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Notes to Accounts of Deccan Cements Ltd.

Mar 31, 2015

1. Corporate Information

Deccan Cements Limited ("The Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacturing and selling of cement.

b. Terms / Rights attached

The Company has only one class of shares - Equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share.

The dividend proposed by Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2015, the amount of per share dividend recognised as distribution to equity shareholders was Rs. 2.50 /- (31st March 2014Rs.1.20 /-) excluding tax on distributed profits.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.(a)Term Loans from Banks (i) Security

The above loans from banks are secured through Joint Deed of Hypothecation dated 25.09.07 entered into by the Company with the consortium of term loan lenders. Pursuant to the said agreement, the term loans are secured by way of first pari passu charge by means of equitable mortgage of the immovable assets and hypothecation of the movable assets of the Company, present and future in favour of the Consortium of banks comprising of State Bank of India, State Bank of Hyderabad, State Bank of Mysore, Andhra Bank and Indian Bank except the current assets specifically charged to working capital lenders in respect of which second charge is created .

3.(a) Deferred Payment Liabilities (Unsecured)

The company in earlier years availed Sales Tax deferral loan aggregating to Rs. 1631.54 Lakh (balance outstanding as at 31.03.15 was Rs.1510.33 Lakh) under a scheme of the State Government, for its enhanced capacity implemented in 2000-01. Balance loan, is repayable as per Schedule given below.

4. Contingent Liabilities and Commitments (not provided for) (Rs. in Lakh)

(A) Contingent Liabilities Current Year Previous Year

(a) Claims against the Company not acknowledged as Debt

(i) Counter Guarantees to banks 656.62 577.30

(ii) Claims for difference in prices for the year 1994 - 95 filed by Metropolitan 6.83 6.83 Transport Project, Chennai, matter pending with High Court of Chennai.

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

(i) Income Tax

For the Asst Year 1997-98 towards disallowances of debenture issue ex- 6.46 6.46 penses and bad debts. Matter pending in appeal before the Income Tax Appellate Tribunal.

(ii) Sales Tax

a) Regarding sales tax on packing materials in respect of Asst Year 11.52 11.52 1993-94 for which the company filed writ petition in the High Court of Andhra Pradesh and obtained stay on payment of 50% of the disputed demand.

b) Sales Tax Demand for the deemed excess production based on the Energy Audit for the years 1999 - 2000 & 2000 - 01. 85.68 85.68

c) Sales Tax Demand for interest of Rs. 1,37, 24,338 /- on alleged excess utilization of Sales tax incentive.Stay was granted by Additional Com- missioner (CT) (Legal) subject to 50 % payment of disputed amount. 137.24 137.24

d) Sales Tax Demand for Rs. 51,60,765/-recovery of excess paid interest for the Assessment years 2002 -03 to 2004 -05. Appeal was filed by 51.61 51.61 the company before the High Court of A.P.

(iii) The A.P. Government has issued a G.O. Ms. No 391 levying Water Rates 723.29 723.29 on the quantum of water used in the generation of power and demanded payment of Rs. 723.29 Lakh for the period 1997 to February 2008. Appeal is pending in the High Court of Andhra Pradesh.

(iv) Duty on Electricity generated and consumed was levied by the A.P. Govt. 316.23 316.23 at 25 paise per unit for the years 2003 -04 to 2008 -09. The High court of A.P. has stayed the operation of AP Electricity Duty Amendment Act, 2003 but asked to submit monthly returns of generation of power.

(v) Seigniorage Fee on Sand, Metal& Gravel used for expansion project. 23.59 23.59 (vi) Central Excise 412.64 412.64

Disallowance of Cenvat credit availed on MS Angles, MS Plates, MS Sheets; HR Coils. Pre deposited Rs. 1 Crore as per the order of appellate authority - CESTAT, Bangalore.

(B) Commitments

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

5. Employee Benefits

(i) Defined Benefit Plan

a) Liability for retiring gratuity as on 31st March 2015 is Rs. 222.38 Lakh (31.03.2014; Rs. 247.63 Lakh) of which Rs. 66.87 Lakh (31.03.14 Rs. 79.38 Lakh) is funded with the Life Insurance Corporation of India and the balance of Rs. 155.51 Lakh (31.03.2014: Rs. 168.25 Lakh) is included in provision for Gratuity.

b) Liability for cost of compensated absences as on 31st March 2015 of Rs. 39.51 Lakh (31.03.2014: Rs. 103.15 Lakh) is unfunded and has been actuarially determined and provided for in the books.

c) The details of the Company's post - retirement benefit plans for its employees including whole time directors are given below which are certified by the actuary:

(ii) Defined contribution plans

The Company made Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs.150.85 Lakh (31.03.2014: Rs.93.24 Lakh) for Provident Fund contributions and Rs. 8.07 Lakh (31.03.2014: Rs.7.86 Lakh) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

6. Segment Reporting

The Company is primarily engaged in manufacturing and marketing of cement. Based on risk - return profile, the other identified reportable segment of the company is generation and sale of power.

The Segment revenue, segment result and segment assets relating to power segment is less than the 10% of the total Segment revenue, result and assets. Hence, no segment reporting, as per the Accounting Standard 17 (AS 17), is required at present.

During the year under report the Company's business has been carried out in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

* The Company has no dilutive instruments during the year ended 31st March 2015. Hence, the Diluted Earnings per share equals to Basic Earnings per share

32. The Company has not received any intimation from 'suppliers' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

As at the Balance Sheet date, the Company's net foreign currency exposures that are not hedged by a derivative instrument or otherwise is Nil (31.03.2014: Nil). The foreign exchange contract matures later than three months and not later than one year as on the Balance Sheet date.

The Company has recognized a gain of Rs. 8.31 Lakh on the derivative instrument during the year ended 31st March 2015 (31.03.2014: Nil), which is included in other income.

38. Change in Accounting Policy

Until 31st March 2014, depreciation on tangible fixed assets other than Buildings and Plant & Machinery was provided on Written Down Value Method as per the rates of depreciation prescribed in Schedule XIV to the Companies Act, 1956. With effect from 1st April 2014 to align with the useful life specified in the Schedule II of the Companies Act, 2013, the management changed the method of providing depreciation for these assets from written down method to straight line method. Consequent to the change in the method, the depreciation on these tangible fixed assets was recomputed from the date they were first put to use / capitalized and the resultant excess depreciation of Rs. 55.66 Lakh has been adjusted in current year's depreciation charge.

39. Pursuant to Schedule II of the Companies Act, 2013, with effect from 1st April 2014, the Company has adopted revised useful life of the assets aligning the same with those specified in Schedule II. The Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on 1st April 2014 and has adjusted an amount of Rs.252.26 Lakh (net of deferred tax) from the opening surplus in the Statement of Profit and Loss under Reserves and Surplus. Consequent to the change in the useful life of the other assets, the impact on the depreciation expense for the current year is lower by Rs. 472.69 Lakh.

40. Pursuant to GO no 328 Dt. 31.12.2005, issued by Industries and Commerce (IP)Department , Government of Andhra Pradesh , Commissioner of Industries , Andhra Pradesh, the Company is entitled to receive an amount of Rs. 100 Lakh as financial assistance for setting up and erection of 132 KV Bay extension at 132 /33 KV Wadapally substation and erection of 32 KVDC SC Line. As against the entitlement amount of Rs. 100 Lakh , the company has received an amount of Rs. 56.36 Lakh during 2013 -14 and Rs. 24 Lakh during 2014 -15 leaving balance of Rs. 19.64 Lakh. Balance assistance receivable along with the amounts received have been recognized as Capital Reserve. The proportionate annual amortization charge has been adjusted against depreciation and amortization expense.

42. Previous Year's figures have been, re-grouped /reclassified wherever necessary to conform to the current year classification / disclosure.

43. Figures are rounded off to the nearest rupee. Figures in brackets represent credits / deductions to the extent applicable.


Mar 31, 2013

1. Corporate Information

Deccan Cements Limited ("the Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in manufacturing and selling of cement.

2: Employee Benefits

(i) Defined Benefit Plan

a) Liability for retiring gratuity as on 31st March 2013 is Rs. 249.75 Lakhs (31.03.2012; Rs. 198.92 Lakhs) of which Rs. 64.02 Lakhs (31.03.2012; Rs. 87.63 Lakhs) is funded with Life Insurance Corporation of India and the balance is included in provision for Gratuity. Liability for Gratuity and Cost of Compensated absences has been actuarially determined and provided for in the books.

b) The details of the Company''s post-retirement benefit plans for its employees including whole time directors are given below which are certified by the actuary.

(ii) Defined contribution plan

Amount recognized as an expense and included in Note No 25 under the head "Contribution to Provident and other funds" Rs. 195.10 Lakhs (Previous year Rs. 112.77 Lakhs).

3: The amount of borrowing cost capitalized during the year is Rs. Nil (Previous Year Rs. Nil).

4: Segment Reporting

The Company''s main business segment is manufacturing of Cement, hence there is no separate reportable segment as per "Segment Reporting - Accounting Standard - 17".

5: The Company has not received any intimation from ''suppliers'' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

6: Balances of debtors, loans and advances and creditors are subject to confirmations.

7: Previous Year''s figures have been recast, re-grouped and reclassified wherever necessary to conform to the current year''s classification.

8: Figures are rounded off to the nearest rupee. Figures in brackets represent credits / deductions to the extent applicable.


Mar 31, 2012

1. Corporate Information:

Deccan Cements Limited ("The Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 in India. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacturing and selling of cement.

2.a. Terms/ Rights attached :

The Company has one class of shares- Equity shares having a par value of Rs 10/-. Each holder of equity shares is entitled to one vote per share

The dividend proposed by Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting.

During the year ended 31 st March 2012, the amount of per share dividend recognized as distribution to equity shareholders was Rs 3 /- ( 31 st March 2011 Rs 1.2)excluding tax on distributed profits.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

3.a Term Loans from Banks :

(i) Security

The above loans from banks are secured through Joint Deed of Hypothecation entered into by the Company dated 25.09.2007 with the consortium of term loan lenders. Pursuant to the said agreement, the term loans are secured by way of first pari passu charge by way of equitable mortgage of the immovable assets and hypothecation of the movable assets of the company, present and future in favor of Consortium of banks comprising of State Bank of India, State Bank of Hyderabad , State Bank of Mysore , State Bank of Saurashtra , Andhra Bank and Indian Bank except the current assets specifically charged to working capital lenders in respect of which second charge is created .

(ii) Personal Guarantees :

The above term loans are further secured by the personal guarantee of Mr. M.B. Raju , Chairman and Ms. P. Parvathi, Managing Director. These personal guarantees exist till the additional mining rights are obtained by the company to the satisfaction of the lenders.

(iii) Rate of Interest(As at the yearend) : 15 % ( Previous year 13. 50 % )

4.a Deposits (Un Secured)

(i) Rate of Interest : Range from 9.06% to 13.29%

4.b Deferred Payment Liabilities :( Unsecured )

(i) Sales Tax Deferral scheme (vide Proceedings No 10 / 3 / 2000 / 0886 / ID, dt.06.06.2000) pursuant to the Sales Tax attributable to the sales effected out of the production from the expansion pertaining to cement division from 600 TPD to 900 TPD is deferred (interest free) for a period of 14 years from 2000-01 or Rs 1631.54 Lacs (whichever is earlier), and the deferred sales tax of each year is repayable after the expiry of 14 years subject to fulfillment of conditions specified in the proceedings. The Sales Tax so deferred aggregating to Rs 1631.54 Lacs. Repayment of this deferred liability will commence during 2014-15 and ends in 2024 -25

(ii) Sales tax exemption scheme vide letter No.30/ 2 /2002 / 0788 /1357 / FD dated 23.10.2002 issued by Commissioner ate of Industries , Hyderabad pertaining to the sales effected out of production from the Slag Cement Division which is exempted for a period of 7 years or Rs 3634.94 Lacs (whichever is earlier). With the implementation of VAT w.e.f. 01.04.2005 the said exemption amounting to Rs 745.98 Lacs has been converted into deferment and the balance period has also been doubled. The company has availed this deferment amount of Rs 745.98 Lacs upto the years of 2006 -07.Repayment of this deferred liability will commence during 2013 - 14 and ends in 2014 - 15

5. Contingent Liabilities and Commitments (inLacs)

(A) Contingent Liabilities Current Year Previous Year

(a) Claims against the Company not acknowledged as Debt:

(i) Counter Guarantees 1013.21 553.12

(ii) Claims for non supply of cement by company's agent for the year 5.52 5.52 1995-96 pending in High Court of Andhra Pradesh

(iii) Claims for difference in prices for the year1994 - 95 filed by 6.83 6.83 Metropolitan Transport Project, Chennai, matter pending with High

Court of Chennai

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

(i) Income Tax:

a) For the Asst Year 97-98 towards disallowances of debenture 6.46 6.46

issue expenses and bad debts. Matter pending in appeal before the Income Tax Appellate Tribunal

(ii) Sales Tax:

a) Regarding sales tax on packing materials in respect 11.52 11.52 of Asst Year 1993-94 for which the company filed writ petition in the High Court of Andhra Pradesh and obtained stay on payment of 50% of the disputed demand

b) Regarding sales tax on transfer of clinker from cement division 315.44 315.44 to slag division for the years 2001 -02 & 2005 -06 The matter is pending in appeal before High Court of Andhra Pradesh.

(iii) Sales Tax Deferment for the year 2001 -02 on the additional 168.97 168.97 products manufactured, amounting to Rs. 168.97 Lacs stayed by the AP High Court.

Sales Tax Demand for the deemed excess production based on the 85.68 85.68

Energy Audit for the years 1999 - 2000 & 2000 - 01

(iv) The A.P. Government has issued a G.O. Ms. No 391 levying water 723.29 723.29 Rates on the quantum of water used in the generation of power

and demanded payment of Rs. 723.29 Lacs for the period 1997 to February 2008. Appeal is pending in the High Court of Andhra Pradesh.

(v) Duty on Electricity generated and consumed was levied by the AP 316.23 316.23 Govt.at 25 paise per unit for the years 2003 -04 to 2008 -09. The

High court of A.P. has stayed the operation of AP Electricity Duty Amendment Act, 2003 but asked to submit monthly returns of generation of power.

(B) Estimated amount of contracts to be executed on capital account and not 293.00 150.62 provided for: (net of advances)

6. Employee Benefits:

(i) Defined Benefit Plan

a) Liability for retiring gratuity as on March 31st ,2012 is Rs 198.92 Lacs (31.03.2011; Rs 177.67 Lacs) of which Rs 87.63 Lacs (31.03.11 Rs 83.60 Lacs) is funded with the Life Insurance Corporation of India and the balance is included in provision for Gratuity . Liability for Gratuity and Cost of Compensated absences has been actuarially determined and provided for in the books.

b) The details of the Company's post - retirement benefit plans for its employees including whole time directors are given below which are certified by the actuary.

(ii) Defined contribution plan

Amount recognized as an expense and included in Note No 24 under the head "Contribution to Provident and other funds" Rs 112.77 Lacs (Previous year Rs 107.82 Lacs).

7 The amount of borrowing cost capitalized during the year is Rs Nil .( Previous Year Rs Nil)

8 Segment Reporting: The Company's main business segment is manufacturing of Cement, hence there is no separate reportable segment as per "Segment Reporting - Accounting Standard - 17 "

9. The Company has not received any intimation from ' suppliers ' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the yearend together with interest paid / payable as required under the said Act have not been given.

10. Balances of debtors, loans and advances and creditors are subject to confirmations.

11. Previous Year's figures have been recast, re-grouped and reclassified wherever necessary to conform to the current year's classification.

12. Figures are rounded off to the nearest rupee. Figures in brackets represent credits / deductions to the extent applicable.


Mar 31, 2011

1. Contingent Liabilities :

Rs. in Lacs

Current Year Previous Year

a) Monies for which the company is contingently Liable:

i) Counter Guarantee 553.12 716.41

ii) Claims for non supply of cement by companys agent for the year 1995-96 Pending in High Court of Andhra Pradesh 5.52 5.52

iii) Claims for difference in prices for the year 1994 - 95 filed by Metropolitan Transport Project, Chennai, matter pending with High Court of Chennai 6.83 6.83

b) Income Tax:

i) For the Asst Year 97-98 towards disallowances of debenture issue expenses and bad debts. Matter pending in appeal before the Income Tax Appeallate Tribunal, Hyderabad 6.46 6.46

ii) For the Asst. Year 06 - 07 towards disallowance of deduction claimed u/s 80 I (A). Matter pending with CIT (appeals). 359.03 359.03

c) Sales Tax:

i) Regarding sales tax on packing materials in respect of Asst Year 1993-94 for which the company filed writ petition in the High Court of Andhra Pradesh and obtained stay on payment of 50% of the disputed demand 11.52 11.52

ii) Regarding sales tax on transfer of clinker from cement division to slag division for the years 2001-02 & 2005- 06 The matter is pending in appeal before High Court of Andhra Pradesh. 315.44 315.44

d) Sales Tax Deferment for the year 2001 -02 on the additional products manufactured, amounting to Rs. 168.97 Lacs stayed by the AP High Court. 168.97 168.97

e) Sales Tax Demand for the deemed excess production based on the Energy Audit for the years 1999 - 2000 & 2000 - 01 85.68 85.68

f) The A.P. Government has issued a G.0. Ms. No 391 levying water Rates on the guantum of water used in the generation of power and demanded payment of Rs. 723.29 lacs for the period 1997 to February 2008. Appeal is pending in the High Court. 723.29 723.29

g) Duty on Electricity generated and consumed was levied by the AP Govt, at 25 paise per unit for the years 2003-04 to 2008 - 09. The High court has stayed the operation of AP Electricity Duty Amendment Act, 2003 but asked to submit monthly returns of generation of power. 316.23 316.23

h) Singareni Collieries Company Ltd raised Debit Note however the company has made representation to waive the same. 231.66 -

2. Secured Loans:

A) Term Loans:

i) The Term Loans from Banks are secured by hypothecation of present and future immovable assets in favour of consortium of banks comprising of State Bank of India, State Bank of Hyderabad, State Bank of Mysore, State Bank of Saurashtra, Andhra bank and Indian Bank ranking pari passu charge except the current assets specifically charged to working capital lenders in respect of which second charge is created.

ii) The Term Loans are further secured by the personal guarantee of Mr. M.B. Raju, Chairman and Ms. P. Parvathi, Managing Director till the additional mining rights are obtained to the satisfaction of the lenders.

B) Working Capital:

Cash Credit facility with State Bank of India and Andhra Bank is secured by hypothecation of stocks of raw materials, stock in process, finished goods, spares and book debts and second charge on Fixed Assets and further secured by the personal guarantee of Mr. M.B. Raju, Chairman and Ms. P. Parvathi, Managing Director.

3. Unsecured Loans:

The Government of Andhra Pradesh has extended to the company the incentive of:

(a) Sales Tax Deferral Scheme (vide proceedings No. 10/3/2000/0886/ID, dt.6.6.2000,) pursuant to the Sales Tax attributable to the sales effected out of the production from the expansion pertaining to Cement Division from 600 TPD to 900 TPD is deferred (interest free) for a period of 14 years from 2000-01 or Rs. 1631.54 lacs (whichever is earlier), and the Deferred Sales Tax of each year is repayable after the expiry of 14 years subject to fulfillment of conditions specified in the proceedings. Based on the Sales Tax returns, the company has availed deferment of Sales Tax during the year Rs. 354.37 lacs (Previous year Rs. 168.37 lacs). The Sales Tax so deferred aggregating to Rs. 1631.54 lacs (previous year Rs. 1277.17 lacs)

(b) Sales tax exemption scheme vide letter No.30/2/2002/0788/1357/FD dated 23.10.2002 issued by Commissionarate of Industries, Hyderabad pertaining to the sales effected out of production from the new Slag Cement Division which is exempted for a period of 7 years or Rs. 3634.94 lacs (whichever is earlier). With the implementation of VAT w.e.f 01.04.2005 the said exemption amounting to Rs. 745.98 lacs has been converted into deferment and the balance period has also been doubled. The Company has availed this deferment amount of Rs. 745.98 lacs upto the years of 2006-07.

4. The amount of borrowing cost capitalized during the year is Rs. Nil (Previous Year Rs. 158.21)

5. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

6. Employee Benefits:

A) Defined Benefit Plan

a) Liability for retiring gratuity as on March 31st, 2011 is Rs. 156.26 Lacs (31.03.2010; Rs. 166.30 Lacs) of which Rs. 78.83 lacs (31.03.09 - Rs. 76.75 lacs) is funded with the Life Insurance Corporation of India (LIC) and the balance is included in provision for Gratuity. Liability for Gratuity and Cost of Compensated absences has been actuarially determined and provided for in the books.

7. Accounting Standard 18 - Related Party Disclosure.

i) Names of related parties and description of relationships

(i) Key Management Personnel (KMP)

a) Mr. M.B.Raju

b) Ms. P.Parvathi

(ii) Relatives of KMP

a) Ms. M.Lakshmi

b) Miss. P.Aishwarya

c) Mr. P.Anirudh

(iii) Directors

a) Mr. Umesh Shrivastava

b) Mr. K.P.Singh

c) Mr. P.Venugopal Raju

d) Mr. R.S.Agarwal

e) Mr. J.Narayana Murthy

(iv) Enterprises in which KMP or relatives having significant influence.

a) DCL Exim Limited.

b) Satya Sai Investments and Leasing Limited

c) MelviUie Finvest Limited

d) DCL Information Technologies Limited

8. Segment Reporting: The companys main business segment is manufacturing of Cement, hence there is no separate reportable segment as per "Segment reporting - Accounting Standard - 17 "

9. Balances of debtors, loans and advances and creditors are subjected to confirmations.

10. Previous Years figures have been recast, re - grouped and reclassified wherever necessary to conform to the current years classification.

11. Figures are rounded off to the nearest rupee. Figures in brackets represent credits/deductions to the extent applicable.


Mar 31, 2010

1. Contingent Liabilities :

Rs. in Lacs

Current Year Previous Year

a) Monies for which the company is contingently Liable:

i) Counter Guarantee 716.41 963.33

ii) Claims for non supply of cement by companys agent for the year 1995-96 pending in High Court of Andhra Pradesh 5.52 5.52

iii) Claims for difference in prices for the year 1994-95 filed by Metropolitan Transport Project, Chennai, matter pending with High Court of Chennai 6.83 6.83

b) Income Tax:

i) For the Asst. Year 97-98 towards disa- llowance of Debenture issue expenses and bad debts. Matter pending in appeal before the Income Tax Appellate Tribunal, Hyderabad 6.46 6.46

ii) For the Asst. Year 06 - 07 towards disa- llowance of deduction claimed u/s 80 I (A). Matter pending with CIT (appeals). 359.03 359.03

c) Sales Tax:

i) Regarding sales tax on packing materials in respect of Asst Year 1993-94 for which the company filed writ petition in the High Court of Andhra Pradesh and obtained stay on payment of 50% of the disputed demand 11.52 11.52

ii) Regarding sales tax on transfer of clinker from cement division to slag division for the years 2001-02 & 2005-06 The matter is pending in appeal before the Sales Tax Tribunal and stay has been obtained on payment of 50% of the disputed demand. 315.44 315.44

d) Difference in voltage surcharge charged by AP Transco Rs.42.33 lacs for the year 1999-2000 for which writ petition filed in the High Court of Andhra Pradesh and stay obtained. 42.33 42.33

(Total Liability Rs. 84.66 Lacs)

e) Input tax Credit on coal for the year 2004 -05 was withdrawn by the AP Govt, with retrospective effect which was challenged by the company in A P High Court. 50 % of the amount demanded was deposited by the company.

(Total Liability Rs. 32.27 Lacs) 16.13 16.13

f) Sales Tax Deferment for the year 2001-02 on the additional products manufactured, amounting to Rs. 168.97 Lacs stayed by the AP High Court. 168.97 168.97

g) Sales Tax Demand for the deemed excess production based on the Energy Audit for the years 1999-2000 & 2000-2001 85.68 85.68

h) The A.P. Government has issued a G.0. Ms. No 391 levying Water Rates on the quantum of water used in the generation of power and demanded payment of Rs. 723.29 lacs for the period 1997 to February 2008. Appeal is pending in the High Court. 723.29 723.29

i) Duty on Electricity generated and consumed was levied by the AP Govt, at 25 paise per unit for the years 2003-04 to 2008-09. The High court has stayed the operation of AP Electricity Duty Amendment Act,2003 316.23 316.23

2. Estimated amount of contracts to be executed on capital account not provided for (net of advances) : 406.00 466.00

3. Secured Loans:

A) Term Loans:

i) The Term Loans from Banks are secured by hypothecation of present and future immovable assets in favour of consortium of banks comprising of State Bank of India, State Bank of Hyderabad, State Bank of Mysore, State Bank of Saurashtra, Andhra bank and Indian Bank ranking pari passu charge except the current assets specifically charged to working capital lenders in respect of which second charge is created.

ii) The Term Loans are further secured by the personal guarantee of Mr. M B Raju, Chairman and Ms. P Parvathi, Managing Director till the additional mining rights are obtained to the satisfaction of the lenders.

B) Working Capital:

Cash Credit facility with State Bank of India and Andhra Bank is secured by hypothecation of stocks of raw materials, stock in process, finished goods, spares and book debts and second charge on Fixed Assets and further secured by the personal guarantee of Mr. M B Raju, Chairman and Ms. P. Parvathi, Managing Director.

4. Unsecured Loans:

The Government of Andhra Pradesh has extended to the company the incentive of: (a) Sales Tax Deferral Scheme vide their proceedings No. 10/3/2000/0886/ID dt.6.6.2000, pursuant to which the Sales Tax attributable to the sales effected out of the production from the expansion pertaining to Cement Division from 600 TPD to 900 TPD is deferred (interest free) for a period of 14 years from 2000-01 or Rs.1631.54 lacs (whichever is earlier), and the Deferred Sales Tax of each year is repayable after the expiry of 14 years subject to fulfillment of conditions specified in the proceedings. Based on the Sales Tax returns, the company has availed deferment of Sales Tax during the year Rs.168.37 lacs (Previous year Rs.108.95 lacs). The Sales Tax so deferred aggregates to Rs.1277.17 lacs (previous year Rs.1108.80 lacs)

(f) Sales tax exemption scheme vide letter No.30/2/2002/0788/1357/FD dated 23.10.2002 issued by Commissionarate of Industries, Hyderabad pertaining to the sales effected out of production from the new Slag Cement Division which is exempted for a period of 7 years or Rs.3634.94 lacs (whichever is earlier). With the implementation of VAI w.e.t 01.04.2005 the said exemption amounting to Ks.745.98 Lacs has been converted into deferment and the balance period has also been doubled. The Company has fully availed this deferment amount of Rs.745.98 lacs upto the year of 2006-07.

5. The amount of borrowing cost capitalized during the year is Rs.158.22 lacs (Land Nil, Buildings Rs. Nil lacs, Plant & Machinery Rs. 158.21 lacs and Others Rs.Nil lacs) (Previous year Rs. 2814.92).

6. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

7. Employee Benefits:

A) Defined Benefit Plan

a) Liability for retiring gratuity as on March 31st ,2010 is Rs.156.26 Lacs (31.03.2009; Rs.166.30 Lacs) of which Rs. 78.83 lacs (31.03.09 Rs. 76.75 lacs) is funded with the Life Insurance Corporation of India and the balance is included in provision for Gratuity. Liability for Gratuity and Cost of Compensated absences has been actuarially determined and provided for in the books.

b) The details of the Companys post-retirement benefit plans for its employees including whole time Directors are given below which are certified by the actuary.

8.Segment Reporting :The companys main business segment is manufac -turing of Cement,hence there is no separate reportable segment as per "Segment reporting -Accounting Standard -17".

9.Balances of debtors,loans and advances and creditors are subject to confirmations.

10.Previous Years figures have been recast re-grouped and reclassified wherever necessary to conform to the current years classification.

11.Figures are rounded off to the nearest rupee.Figures in brackets represent credits /deductions to the extent applicable.

 
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