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Notes to Accounts of Century Textiles & Industries Ltd.

Mar 31, 2014

1. (a) Trade payables include (i) Rs. Nil (31.03.2013 - Rs. 0.41 Crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act 2006 (MSMED Act); and (ii) Rs. 503.53 Crore (31.03.2013 - Rs. 359.17 Crore) due to other creditors.

(b) Trade payables include acceptances of Rs. 138.62 Crore (31.03.2013 Rs. 107.12 Crore).

(c) The amount due to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 CMSMED Acf) towards principal Rs. Nil (31.03.2013 - Rs. 0.41 Crore). There are no other amounts paid / payable towards interest / principal under the MSMED Act.

(d) The above information has been provided as available with the Company to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSMED Act.

2. Provision for disputed matters in respect of known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies / claims, the actual outflow on which will depend on the outcome of the respective proceedings.

3. CONTINGENT LIABILITIES NOT PROVIDED FOR

31.03.2014 31.03.2013 (Rs. in Crore) (Rs. in Crore)

(a) (i) Claims against the Company not acknowledged as debts in respect of:

- Custom Duty and Excise Duty 14.77 18.53

- Sales Tax and Entry Tax 111.46 105.32

- Power Charges 25.94 12.48

- Royalty 345.32 310.98

- Others 29.85 13.88

(ii) Claims not acknowledged as debts jointly with other members of "Business Consortium of Companies" in which the Company had an interest (proportionate) 20.84 20.02

(b) Disputed income tax matters under appeal 15.65 14.26

(c) Registration and Road Tax on Dumper of Cement Division Amount not determinable

(d) Liability on account of Jute packaging obligation upto 30th June, 1997 under the Jute Packaging Materials (Compulsory use in Packing Commodities) Act, 1987 - Amount not Determinable

(e) The Competition Commission of India (CCI) has imposed a penalty of Rs. 274.02 Crore on the Company based on the complaint filed by the Builders Association of India alleging cartelisation by the Company along with other cement manufacturing companies. Based on the legal opinion, the Company believes that it has a good case and has filed an appeal against the order before the Competition Appellate Tribunal (COMPAT). Accordingly no provision has been made in the accounts. During the year, the Company was directed to deposit 10% of this demand pending disposal of the appeal by COMPAT. Consequently, an amount of Rs. 27.40 Crore was deposited by the Company as Fixed Deposit with its bankers in the name of the "Registrar, Competition Appellate Tribunal A/c Century Textiles and Industries Ltd." 274.02 274.02

The amounts shown in respect of item No.32 (a) to (e) represent the best possible estimates arrived at on the basis of available information. The uncertainties are dependent on the outcome of the different legal processes. The timing of future cash flows will be determinable only on receipt of judgements / decisions pending with various forums / authorities. The Company does not expect any reimbursements against the above.

(f) Guarantees given by the Company''s bankers 13.29 22.48 Guarantees have been given by the Company''s bankers in the normal course of business and are not expected to result in any liability on the Company.

(g) Undertaking given by the Company under confessional duty / exemption scheme to 553.03 632.08 government authorities (net of obligation fulfilled) 4. Revenue expenditure on research and development activities relating to Government recognised in-house research and development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs. 0.82 Crore (2012-2013 Rs. 0.74 Crore). No capital expenditure on research and development has been incurred during the year (2012-13 Rs. Nil).

5. RELATED PARTY INFORMATION A Relationships:

(a) Where significant influence exists :

(i) M/s Pilani Investment and Industries Corporation Limited

(ii) M/s Kesoram Insurance Broking Services Limited

(iii) M/s Vasavadatta Services Limited

(iv) M/s Industry House Limited

(v) M/s Bander Coal Company Private Limited

(b) Key Management Personnel :

Shri B.L. Jain (Whole-time Director)

(c) Other Related Parties :

(1) Shri B.K. Birla

(2) M/s Kesoram Industries Limited

(3) M/s Century Enka Limited

(4) M/s Jayshree Tea & Industries Limited

Note : The parties listed under 1(c) above, are strictly not "related parties'' as per the requirements of AS-18, but are being included herein for making the Financial Statements more transparent.

C. Other Disclosures

1. Segments have been identified taking into account the organisation structure as well as the differing risks and returns.

2. The Company has disclosed business segment as the primary segment.

3. Composition of the business segments

Name of the Segment Types of products / services Comprises of:

a. Textiles Yarn, cloth and denim cloth, viscose filament yarn and tyre yarn.

b. Pulp and Paper Pulp, writing & printing paper, tissue paper and multilayer packaging board.

c. Cement Cement and clinker.

d. Others Salt works, chemicals, floriculture and real estate.

4. Inter segment revenues are recognised at works / factory costs of the transferor unit / division or at sales price.

5. The Segment revenue, results, assets and liabilities include the respective amounts identifiable to each segment and amounts allocated on a reasonable basis.

The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

Provident Fund Liability :

In case of certain employees, the Provident fund contribution is made to trusts administered by the Company. In terms of guidance note Issued by the Institute of Actuaries of India, the Actuary has provided a valuation of Provident fund liability based on the assumptions listed and determined that there is no shortfall as at 31st March, 2014.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Remaining term of maturity - 9 to 18 years

Expected guaranteed interest rate - 8.75%

Discount rate for the remaining term to maturity of interest portfolio - 9.10%

6. The Company has created a debenture redemption reserve to the extent of available profits for the year, for the purpose of redemption of its secured redeemable non convertible debentures.

7. Unclaimed fixed deposits amounting to Rs. 22,500 [31.03.2013 (Rs. 22,500)] and Rs. 3,150 [31.03.2013 (Rs. 3,150)] being interest accrued and due thereon remain unpaid in view of the internal disputes between the claimants which has been referred to the Court whose decision is awaited.

8. Figures less than Rs. 50,000 have been shown at actuals in brackets, since the figures are rounded off to the nearest lac.

9. prevjOUS year''s figures have been regrouped / recast wherever necessary.

10- Significant Accounting Policies followed by the Company are as stated in the statement annexed to this Schedule as Annexure I.


Mar 31, 2013

1. (a) Trade payables include (i) Rs. 0.41 Crore (31.03.2012 - Rs.1.82 Crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs. 359.46 Crore (31.03.2012 - Rs. 305.73 Crore) due to other creditors.

(b) The amount due to suppliers registered under Micro, Small and Medium Enterprise Development Act, 2006 (''MSMED Act''), based on information available with the Company.

2. Provision for disputed matters in respect of known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies / claims, the actual outflow on which will depend on the outcome of the respective proceedings.

3. Revenue expenditure on research and development activities relating to Government recognised in-house research and development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs.0.74 Crore (2011-2012 Rs. 0.60 Crore). No capital expenditure on research and development has been incurred during the year (2011-12 Rs.Nil)

4. RELATED PARTY INFORMATION 1 Relationships :

(a) Where significant influence exists :

(i) M/s Pilani Investment and Industries Corporation Limited

(ii) M/s Kesoram Insurance Broking Services Limited

(iii) M/s Vasavadatta Services Limited

(iv) M/s Industry House Limited

(v) M/s Bander Coal Company Private Limited

(b) Key Management Personnel :

Shri B.L. Jain (Whole-time Director)

(c) Other Related Parties :

(1) Shri B.K. Birla

(2) M/s Kesoram Industries Limited

(3) M/s Century Enka Limited

(4) M/s Jayshree Tea & Industries Limited

Note : The parties listed under 1(c) above, are strictly not ''related parties'' as per the requirements of AS-18, but are being included herein for making the Financial Statements more transparent.

The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

Provident Fund Liability :

In case of certain employees, the Provident fund contribution is made to trusts administered by the Company. In terms of guidance note Issued by the Institute of Actuaries of India, the Actuary has provided a valuation of Provident fund liability based on the assumptions listed and determined that there is no shortfall as at 31st March, 2013.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Remaining term of maturity - 11 to 18 years

Expected guaranteed interest rate - 8.5%

Discount rate for the remaining term to maturity of interest portfolio - 8.02%

5. In view of loss during the year, the Company has not created debenture redemption reserve in respect of secured redeemable non convertible debentures.

6. Unclaimed fixed deposits amounting to Rs.22,500 [31.3.2012 Rs.22,500] and Rs. 3150 [31.3.2012 Rs.3,150] being interest accrued and due thereon remain unpaid in view of the internal disputes between the claimants which has been referred to the Court whose decision is awaited.

7. Trade payable includes acceptances of Rs. 107.12 Crore (31.03.2012 Rs. 72.39 Crore).

8. Figures less than Rs.50,000 have been shown at actuals in brackets, since the figures are rounded off to the nearest lac.

9. Previous year''s figures have been regrouped / recast wherever necessary.

10. Significant Accounting Policies followed by the Company are as stated in the statement annexed as Annexure I.


Mar 31, 2012

1 Loans covered in S.No. 1 to 6 and 11 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile (Birla Century), Rayon, Cement, Pulp and paper divisions and phase I of Real Estate Development (excluding lease hold land of Birla Century and Pulp and Paper Divisions).

2 Loans covered in S.No. 7 to 10 above :

First pari passu charge over the entire fixed assets, present and future of the Company's Textile (Birla Century), Rayon, Cement, Pulp and Paper Divisions and phase I of Real Estate Development (excluding leasehold land at Birla Century, Pulp & Paper, Sonar Bangla Cement and Maihar Cement Unit I & II Divisions).

3 Loans covered in S.No. 12 and 18 to 19 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile, Rayon, Cement and Pulp & Paper Divisions and phase I of Real Estate Development (excluding the lease hold land of the Birla Century, Pulp and Paper and Maihar Cement I & II Divisions).

4 Loans covered in S.No. 13 to 17 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile (Birla Century), Rayon, Cement and Pulp & Paper Divisions and phase I of Real Estate Development of the Company including those acquired/ to be acquired for the new project (excluding the lease hold land of Birla Century, Pulp & Paper & Sonar Bangla Cement Divisions).

5 Loans covered in S.No. 20 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile, Rayon, Cement and Pulp & Paper Divisions and phase I of Real Estate Development including those acquired/to be acquired for the new project (excluding the lease hold land of all Divisions).

6 Loans covered in S.No. 21 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile (Birla Century), Rayon, Cement & Pulp and Paper Divisions and phase I of Real Estate Development including expansion project of Denim Division (excluding the lease hold land of the Pulp and Paper Division).

7 Loans covered in S.No. 22 to 31 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile (Birla Century), Rayon, Cement and Pulp & Paper Divisions and phase I of Real Estate Development including those acquired/to be acquired for the new project (excluding the lease hold land of Pulp & Paper Division).

The Board has recommended dividend @ Rs. 5.50 (Rupees five and paise fifty only) per equity share of Rs. 10 each on 9.30.45.680 equity shares for the year ended 31st March, 2012 (Previous year Rs. 5.50 per equity share of Rs. 10 each on 9.30.45.680 equity shares.)

Nature of Security

(i) Working capital loans from banks are secured against the hypothecation of the whole of the Company's raw materials, finished goods, material-in-process, stores and spares, present and future book debts, receivables, etc. and second charge created over movable and immovable fixed assets of Company's Divisions viz. Birla Century, Cement, Pulp & Paper and Rayon Divisions (excluding leasehold land at Birla Century, Pulp & Paper and Sonar Bangla Cement Division) and also a portion of the land at Worli, Mumbai.

(ii) The charge created as per para (i) also extends to the guarantees given by the banks on behalf of the Company, aggregating Rs. 228.64 Crore (31.3.2011 Rs. 175.78 Crore).

Note:

(i) Unclaimed dividend amounting to Rs.0.03 Crore (31.3.2011 Rs. 0.03 Crore) is pending on account of litigation among claimants / notices from the tax recovery officer.

(ii) There is no amount due and outstanding to be credited to Investors Education and Protection Fund as at the balance sheet date other than cases under litigation among claimants regarding beneficial ownership.

(a) Includes Rs. 5.20 Crore (Previous year Rs. 5.44 Crore) for which sale and conveyance deeds and other transfer formalities are yet to be executed. Stamp duty and other incidental expenses will be capitalised on execution of the same.

(b) Includes premises on ownership basis Rs. 2.67 Crore (Previous year Rs. 2.67 Crore), leasehold premises Rs. O.OlCrore (Previous year Rs. 0.01 Crore) and cost of shares in co-operative societies (Rs. 750/-) [Previous year (Rs.750/-)].

(c) Wagons acquired under "Own Your Wagon" scheme have been given on lease to railways.

(d) Land Development at Worli, Mumbai - Construction of two commercial building with car parking spaces etc. has commenced on the Company's freehold land at Worli, Mumbai as permitted by the relevant regulations. The buildings will cover a constructed area of about 13 lac square feet and are expected to be completed by late 2012-13.

(e) Includes adjustment for Revaluation Reserve (Refer Note 44)

(f) i) 44 hectares of land were acquired at Manikgarh Cement Division and were subsequently surrendered to the Forest Department, Government of India, pursuant to the provisions of the Forest Conservation Act, 1980. The amount of compensation payable will be accounted for when determined by the Collector.

ii) In respect of Manikgarh Cement Division, Land measuring 41.20 hectares occupied by the Forest Department and disputed by the Company was adjudicated by the Collector and the Divisional Commissioner (Appeals) in favour of the Company. The Government of Maharashtra on a reference made by the Forest Department directed the Collector for a fresh demarcation of the site boundaries and has also directed the Forest Department to refund the compensation paid by the Company along with interest for the land falling within their boundary. The Revisional Authority has since observed that approx. 17 hectares of land falls within the boundaries of the reserved forest. The Company has filed a writ petition before the Bombay High Court, Nagpur bench against the said order. Adjustments, if any will be made, in the year in which the matter is finally settled.

8 (a) Trade payables include (i) Rs. 1.82 Crore (31.03.2011 - Rs.0.95 Crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs. 309.85 Crore (31.03.2011 - Rs. 410.79 Crore) due to other creditors.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

8.Provision for disputed matters in respect of known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies / claims, the actual outflow on which will depend on the outcome of the respective proceedings.

10. Contingent Liabilities not provided for

31.3.2012 31.3.2011 (Rs.in Crore) (Rs. in Crore)

(a) (i) Claims against the Company not acknowledged as debts in respect of :

- Custom Duty and Excise Duty 17.98 15.17

- Sales Tax and Entry Tax 94.46 40.49

- Power Charges 15.10 12.48

- Royalty 281.52 202.93

- Others 17.57 33.10

(ii) Claims not acknowledged as debts jointly with other members of "Business Consortium of Companies" in which the Company had an interest (proportionate) 19.19 18.59

(b) Disputed income tax matters under appeal 13.18 11.71

(c) Registration and Road Tax on Dumper of Cement Division Amount not determinable

(d) Liability on account of Jute packaging obligation upto 30th June, 1997 under the Jute Packaging Materials (Compulsory use in Packing Commodities) Act,1987 - Amount not determinable

(Future cash flows in respect of item No.32 (a) to (d) above are determinable only on receipt of judgments/decisions pending with various forums/authorities.)

e) Guarantees given by the Company's bankers 2.41 4.49 Guarantees have been given by the Company's bankers in the normal course of business and are not expected to result in any liability on the Company

(f) Undertaking given by the company under concessional duty/exemption scheme to government authorities (net of obligation fulfilled) 696.79 746.42

11. Revenue expenditure on research and development activities relating to Government recognised in-house research and development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs.0.60 Crore (2010-2011 Rs. 0.57 Crore). No capital expenditure on research and development has been incurred during the year (2010-11 Rs.Nil)

12. RELATED PARTY INFORMATION 1 Relationships :

(a) Where significant influence exists :

(i) Pilani Investment and Industries Corporation Limited

(ii) Kesoram Insurance Broking Services Limited

(iii) Vasavadatta Services Limited

(iv) Industry House Limited

(v) Bander Coal Company Private Limited

(b) Key Management Personnel :

Shri B.L. Jain (Whole-time Director)

(c) Other Related Parties :

(1) Shri B.K. Birla

(2) Kesoram Industries Ltd.

(3) Century Enka Ltd.

(4) Jayshree Tea & Industries Ltd.

Note : The parties listed under 1(c) above, are strictly not 'related parties' as per the requirements of AS-18, but are being included herein for making the Financial Statements more transparent.

The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

Provident Fund Liability :

In case of certain employees, the Provident fund contribution is made to trusts administered by the Company. In terms of guidance note Issued by the Institute of Actuaries of India, the Actuary has provided a valuation of Provident fund liability based on the assumptions listed and determined that there is no shortfall as at 31st March, 2012.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Remaining term of maturity - 11 to 18 years Expected guaranteed interest rate - 8.25%

Discount rate for the remaining term to maturity of interest portfolio - 8.50%

13. Remuneration has been paid to the whole time director for the year ended 31st March, 2012 in terms of the resolution passed by the shareholders at the Annual General Meeting of the Company held on 28th July, 2009. In the absence of adequate profits for the said year, the remuneration paid, in accordance with the provisions of Revised Schedule XIII to the Companies Act, 1956, is proposed to be ratified at the ensuing Annual General Meeting of the Company.

14. Unclaimed fixed deposits amounting to ( Rs.22,500 ) [31.3.2011 (Rs.22,500)] and (Rs. 3150) [31.3.2011 (Rs.3,150)] being interest accrued and due thereon remain unpaid in view of the internal disputes between the claimants which has been referred to the Court whose decision is awaited.

15. The Company had, during the year 1983, carried out a revaluation of certain assets viz. Land, Buildings and Plant and Machinery, at some of its divisions, the residual value of which, as at 31st March, 2012, aggregate Rs.16.73 Crore. Since the revalued amounts do not reflect values which are relevant at present, the Board of Directors, at their meeting dated 2nd May, 2012, has decided to reverse the aforesaid amount which would result in these assets being stated at their historical cost less accumulated depreciation. The above accounting treatment does not have any impact on the Statement of Profit and Loss for the current or subsequent years.

16. Figures less than Rs.50,000 have been shown at actuals in brackets, since the figures are rounded off to the nearest lac.

17. The Financial statements for the year ended 31st March, 2011 had been prepared as per the applicable pre- revised Schedule - VI to the Companies Act 1956. Consequent to the notification under the Companies Act 1956 , the financial statements for the year ended 31st March, 2012 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to confirm to this year's classification.

18. Significant Accounting Policies followed by the Company are as stated in the statement annexed as Annexure I.


Mar 31, 2011

1. Secured Loans :

(a) Rupee term loans from banks are secured by first pari passu mortgage / hypothecation of all the immovable / movable fixed assets, present and future of the Companys Birla Centur/, Cement, Pulp & Paper and Rayon Divisions (excluding Leasehold Land at Birla Century, Pulp & Paper and Soner Bangla Cement Division ) and also a portion of land at Worli, Mumbai and second charge created in favour of certain term lenders on the current assets of the Company. Loans for the Companys Century Denim Division are also secured by mortgage / hypothecation of all the immovable / movable fixed assets of the Denim Division (Due within one year Rs. 385.17 Crore).

(b) Pre-shipment, Post-shipment, Cash Credits, Working Capital Demand Loans and Export Bills Discounting facilities are secured against the hypothecation of the whole of the Companys Raw Materials, Finished Goods, Material in process, Stores and Spares, present and future Book Debts, Receivables, etc. and second charge created over movable and immovable fixed assets Companys divisions viz. Birla Century, Cement, Pulp & Paper and Rayon Divisions ( excluding Leasehold Land at Birla Century, Pulp & Paper and Sonar Bangla Cement division) and also a portions of the land at Worli, Mumbai.

(c) The charge created as per para (b) also extends to the guarantees given by the banks on behalf of the Company, aggregating Rs. 175.78 Crore (31.3.2010 Rs. 149.68 Crore).

2. (a) 44 hectares of land were acquired at Manikgarh Cement Division and were subsequently surrendered to the Forest Department, Government of India, pursuant to the provisions of the Forest Conservation Act, 1980. The amount of compensation payable will be accounted for when determined by the Collector.

(b) In respect of Manikgarh Cement Division, Land measuring 41.20 hectares occupied by the Forest Department and disputed by the Company was adjudicated by the Collector and the Divisional Commissioner (Appeals) in favour of the Company. The Government of Maharashtra on a reference made by the Forest Department directed the Collector for a fresh demarcation of the site boundaries and has also directed the Forest Department to refund the compensation paid by the Company along with interest for the land falling within their boundary. The Revisional Authority has since observed that approx. 17 hectares of land falls within the boundaries of the reserved forest. The Company has filed a writ petition before the Bombay High Court, Nagpur bench against the said order. Adjustments, if any will be made, in the year in which the matter is finally settled.

3. (a) Sundry Creditors in Schedule 8 to the Accounts include (i) Rs. 0.95 Crore (31.03.2010 - Rs. 0.20 Crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs. 866.40 Crore (31.03.2010 - Rs. 794.68 Crore) due to other creditors.

(b) No interest is paid / payable during the year to any enterprise registered under the MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

4. (a) Unclaimed Fixed deposits amounting to (Rs. 22500) [31.3.2010 (Rs. 22500)] and (Rs. 3150) [31.3.2010 (Rs.3150)] being interest accrued and due thereon remain unpaid in view of the internal disputes between the claimants which has been referred to the Court whose decision is awaited.

(b) Unclaimed Dividends amounting to Rs. 0.03 Crore (31.3.2010 Rs. 0.02 Crore) is pending on account of litigation among claimants / Notices from Tax Recovery Officer.

31.3.2011 31.3.2010

(Rs.in Crore) (Rs. In Crore)

5. Contingent Liabilities not

provided for :

(a) Guarantees given by Companys

bankers [Guarantees have been given

by the Companys bankers in the normal

course of business and are not expected

to result in any liability on the 4.49 1.89

Company)

8. Sales are net of cash discounts Rs. 45.29 Crore (2009-2010 Rs. 45.11 Crore).

11. LAND DEVELOPMENT AT WORLI, MUMBAI:

Construction of two commercial buildings with car parking spaces etc. has commenced on the Companys freehold land at Worli, Mumbai as permitted by the relevant regulations. The buildings will cover a constructed area of about 13 lac square feet and are expected to be completed by late 2011-12.

12. The Company has, retrospectively, with effect from 1st April, 2007, opted to recognise exchange differences arising on reporting of long term foreign currency monetary items in line with paragraph 46 of Accounting Standard 11 inserted vide Notification No. GSR 225E dated 31st March, 2009 as per Companies (Accounting Standards) Amendment Rules, 2009.

Pursuant to the above, the effect of exchange differences on long term foreign currency monetary items, so far as they relate to acquisition of depreciable capital assets, have been adjusted to the cost of such assets and depreciated over their remaining useful lives. Accordingly net exchange gain relating to the financial year 2010-2011 amounting to Rs. Nil (Previous year Rs. 0.73 Crore), has been adjusted to the cost of fixed assets.

There are no long term foreign currency monetary items which require exchange differences to be amortised.

13. Revenue expenditure on Research and Development activities relating to Government recognised in-house Research and Development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs. 0.57 Crore (2009-2010 Rs. 0.48 Crore). No Capital expenditure on Research and Development has been incurred during the year.

C. Other Disclosures

1. Segments have been identified in line with the Accounting Standard, AS-17 "Segment Reporting" (AS-17), taking into account the organisation structure as well as the differing risks and returns.

2. Company has disclosed Business Segment as the primary segment.

3. Composition of the Business Segment.

Name of the Segment Types of products / services comprises of:

a. Textiles Yarn, Cloth and Denim Cloth, Viscose Filament

Yarn and Tyre Yarn.

b. Pulp and Paper Pulp, Writing & Printing paper, Tissue paper,

Multilayer packaging Board and Fibre line.

c. Cement Cement and Clinker.

d. Others Salt Works, Chemicals, Floriculture

and Real Estate.

4. Inter segment revenues are recognised at works / factory costs of the transferor unit / division or at Sales Price.

5. The Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each segment and amounts allocated on a reasonable basis.

24. Sundry Creditors include amounts provided in respect of known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies / claims, the actual outflow on which will depend on the outcome of the respective proceedings.

27. Figures less than Rs.50000 have been shown at actuals in brackets, since the figures are rounded off to the nearest lac.

28. Previous years figures have been regrouped/recast wherever necessary.


Mar 31, 2010

1. Secured Loans:

(a) Sales Tax Interest Free Loan from Madhya Pradesh Audyogik Vikas Nigam is secured by hypothecation and mortgage on the movable and immovable properties of Century Cement at Raipur and Maihar Cement at Maihar, present and future and such charge to remain subsequent to the charges created / to be created by the Company in favour of Rupee/ Foreign Currency Term Loans from Banks. (Due within one year Rs. 0.01 Crore).

(b) Rupee loans from Banks are secured / to be secured by first pari passu mortgage / hypothecation of all the immovable / movable fixed assets, present and future, of the Companys Birla Century, Cement, Pulp & Paper (excluding leasehold land) and Rayon Divisions and second charge created / to be created in favour of certain term lenders on the current assets of the Company. Loans for the Companys Century Denim Division are also secured by mortgage / hypothecation of all the immovable / movable fixed assets of the Denim Division. Short Term Rupee Loan is secured by way of second and subservient charge on movable current assets of the Company (Due within one year Rs. 394.56 Crore).

(c) Pre-shipment, Post-shipment, Cash Credits, Working Capital Demand Loans and Export Bills Discounting facilities are secured against the hypothecation of the whole of the Companys Raw Materials, Finished Goods, Materials- in-process, Stores and Spares, present and future Book Debts, Receivables, etc. and second charge created / to be created over movable and immovable fixed assets of Birla Century, Cement, Pulp & Paper (excluding leasehold land) and Rayon Divisions of the Company. Inland Bills discounting facilities from Banks are secured against Railway Receipts, Lorry Receipts, etc.

(d) The charge by way of hypothecation of Raw Materials, Finished and Semi-finished goods and Stores and Spares in favour of banks, also extends to the guarantees given by the banks on behalf of the Company, aggregating Rs. 149.68 Crore (31.3.2009 Rs. 125.70 Crore).

2. (a) 44 hectares of land were acquired at Manikgarh Cement Division and were subsequently surrendered to the Forest Department, Government of India, pursuant to the provisions of the Forest Conservation Act, 1980. The amount of compensation payable will be accounted for when determined by the Collector.

(b) In respect of Manikgarh Cement Division, Land measuring 41.20 hectares occupied by the Forest Department and disputed by the Company was adjudicated by the Collector and the Divisional Commissioner (Appeals) in favour of the Company. The Government of Maharashtra on a reference made by the Forest Department directed the Collector for a fresh demarcation of the site boundaries and has also directed the Forest Department to refund the compensation paid by the Company along with interest for the land falling within their boundary. The Revisional Authority has since observed that approx. 17 hectares of land falls within the boundaries of the reserved forest. The Company has filed a writ petition before the Bombay High Court, Nagpur bench against the said order. Adjustments, if any will be made, in the year in which the matter is finally settled.

3. (a) Sundry Creditors in Schedule 8 to the Accounts include (i) Rs.0.20 Crore (31.3.2009 - Rs.0.02 Crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs.807.23 Crore (31.3.2009- Rs. 673.30 Crore) due to other creditors.

(b) No interest is paid / payable during the year to any enterprise registered under the MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

4. (a) Unclaimed Fixed deposits amounting to (Rs.22,500) [31.3.2009 (Rs. 22,500)] ant (Rs. 3,150) [31.3.2009

(Rs. 3,150)] being interest accrued and due thereon remain unpaid in view of the inte nal disputes between the claimants which has been referred to the Court whose decision is awaited.

(b) Unclaimed Dividends amounting to Rs.0.02 Crore (31.3.2009 Rs. 0.02 Crore) is pendi g on account of litigation among claimants / Notices from Tax Recovery Officer.

31.3.2010 31.3.2009 (Rs, in Crore) (Rs. In Crore) 5. Contingent Liabilities not provided for: -- --

(a) Guarantees given by the Companys bankers

[Guarantees have been given by the Companys bankers in the normal course of business and are not expected to result in any liability on the Company) 1.89 1.89

(b) (i) Claims against the Company not acknowledged as debts in respect of:

- Custom Duty and Excise Duty 37.89 24.24

- Sales Tax and Entry Tax 35.96 28.78

- Power Charges 23.72 276.41

- Royalty 168.80 143.31

- Others 18.60 36.07

(ii) Claims against members of a "Business Consortium of Companies" in which the Company had an interest not acknowledged as debts. (proportionate) 17.48 17.19

(c) Registration and Road Tax on Dumper of the Cement Division Amount not determinable

(d) Disputed tax matters in appeal 2.81 0.46

(e) Liability on account of Jute packaging obligation upto 30th June, 1997 under the Jute Packaging Materials (Compulsory use in Packing Commodities) Act, 1987 Amount not determinable

Note : Item No.5(b) to 5(e)

(The Company has taken legal and other steps necessary to protect its position in respect of these claims, which based on legal advice are not sustainable. It is not possible to make any further determination of the liabilities which may arise or the amounts which may be refundable in these respects).

6. Sales are net of cash discounts Rs.45.11 Crore (2008-2009 Rs. 28.91 Crore).

7. The arrears of depreciation for the accounting years 1999-2000 and 2000-2001 in respect of assets of certain divisions have, as a matter of prudence and in accordance with relevant accounting standards, supported by a legal opinion, been charged off over two accounting years viz. 2007-2008 and 2008-2009.

8. The Company has recognised exchange differences arising on long term foreign currency monetary items in line with Accounting Standard 11 inserted vide Notification No. GSR 225E dated 31st March, 2009 as per Companies (Accounting Standards) Amendment Rules, 2009.

Pursuant to the above, the effect of exchange differences on long term foreign currency monetary items, so far as they relate to acquisition of depreciable capital assets, have been adjusted to the cost of such assets and depreciated over their remaining useful lives. Accordingly net exchange gain relating to the financial year 2009-2010 amounting to Rs. 0.73 Crore, has been adjusted to the cost of fixed assets.

There are no long term foreign currency monetary items which require exchange differences to be amortised.

9. Revenue expenditure on Reasearch and Development activities relating to Government recognised in-house Reasearch and Development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs. 0.48 Crore (2008-2009 Rs. 0.51 Crore). No Capital expenditure on Research and Development has been incurred during the year.

10. Related Party Information

1 Relationships:

(a) Where significant influence exists :

(i) M/s Pilani Investment and Industries Corporation Limited.

(ii) M/s Kesoram Insurance Broking Services Limited.

(iii) M/s Vasavadatta Services Limited.

(iv) M/s Industry House Limited

(v) M/s Bander Coal Company Private Limited

(b) Key Management Personnel :

Shri B.L. Jain (Whole-time Director)

(c) Other Related Parties : (i) Shri B.K. Birla

(ii) M/s Kesoram Industries Ltd.

(iii) M/s Century Enka Ltd.

(iv) M/s Jayshree Tea & Industries Ltd.

NOTES : (i) The parties listed under 1(c) above, are strictly not "related parties as per the requirements of AS-18, but are being included herein for making the Financial Statements more transparent.

(ii) Related party relationship is as identified by the Company and relied upon by the Auditors.

11. Sundry Creditors include amounts provided in respect of known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies / claims, the actual outflow on which will depend on the outcome of the respective proceedings.

12. Figures less than Rs.50,000 have been shown at actuals in brackets, since the figures are rounded off to the nearest lac.

13. Previous years figures have been regrouped/recast wherever necessary.

 
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