending against such EPCG licenses 22.24 -

(d) The Income tax assessment of the Company has been completed upto Assessment Year 2009-10. However, the Company as well as the Income Tax Department are in appeal before the Appellate authorities against the assessment of the earlier years. These appeals have not resulted into any demand on account of carry forward losses.

3. Pursuant to the Scheme of Amalgamation (the Scheme) under Sections 391 to 394 of the Companies Act, 1956, the Hon''ble High Court of Bombay pronounced an order on September 14, 2012, sanctioning the Scheme of Amalgamation of Bajaj Eco-Tec Products Limited (BEPL or Amalgamating Company) a wholly owned subsidiary company with the Company with effect from the appointed date April 01, 2012. Upon filing with the Registrar of Companies Maharashtra, Mumbai on October 01, 2012, the Scheme has become effective. BEPL is engaged in the business of manufacturing Medium Density Fibre (MDF) Boards and Particle Boards.

a) In terms of the Scheme approved by the Hon''ble High Court, the entire business and whole of the undertaking of BEPL, as a going concern stands transferred to and vested in the Company with effect from April 01, 2012 being the Appointed Date.

b) As BEPL was a wholly owned subsidiary of the Company, no consideration was payable pursuant to amalgamation.

c) Accounting for Amalgamation: The amalgamation of BEPL with the Company is accounted for on the basis of the Pooling of Interest Method as envisaged in the Accounting Standards (AS)-14 on Accounting for Amalgamation specified in the Companies (Accounting Standard) Rules 2006 and in terms of the Scheme, as below.

d) All assets and liabilities of BEPL were recorded at their respective book values under the respective accounting heads of BHL. The intercompany balances and transaction stood cancelled. As a result of merger, there is no deficit or surplus arising between the aggregate value of assets taken over by the Company and aggregate value of the liabilities and reserves of BEPL. The cost or expenses related to merger amounting to Rs. 0.68 crore have been adjusted with general reserve of the Company, as per the Scheme.

e) From the effective date the authorised share capital of the Company will be Rs. 271.00 crore divided into 2,71,00,00,000 equity shares of the face value of Rs. 1 each.

f) BEPL stands dissolved without being wound up from the Effective Date i.e. October 01, 2012.

4. The Company concluded a Rights Issue in October 2011 and raised an aggregate of Rs. 1,479.75 crore with the principal object of repaying/prepaying certain loan funds. Upon allotment of 41,10,42,800 equity shares of face value Rs.1/- at a price of Rs. 36/- per share (including share premium of Rs.35/- per share) on October 31, 2011, the paid up Equity Share Capital and Share Premium Account have increased by Rs.41.10 crore and Rs. 1,438.65 crore respectively. These newly allotted shares rank pari passu in all respect with the existing equity shares of the Company. Out of the net Rights issue proceeds, an aggregate sum of Rs. 1,453.73 crore have been utilised towards objects of the issue upto September 30, 2012. Pending utilisation, the balance proceeds have been temporarily used to reduce the exposure of working capital borrowings from banks, which will be redrawn as and when necessary to meet the obligations as per the object of the issue.

5. As required by paragraph 46 inserted vide notification dated March 31, 2009 to the Accounting Standard AS-11 "The Effect of Changes in Foreign Exchange Rates", the Company had already opted to adjust the exchange fluctuations on Long Term Monetary Items to the carrying cost of fixed assets. Further as per paragraph 46A, inserted vide notification dated December 29, 201 1 to AS-11, the Company has adjusted Rs. 67.76 crore being the loss on exchange fluctuation on long-term monetary items for the financial year September 30, 2012 to carrying cost of fixed assets. The unamortised foreign exchange fluctuation capitalised to fixed assets, amounts to Rs.323.19 crore as at September 30, 2012.

6. Due to absence of profits during the year, the managerial personnel have been paid the remuneration as approved by shareholders and remuneration committee as minimum remuneration along with the approval of Central Government, wherever applicable.

7. Pursuant to the General Circular no. 2/2011 dated 8th February, 2011 of Ministry of Corporate Affairs and consent of the Board of Directors vide their resolution passed at the Board Meeting held on November 26, 2012 for not attaching the Balance Sheets of subsidiaries, the Company has not attached with its Balance Sheet as at September 30, 2012, the documents specified in Section 212(1) of the Act in respect of its four subsidiaries, viz. (i) Bajaj Aviation Private Limited, (ii) Lalitpur Power Generation Company Limited, (iii) Bajaj Power Generation Private Limited, (iv) Bajaj Hindusthan (Singapore) Private Limited, and has disclosed the requisite information in the Consolidated Balance Sheet as at September 30, 2012 in Annexure A.

8. For the year ended September 30, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company for preparation 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. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year,

9. As per Accounting Standard (AS)-17 on "Segment Reporting", segment information has been provided under the notes to Consolidated Financial Statements.

 
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