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Chettinad Cement Corporation Ltd. Notes to Accounts, Chettinad Cement Corporation Ltd. Company
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Notes to Accounts of Chettinad Cement Corporation Ltd.

Mar 31, 2014

1. Basis of Accounting, Presentation and Disclosure of Financial Statements

Financial Statements have been prepared complying in all material respects with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant Provisions of the Companies Act, 1956. Financial Statements have been prepared under the historical cost convention on an accrual basis. The Accounting Policies have been consistently applied by the Company and are consistent with those used in the previous year. Previous year figures are regrouped wherever necessary.

2. Contingent Liabilities and Commitments As at 31st As at 31st (to the extent not provided for) March 2014 March 2014

(i) Contingent Liabilities Claims against the Company not acknowledged as Debt

(a) Sales Tax Act 706 472 (b) Income Tax Act 2421 657 (c) Customs Act 4865 - (d) Royalty on Limestone 547 547 (e) Lease Rent on Govt. Lands 74 74 (f) Others 332 - Bills Discounted, Guarantees & Letters of Credit 1831 2371

10776 4121

(ii) Commitments (a) Estimated amount of contracts remaining to be executed on capital account and not provided for 13725 6123 13725 6123

Total 24501 10244

The CENVAT credit disallowance on some of the Inputs and Capital Goods, Service Tax on goods transports and levy of differential Excise Duty, amounting to Rs 7104 lakhs as on 31.3.2014 (Rs 19046 lakhs) which remains unpaid and against which the Company has preferred appeals. Based on the earlier favourable decisions on similar issues by the Appellate Authorities, in the opinion of the Management, no Provision is considered necessary.

3. Disclosure on Micro and Small Enterprises

There are no Micro, Small and Medium enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the company owes dues on account of Principal amount together with Interest. The above information has been determined to the extent such parties have been identified on the basis of information available with the company and the same has been relied by the Auditors.

4. Buildings include ownership Flat at Mumbai and value of shares in Bombay Middle Class Co-operative Housing Society Ltd., which are in the process of being transferred to the name of the Company.

5. Disclosure as required by Accounting Standard 19, "Leases" prescribed by the Companies (Accounting Standard) Rules, 2006 are given below:

a. Where the Company is a Lessee:

i) The Company has taken various residential, office and godown premises under Operating Lease or Leave & Licence Agreements. These are generally not non-cancellable and the period of lease is 11 months and longer and are renewable by mutual consent on mutually agreeable terms. ii) Lease payments are recognised in the Statement of Profit and Loss Account under "Rent"

b. Where the Company is a Lessor:

Details in respect of assets given (Rs in lakhs) on operating lease.

Particulars Gross Block as at Accumulated Depreciation 31.03.2014 Depreciation (Corresponding As at 31.03.2014 to the period of lease rentals)

Freehold Building 130 21 0.01

These assets are in respect of premises given on lease for an initial period with option to renew the lease as per terms in the agreements.

Initial direct costs are recognised as expenses in the year in which it is incurred.

6. The Company has, with a view to expand its Cement manufacturing activities at pan India levels, had entered into a Share Purchase Agreement with the Promoters of Anjani Portland Cement Limited ("Target Company"), a listed company having its manufacturing unit in Nalgonda District, Telangana on the 12th March, 2014. The company agreed to acquire upto a maximum of 75% of the total Equity Share Capital and voting power in the Target Company from its Promoters and from its Public Shareholders through an Open Offer as per SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 ("SAST Regulation") at a price of Rs. 61.75 per Equity Share. In line with the requirements of the Open Offer, the Company had deposited a sum of Rs 738.25 lakhs in an Escrow account being 25% of the Open Offer consideration.

The Company then acquired 9010901 Equity Shares constituting 49% of the Equity Share Capital of the Target Company, from its Promoters in May''2014 and thereafter acquired 3141752 Equity Shares from the Public Shareholders of the Target Company in July 2014, constituting 17% of the Equity Share Capital of the company, through the Open Offer given as per SAST Regulations.

With these acquisitions, the Company currently holds 66% of the Equity Share Capital of the Target Company and the Target Company has become a subsidiary of our Company. The Company will be acquiring further 9% from the erstwhile Promoters to take the overall holding to 75% in the company.

7. Voluntary Delisting from Stock Exchanges

The Company has completed the process of voluntary delisting of its securities from all the Stock Exchanges where they were listed. The National Stock Exchange vide their Letter NSE/LIST/ 204482-X dated 17.05.2013, the Bombay Stock Exchange vide their Notice 20130527-6 dated 27.05.2013 and the Madras Stock Exchange vide their Letter No. MSE/LD/PSK/738/140/13 dated 24.05.2013 have communicated to the Company that the admission to dealings in the securities of the Company will be withdrawn (delisted) with effect from the 7th June, 2013.

The Company had made an Exit Offer to the remaining Public Shareholders of the Company, as required by the Delisting Regulations, to surrender their Shares at the Delisting Exit Price to the Promoters for a period of one year from the date of delisting. The Exit Offer period ended on 6th June, 2014.

8. Confirmations of balance have been sought and obtained from Parties covering substantial amount of outstanding and wherever applicable necessary adjustments have been made in the financial statements. In respect of other Parties, the balances as appearing in the books of account have been adopted.

9. There is no impairment of assets as per Accounting Standard 28.

10. The Company has been granted eligibility certificate whereby the Company is entitled to the benefit of Interest Free Sales Tax Deferral Scheme for manufacturing cement for 12 years ending March, 2014 for deferral of Sales Tax not exceeding Rs. 21477.82 lakhs. The Company has availed the entire benefit as on 31.03.2010. Such Sales Tax Deferral has to be repaid in stipulated instalments commencing from Financial Year 2014-15.

11. The Company has availed Soft Loan Financial Assistance of Rs. 7007 lakhs (Rs. 4244 lakhs) from State Industrial Promotion Corporation of Tamilnadu Limited (SIPCOT) under the Structured Incentive Package for its Ariyalur Cement Project, sanctioned by the Government of Tamilnadu under The New Industrial Policy, 2007.

12. Depletion in the Freehold Quarry Land to the value of Rs. 205 lakhs (Rs195 lakhs) has been accounted.

13. Other Current Liabilities (Note 9) includes Rs. 541 lakhs (Rs. 786 lakhs) due to Managing Director being the balance remuneration for the year 2013-14.

14. The Company did not use jute bags in packing cement as per Jute Packaging Materials (Compulsory use in the Packing Commodities) Act 1987 in view of the Consumer''s preference and resistance from workers who are handling the packing materials. The Supreme Court upheld the validity of the said Act. The Government did not include cement for compulsory packaging in Jute Bags from 1st July 1997. The Liability that may arise for non compliance of the said Act for the earlier period is not ascertainable and the impact on the Profits and Current Liabilities is not quantifiable.


Mar 31, 2013

1. Basis of accounting, presentation and disclosure of financial statements

Financial statements have been prepared complying in all material respects with the Accounting standards notified by Companies (Accounting Standards) Rules,2006,(as amended) and the relevant provisions of the Companies Act, 1956. Financial statements have been prepared under the historical cost convention on an accrual basis. The Accounting Policies have been consistently applied by the Company and are consistent with those used in the previous year.

NOTE 2A

The Company has not issued any shares with differential rights.

NOTE 2B

The company is not a subsidiary Company, hence disclosure of share holding by Holding Company is not applicable.

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

(i) Contingent Liabilities

(a) Claims against the company 1750 7448 not acknowledged as debt

(b) Guarantees Letters of Credit 2371 2877

4121 10325

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for 6123 1374

6123 13740

10244 24065

3- Disclosure on Micro and Small Enterprises

There are no Micro, Small and Medium enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the company owes dues on account of Principal amount together with interest. The above information has been determined to the extent such parties have been identified on the basis of information available with the company and the same has been relied by the Auditors.

4. Buildings include ownership Flat at Mumbai and value of shares in Bombay Middle Class Cooperative Housing Society Ltd., which are in the process of being transferred to the name of the Company.

5. The CENVAT cred it disallowance on some of the inputs, capital goods, service tax on goods transports and levy of differential excise duty, amounts to Rs. 19046 Lakhs as on 31.3.2013 (Rs,6605 Lakhs) and remain unpaid against which the company has preferred appeals. Based on the earlier favorable decisions on similar issues by the Appellate Authorities, in the opinion of the management, no provision is considered necessary.

6. Disclosure as required by Accounting Standard 19, "Leases" prescribed by the Companies (Accounting Standard) Rules, 2006 are given below:

a. Where the Company is a lessee :

i) The Company has taken various residential, office, and go down premises under operating lease or leave license agreements. These are generally not non-cancellable and the period of lease is in months and longer and are renewable by mutual consent on mutually agreeable terms.

ii) Lease payments are recognized in the statement of Profit and Loss Account under "Rent"

b. Where the Company is a less or:

Details in respect of assets given on operating lease.

These assets are in respect of premises given on lease for an initial period with option to renew the lease as per terms in the agreements.

Initial direct costs are recognized as expenses in the year in which it is incurred.

7. Voluntary Delisting from Stock Exchanges

The Promoters of the company have completed the process of Voluntary Delisting of the Equity Shares of the company from all the Stock Exchanges where they are listed, namely the National Stock Exchange of India Limited and Madras Stock Exchange Limited and have taken steps to withdraw its Equity Shares being traded in the Bombay Stock Exchange under permitted to Trade category.

The company has made the final Application with the Stock Exchanges for their approval to the delisting and the National Stock Exchange of India Limited vide their Letter NSE/LIST/204482-X dated 17.05.2013, the Bombay Stock Exchange vide their Notice 20130527-6 dated 27.05.2013 and Madras Stock Exchange Limited vide their Setter No. MSE/LD/PSK/738/140/13 dated 24.05.2013 have communicated to the company that the admission to dealings in the securities of the company will be withdrawn (delisted) with effect from the 7"''June, 2013.

8. Confirmation of balances have been sought and obtained from Parties covering substantial amount of outstanding and wherever applicable necessary adjustments have been made in these financial statements. In respect of other Parties, the balances as appearing in the books of account have been adopted.

9. There is no impairment of assets as per Accounting Standard 28.

10. The Company has been granted eligibility certificate whereby the company is entitled to the benefit ; : of Interest free sales tax deferral scheme for manufacturing cement fori2 years ending March, 2014 for deferral of sales tax not exceeding Rs.21477.82 Lakhs. The company has availed the entire benefit as on 31.03.2010. Such sales tax deferral has to be repaid in stipulated installments commencing from Financial Year20i4-15-

11. The company has availed Soft Loan Financial Assistance of Rs. 4244 Lakhs (Rs.1757 lakhs) from State Industrial Promotion Corporation of Tamiinadu Limited (SIPCOT) under the Structured Incentive Package for its Ariya Sur Cement Project, sanctioned by the Government of Tamilnadu under The New Industrial Policy, 2007.

12. Depletion in the freehold Quarry Sand to the value of Rs. 195 Lakhs (Rs.203 lakhs) has been accounted.

13. Sundry Creditors includes Rs. 786 Lakhs (Rs.i274 Lakhs) due to Managing Director being the balance remuneration fortheyear2oi2-i3.

14. The Company did not use jute bags in packing cement as per Jute Packaging Materials (Compulsory use in the Packing Commodities) Act 1987 in view of the Consumer''s preference and resistance from workers who are handling the packing materials. The Supreme Court upheld the validity of the said Act. The Government did not include cement for compulsory packaging in Jute Bags from ist July 1997. The Liability that may arise for non compliance of the said Act for the earlier period is not ascertainable and the impact on the profits and current liabilities is not quantifiable.

15. Research and development expenditure for the year isRs. 86 Lakhs(Rs. 55 Lakhs) including Depreciation ofRs. 0.26 Lakhs (Rs. 0.30 Lakhs)

16. Current tax Includes short provision for earlier years ofRs. Nil (Rs.i82i Lakhs)


Mar 31, 2012

NOTE 1B

The Company has not issued any shares with differential rights

NOTE 2C

The company is not a subsidiary Company, hence disclousre of share holding by Holding Company is not applicable

NOTE 3E

The company has not reserved any shares for issue under options and contracts/commitments for the sale of shares/disinvestment

4. Disclosure on Micro and Small Enterprises

There are no Micro, Small and Medium enterprises as defined in the Micro,Small and Medium Enterprises Development Act, 2006 to whom the company owes dues on account of Principal amount together with Interest. The above information has been determined to the extent such parties have been identified on the basis of information available with the company and the same has been relied by the Auditors.

5. Buildings include ownership Flat at Mumbai and value of shares in Bombay Middle Class Cooperative Housing Society Ltd., which are in the process of being transferred to the name of the Company.

6.Power & Fuel is net of Captive Power Plant Income of Rs. 25892 lakhs ( Rs. 20660 Lakhs)

7. The CENVAT credit disallowance on some of the inputs, capital goods, service tax on goods transports and levy of differential excise duty, amounts to Rs. 6605 Lakhs as on 31.3.2012 (Rs. 3069 Lakhs) and remain unpaid against which the company has preferred appeals. Based on the earlier favourable decisions on similar issues by the Appellate Authorities, in the opinion of the management, no provision is considered necessary.

8. Disclosure as required by Accounting Standard 19, "Leases" prescribed by the Companies (Accounting Standard) Rules, 2006 are given below:

a. Where the Company is a lessee

i) The Company has taken various residential, office, and godown premises under operating lease or leave & licence agreements. These are generally not non-cancellable and the period of lease is 11 months and longer and are renewable by mutual consent on mutually agreeable terms.

ii) Lease payments are recognised in the statement of Profit and Loss Account under "Rent"

These assets are in respect of premises given on lease for an initial period with option to renew the lease as per terms in the agreements.

Initial direct costs are recognised as expenses in the year in which it is incurred.

9. Confirmation of balances have been sought and obtained from Parties covering substantial amount of outstanding and wherever applicable necessary adjustments have been made in these financial statements. In respect of other Parties, the balances as appearing in the books of account have been adopted.

10. There is no impairment of assets as per Accounting Standard 28.

11. The Company has been granted eligibility certificate whereby the company is entitled to the benefit of Interest free sales tax deferral scheme for manufacturing cement for 12 years ending March, 2013 for deferral of sales tax not exceeding Rs. 21477.84 Lakhs . The company has availed the entire benefit as on 31.03.2010. Such sales tax deferral has to be repaid in stipulated instalments commencing from Financial Year 2014-15.

12. The company has availed Soft Loan Financial Assistance of Rs. 1757 lakhs from State Industrial Promotion Corporation of Tamilnadu Limited (SIPCOT) under the Structured Incentive Package for its Ariyalur Cement Project, sanctioned by the Government of Tamilnadu under The New Industrial Policy, 2007.

13. Depletion in the freehold Quarry land to the value of Rs. 203 Lakhs (Rs.151.81 lakhs) has been accounted.

14. Sundry Creditors includes Rs. 1274 Lakhs (Rs. 452 Lakhs) due to Managing Director being the balance remuneration for the year 2011-12.

15. The Company did not use jute bags in packing cement as per Jute Packaging Materials (Compulsory use in the Packing Commodities) Act 1987 in view of the Consumer's preference and resistance from workers who are handling the packing materials. The Supreme Court upheld the validity of the said Act. The Government did not include cement for compulsory packaging in Jute Bags from 1st July 1997. The Liability that may arise for non compliance of the said Act for the earlier period is not ascertainable.

16. Research and development expenditure for the year is Rs. 55 Lakhs (Rs. 55 Lakhs) including Depreciation of Rs. 0.30 Lakhs ( Rs. 0.34 Lakhs)

17. Current tax Includes short provision for earlier years of Rs. 1821 lakhs ( Rs. Nil)

18. The Company identifies business segment as the primary segment as per AS-17 and under the primary segment, there are two reportable segment viz cement and power generation. These were identified considering the nature of the products, differing risk and returns.

The company caters mainly to the needs of the domestic market and thus there are no reportable geographical segments.

A) Names of related parties and description of relationship and closing balance. i) Name of Associates

1 South India Corporation Ltd

2 South India Corporation (T) Private Ltd

3 Chettinad Corporation (P) Ltd

4 Chettinad Plantations (P) Ltd

5 Chettinad Structural & Engineering Ltd

6 Chettinad Logistics (P) Ltd

7 Chettinad Lignite Transport Services (P) Ltd

8 Chettinad Financial Management Services (P) Ltd

9 Chettinad Software Services (P) Ltd

10 Chettinad Builders (P) Ltd

11 Chettinad Realtors (P) Ltd

12 Chettinad Hospitals (P) Ltd

13 Chettinad Pharmaceuticals (P) Ltd

14 Chettinad Electronics (P) Ltd

15 Chettinad e-Publishing (P) Ltd

16 Chettinad Trucks & Equipments (P) Ltd

17 Chettinad Earth Movers (P) Ltd

18 Haaciendaa Infotech and Realtors (P) Ltd

19 Chettinad International Coal Terminal (P) Ltd

20 Chettinad Clearing & Forwarding (P) Ltd

21 Chettinad Land & Building Development (P) Ltd

22 Chettinad Projects Development (P) Ltd

23 Chennai Computer and Software Services (P) Ltd

24 Chettinad Inland Water Transport Services (P) Ltd

25 Chennai Organic Chemicals and Fertilizers (P) Ltd

26 Chettinad Morimura Semi Conductor Material (P) Ltd

27 Chettinad Engineering and Allied Services (P) Ltd

28 Chettinad Apparels (P) Ltd

29 Chettinad Packers and Movers (P) Ltd

30 Chettinad Power Corporation (P) Ltd

31 Chettinad TV Network (P) Ltd

32 Chettinad Radio Network (P) Ltd

33 Chettinad Electric Company (P) Ltd

34 Durandel Foods (P) Ltd

35 Chettinad Container Terminal (P) Ltd

36 Chettinad Energy Resource (P) Ltd

37 Chettinad Enterprises (P) Ltd

38 Chettinad Dairy & Poultry Farms (P) Ltd

39 Chettinad Coal Washeries (P) Ltd

40 Chettinad Hitech Semi Conductor Materials (P) Ltd

41 Chettinad Developers (P) Ltd

42 Chettinad Security Services (P) Ltd

43 Chettinad Properties (P) Ltd

44 Chettinad Refineries (P) Ltd

45 Chettinad Oil & Gas Enterprises (P) Ltd

46 Chettinad Natural Resources (P) Ltd

47 Chettinad Oil Corporation (P) Ltd

48 Belaire Apartments (P) Ltd

ii)Closing Balance Cr. Rs. 57214 Lakhs (Cr. Rs. 28204 Lakhs)

iii)The related party relationship is as identified by the Company and relied upon by the Auditors.

B) Key Management Personnel : Dr. M.A.M. Ramaswamy & Sri M.A.M.R. Muthiah Sitting fees of Rs. 0.06 lakhs (Rs. 0.06 lakhs) paid to Dr. M.A.M. Ramaswamy, Chairman. Remuneration and sitting fees of Rs. 1322.56 Lakhs (Rs. 500.96 Lakhs) paid to Sri M.A.M.R. Muthiah, Managing Director.

19. Employee Benefits : Details as per As 15

The company has calculated the various employee benefits provided to employees as under: A) Employee Plan

Provident Fund

The company's contribution to Provident Fund is vested with the Employees Provident Fund

Scheme of the Government of India.


Mar 31, 2010

1)Estimated amount of contracts remaining to beexecuted on capLtal account not pnovided for Rs-3098 Lakhs(Rs.23586Lakhs)

2) a) Salaries, Wages, PF & ESI allocated to other heads Rs 405 Lakhs {Rs-269 Lakhs).

b) Powerallocated toother heads Rs. 148 Lakhs(Rs.i42 Lakhs)

c) Stores ErSparesallocated to other heads Rs. 139 Lakhs (Rs.160 Lakhs)

4) Contingent Liabilities not provided for

a) Letter of Credit given by Bankers Rs, 257 Lakhs (Rs.1869 Lakhs)

b) Guarantees given bythe Banks Rs. 102 Lakhs (Rs.477 Lakhs)

c) Disputed amount of VATcred it 0 f Rs.315 La khs (Rs,202 Lak hs)

d) Disputed Royalty on Limestone Rs.547 Lakhs (Rs 547 Lakhs)

e) Disputed Lease Rent on Government Lands Rs.74 Lakhs (Rs. 74 lakhs)

5) BuiId ingsindude own ership Flat at Mumbai and value of shares in Bombay Middle Cla ss Cooperative Hous ing Society Ltd., inthe name of there prese ntat 1 ve of the Company.

6) Thereare no Micro, Small and Medium enterprises asdefined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the company owes dues on account of Principle amount together with Interest, The above information has been determined to the extent such parties have been identified on the basis of information available with the company and the same has been relied by the Auditors,

7) Remuneration paid to the managing director is Rs. 623 iacs{ Minimum remuneration Rs. 48 lakhs) Co m putation of net profit und er sectio n 349 of the compan ies Act 1956

8) The Sundry Creditors includes Rs. 575 lacs (Rs. Nil) due to Ma naging Director being the balance remuneration for the year 2009-10.

9) The Company did not use jute bags in packing cementas perjute Packaging Materials (Compulsory use in the Packing Commodities) Act 19&7 in view of the Consumers preference and resistance from workers who are handling the packing materials. TheSupremeCourt upheld the validity of the sa id Act. The G overnme nt did not i ncl ud e ce me n t for comp u Isory packaging in J ute Ba gs fro m 1st J u ly 1997, The Liability that m^y arise for non compliance of the said Act for the earlier period is not ascertainable.

10) Power & Fuel is net of Wind Energy Generation income of Rs, Nil (Rs.58 Lakhs)and Captive Power Plant Incomeof Rs. 18680 Lakhs(Rs.767i Lakhs)

11) The Company identifies business segment as the primary segment as per AS-17 and under the primary segment j there are two reportable segment viz cement and power gene ration. These were identified considering the nature of the products, differing nskand returns,

The company caters mainly to the needs of the domestic market and thus there are no reportable geographical segments.

12) Employee Benefits: Details as per As 15.

The company has calculated the various employee benefits provided to employees as under: A) Employee Plan

a) Provident Fund

b) Superannuation Fund

The companys contribution to Provident Fund is vested with the Employees Provident

Fund Scheme of the Government of India.

The Superannuation Fund is managed by the Life Insurance Corporation of India.

A) Names of related parties and description of relationship and closing balance. i) Na m e of Assoc i ate

1. South India Corporation Ltd.

1. Chettinad Structural Is Engineering P. Ltd

3. Chettinad Logistics Private Ltd.

4. Chettinad BjiIders Private Ltd.

5. Chettinad Port Services Private Ltd.

6. Chettinad International Coal Terminal Private Ltd.

7. Chettinad Financial Management Services Private Ltd, %. Chettinad Software Services Private Ltd,

9. Haaciendaa Infotech and Realtors Private Ltd-

io. Chettinad Hospitals Private Ltd

in. Chettinad Corporation Private Ltd.

12. ChettinadPlantationsPrivateLtd.

13. SIC Travancore Private Ltd,

14. Chettinad Morimura Semiconductor Material Private Ltd.

15. Chettinad Quartz Product Private Ltd.

16. Chettinad Lignite Transport Services Private Ltd.

17. Chettinad Realtors Private Ltd.

18. Chettinad Energy Private Ltd,

iq. Chettinad Pharmaceuticals Private Ltd-

20. Chettinad Electronics Private Ltd.

21. Chettinad e - p u blis hi ng Pr ivate Ltd.

22, Chettinad Trucks and Equipments Private Ltd.

23, Chettinad Earth Movers Private Ltd.

24, Chennai Computer and Software Services Private Ltd,

25. Chettinad Clearing and Forwarding Private Ltd.

it- Chettinad Land and Building Development Private Ltd.

27. Chettinad Proj ects Devel q p m en t Pri va re Ltd.

2S. Chettinad Inland Water Transport Private Ltd.

29. Allied Minerals & Metals Pvt. Ltd

ii) Closing Balance Cr. Rs. 20487 Lakhs (Cr. Rs. 40037 Lakhs)

iii) The related party relationship is as identified by the Company and relied upon by the Auditors.

B) Key Management Personnel : Dr. M.A.M. Ramaswamy & Sri M.A.M.R. Muthiah.

Sitting fees of R5-12000/- (Rs.8000/-) paid to Dr. M.A.M. Ramaswamy, Chairman.

Remuneration and silting fees of Rs.623.54 Lakhs (Rs.48.48 Lakh;) paid to Sri M.A.M.R. Muthiah, Managing Director.

13) Research and Develop men I Expenditure forthe year IJ Rs-55 Lakhs (Rs,55 Lakhs) including Depreciation of Rs.Q.38 Lakhs{Rs,j.7t) Lakhs)

14) The CENVAT credit disallowanceon some of the Inputs, capital goods, service tax on goods transports and levy of differential excise duty, amounts to Rs.4979 Lakhsas on 31.3.2010 (Rs.2279 Lakhs) and remain unpaid a ga i nst w hich the compa ny ha 5 p referred a p pea I s. Based on the ea rlier favou ra ble d ecisio ns 0 n s i m ilar iss ues by the Appellate Authorities, in the opinion of the management, there may not be any liability.

15) Disclosure as required by Accounting Standard 19, "leases prescribed by the Companies (Accounting Standard) Rules, 2006 are given below; a.Where the Company is a leases

i) The Company has taken various residential, office, and godown premises under operating lease or leave & licence agreements. These are generally not non-cancellable and the period of lease is 11 months and longer and are renewable by mutual consent on mutually agreeable terms,

ii) Lease payments are recognised in the statement of Profit and Loss Account under Rent

16J The company has filed writ petitions challenging the validity of levy of Fringe Benefit Tax before the High Court of Madras. Interim stay has been obtained. However as an abundant caution, provision has been made for the above.

17) During the financial year 2009-10, M/s Allied Minerals and Metals Private Limited, a Group Company, holding substantial limestone bearing lands In Andhra Pradesh, amalgamated with the company, pursuant to a scheme of amalgamation sanctioned by Honorable High Court of Madras on 21 June, 2010 with effect from TJanuary 2010, being the appointed date. Accordingly, the entire business and all assets and liabilities of M/s Allied Minerals and Metals Private limited were transferred and vested in the company as on the appo I nted d a te. The effect of amalga ma tion h a s bee n i nc I uded i n th e f in a ncial statements of the company for the year ended 31.03.2010.

The Amalgamation has been accounted as per the scheme sanctioned by the Honourable High Court of Madras, under the "Pooling of Interest method* which is in line with accounting standard 14 "Accounting for Amalgamation" prescribed by the Companies (Accounting standard) Rules, 2006. Upon the Scheme of Amalgamation becoming fully effective, the Authorised Share Capital of both Transferor and Transferee Companies stood combined to Rs,50000 Lakhs in the Books of the Transferee Company.

Accordingly, the accounting treatment has been given as under:

All assets and liabilities including the provisions of the transferor company as at the appointed date have been recorded In the books of transferee company at the book value.

Pursuant tothe sanctioned scheme of amalgamation, 86,95,648 Equity sharesof Rs, io/- each of Chettinad Cement Corporation Limited has been issued and allotted to the shareholders of Allied Minerals and Metals Private limited on 14"1 day of July 2010 in the ratio of 1 equity share of Rs, 10 each of Chettinad Cement

Corporation Limited for every 46 equity shares of Rs. io each held in Allied Minerals and Metals Private limited as on the record date.

The excess of value of assets over the value of liabilities of the Transferor Company after adjusting aggregate face value of shares issued to the members of Transferor Company, a mounting to Rs.39737 Lakhs, pursuant to the Scheme of Amalgamation have been carried to the Capital Reserve Account,

ii) Confirmations of balances have been sought and obtained from Parties covering substantial amount of outstanding and wherever applicable necessary adjustments have been made inthe Accounts. In respect of other Parties, the balances as appearing in the books of accounts have been adopted.

18) There is no impairment of assets as per Accounting Standard 28.

19) Previous years figures have been regrouped wherever necessary and figures in brackets, unless otherwise mentioned, relate to previous year.

20) The Company has been granted eligibility certificate whereby the company is entitled to the benefit of IFST deferral scheme for manufacturing cement for 12 years ending 2013 for deferral of sales tax not exceeding Rs.21477.84 Lakhs . the company has availed the entire benefit as on 31.03.2010. Such sales tax deferral has to be repaid In stipulated Instalments commencing from Financial Year 2014-15.

21) The Interest of Rs. Mil (724 Lakhs) has been capitalised during the year towards borrowing cost attributed to the acquisition of qualifying Assets.

22) During the year a loss of Rs 20 lakhs (Previous year Rs. 826 lakhs) arising out of exchange difference on translation of Foreign Currency loans availed for acquisition of Fixed Assets has been capitalised as per the option provided under AS-11 of Companies (Accounting Standard) Rules, 2006.

 
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