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Notes to Accounts of Ballarpur Industries Ltd.

Mar 31, 2015

1. CONTINGENT LIABILITIES AND COMMITMENTS:

31.03.2015 30.06.2014

(to the extent not provided for)

1) Contingent Liabilities:

Claims against the Company not acknowledged as debts 18,263 12,080

Guarantees 1,828 2,101

TOTAL (A) 20,091 14,181

2) Commitments:

Estimated amount of contracts remaining to be executed on capital account and not 171 89 provided for (net of advances)

TOTAL (B) 171 89

TOTAL (A B) 20,262 14,270

2. segment reporting:

The Company has identified business segment as the primary segment after considering all the relevant factors. The company''s manufactured products are sold primarily within India and as such there are no reportable geographical segment. The Expenses, which are not directly identifiable to a specific business segment are clubbed under "Unallocated Corporate Expenses" and similarly, the common assets and liabilities, which are not identifiable to a specific segment are clubbed under "Unallocated Corporate Assets/ Liabilities" on the basis of reasonable estimates.

3. The manufacturing activity at Kamlapuram Unit of the Company has been temporarily suspended in view of continuing adverse market conditions and continuous losses being incurred. During the current period, the unit has incurred loss of Rs. 46,03,74,912/-. and The accounts of the Unit for the period ended 31st March, 2015 have been prepared on the "Going Concern" basis. Further,

1. The Unit has given representation to the Telangana State Government for certain subsidies on inputs and Power for re-starting the manufacturing activity. The said representation is understood to be under active consideration of the State Government.

2. State Government of Andhra Pradesh has also issued notification bearing no. G.O.Ms.No.158 Dt.11-05-2015 shifting VAT on wood from 14.50% to 5% on the basis of representations made by the Unit and Telangana state Government.

The above positive developments will enable the Unit to revive its operations with the improvement in profitability. b-37 In the opinion of the board of Directors, all assets other than fixed assets and non-current investments are realisable in the ordinary course of business at the value at which they are stated in the Financial Statements. b-38 Accounts with certain financial institutions, banks and companies are subject to reconciliation, however in the opinion of management, these will not have any significant impact on the profit for the period/year and the net worth of the Company as on Balance Sheet date. b-39 The financial statements are for a period of 9 months i.e. from 1st July, 2014 to 31st March, 2015, therefore the figures of the current period are not comparable with those of the previous year. b-40 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Jun 30, 2014

Company overview

Ballarpur Industries limited (''BIlt'' or the company), a public limited company is engaged primarily in the business of manufacturing of writing and printing (W&p) paper, pulp and paper products.

A-1 Contingent liabilities and Commitments:

30.06.2014 30.06.2013 (to the extent not provided for)

1) Contingent liabilities:

(a) Claims against the Company not acknowledged as debts 12,080 10,831

(b) Guarantees 2,101 1,856

total (a) 14,181 12,687

2) Commitments:

estimated amount of contracts remaining to be executed on capital account and not provided 89 161 for (net of advances) total (B) 89 161

Total (a B) 14,270 12,848

3) In respect of loan availed by its foreign wholly owned subsidiary, Ballarpur International holdings B.V:

i) the Company has granted to the lender an irrevocable and unconditional right to require it to purchase loan wholly or in part(s), as may be required by lender through exercise of put option given to lender subject to a maximum limit of uSD 70 Million. ii) the Company has granted to the lender a corporate guarantee of uSD 35.10 Million. iii) the Company has executed an "indemnity and undertaking" for stand by letter of credit facility of uSD 30 Million.

B-2 Segment reporting:

the Company has identified business segment as the primary segment after considering all the relevant factors. the Company''s manufactured products are sold primarily within India and as such there are no reportable geographical segment.

The expenses, which are not directly identifiable to a specific business segment are clubbed under "unallocated Corporate expenses" and similarly, the common assets and liabilities, which are not identifiable to a specific segment are clubbed under "unallocated Corporate Assets/ liabilities" on the basis of reasonable estimates.

B-3 Information on related parties as required by accounting standard-as 18 "related party disclosures":

a) list of related parties over which control exists subsidiary Companies (Including step down subsidiaries)

Ballarpur International Holdings B.V.

Ballarpur International Graphic paper Holdings B.V. (now known as BIlt paper B.V.)

Ballarpur paper Holdings B.V.

Ballarpur Speciality paper Holdings B.V.

BIlt Graphic paper products limited

BIlt tree tech limited

Sabah Forest Industries Sdn. Bhd.

premier tissues (India) limited

b) name of the related parties with whom transactions were carried out during the year and nature of relationship name of related party nature of relationship

Ballarpur International Holdings B.V. Subsidiary

BIlt tree tech limited Subsidiary

premier tissues (India) limited Subsidiary

Ballarpur paper Holdings B.V. Step Down Subsidiary

BIlt Graphic paper products limited Step Down Subsidiary

Sabah Forest Industries Sdn. Bhd. Step Down Subsidiary

Arizona printers & packers private limited other Related parties

Avantha Holdings limited other Related parties

Avantha power & Infrastructure limited other Related parties

Avantha Realty limited other Related parties

BIlt Industrial packaging Company limited other Related parties

Biltech Building elements limited other Related parties

Crompton Greaves limited other Related parties

Global Green Company limited other Related parties

Jhabua power limited other Related parties

Korba West power Company limited other Related parties

Krebs & Cie (India) limited other Related parties

leading line Merchant traders (p) limited other Related parties

Mirabelle trading pte. limited other Related parties

prestige Wines & Spirits private limited other Related parties

Saraswati travels (p) limited other Related parties

Solaris Chemtech Industries limited other Related parties

uHl power Company limited other Related parties

Key management personnel

Mr. Gautam thapar Mr. R R Vederah Mr. B Hariharan

c) details of transactions with related parties:

(Financial transactions have been carried out in the ordinary course of business and/or in discharge of contract obligation)

B-4 the Company has operating leases for various premises and for other assets, which was renewable on a periodic basis and are cancellable. Rental expenses for operating lease charged to Statement of profit and loss for the year are Rs.13 lacs (30th June,2013 Rs. 3 lacs).

B-5 In the opinion of the Board of Directors, all assets other than fixed assets and non-current investment are realisable in the ordinary course of business at the value at which they are stated in the Financial Statements.

B-6 Accounts with certain financial institutions, banks and companies are subject to reconciliation, however in the opinion of management, these will not have any significant impact on the profit for the year and the net worth of the Company as on the Balance Sheet date.

B-7 Business transfer agreement and slump exchange agreement

A. During the previous year, the Company has entered into an agreement for purchase of Captive power plant (Cpp) along with related moveable assets, net current assets, agreements, licenses and permits, approvals, employees, business and commercial rights, etc. by way of slump sale from Avantha power & Infrastructure limited(ApIl) on a going concern basis. pursuant to Business transfer Agreement, all the assets and liabilities of Cpp were transferred to the Company subject to pending certain formalities. However, pending certain clearances/ approval, ApIl had continued to perform obligation/operate Cpp unit in trust for and on behalf of the Company.

B) During the previous year, with effective from 1st July 2012, pursuant to slump exchange agreement between the Company and Bilt Graphic paper products limited(BGppl), the business undertaking of the Company situated at units Sewa and Ashti engaged in the business of manufacturing of Copier paper have been transferred to BGppl by way of slump exchange on a going concern, with then business undertaking of BGppl situated at unit Kamlapuram engaged in the business of manufacture of Rayon Grade pulp.

B-8 previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/disclosure.


Mar 31, 2014

1 EXCEPTIONAL ITEMS

Exceptional items relates to expenses incurred on settlement of workers/ staff amounting to Rs. Nil (2012-13: Rs. 1,29,12,715) arising from closure of Kollam Unit of the Company.

2 LEASE COMMITMENTS:

The Company has entered into leasing arrangements for office buildings and godown for storage of inventory that are cancellable at the option of the Company. Rent expense on account of cancellable leases for the year ended March 31, 2014 amounts to Rs. 2,36,52,884 (2012-13 : Rs. 2,19,13,800).

3 SEGMENT INFORMATION

A. Primary segment reporting (by business segments)

i. Composition of business segments

The Company''s business segments are organised as under:

Clay products: Segment manufactures and supplies the clay products to various industries like paper, paint, rubber and fiberglass etc.

Starch products: Segment comprising starch/specialty starch, syrups and modified starch, manufactures and supplies the starch products to various industries like paper, textile, food and pharma, etc.

4 In accordance with the required Accounting Standard (AS-18) on related party disclosures where control exist and where transactions have taken place and description of the relationship as identified and certified by management are as follows:

A. Holding Company

DBH International Private Limited

B. Associates

Enterprises which have significant influence over the Company: Karun Carpets Private Limited

C. Enterprises over which substantial shareholders of the Company and their relatives have significant influence:

Greaves Cotton Limited

Premium Transmission Limited

Pembrill Industrial & Engineering Co. Limited

Greaves Leasing Finance Limited

Dee Greaves Limited

Bharat Starch Products Limited

Aravali Sports & Cultural Foundation

DBH Consulting Limited

DBH Investments Pvt. Limited

Greaves Auto Limited

D. Key management personnel and their relatives

Mr. Karan Thapar – Chairman

Ms. Devika Thapar (Daughter of Mr. Karan Thapar)

Mr. Karam Thapar (Son of Mr. Karan Thapar)

Mr. B. M. Thapar (Father of Mr. Karan Thapar)

Dr. Venkatesh Padmanabhan (Managing Director and Chief Executive Officer)

Mr. Rahul Gupta (Executive Director) (up to December 31, 2012)

Mr. S.K. Jain (Sr. Vice President Corporate Finance, Accounts and Administration)

Mr. P.S. Saini (Company Secretary and Head Corporate Legal)

5. CONTINGENT LIABILITIES AND COMMITMENTS

1) Contingent liabilities

Particulars As at March 31, 2014 As at March 31, 2013 Rs. Rs.

a) Outstanding bank guarantees and letter of credits 1,99,74,041 4,16,49,453

b) Excise and sales tax matters:

i) Demand received from Commissioner of Central Excise, Panchkula 6,34,94,596 6,34,94,596

on account of misclassification of plain maize starch against which stay has been granted by CESTAT, New Delhi (including penalty of Rs. 3,17,47,298; (2012-13: Rs. 3,17,47,298) against which an amount of Rs. 5,07,000 (2012-13 : Rs. 5,07,000) deposited under protest (note 3).

ii) Haryana local area development tax levied by the State Government - 32,16,191 on the goods received from other state, pending before Supreme Court of India against which an amount of Rs. 32,16,191 (2012-13: Rs. 32,16,191) deposited under protest and the same has been provided in the books during the year.

iii) Entry tax levied by the Government of Kerala on Special Kerosene Oil 1,51,33,588 1,51,33,588 (SKO), pending before Hon''ble Supreme Court of India against which an amount of Rs. 1,51,33,588 (2012-13 : Rs. 1,51,33,588) deposited under protest.

c) Income tax matters 14,00,52,056 7,42,03,748

2) Estimated amounts of contracts remaining to be executed on capital account (net of advances) Rs. 2,38,80,226 (2012-13 : Rs. 1,82,68,305).

3) a) Contingent liabilities with respect to excise and sales tax matters referred in paragraph 1 (b) above exclude demands aggregating Rs. 107,369,734 for the years 2000 to 2004 relating to inputs used in manufacture of excisable as well as exempted goods and convert credit of service tax, pending with Central Excise and Service Tax Appellate Tribunal (CESTAT), which were set aside by CESTAT and remanded back to the relevant authorities for a fresh decision and revision to the demand. Consequently amount deposited under protest amounting to Rs. 12,41,379 have been considered good and recoverable and no provision for the same has been considered necessary.

b) Contingent liabilities with respect to income tax matters referred in paragraph 1(c) above includes :

i) in respect of demand aggregating to Rs. 5,24,38,648 for the assessment year 1997-98,1999-2000, 2000-01 and 2001-02 raised by the assessing officer in view of order of Hon''ble High Court of Kerala disallowing certain expenses to verify the facts, an appeal was filed with the CIT(Appeals).

ii) in respect of demand aggregating to Rs. 5,61,53,668 for the assessment year 1995-96 raised by the assessing officer in view of order of Hon''ble High Court of Kerala disallowing certain expenses to verify the facts, an appeal was filed with the CIT (Appeals).

iii) in respect of demand aggregating to Rs. 2,17,65,100 for the assessment year 2010-11 raised by assessing officer in view of the order of CIT (Appeals) dismissing the appeal filed by the Company with respect to contribution made to gratuity fund, against which the Company has fled an appeal with Income-tax Appellate Tribunal.

iv) in respect of demand aggregating to Rs. 43,34,460 for the assessment year 2007-08 raised by the Assessing Officer in view of the order of ITAT to verify the facts with respect to disallowance of certain expenditure, the Company has filed an appeal with CIT (Appeals).

v) in respect of demand aggregating to 53,60,180 for the assessment year 2008-09 raised by the Assessing Officer disallowing certain expenses u/s 148, against which the Company has filed an appeal with CIT (Appeals).

Based on above, the management is of the opinion that the appeals will be allowed in favor of the Company and hence no provision is required for the above.

6 DELISTING OF SHARES

The equity shares of the Company are in the process of being de-listed from the Bombay Stock Exchange and Calcutta Stock Exchange. The acquirer (Promoter) has accepted an exit price of Rs. 48 per equity share as derived under Reverse Book Building process enunciated in the delisting guidelines of Securities and Exchange Board of India.

43 CHANGE OF NAME

With effect from June 27, 2012, the name of the Company was changed from English Indian Clays limited to EICL Limited.

44 PREVIOUS YEAR FIGURES

Previous year figures have been re-grouped/recast, wherever necessary to conform the current year classification.


Jun 30, 2013

CompanY overvIew

Ballarpur Industries Limited (‘BILt'' or the company), a public limited company is engaged primarily in the business of manufacturing of writing and printing (W&P) paper, pulp and paper products.

A-1 In the opinion of the Board of Directors, all assets other than fxed assets and non-current investments are realisable in the ordinary course of business at the value at which they are stated in the Financial statements. B-38 Accounts with certain fnancial institutions, banks and companies are subject to reconciliation, however in the opinion of management,

these will not have any signifcant impact on the proft for the year and the net worth of the Company as on the Balance sheet date. B-39 Depreciation charged for the year and debited to the statement of Proft and Loss includes ` nil (Previous year ` 135 Lacs) being depreciation

on the revalued portion of fxed assets, since the revaluation reserve stood exhausted in the earlier years. B-40 Business transfer agreement and slump exchange agreement

A. During the year, the Company has entered into an agreement for purchase of Captive Power Plant (CPP) along with related moveable assets, net current assets, agreements, licenses and permits, approvals, employees, business and commercial rights, etc. by way of slump sale from Avantha Power & Infrastructure Limited(APIL) on a going concern basis. Pursuant to Business transfer Agreement, all the assets and liabilities of CPP were transferred to the Company subject to pending certain formalities. however, pending certain clearances/ approval, APIL had continued to perform obligation/operate CPP unit in trust for and on behalf of the Company.

B. During the year, with effective from 1st july 2012, pursuant to slump exchange agreement between the Company and Bilt Graphic Paper Products Limited(BGPPL), then business undertaking of the Company situated at units sewa and Ashti engaged in the business of manufacturing of copier paper have been transferred to BGPPL by way of slump exchange on a going concern, with the then business undertaking of BGPPL situated at unit Kamlapuram engaged in the business of manufacture of rayon grade pulp.

A-2 Previous year''s fgures have been regrouped / reclassifed wherever necessary to correspond with the current year''s classifcation/ disclosure and due to purchase of captive power plant and slump exchange of unit KPM with unit sewa and unit Ashti, the same are not comparable with current year fgures.


Mar 31, 2013

A) Terms and rights attached to preference shares

Preference shares carry a cumulative dividend of 11% p.a. Each holder of preference share is entitled to one vote per share only on resolutions placed before the Company which directly affect the rights attached to the cumulative preference shares. The Company declares and pays dividend in Indian Rupees.

During the year ended March 31, 2013, the amount of per share dividend recognised as distributions to preference shareholders was Rs. 11.00 (2011-12 : Rs. 11.00 per share) of which dividend proposed by the Board of Directors subject to the approval ofthe shareholders is Rs. 5.50 per share (2011-12 : Rs. 5.50 per share).

11% Cumulative redeemable preference shares are redeemable at par at the option of the Company not earlier than 18 months but not later than 5 years from the date of allotment/renewal September 04, 2011 and October 01, 2009 for Rs. 200,000,000 and Rs. 100,000,000 respectively, i.e. between March 04, 2013 to September 04, 2016 and March 31, 2011 to September 30, 2014 respectively.

Notes:

a) Rupee term loan from banks comprises of:

(i) Loan of Rs. 250,000,000 taken from Axis Bank during the financial year 2010-11 and carries interest @ base rate 2.50% p.a. The loan is repayable in 16 equal quarterly installments starting from September 27, 2011.

(ii) Loan ofRs. 250,000,000 taken from State Bank of India during the financial year 2010-11 and carries interest @ base rate 2.25% p.a. The loan is repayable in 16 equal quarterly installments starting from October 28, 2011.

(iii) Loan of Rs. 200,000,000 taken from IndusInd Bank during the financial year 2011-12 and carries interest @ base rate 2.00% p.a. The loan is repayable in 12 equal quarterly installments starting from September 30, 2012.

(iv) Loan of Rs. 275,000,000 (including ECB of US$ 1,500,000) sanctioned by ICICI Bank of which loan of Rs. 100,000,000 taken from ICICI Bank during the financial year 2012-13 and carries interest @ base rate 2.75% p.a. The loan is repayable in 24 equal quarterly installments starting from February 14, 2014.

b) Loan of Rs. 275,000,000 (including ECB of US$ 1,500,000) sanctioned by ICICI Bank of which US$ 1,500,000 taken from ICICI Bank during the financial year 2011-12 and carries interest @ Libor 4.65% p.a. The loan is repayable in 28 quarterly installments starting from March 08, 2012.

c) All term loans from banks are secured by an equitable charge on all immovable properties of the Company, both present and future and are also secured by way of hypothecation of the Company''s movable properties including movable plant and machinery, machinery spares, tools and accessories and other movables both present and future (save and except book debts) subject to prior charges created in favour of the Company''s bankers on stocks of raw materials, consumable stores, finished goods, etc. for working capital facilities. The above charges rank pari-passu with charges created/to be created by the Company in favour of other term lending banks.

d) Deposits from public carry interest rate ranging from 9.00% to 10.50% p.a. and the same is repayble within a period of 1 to 3 years from the date of deposit as per the scheme opted by the deposit holder.

e) Current maturities of long term borrowings are disclosed under the head other current liabilities in note 10.

Notes:

a) Cash credit and working capital demand loans along with guarantees and letters of credit facilities given by the banks are secured by hypothecation of finished goods, semi-finished goods, consumable stores and spares, raw material and book debts at Yamunanagar, Thiruvananthapuram and Shimoga factories and second pari passu charge on block of fixed assets ofthe Company.

b) Cash credit and working capital demand loans from banks comprises ofthe following:

(i) Cash credit of Rs. 300,000,000 sanctioned by Axis Bank is repayable on demand and carries interest rate at base rate 2.50% p.a. (including a sub-limit ofRs. 300,000,000 as working capital demand loan at base rate 1.25% p.a.).

(ii) Cash credit/working capital demand loan of Rs. 200,000,000 from State Bank of India is repayable on demand and carries interest rate at base rate 0.50% p.a. Working capital demand loan of Rs. 100,000,000 is availed at 10.75% p.a.

(iii) Cash credit/working capital demand loan of Rs. 100,000,000 from Yes Bank is repayable on demand and carries interest rate at base rate 2.25% p.a.

(iv) Cash credit/working capital demand loan of Rs. 150,000,000 from IndusInd Bank is repayable on demand and carries interest rate at base rate 2.25% p.a. Working capital demand loan ofRs.125,000,000 is availed at 11.25% p.a.

(v) Cash credit/working capital demand loan of Rs. 100,000,000 sanctioned by ICICI Bank during the financial year 2012-13 is repayable on demand and carries interest @ base rate 2.75% p.a. Working capital demand loan of Rs. 55,000,000 is availed at @ base rate 2.35% p.a."

*The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at March 31, 2013 has been made in the financial statements based on information received and available with the Company. (Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the MSMEDA is not expected to be material).

Notes:

a) Fixed assets held for sale represent land and buildings of gross book value Rs. 15,053,397 (2011-12 : Rs. 15,053,397) and net book value Rs. 14,737,209 (2011-12 : Rs. 14,813,599) located at Kollam unit, which management intends to divest within the next 12 months at amounts equal to or exceeding the asset carrying values at the respective Balance Sheet dates.

b) Previous year fixed assets held for sale represent land and buildings of gross book value Rs. 45,092,126 (net book value Rs. 37,714,290) located at Puducherry unit.

1 EXCEPTIONAL ITEMS

Exceptional items pertains to expenses incurred on settlement of workers/ staff amounting to Rs. 12,912,715 related to Kollam unit of the Company (2011-12: Rs. 22,169,932) arising from the closure of Puducherry operations w.e.f October 10, 2011.

2 LEASE COMMITMENTS:

The Company has entered into leasing arrangements for office buildings and godown for storage of inventory that are cancelable at the option of the Company. Rent expense on account of cancelable leases for the year ended March 31, 2013 amounts to Rs. 21,913,800 (2011-12 : Rs. 19,007,150).

3 SEGMENT INFORMATION

A. Primary segment reporting (by business segments)

i. Composition of business segments

The Company''s business segments are organised as under:

Clay products: Segment manufactures and supplies the clay products to various industries like paper, paint, rubber and fiberglass etc.

Starch products: Segment comprising starch/specialty starch, syrups and modified starch, manufactures and supplies the starch products to various industries like paper, textile, food and pharma, etc.

4. In accordance with the required Accounting Standard (AS-18) on related party disclosures where control exist and where transactions have taken place and description ofthe relationship as identified and certified by management are as follows:

A. Holding Company

DBH International Private Limited

B. Associates

Enterprises which have significant influence over the Company:

Karun Carpets Private Limited

C. Enterprises over which substantial shareholders of the Company and their relatives, have significant influence:

Greaves Cotton Limited

Premium Transmission Limited

Pembril Industrial & Engineering Co. Private Limited

Greaves Leasing Finance Limited

Dee Greaves Limited

Bharat Starch Products Limited

Aravali Sports & Cultural Foundation

DBH Consulting Limited

DBH Investments Private Limited

Greaves Farymann Diesel GmbH

Greaves Auto Limited

Greaves Cotton Netherlands B.V

D. Key management personnel & their relatives

Mr. Karan Thapar - Chairman

Ms. Devika Thapar (Daughter of Mr. Karan Thapar)

Mr. Karam Thapar (Son of Mr. Karan Thapar)

Mr. B M Thapar (Father of Mr. Karan Thapar)

Ms. Sulochna Thapar (Mother of Mr. Karan Thapar)

Dr. Venkatesh Padmanabhan (Managing Director and Chief Executive Officer)

Mr. Rahul Gupta (Executive Director) (upto December 31, 2012)

Mr. S.K. Jain (Sr. Vice President Corporate Finance, Accounts & Administration)

Mr. P.S. Saini (Company Secretary & Head Corporate Legal)

Based on the above, the management is of the opinion that the appeals will be allowed in favour of the Company and hence no provision is required for the above.

2) Estimated amounts of contracts remaining to be executed on capital account (net of advances) Rs. 18,268,305 (2011-12: Rs. 54, 185,183).

3) Contingent liabilities with respect to excise and sales tax matters referred in paragraph 1 (c) above excludes demands aggregating Rs. 107,369,734 for the year 2000 to 2004 relating to inputs used in manufacturing of excisable and as well as exempted goods and cenvat credit of service tax, pending with Central Excise and Service Tax Appellate Tribunal (CESTAT) were set aside and remitted to the relevant authorities for a fresh decision and revision in demand. Consequently amount deposited under protest amounting to Rs. 1,241,379 have been considered good and recoverable and no provision for the same has been considered necessary. Further, till the time demands are received by the Company amounts of contingent liabilities, if any, is not ascertainable.

5 CHANGE OF NAME

With effect from June 27, 2012, the name of the Company, was changed from English Indian Clays Limited to EICL Limited

6 Previous year figures

Previous year figures have been re-grouped/recast, wherever necessary to confirm the current year classification.


Jun 30, 2012

COMPANY OVERVIEW

Ballarpur Industries Limited ('BILT' or the company), a public limited company is engaged primarily in the business of manufacturing of writing and printing (W&P) paper and paper products.

1.1 Rights, preferences and restrictions attached to shares:

The company has one class of equity shares having a par value of Rs. 2 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note:-

2.1 Includes raw material-in-transit of Rs. NIL (Previous Year Rs. 614 Lacs)

2.2 Includes stores & spares-in-transit of Rs. 1 Lacs (Previous Year Rs. 11 Lacs)

2.3 Includes chemicals-in-transit of Rs. 96 Lacs (Previous Year Rs. 42 Lacs)

2.4 Includes packing material-in-transit of Rs. NIL (Previous Year Rs. 21 Lacs)

Rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

IN LACS

30.06.2012 30.06.2011

(to the extent not provided for)

Contingent liabilities:

(a) Claims against the company not acknowledged as debts 10,210 10,181

(b) Guarantees 1,379 1,218

Total (A) 11,589 11,399

COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided 569 785 for (net of advances)

Total (B) 569 785

Total (A B) 12,158 12,184

3. Segment Reporting

The Company has identified business segment as the primary segment after considering all the relevant factors. the Company's manufactured products are sold primarily within India and as such there are no reportable geographical segment.

The Expenses, which are not directly identifiable to a specific business segment are clubbed under "Unallocated Corporate Expenses" and similarly, the common assets and liabilities, which are not identifiable to a specific segment are clubbed under "Unallocated Corporate Assets/ Liabilities" on the basis of reasonable estimates.

a) List of Related Parties over which control exists

Subsidiary Companies

Ballarpur International Holdings B.V.

Ballarpur Paper Holdings B.V.*

Sabah Forest Industries Sdn. Bhd.*

BILT Tree Tech Limited

BILT Graphic Paper Products Limited*

Ballarpur International Graphic Paper Holdings B.V.*

Ballarpur Speciality Paper Holdings B.V Ballarpur Packaging Holdings B.V,

Ballarpur International Packaging Holdings B.V. (merged with Ballarpur Packaging Holdings w.e.f. 29.12.2011) Premier Tissues (India) Limited

Bilt Paper Limited (voluntary dissolution w.e.f 21.02.2012)

* Step down subsidiary

4 Unit Ashti has imported certain plant and machinery at concessional rate of custom duty under 5% Export Promotion Capital Goods (EPCG) scheme. the Unit has been granted two licenses, accordingly the unit is obliged to export goods amounting UsD 9.17 million, which is equivalent to eight and half times the duty saved on import of machinery. the unit is required to meet this export obligation over a period of eight years starting from 17th March 2005The unit has achieved total export of UsD 12.91 million as on 30.06.11.the management is in the process of submitting the required documents for the issuance of export obligation discharge certificate from the Director General of Foreign trade.

5 In the opinion of the board, all assets other than fixed assets and non-current investments are realisable in the ordinary course of business at the value at which they are stated in the Financial statements.

6 The Company has entered into a Power Purchase Agreement with Avantha Power & Infrastructure Limited and the rates of purchase of power and steam have been agreed periodically as per the terms of the agreement.

7 Accounts with certain financial institutions, banks and companies are subject to reconciliation, however in the opinion of management, these will not have any significant impact on the profit for the year and on the net worth of the Company as on the Balance sheet date.

8 Depreciation charged for the year and debited to the statement of profit and loss includes Rs. 135 Lacs (Previous Year Rs. 214 Lacs) being depreciation on the revalued portion of fixed assets, since the revaluation reserve stood exhausted in the earlier years.

9 significant Event Occuring After Balance sheet Date

a) On 24th August, 2012, the Members of the Company and BILT Graphic Paper Products Limited (BGPPL, step down subsidiary of the Company) have approved transfer, by way of slump exchange basis as a going concern with effect from 1st July 2012, the business undertakings of the Company situated at Units sewa and Ashti engaged in the business of manufacture of Copier Paper, with business undertaking of BGPPL, situated at Unit Kamalapuram engaged in the business of manufacture of Rayon Grade Pulp, for a net outflow of Rs.115 Crores to be paid by the Company to BGPPL towards difference in value of exchange of the aforesaid business undertakings, subject to pending requisite approvals.

b) The Board of Directors of the Company have approved purchase by way of slump sale basis as a going concern, with effect from 1st July 2012, the Captive Power Plant of M/s Avantha Power & Infrastructure Limited (APIL) situated at Unit shree Gopal subject to pending requisite approvals.

10 The Revised schedule VI has become effective from 1 April, 2011 for the preparation of Financial statements. this has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2012

Notes:

a) Rupee term loan from banks comprises of:

(i) Loan of Rs.200,000,000 taken from Axis Bank during the financial year 2007-08 and carries interest @ base rate 2.50% p.a. The loan is repayable in 16 equal quarterly installments starting from September 28,2008.

(ii) Loan of Rs.250,000,000 taken from Axis Bank during the financial year 2010-1 land carries interest @ base rate 2.50% p.a. The loan is repayable in 16 equal quarterly installments starting from September 27,2011.

(iii) Loan of Rs. 200,000,000 taken from State Bank of India during the financial year 2008-09 and carries interest @ base rate 3.50%p.a.The loan is repayable in 16 quarterly installments starting from June 30, 2009. It includes Rs. 40,000,000 (2010-11: Rs.120,000,000) borrowed from a bank and is convertible into equity shares in case of*default.

(iv) Loan of Rs. 250,000,000 taken from State Bank of India during the financial year 2010-11 and carries interest @ base rate 3.25% p.a. The loan is repayable in 16 equal quarterly installments starting from October 28,2011.

(v) Loan of Rs.200,000,000 taken from Yes Bank during the financial year 2009-10 and carries interest @ base rate 2.80% p.a. The loan is repayable in 8 equal quarterly installments starting from December 24,2010.

(vi) Loan of Rs. 200,000,000 taken from Induslnd Bank during the financial year 2011-12 and carries interest @ base rate 2.00% p.a. The loan is repayable in 12 equal quarterly installments starting from September 30,2012.

b) Loan of Rs.275,000,000 (including ECB of USD5,000,000) sanctioned by ICICI Bank of which USD 1,500,000 taken from ICICI Bank during the financial year 2011-12 and carries interest @ Libor 4.65%p.a.The loan is repayable in 56 quarterly installments starting from March 8,2012.

c) All term loans from banks are secured by an equitable charge of* all immovable properties of the Company, both present and future and are also secured by way of hypothecation of the Company's movable properties including movable plant and machinery, machinery spares, tools and accessories and other movables both present and future (save and except book debts) subject to prior charges created in favour of the Company's bankers on stocks of raw materials, consumable stores, finished goods etc. For working capital facilities. The above charges rank pari-passu with charges created/to be created by the Company in favour of*other term lending banks.

d) Deposits from public

Deposits from public carry interest rate ranging from 9.00% tol0.50% p.a. and the same is repayble within a period of 1 to 3 years from the date of deposit as per the scheme opted by the deposit holder.

e) Other loans and advances

Intercorporate deposits includes loan taken from Sewastuti Finance Pvt. Ltd. @10.00% and is repayable within 1 year from the date of* deposit.

f) Current maturities of long term liabilities are disclosed under the head other current liabilities.

Notes:

a) Cash credit and working capital demand loans along with guarantees and letters of credit facilities given by the banks are secured by hypothecation of finished goods, semi-finished goods, consumable stores and spares, raw material and book debts at Yamunanagar, Puducherry, Thiruvananthapuram and Shimoga factories and second pari passu charge on block of fixed assets of the Company.

b) Cash credit and working capital demand loans from the bank comprises of the following :

(i) Cash credit ofRs. 300,000,000 sanctioned by Axis Bank is repayable on demand and carries interest rate at base rate 2.50% p.a. (Including a sub-limit ofRs. 300,000,000 as working capital demand loan at base rate 2.00% p.a.).

(ii) Cash credit / working capital demand loan of Rs. 200,000,000 from State Bank of India is repayable on demand and carries interest rate at base rate 3.25% p.a. Working capital demand loan of Rs.100,000,000 is availed at 11.25% p.a.

(iii) Cash credit /working capital demand of Rs.100,000,000 from Yes Bank is repayable on demand and carries interest rate at base rate 2.25%p.a.

(iv) Cash credit / working capital demand loan of Rs.150,000,000 from Induslnd Bank is repayable on demand and carries interest rate at base rate 2.25% p.a. Working capital demand loan of Rs.150,000,000 is availed at 11.55 % p.a.

Notes:

a) Additions to Plant and Machinery include additions to research and development assets amounting to Rs.4,104,099 (2010-11: Rs.5,432,014) and depreciation charge for the year includes 12,209,729 (2010-11: Rs.1,943,239) on account of research and development assets.

b) Pursuant to the sale cum lease agreement dated May 22,2008, the Company has acquired land for the purpose of setting up a starch manufacturing plant at Shimoga, Karnataka. The Company has paid an amount of t 53,130,000 as allotment consideration and the land shall be transferred in the name of the Company on a freehold basis at end of 10 years, payment of registration charges, stamp duty at prevailing price upon fulfillment of certain conditions. As per agreement the land has been transferred on lease basis to Company for the period of 10 years and Company is required to pay lease rent of t68,410 and maintenance charges of Rs. 99,600 per annum.

c) Capital work in progress include borrowing cost of Rs.331,383 (2010-114,914,461)

d) Adjustments include fixed assets held for sale which represent land and buildings of gross book value Rs.45,092,126 (2010-11:Rs.45,132,426), net book value 137,714,290 (2010-11 : Rs.38,632,678) located at Puducherry unit, which management intends to divest within the next 12 months at amounts equal to or exceeding the asset carrying values at the respective balance sheet dates.

Note:

a) Out of this f 2,500,000 (total provision Rs. 3,209,882) have been recovered during the current year and therefore the provision has been written back.

Note:

a) Fixed assets held for sale represent land and buildings of gross book value Rs.45,092,126 (2010-11 : Rs. 45,132,426), net book value Rs. 37,714,290 (2010-11: Rs. 38,632,678) located at Puducherry unit, which management intends to divest within the next 12 months at amounts equal to or exceeding the asset carrying values at the respective balance sheet dates.

Notes:

a) Net of amount receivable from related parties Rs. 113,772.

b) Employee benefit expenses includes research and development expenses (note 41).

1 Exceptional items

Exceptional items relates to expenses incurred on settlement of workers/ staff amounting to Rs. 22,169,932 arising from the closure of Puducherry operations w.e.f October 10,2011.

2 Lease commitments:

The Company has entered into leasing arrangements for office buildings and godown for storage of inventory that are cancelable at the option of the Company. Rent expense on account of cancelable leases for the year ended March 31,2012 amounts to Rs.19,007,150 (2010-11: Rs. 17,133,063).

3 Segment information

A. Primary segment reporting (by business segments)

i. Composition of business segments

The Company's business segments are organised as under:

Clay products: Segment manufactures and supplies the clay products to various industries like paper, paint, rubber and fiberglass etc.

Starch products: Segment comprising starch/specialty starch, syrups and modified starch, manufactures and supplies the starch products to various industries like paper, textile, food and pharma, etc.

4. In accordance with the required Accounting Standard (AS-18) on related party disclosures where control exist and where transactions have taken place and description of the relationship as identified and certified by management are as follows:

A. Holding Company DBH International Private Limited

B. Associates Enterprises which have significant influence over the Company: Karun Carpets Private Limited

C. Enterprises over which substantial shareholders of the Company and their relatives, have significant influence:

Greaves Cotton Ltd.

Premium Transmission Ltd.

Pembril Industrial & Engineering Co. Pvt. Ltd.

Greaves Leasing Finance Ltd.

Dee Greaves Ltd.

Bharat Starch Products Ltd.

Aravali Sports & Cultural Foundation DBH Consulting Limited DBH

Investments Pvt. Ltd.

Greaves Farymann Diesel GmbH Greaves Auto Ltd.

Greaves Cotton Nether lands B.V.

D. Key management personnel & their relatives Mr. Karan Thapar - Chairman Ms. Devika Thapar (Daughter of Mr. Karan Thapar) Mr. Karam Thapar (Son of Mr. Karan Thapar) Mr. B M Thapar (Father of Mr. Karan Thapar) Ms. Sulochna Thapar (Mother of Mr. Karan Thapar) Mr. Rahul Gupta (Executive Director) Mr. S.K. Jain (Sr. Vice President Corporate Finance, Accounts & Administration) Mr. P.S. Saini (Company Secretary & Head Corporate Legal)

1) a) In respect of demand aggregating to Rs.38,171,395 (including demand raised towards penalty of Rs. 24,853,455) for the assessment year 1996-97 raised by the assessing officer in view of order of Hon'ble High Court of Kerala disallowing certain expenses, a revised petition was filed by the Company with the Hon'ble High Court of Kerala for re-hearing the facts of the case and an appeal was filed with the CIT(Appeals) against the demand raised towards penalty of Rs. 24,853,455. The same has been decided in favour of the Company and the penalty levied in the case has been accordingly cancelled.

b) In respect of demands aggregating to Rs. 733,590, Rs. 668,551 and Rs. 701,603 for the assessment years 2004-05, 2005-06 and 2006-07 respectively raised by the assessing officer (International Tax), the Company has filed appeals with the CIT (Appeals).

Based on the above, the management is of the opinion that the appeals will be allowed in favour of the Company and hence no provision is required for the above.

2) Estimated amounts of contracts remaining to be executed on capital account (net of advances) Rs. 54,185,183 (2010-11: Rs.83,446,000).

4) Contingent liabilities with respect to excise and sales tax matters referred in paragraph 1 (d) above excludes demands aggregating Rs. 107,369,734 for the year 2000 to 2004 relating to inputs used in manufacturing of excisable and as well as exempted goods and cenvat credit of service tax, pending with Central Excise and Service Tax Appellate Tribunal (CESTAT) were set aside and remitted to the relevant authorities for a fresh decision and revision in demand. Consequently amount deposited under protest amounting to Rs. 1,241,379 have been considered good and recoverable and no provision for the same has been considered necessary. Further, till the time demands are received by the Company amounts of contingent liabilities, if any, is not ascertainable.

5 Previous year figures

Till the year ended March 31, 2011 the Company was using pre-revised schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended March 31,2012 the revised schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to confirm to this year's classification. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosure made in the financial statements, particularly presentation of balance sheet.


Mar 31, 2011

1) Contingent liabilities As at As at March 31, 2011 March 31,2010 Rs. Rs.

a) Outstanding bank guarantees and letter of credits 35,724,935 23,117,579

b) Bills and cheques discounted 92,438,167 115,617,470

c) Indemnity bond countersigned by the Company and 24,984,972 24,984,972 given to bank with respect to release of interest on deposit received by group companies

d) Excise & Sales-tax matters:

i) Demand received from Commissioner of Central Excise, 63,494,596 63,494,596

Panchkula on account of misclassification of plain maize starch against which stay has been granted by CESTAT, New Delhi (including penalty of Rs.31,747,298; (2009-10: Rs. 31,747,298) against which an amount of Rs. 507,000 (2009-10: Rs. 507,000) deposited under protest. (Refer Note 4 below)

ii) Haryana Local Area Development Tax levied by the 3,216,191 3,216,191

State Government on the goods received from other state, pending before Supreme Court of India against which an amount of Rs. 3,216,191 (2009-10: Rs. 3,216,191) deposited under protest.

iii)Entry tax levied by the Government of Kerala on 15,133,588 15,133,588

Special Kerosene Oil (SKO), pending before Supreme Court of India against which an amount of Rs. 15,133,588 (2009-10: Rs. 15,133,588) deposited under protest.

e) Income tax matters (Refer Note 3 (c) & (d) below) 40,275,139 106,202,437

f) Claims against the Company not acknowledged as debts (amount to the extent ascertainable) amounts to :

i) Rs. 5,082,186 (2009-10: Rs. 5,058,411) in respect of lease rent on lands acquired on lease for which the case is pending before the Honble High Court of Kerala.

2) Estimated amounts of contracts remaining to be executed on Capital Account (Net of advances) Rs. 83,446,000 (2009-10:^243,780,768).

3) a) Pursuant to an appeal filed with the Commissioner of Income Tax (Appeals), the Company received a favorable order allowing brought forward losses ofRs. 128,079,580 relating to erstwhile Bharat Starch Industries Limited (BSIL) (since merged with the Company w.e.f. 01.04.2001) for the assessment year 1998-99 from the Appellate authorities against which department had filed an appeal and the same has been sent back to the Department for re-assessment.

b) In respect of demand aggregating to Rs. 2,563,710 for the Assessment year 2007-08, raised by the Assesing Officer disallowing certain expenses, the appeal filed before the Commissioner (Appeals), Thiruvanathapuram (Kerala) by the Company has been decided in favour of the Company, though the department has filed an appeal with Income tax appellate tribunal. Hence, no demand exists on date.

c) In respect of demand aggregating to Rs. 38,171,395 (including demand raised towards penalty of Rs. 24,853,455) for the Assessment year 1996-97 raised by the Assessing officer in view of order of Honble High Court of Kerala disallowing certain expenses, a revised petition has been filed by the company with the Honble High Court of Kerala for re-hearing the facts of the case.

d) In respect of demands aggregating to Rs. 733,590, Rs. 668,551 and Rs. 701,603 for the Assessment years 2004-05, 2005-06 and 2006-07 respectively raised by the Assessing officer (International Tax), the Company has filed appeals with the CIT (Appeals).

Based on the above, the management is of the opinion that the appeals will be allowed in favour of the Company and hence no provision is required for the above.

4) Contingent liabilities with respect to excise and sales tax matters referred in Paragraph 1 (d) above excludes demands aggregating Rs. 107,369,734 for the year 2000 to 2004 relating to inputs used in manufacturing of excisable and as well as exempted goods and cenvat credit of service tax, pending with Central Excise and Service Tax Appellate Tribunal (CESTAT) were set aside and remitted to the relevant authorities for a fresh decision and revision in demand. Consequently amount deposited under protest amounting to Rs. 1,241,379 have been considered good and recoverable and no provision for the same has been considered necessary till the time demands are received by the Company amounts of contingent liabilities, if any, is presently not ascertainable.

5) i) Pursuant to the sale cum lease agreement dated 22.05.2008 the Company has acquired land for the purpose of setting up a starch manufacturing plant at Shimoga, Karnataka. The Company has paid an amount of Rs. 53,130,000 as allotment consideration and the land shall be transferred in the name of the Company on a freehold basis at end of 10 years, payment of registration charges, stamp duty at prevailing price upon fulfillment of certain conditions. As per agreement the Land has been transferred on lease basis to Company for the period of 10 years and Company is required to pay lease rent of Rs. 68,410 and maintenance charges of Rs. 99,600 per annum.

6) Segment Information

A. Primary segment reporting (by business segments)

i. Composition of business segments

The Companys business segments are organised as under:

Clay products: Segment manufactures and supplies the clay products to various industries like paper, paint, rubber and fibreglass etc.

Starch products: Segment comprising starches/specialty starches, syrups and modified starches, manufactures and supplies the starch products to various industries like paper, textile, food and pharma etc.

7) Lease Commitments:

The Company has entered into leasing arrangements for office buildings and godown for storage of inventory that are cancelable at the option of the Company. Rent expense on account of cancelable leases for the year ended March 31, 2011 amounts to Rs. 17,133,063 (2009-10; Rs. 15,864,746).

8) Related Party Disclosures

In accordance with the required Accounting Standard (AS-18) on related party disclosures where control exist and where transactions have taken place and description of the relationship as identified and certified by management are as follows:

A. Associates

Enterprises which have significant influence over the Company:

DBH International Private Limited; and Karun Carpets Private Limited

B. Enterprises over which substantial shareholders of the Company and their relatives, have significant influence:

Greaves Cotton Ltd,Premium Transmission Ltd,

Pembrill Industrial & Engineering Co. Ltd,

Greaves Leasing Finance Ltd,

Bharat Projects Pvt Ltd,

Dee Greaves Ltd, Standard Refinery & Distillery Ltd,

Bharat Starch Products Ltd,

Aravali Sports & Cultural Foundation,

DBH Consulting Limited,

DBH Investments Pvt. Ltd.,

Greaves Farymann Diesel GmbH,

Greaves Auto Ltd. And

Greaves Cotton Netherlands B.V.

C. Key Management Personnel & their relatives

Mr. Karan Thapar - Chairman,

Ms. Devika Thapar (Daughter of Mr. Karan Thapar),

Mr. Karam Thapar (Son of Mr. Karan Thapar),

Mr. B M Thapar, Ms. Sulochana Thapar,

Mr. D. Kohli (upto March 31, 2010) ,

Ms. Amita Kohli (Wife of Mr. D. Kohli) (upto March 31, 2010),

Mr. Vikramaditya Kohli (Son of Mr. D. Kohli) (upto March 31, 2010),

Ms. Jasbir Kohli (Mother of Mr. D. Kohli) (upto March 31, 2010),

Mr. Rahul Gupta (Executive Director).

Mr. S.K. Jain (Sr. Vice President Corporate Finance, Accounts & Administration),

Mr. P.S. Saini (Company Secretary & Head Corporate Legal),

9) The Company has dispatched requests to its vendors seeking confirmation under the Micro, Small and Medium Enterprises Act, 2006. However, only few responses have been received so far. Accordingly, information required to be disclosed under the Micro, Small and Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. As represented by the management there are no Micro, Small and Medium enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2011. Listed below are the details of interest due on delayed payments during the year:

I Delayed payments due as at the year end on account of Principal - Rs. Nil (2009-10 - Rs. Nil) and Interest due thereon - Rs. Nil (2009-10 - Rs. Nil)

II Total interest paid on all delayed payments during the year under the provisions of the Act -Rs. Nil (2009-10 -Rs. Nil)

III Interest due on principal amounts paid beyond the due date during the year but without the interest amounts under this Act - * Nil (2009-10 - Rs. 22,244)

IV Interest accrued but not due- Rs. Nil (2009-10 - Rs. Nil)

V Total Interest Due but not paid - Rs. Nil (2009-10 - Rs. 22,244)

10) Previous year figures have been re-grouped/recast, wherever necessary to confirm to the current year classification.


Mar 31, 2010

1) Contingent Liabilities As at As at March 31,2010 March 31,2009 Rs. Rs. a) Outstanding bank guarantees 21,905,159 20,829,249 b) Bills and cheques discounted 115,617,470 74,892,642 c) Indemnity bond countersigned by the Company and 24,984,972 24,984,972 given to bank with respect to release of interest on deposit received by group companies

d) Excise & Sales-tax matters: i) Demand received from Commissioner of Central Excise, 63,494,596 63,494,596 Panchkula on account of misclassification of plain maize starch against which stay has been granted by CESTAT, New Delhi (including penalty of Rs 31,747,298; (2008-09: Rs. 31,747,298) against which an amount of Rs.507,000 (2008-09; Rs. 507,000) deposited under protest. (Refer Note 4 below)

ii) Haryana Local Area Development Tax levied by the 3,216,191 3,216,191 State Government on the goods received from other state ,pending before Supreme Court of India against which an amount of Rs. 3,216,191 (2008-09: Rs. 3,216,191) deposited under protest.

iii) Entry tax levied by the Government of Kerala on 15,133,588 15,133,588 Special Kerosene Oil (SKO), pending before Supreme Court of India against which an amount of Rs. 15,133,588 (2008-09: Rs. 15,133,588) deposited under protest.

e) Income tax matters (Refer Note 3 (d) & (e) below) 106,202,437 103,638,727 f) Claims against the Company not acknowledged as debts amount to the extent ascertainable amounts to :

i) Rs. 5,058,411 (2008-09: Rs 5,010,861) in respect of lease rent on lands acquired on lease for which the case is pending before the Honble High Court of Kerala.

2) Estimated amounts of contracts remaining to be executed on Capital Account (Net of advances) Rs. 243,780,768 (2008-09: Rs. 245,142,155).

3) a) Pursuant to an appeal filed with the Commissioner of Income Tax (Appeals), the Company received a favorable order allowing brought forward losses of Rs. 128,079,580 relating to erstwhile Bharat Starch Industries Limited (BSIL) (since merged with the Company w.e.f. 01.04.2001) for the assessment year 1998-99 from the Appellate authorities against which department had filed an appeal and the same has been sent back to the Department for reassessment.

b) In respect of the claim of loss of Rs. 139,842,989/- of BSIL for the assessment year 2001 -02, Miscellaneous Petition was pending before the Income Tax Appellate Tribunal. During the previous year, the company received a favourable order allowing claim of the said losses.

c) In respect of demands aggregating to Rs. 48,420,562 and Rs. 19,834,560 for the Assessment year 2003-04 and 2005-06 respectively raised by the Assessing officer due to pending assessment of losses of amalgamating company erstwhile BSIL, the CIT (Appeals) has directed the Assessing officer to re-decide in view of availability of assessed losses of amalgamating company erstwhile BSIL. In view of availability of losses of BSIL as per (a) and (b) above the demand does not exist against the Company. The Company has deposited under protest Rs. 48,420,562 and Rs. 2,000,000 for the Assesment year 2003-04 and 2005-06 respectively.

d) In respect of demands aggregating to Rs. 103,638,727 for the Assessment years 2002-03, 2004-05 and 2006-07 raised by the Assessing officer disallowing the losses of amalgamating company erstwhile BSIL, the appeals have been filed before the Commissioner (Appeals) , Thiruvananthapuram (Kerala).

e) In respect of demands aggregating Rs. 2,563,710 for the Assessment year 2007-08 raised by the Assessing officer disallowing certain expenses, the appeals have been filed before the Commissioner (Appeals), Thiruvananthapuram (Kerala).

Based on the opinion obtained by the Company from its tax advisor, the appeals will be allowed in favour of the Company and hence no provision is required for the above.

4) Contingent liabilities with respect to Excise and Sales Tax matters for the year 2008-09 referred in Paragraph 1 (d) above excludes demands aggregating Rs. 107,369,734 relating to inputs used in manufacturing of excisable and as well as exempted goods and Cenvat Credit of Service Tax, pending with Central Excise and Service Tax Appellate Tribunal (CESTAT) were set aside and remitted to the relevant authorities for a fresh decision and revision in demand. Consequently amount deposited under protest amounting to Rs. 1,241,379 have been considered good and recoverable and no provision for the same has been considered necessary till the time demands are received by the Company amounts of contingent liabilities, if any, is presently not ascertainable.

5) i) Pursuant to the Sale cum Lease agreement dated 22.05.2008 the Company has acquired land for the purpose of setting up a Starch manufacturing plant at Shimoga, Karnataka with an installed capacity of 500 TPD. The Company has paid an amount of Rs. 531 lacs as allotment consideration and the land shall be transferred in the name of the Company on a freehold basis at end of 10 years, payment of registration charges, stamp duty at prevailing price upon fulfillment of certain conditions. As per agreement the Land has been transferred on lease basis to Company for the period of 10 years and Company is required to pay lease rent of Rs. 68,410 and maintenance charges of Rs. 99,600 per annum.

iii) This project was put on hold due to economic slowdown during the year 2008-09 and is under continuous review of the Company and may be reviewed during the next financial year in view of improved economic conditions.

6) Segment Information

A. Primary Segment Reporting (by Business Segments)

i. Composition of Business Segments

The Companys business segments are organised as under:

Clay Products: Segment manufactures and supplies the clay products to various industries like paper, paint, rubber and fibreglass etc.

Starch Products : Segment comprising starches/specialty starches, syrups and modified starches, manufactures and supplies the starch products to various industries like paper, textile, food and pharma etc.

7) Lease Commitments:

The Company has entered into leasing arrangements for office buildings and godown for storage of inventory that are cancelable at the option of the company. Rent expense on account of cancelable leases for the year ended March 31, 2010 amount to Rs. 15,864,746 (2008-09; Rs. 16,489,965).

8) Related Party Disclosures

In accordance with the required Accounting Standard (AS-18) on related party disclosures where control exist and where transactions have taken place and description of the relationship as identified and certified by management are as follows:

A. Associates

Enterprises which have significant influence over the Company:

DBH International Private Limited and Karun Carpets Private Limited

B. Enterprises over which substantial shareholders of the Company and their relatives, have significant influence:

Greaves Cotton Ltd, Crompton Greaves Limited (upto March 31, 2009), Premium Energy & Transmission Ltd, Solaris Holdings Ltd. (upto March 31, 2009), Solaris Bio-chemicals Ltd. (upto March 31, 2009), Pembrill Industrial & Engineering Co. Ltd, Greaves Leasing Finance Ltd, Bharat Projects Pvt Ltd, Dee Greaves Ltd, KCT Chemicals & Electricals Ltd. (upto March 31, 2009), Standard Refinery & Distillery Ltd, Bharat Starch Products Ltd, Aravali Sports & Cultural Foundation, Karam Chand Thapar & Bros. Ltd. (upto March 31, 2009), DBH Consulting Limited, DBH Investments Pvt. Ltd., Greaves Farymann Diesel GmbH, Greaves Auto Limited and Greaves Cotton Netherlands B.V.

C. Key Management Personnel & their relatives

Mr Karan Thapar - Chairman, Ms Devika Thapar (Daughter of Mr Karan Thapar), Mr Karam Thapar (Son of Mr Karan Thapar), Mr. B M Thapar, Ms. Sulochna Thapar, Mr D Kohli, Ms. Amita Kohli (Wife of Mr D Kohli), Mr Vikramaditya Kohli (Son of Mr D Kohli), Ms. Jasbir Kohli (Mother of Mr D Kohli), Mr S K Jain, (Vice President Corporate Finance, Accounts and Administration), Mr P S Saini, (Company Secretary and Head Corporate Legal) Mr. Rahul Gupta, (Executive Director), Mr. G. S. Nair (up to March 31, 2009).

9) Employee benefits

During the year, the Company has recognized the following amounts in the Profit and Loss Account.

Defined Benefit Plans

Company has defined benefit plan in terms of gratuity

Other long term Employee Benefits Compensated Absences

During the year the company has recognised a charge of Rs. 638,507 (2008-09 - Rs. 4,883,541)

10) The Company has dispatched requests to its Vendors seeking confirmation under the Micro, Small and Medium Enterprises Act, 2006. However, only few responses have been received so far. Accordingly, information required to be disclosed under the Micro, Small and Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. As represented by the management there are no Micro, Small and Medium enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at March 31,2010. Listed below are the details of interest due on delayed payments during the year:

I Delayed payments due as at the year end on account of Principal - Rs. Nil (2008 - 09 - Rs. Nil) and Interest due thereon - Rs. Nil (2008-09 Rs. Nil)

II Total interest paid on all delayed payments during the year under the provisions of the Act - Rs. Nil (2008-09 Rs. Nil)

III Interest due on principal amounts paid beyond the due date during the year but without the interest amounts under this Act - Rs. 22, 244 (2008-09 - Rs. Nil)

IV Interest accrued but not due- Rs. Nil (2008-09 - Rs. Nil)

V Total Interest Due but not paid - Rs. 22,244 (2008-09 - Rs.Nil)

11) Previous year figures have been re-grouped/recast, wherever necessary to confirm to the current year classification.

 
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