Home  »  Company  »  JK Cement  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of JK Cement Ltd.

Mar 31, 2023

a. Terms and rights attached to equity shares

There are only 1 class of Equity shares having a par value of H10 each. Each holder of equity shares is entitled to one vote per share. 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. There is no restriction on distribution of dividend. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Debenture Redemption Reserve (DRR)

For the debentures issued and outstanding, the Company has created DRR in accordance with requirement of section 71 of the Companies Act 2013. However, pursuant to a Ministry of Corporate Affairs notification dated 16 August 2019 amending Section 71 of the Companies Act, 2013 and Rule 18 (7) of the Companies (Share Capital and Debentures) Rules, 2014, the Company is not required to maintain DRR for debentures issued and accordingly has applied the said change in provision to debentures issued prospectively post 31 March 2020.

General Reserve

The Company appropriates a portion to general reserves out of the profits voluntarily to meet future contingencies. The said reserve is available for payment of dividend to the shareholders as per the provisions of the Act.

Securities Premium

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

Retained earnings

Retained earnings represents all accumulated net income netted by all dividends paid to shareholders. Retained earnings includes re-measurement loss/(gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company.

Other Comprehensive Income

Remeasurement of defined benefit plans

Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits:

(a) actuarial gains and losses

(b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and

(c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset)

Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalentfiixed deposits and current investments.

In order to achieve this overall objective, the company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2023 and 31 March 2022.

Disaggregated revenue information

a. The Company is primarily in the business of manufacture and sale of cement. The product shelf life being short, all sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations which is typically upon dispatch/delivery. The amounts receivable from customers are generally on terms of 0 to 90 days. There is no significant financing component in any transaction with the customers.

b. The Company does not have any remaining performance obligation as contracts entered for sale of goods are for a shorter duration.

c. The Company does not provide performance warranty for products, therefore there is no liability towards performance warranty.

d. The management determines that the segment information reported in Note 37 is sufficient to meet the disclosure objective with respect to disaggregation of revenue under Ind AS 115 Revenue from contract with customers.

36. Contingent liabilities, contingent assets and commitments

A. Contingent liabilities in respect of:

As at 31 March 2023

As at 31 March 2022

1. Claim against the Company not acknowledged as debts includes show cause notices

pertaining to excise duty, interest which is included in point no. 5 below and others (cash flow is dependent on court decision pending at various level)

4,367.73

4,470.30

2. There are numerous interpretative issues relating to the Supreme Court (SC) judgement dated 28 February 2019 on Provident Fund (PF) on the inclusion of allowances for the purpose of PF contribution as well as its applicability of effective date. The Company is evaluating and seeking legal inputs regarding various interpretative issues and its impact.

As a matter of caution, the Company has applied the judgement on a prospective basis from the date of the SC order. The Company will update its provision for the period prior to the Supreme Court judgement, on receiving further clarity on the subject.

Other for which the Company is contingently liable

3. In respect of disputed demands for which Appeals are pending with Appellate Authorities/ Courts - no provision has been considered necessary by the Management

a) Excise duty and Octroi *

678.16

2,606.37

b) GST , Sales Tax and Entry Tax*

11,177.72

10,480.80

c) Service Tax*

-

48.56

d) Income Tax (primarily on account of disallowance of 80 IA claims, depreciation on goodwill and additional depreciation on power plants etc.)

3,187.97

6,219.95

4. In respect of interest on "Cement Retention Price" realised in earlier years

1,353.33

1,332.95

5. The Competition Commission of India (‘CCI'') has imposed penalty of H12,854 lacs (‘first

matter'') and H928 lacs (‘second matter'') in two separate orders dated 31 August 2016 and 19 January 2017 respectively for alleged contravention of provisions of Competition Act 2002 by the Company. The Company has filed appeals against the above orders. The National Company Law Appellate Tribunal (‘NCLAT''), on hearing the appeal in the first matter, upheld the decision of CCI for levying the penalty vide its order dated 25 July 2018. Post order of the NCLAT, CCI issued a revised demand notice dated 7 August 2018 of H15,492 lacs consisting of penalty of H12,854 lacs and interest of H2,638 lacs (included under ‘Claim against the Company not acknowledged as debts''). The Company has filed appeal with Hon''ble Supreme Court against the above order. Hon''ble Supreme Court has stayed the NCLAT order.

In the second matter, demand had been stayed and the matter is pending for the hearing before NCLAT.

While the appeal of the Company is pending for hearing, the Company backed by a legal opinion, believes that it has a good case and accordingly no provision has been considered in the books of accounts.

13,782.00

13,782.00

37. Segment information

Segment information is presented in respect of the Company''s key operating segments. The operating segments are based on the Company''s management and internal reporting structure.

Operating Segments

The Company''s Board of Directors have been identified as the Chief Operating Decision Maker (''CODM''), since they are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget, planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any new facility.

Board of Directors reviews the operating results at company level, accordingly there is only one Reportable Segment for the Company which is "Cement", hence no specific disclosures have been made.

B. Information about major customers (from external customers)

The Company has not derived revenues from single customer during the year as well as during previous year which amount to 10 per cent or more of the entity''s revenues.

38. Employee benefits

The Company contributes to the following post-employment defined benefit plans in India.

(ii) Defined Benefit Plan:

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Group Gratuity Trust (J. K. Cement Gratuity Fund) registered under Income Tax Act-1961.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2022. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the scheme''s bond holdings.

Life expectancy: The pension obligations are to provide benefits for the life of the member, so increase in life expectancy will result in increase in plans liability. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.

The Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans. Within this framework, the company''s ALM objective is to match assets to the pension obligations under the employee benefit plan term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency. The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. A large portion of assets at reporting date consists of government and corporate bonds, although the Company also invests in equities, cash and mutual funds. The Company believes that equities offer the best returns over the long term with an acceptable level of risk.

I. Social Security Code

The Code on Social Security, 2020 (''Code) amended and consolidated the laws relating to social security with the goal to extend social security to all employees and workers either in the organised or unorganised or any other sectors. In light of the amended code, employers are required to assess the impact of change in definition of wages on their organizations. A change in the definition of wage might have a large impact due to enhanced provision for gratuity/leave, net pay of employees, possible enhanced provision for Provident Fund and other employee benefits dependent on the wages.

The government decided to defer the decision to notify the date of implementation of the code, so the companies are advised to include a disclosure about the impact on transition to the new code in their financial statements. However, once the code becomes effective the entities will be required to evaluate if the changes are a plan amendment or change in actuarial assumption.

c) Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees (except corporate guarantee) provided or received for any related party receivables or payables.

B. Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:

(a) recognised and measured at fair value and

(b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted securities.

There are no transfers between level 1 and level 2 during the year.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

• the use of quoted market prices or dealer quotes for similar instruments

• the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date

• the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

The carrying amounts of trade receivables, trade payables, current borrowings, cash and cash equivalent, other bank balances, other current financial liabilities/ assets are considered to be the same as their fair values, due to their shortterm nature.

Valuation technique used to determine fair value

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values :

(a) The fair value of unquoted non current investments and other non current financial liabilities/assets (majorily Security deposits) are estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

(b) Fair value of current investment in mutual funds are based on market observable inputs i.e. Net Asset Value at the reporting date.

(c) The fair values of the Company''s interestbearing borrowings were determined by using Discounted Cash Flow (DCF) method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period.

(d) The fair value of lease liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

II. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

• credit risk;

• liquidity risk; and

• market risk

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the Risk Management Committee,

which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s Audit Committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers including deposits with banks and financial institutions.

Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,

management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the Risk Management Committee.

In monitoring customer credit risk, customers are accompanied according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors. The Company holds bank guarantees/ security deposits against trade receivables of H12,508.41 lacs (31 March 2022: H14,064.88 lacs) and as per the terms and condition of the agreements, the Company has the right to encash the bank guarantee or adjust the security deposits in case of defaults.

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables

During the year based on specific assessment, the Company recognised bad debts and advances of H0.04 lacs (31 March 2022: Nil).

The year end trade receivables do not include any amounts with such parties.

The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 9.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss

through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March 2023 and 31 March 2022 is the carrying amounts as shown in Note 4,8,10,11 & 12. The Company has not recorded any further loss during the year in these financial instruments and cash deposits as these pertains to counter parties of good credit ratings/credit worthiness.

A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macroeconomic factors

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that

it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalent on the basis of expected cash flows. This is generally carried out in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in Indian National Rupee (''INR''). and have an average maturity of Nil years (as at 31 March 2022 - Nil years).

Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.

Further the Company issued financial guarantee as disclosed in note 36 for which the possibility of payment is remote.

iv. Market risk

Market risk comprises of Interest rate risk, commodity risk and currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of interest rate risk and currency risk. Financial instruments affected by market risk primarily include trade and other receivables, trade and other payables and borrowings.

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry. In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified

portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

Commodity Price Risk

The Company is exposed to commodity price risk arising out of fluctuation in prices of raw materials (flyash, gypsum and laterite) and fuel (coal and pet coke). Such price movements, mostly linked to external factors, can affect the production cost of the Company. To manage this risk, the Company take steps such as monitoring of prices, optimising fuel mix and pursue longer and fixed price contracts, where considered necessary. Additionally, processes and policies related to such risks are controlled by central procurement team and reviewed by the senior management.

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency). The Company manages its foreign currency risk by taking foreign currency forward contracts, if required

Interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 31 March 2023 and 31 March 2022, the Company''s borrowings at variable rate were mainly denominated in Indian National Rupee (''INR'').

The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

44. Additional regulatory information required by Schedule III(i) Details of benami property held

No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Borrowing secured against current assets

The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the company with banks and financial institutions are in agreement with the books of accounts.

(iii) Wilful defaulter

None of the entities in the company have been declared wilful defaulter by any bank or financial institution or government or any government authority.

(iv) Relationship with struck off companies

The Company has not made any transactions during the year with the companies struck off under Companies Act, 2013 or Companies Act, 1956. However, there are certain old balances lying in

(v) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(vi) Compliance with approved scheme(s) of arrangements

The Board of Directors at their meeting held on August 14,2021 had approved a scheme of amalgamation involving amalgamation of Jaykay Cem (Central) Ltd (''wholly owned subsidiary company'') with JK Cement Ltd. under section 230 to 232 and other applicable provisions of the Companies Act, 2013 subject to requisite approvals. Under the aforesaid scheme the appointed date for the amalgamation is April 01, 2021.

The scheme has been approved by the Hon''ble National Company Law Tribunal(''NCLT'') on March 02, 2023 and management has made application to get the certified copy of the order on March 06, 2023 which is yet to be obtained from the NCLT. Further management is in the process to obtain the other necessary approvals including transfer of Mining right and other incentive scheme in the name of Company. The Scheme shall become effective upon receipt of all requisite approvals, fulfilment of conditions prescribed therein and upon filing of the certified copy of the NCLT Order with the Registrar of Companies involved in the Scheme.

(vii) Utilisation of borrowed funds and share premium

The Company has not advanced or lend or invested funds to any other person(s) or entity(ies),

including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(viii) Utilisation of borrowings availed from banks and financial institution

The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were taken.

(ix) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(x) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(xi) Valuation of PP&E, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(xii) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

45. Exceptional Item

J. K. Cement Works (Fujairah) FZC is incurring losses for the past several years since its incorporation and its net worth has been significantly eroded.

In the Current year, based on business valuation of J. K. Cement Works (Fujairah) FZC (step down subsidiary of J. K. Cement (Fujairah) FZC ) by an independent external valuer, the company had recognised provision towards diminution in carrying value of investment in J. K. Cement (Fujairah) FZC of Nil (31 March 2022 H13,000 lacs ) leading to total diminution in carrying value of investment in J.K. Cement (Fujairah) of H45,837.92 lacs as at March 31, 2023. The amount of H13,000 lacs was disclosed as an exceptional item in the previous year ended March 31, 2022.


Mar 31, 2022

Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalent, excluding discontinued operations.

Debenture Redemption Reserve (DRR)

For the debentures issued and outstanding as at 31 March 2022 the Company has created DRR in accordance with requirement of section 71 of the Companies Act 2013. However, pursuant to a Ministry of Corporate Affairs notification dated 16 August 2019 amending Section 71 of the Companies Act, 2013 and Rule 18 (7) of the Companies (Share Capital and Debentures) Rules, 2014, the Company is not required to maintain DRR for debentures issued and accordingly has applied the said change in provision to debentures issued prospectively post 31 March 2020.

General Reserve

The Company appropriates a portion to general reserves out of the profits voluntarily to meet future contingencies. The said reserve is available for payment of dividend to the shareholders as per the provisions of the Act.

Securities Premium

In order to achieve this overall objective, the company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2022 and 31 March 2021.

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

Retained earnings

Retained earnings represents all accumulated net income netted by all dividends paid to shareholders. Retained earnings includes re-measurement loss/(gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company.

Other Comprehensive Income Remeasurement of defined benefit plans

Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits:

(a) actuarial gains and losses

(b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and

(c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset)

to provide for income tax at old rates, considering available unutilised minimum alternative tax credit and other tax benefits/holidays.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relates to income taxes levied by the same tax authority.

"In assessing the realisability of deferred tax assets, management considers whether it is probable, that some portion, or all, of the deferred tax assets will not be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the years in which the temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable incomes over the years in which the deferred tax assets are deductible, management believes that it is probable that the Company will be able to realise the benefits of those deductible differences in future.In calculating the tax provisions, the Company has considered certain deductions under section 80IA as being deductible for tax purposes based on expert opinion and other court rulings in similar matters.Accordingly management has determined that no provision is required to be recognised for these deductions.

*The Government of India on 20 September 2019, vide the Taxation Laws (Amendment) Ordinance 2019, inserted a new section 115BAA in the Income-tax Act, 1961, which provides domestic companies a non-reversible option to pay corporate tax at reduced rates effective, 1 April 2019, subject to certain conditions. The Company is continuing *Loan repayable on demand are secured by first charge on current assets of the Company namely inventories, book debts etc. and second charge on PPE of the Company except the PPE pertaining to J. K. Cement Works, Gotan, J. K. Cement Works, Balasinor, J. K. Cement Works, Katni and the assets having exclusive charge of other lenders. Second charge on fixed assets at Karnataka plant shall rank pari passu with the State Govt. of Karnataka for interest free loan against VAT payable by the Borrower.

Disaggregated revenue information

a. The Company is primarily in the business of manufacture and sale of cement. The product shelf life being short, all sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations which is typically upon dispatch/delivery. The amounts receivable from customers are generally on terms of 0 to 90 days. There is no significant financing component in any transaction with the customers.

b. The Company does not have any remaining performance obligation as contracts entered for sale of goods are for a shorter duration.

c. The Company does not provide performance warranty for products, therefore there is no liability towards performance warranty.

d. The management determines that the segment information reported in Note 37 is sufficient to meet the disclosure objective with respect to disaggregation of revenue under Ind AS 115 Revenue from contract with customers.

('' in Lacs)

36. Contingent liabilities, contingent assets and commitments

For the year ended 31 March 2022

For the year ended 31 March 2021

A. Contingent liabilities in respect of:

1. Claim against the Company not acknowledged as debts (includes show cause notices pertaining to excise duty and others)(cash flow is dependent on court decision pending at various level)

4,470.30

6,941.93

2. There are numerous interpretative issues relating to the Supreme Court (SC) judgement dated 28 February 2019 on Provident Fund (PF) on the inclusion of allowances for the purpose of PF contribution as well as its applicability of effective date. The Company is evaluating and seeking legal inputs regarding various interpretative issues and its impact.

As a matter of caution, the Company has applied the judgement on a prospective basis from the date of the SC order. The Company will update its provision for the period prior to the Supreme Court judgement, on receiving further clarity on the subject.

Other for which the Company is contingently liable

3. In respect of disputed demands for which Appeals are pending with Appellate Authorities/ Courts - no provision has been considered necessary by the Management

a) Excise duty 1

2,606.37

2,351.44

b) Sales and Entry Tax1#

10,480.80

1,380.63

c) Service Tax1

48.56

48.56

d) Income Tax (primarily on account of disallowance of depreciation on goodwill and additional depreciation on power plants etc.)2

6,219.95

1,087.48

4. In respect of interest on "Cement Retention Price" realised in earlier years

1,332.95

1,312.57

5. The Competition Commission of India (''CCI'') has imposed penalty of ''12,854 lacs (‘first matter'') and ''928 lacs (‘second matter'') in two separate orders dated 31 August 2016 and 19 January 2017 respectively for alleged contravention of provisions of Competition Act 2002 by the Company. The Company has filed appeals against the above orders. The National Company Law Appellate Tribunal (''NCLAT''), on hearing the appeal in the first matter, upheld the decision of CCI for levying the penalty vide its order dated 25 July 2018. Post order of the NCLAT, CCI issued a revised demand notice dated 7 August 2018 of ''15,492 lacs consisting of penalty of ''12,854 lacs and interest of ''2,638 lacs. The Company has filed appeal with Hon''ble Supreme Court against the above order. Hon''ble Supreme Court has stayed the NCLAT order. While the appeal of the Company is pending for hearing, the Company backed by a legal opinion, believes that it has a good case and accordingly no provision has been considered in the books of accounts. In the second matter, demand had been stayed and the matter is pending for the hearing before NCLAT.

13,782.00

13,782.00

6. In respect of land tax levied by state Government of Rajasthan

15.46

15.46

7. In respect of demand of Railway Administration pending with Jodhpur High Court

257.16

218.86

8. In respect of charges on account of electricity duty, water cess etc. levied by Ajmer Vidyut Vitran Nigam Ltd (AVVNL)

5,117.69

6,489.34

9. In respect of Environmental and Health Cess

328.37

328.37

10. In respect of Interest on Rajasthan Electricity duty WHR 2017-18,2018-2019 and 20192020

460.51

460.51

11. In respect of Workmen Compensation Act Case no. 55/2020

6.33

-

12. In respect of S.B. Civil Misc. Appeal no. 919/2013

1.62

-

13. In respect of J. K. Cement Vs Jagdish Jatia & Others 89/2019

3.00

-

14. In respect of J. K. Cement Vs G.M.(Eastern)Railway Kolkata & Others 32/05 & 33/05, case nos 5299/2019 and 5312/2019

52.49

-

('' in lacs)

#The Company has opted the Amnesty Scheme Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019, announced by the Government of India,2021 in relation to disputed liabilities of entry tax cases. Entry tax cases have been settled upto 2011-12 and accordingly Company''s contingent liabilities in relation to these years have been reduced by ''5,042 lacs during the previous year.

Financial Guarantees

Corporate guarantees given to Banks for finance provided to subsidiary Companies.

9,594.87

38,897.98

The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required for the above guarantees.

B. Commitments

Capital commitment

7,356.41

8,934.48

C. Contingent assets

Insurance Claims

359.08

129.68

Refund expected in legal cases

259.17

-

(ii) Defined Benefit Plan:

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Group Gratuity Trust (J. K. Cement Gratuity fund) registered under Income Tax Act-1961.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2022. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

37. Segment information

Segment information is presented in respect of the Company’s key operating segments. The operating segments are based on the Company’s management and internal reporting structure.

Operating Segments

The Company’s Board of Directors have been identified as the Chief Operating Decision Maker (''CODM’), since they are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget, planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any new facility.

Board of Directors reviews the operating results at company level, accordingly there is only one Reportable Segment for the Company which is "Cement", hence no specific disclosures have been made.

F. Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level.

Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the scheme''s bond holdings.

Life expectancy: The pension obligations are to provide benefits for the life of the member, so increase in life expectancy will result in increase in plans liability. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.

The Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans. Within this framework, the company''s ALM objective is to match assets to the pension obligations under the employee benefit plan term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency. The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. A large portion of assets at reporting date consists of government and corporate bonds, although the Company also invests in equities, cash and mutual funds. The Company believes that equities offer the best returns over the long term with an acceptable level of risk.

I. Social Security Code

The Code on Social Security, 2020 (''Code) amended and consolidated the laws relating to social security with the goal to extend social security to all employees and workers either in the organised or unorganised or any other sectors. In light of the amended code, employers are required to assess the impact of change in definition of wages on their organizations. A change in the definition of wage might have a large impact due to enhanced provision for gratuity/leave, net pay of employees, possible enhanced provision for Provident Fund and other employee benefits dependent on the wages.

The government decided to defer the decision to notify the date of implementation of the code, so the companies are advised to include a disclosure about the impact on transition to the new code in their financial statements. However, once the code becomes effective the entities will be required to evaluate if the changes are a plan amendment or change in actuarial assumption.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

There are no transfers between level 1 and level 2 during the year.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

(i) The carrying amounts of trade receivables, trade payables, current borrowings, cash and cash equivalent, other bank balances, other financial liabilities, and other financial assets are considered to be the same as their fair values, due to their short-term nature. The fair values for security deposits are calculated based on cash flows discounted using a current lending rate.

(ii) The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

(iii) The fair value of the financial assets and liabilities is included at the amount at which the instrument is exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

II. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk"

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s Audit Committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers including deposits with banks and financial institutions.

Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the Risk Management Committee.

In monitoring customer credit risk, customers are accompanied according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors. The Company holds bank guarantees/ security deposits against trade receivables of ''14,064.88 lacs (31 March 2021: ''10,766.80 lacs) and as per the terms and condition of the agreements, the Company has the right to encash the bank guarantee or adjust the security deposits in case of defaults.

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

During the year based on specific assessment, the Company recognised bad debts and advances of '' Nil (31 March 2021: '' Nil). The year end trade receivables do not include any amounts with such parties.

The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 9.

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalent on the basis of expected cash flows. This is generally carried out in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March 2022 and 31 March 2021 is the carrying amounts as shown in Note 4,8,10,11 & 12. The Company has not recorded any further loss during the year in these financial instruments and cash deposits as these pertains to counter parties of good credit ratings/credit worthiness.

A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors.

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in Indian National Rupee (''INR''). and have an average maturity of Nil years (as at 31 March 2021 - Nil years).

Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.

Further the Company issued financial guarantee as disclosed in note 36 for which the possibility of payment is remote.

iv. Market risk

Market risk comprises of Interest rate risk commodity risk and currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of interest rate risk and currency risk. Financial instruments affected by market risk primarily include trade and other receivables, trade and other payables and borrowings.

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry. In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

Commodity Price Risk

The Company is exposed to commodity price risk arising out of fluctuation in prices of raw materials (flyash, gypsum and laterite) and fuel (coal and pet coke). Such price movements, mostly linked to external factors, can affect the production cost of the Company. To manage this risk, the Company take steps such as monitoring of prices, optimising fuel mix and pursue longer and fixed price contracts, where considered necessary. Additionally, processes and policies related to such risks are controlled by central procurement team and reviewed by the senior management.

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency). The Company manages its foreign currency risk by taking foreign currency forward contracts, if required.

Interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 31 March 2022 and 31 March 2021, the Company''s borrowings at variable rate were mainly denominated in Indian National Rupee (''INR'').

The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.


45. Additional regulatory information required by Schedule III

(i) Details of benami property held

No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Borrowing secured against current assets

The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the company with banks and financial institutions are in agreement with the books of accounts.

(iii) Wilful defaulter

None of the entities in the company have been declared wilful defaulter by any bank or financial institution or government or any government authority.

(v) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(vi) Compliance with approved scheme(s) of arrangements

The Board of Directors at their meeting held on August 14, 2021 had approved a scheme of amalgamation under Sections 230 to 232 read with other applicable provisions of the Companies Act 2013, involving amalgamation of Jaykaycem (Central) Ltd (''wholly owned subsidiary company'') with J. K. Cement Ltd with effect from the Appointed Date of April 01, 2021. The Scheme is subject to necessary approvals, including sanction of the Scheme by the Hon''ble National Company Law Tribunal, Allahabad Bench.

(vii) Utilisation of borrowed funds and share premium

The Company has not advanced or lend or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(viii) Utilisation of borrowings availed from banks and financial institution.

The borrowing obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were taken.

(ix) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(x) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(xi) Valuation of PP&E, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(xii) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

46. Exceptional Item

J. K. Cement Works (Fujairah) FZC is incurring losses for the past several years since its incorporation and its net worth has been significantly eroded. During the current year ended March 31, 2022 based on business valuation of J. K. Cement Works (Fujairah) FZC (Subsidiary of J. K. Cement (Fujairah) FZC ) by an independent external valuer, the company had recognised provision towards diminution of carrying amount of investment in J. K. Cement (Fujairah) FZC of ''13,000 lacs (31 March 2021 :''16,686.50 lacs). The amount of ''13,000 lacs (31 March 2021 : ''16,686.50 lacs) was disclosed as an exceptional item in the audited financial statement for the year ended on March 31, 2022.

47. COVID 19

The Company has considered the possible effects that may arise out of the still unfolding COVID-19 pandemic on the carrying amounts of property, plant & equipment, investments, trade receivables, etc. For this purpose, the Company has considered internal and external sources of information up to the date of approval of the Standalone Financial statement. Based on the current estimates, the Company does not expect any significant impact on such carrying values. The impact of COVID-19 on the Company''s financial statements may differ from that estimated as at the date of approval of Standalone Financial statement.

1

Disputes are primarily on account of disallowances of input credits, interest on entry tax, etc.

2

The Government of India introduced the Direct tax, Vivad se Vishwas scheme ,2020 by enactment of the Direct Tax Vivad Se Vishwas Act, 2020 and the Direct tax Vivad Se Vishwas Rules, 2020 for settlement of pending Income tax disputes. The Company has settled its pending Income Tax Disputes from AY 2005-06 to 2018-19 (except AY 2007-08 and 2008-09) Under the said scheme and accordingly corresponding contingent liabilities pertaining to these years have been reduced. Based on the final settlement orders received from the designated authority under the scheme for all the above years, the Company had recognised an amount of ''2,150.48 lacs in the Statement of Profit and Loss for the year ended 31 March 2021 and is included in the "Earlier year tax adjustment".


Mar 31, 2021

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

There are no transfers between level 1 and level 2 during the year.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

(i) The carrying amounts of trade receivables, trade payables, Short Term Borrowings, cash and cash equivalents, other bank balances, other financial liabilities, and other financial assets are considered to be the same as their fair values, due to their short-term nature. The fair values for security deposits are calculated based on cash flows discounted using a current lending rate.

(ii) The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs including own credit risk.

(iii) The fair value of the financial assets and liabilities is included at the amount at which the instrument is exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

II. Financial risk management

limits. Risk management policies and systems are

The Company has exposure to the following risks

reviewed regularly to reflect changes in market

arising from financial instruments:

conditions and the Company''s activities. The

- credit risk;

Company, through its training and management

- liquidity risk; and

standards and procedures, aims to maintain a

- market risk

disciplined and constructive control environment in which all employees understand their roles and

i. Risk management framework

The Company''s board of directors has overall

obligations.

responsibility for the establishment and oversight

The Company''s Audit Committee oversees

of the Company''s risk management framework.

how management monitors compliance with

The board of directors has established the Risk

the Company''s risk management policies and

Management Committee, which is responsible for

procedures, and reviews the adequacy of the risk

developing and monitoring the Company''s risk

management framework in relation to the risks

management policies. The committee reports

faced by the Company. The Audit Committee is

regularly to the board of directors on its activities.

assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad

The Company''s risk management policies are

hoc reviews of risk management controls and

established to identify and analyse the risks faced

procedures, the results of which are reported to

by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to

the Audit Committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers including deposits with banks and financial institutions.

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the Risk Management Committee.

In monitoring customer credit risk, customers are Companies according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors. The Company holds bank guarantees/security deposits against trade receivables of '' 10,766.80 lacs (31 March 2020: '' 7,847.63 lacs) and as per the terms and condition of the agreements, the Company has the right to encash the bank guarantee or adjust the security deposits in case of defaults.

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables

Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

During the based on specific assessment, the Company recognised bad debts of '' Nil (31 March 2020: '' Nil). The year end trade receivables do not include any amounts with such parties.

The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 9.

Reconciliation of loss allowance provision -Trade Receivables

Particulars

As at 31 March 2021

As at 31 March 2020

Opening Balance

1,238.27

1,089.97

Change in loss

16.84

148.30

allowance

Closing Balance

1,255.11

1,238.27

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March 2021 and 31 March 2020 is the carrying amounts as shown in Note 4,8,10,11 & 12. The Company has not recorded any further loss during the year in these financial instruments and cash deposits as these pertains to counter parties of good credit ratings/credit worthiness.

A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables

Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and

(All amounts are in '' lacs, unless otherwise stated)

cash equivalents on the basis of expected cash flows. This is generally carried out in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates.

In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in Indian National Rupee (''INR''). and have an average maturity of Nil years (as at 31 March 2020: Nil years).

Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.

iv. Market risk

Market risk comprises of Interest rate risk, commodity risk and currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of interest rate risk and currency risk. Financial instruments affected by market risk primarily include trade and other receivables, trade and other payables and borrowings.

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry. In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency). The Company manages its foreign currency risk by taking foreign currency forward contracts, if required

Interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 31 March 2021 and 31 March 2020, the Company''s borrowings at variable rate were mainly denominated in Indian National Rupee (''INR'').

The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

41. Details of dues to micro and small enterprises as defined under the MSMED, 2006

Information as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the year ended March 31,2021 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.


43. Corporate Social Responsibility

a. Amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during the year was '' 1,194.67 lacs (31 March 2020 : '' 866.70 lacs) i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act,2013.

b. Corporate Social Responsibility (CSR) activities undertaken during the year is '' 1,226.14 lacs (31 March 2020: '' 934.83 lacs). Further, no amount has been spent on construction/acquisition of an asset of the Company and entire amount is spent on cash basis.

44. Exceptional Item

J.K. Cement Works (Fujairah) FZC is incurring losses for the past several years since its incorporation and its net worth has been significantly eroded. Further its financial performance, including estimates of future cash flows and earnings, is significantly affected by the direct or indirect impacts of recent and ongoing COVID-19. During the quarter and year ended March 31,2021, based on business valuation of J.K. Cement Works (Fujairah) FZC (subsidiary of J.K. Cement (Fujairah) FZC) by an independent

external valuer, the Company had recognised provision towards diminution of carrying amount of investment in J.K. Cement (Fujairah) FZC of '' 16,686.50 lacs (31 March 2020 :'' 16,151 lacs). Additionally, the Company had also provided for outstanding receivable from earlier years from J.K. Cement (Fujairah) FZC amounting to Nil (31 March 2020 :'' 1,664 lacs). The total amount of '' 16.686.50 lacs (31 March 2020 : '' 17,815 lacs) is disclosed as an exceptional item in the audited financial results for the quarter and year ended March 31,2021.

45. COVID-19

On account of outbreak of COVID-19 pandemic and consequent lockdown imposed by the Government, the manufacturing facilities of the Company were temporarily shut down during the start of the current year. These facilities were opened in a phased manner in the months of April and May 2020 as the lockdown conditions were relaxed. Accordingly, sales volume of the current year is impacted, although cement demand has been progressively recovering over the year with improved prices. As at the year end, the country is again witnessing surge in COVID-19 cases referred to as second wave of pandemic. Although, the Government of India has ruled out a nationwide lockdown as of now, local and regional lockdowns / restrictions are implemented in certain areas. In these circumstances, safety of

our employees continues to be our key priority. Further, in view of such highly uncertain economic environment which is continuously evolving, the Company has considered the possible effects that may result from COVID-19 pandemic in the preparation of these financial results including the recoverability of carrying amounts of financial and non-financial assets. The Company has used internal and external sources of information for such

(All amounts are in '' lacs, unless otherwise stated)

assessment at the date of approval of these financial results and does not anticipate any challenge in the Company''s ability to continue as a going concern. The impact of pandemic on the Company''s financial results in subsequent periods is highly dependent on the situations as they evolve, and the eventual impact may differ from that estimated as at the date of approval of these financial results.


Mar 31, 2019

1. Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication on impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Units (‘CGUs’).

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or Amortization, if no impairment loss had been recognized.

2. Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

The board of directors of the Company has been identified as being the chief operating decision maker by the Management of the Company. Refer note 37 for segment information presented.

3. Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand and short-term deposits with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

4. Leases

Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company i.e. amount is not significant for revenue or lease paid is below than one year or such lease arrangements are directly charged to revenue mainly go down or official lease accommodation are charged under Rent Head- as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lesser) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the less or’s expected inflationary cost increases.

5. Exceptional item.

Items of income or expense of non-routine are presented separately when their nature and amount of such significance and is relevant to an understanding of the entity’s financial performance.

6. Earnings Per Share (EPS)

Basic earnings per share are computed by dividing the profit for the year by the weighted average number of equity shares outstanding during the period. Diluted earnings per shares is computed by dividing the profit for the year by the weighted average number of equity shares considered for deriving basic earnings per shares and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

(i) The amount incurred by Company as at 31st March 2019,ownership of which vests with State Electricity Boards & Indian Railways is cost Rs, 5,029.53 lacs (31st March 2018: Rs, 5,029.13 lacs), Amortization Rs, 1,117.04 lacs (31st March 2018: Rs, 817.83 lacs) and net block Rs, 3,912.49 lacs (31st March 2018: Rs, 4,211.30 lacs)

(ii) The amount of Rs, 10,743.92 Lacs represents the amount capitalised during the year.

(iii) It includes freehold land for mining having cost of Rs, 3,082.44 lacs (31st March 2018 :Rs, 3,082.44 lacs), Amortization of Rs, 917.85 lacs (31st March 2018 : Rs, 812.29 lacs) and net block of Rs, 2,164.61 lacs ( 31st March 2018: Rs, 2,270.15 lacs)

(iv) Property, plant & equipment pledged as security: Refer note 17 for information on property, plant & equipment pledged as security by the Company.

(v) The title deeds of immovable properties included in property, plant and equipment are held in the name of the Company except for 1 case of leasehold land and 4 cases of freehold land amounting to gross block of Rs, 1,353.07 lacs (net block: Rs, 70.42 lacs) and gross block of Rs, 225.64 lacs (net block: Rs, 225.64 lacs) respectively as at March 31, 2019 for which title deeds are in the name of the erstwhile Company that merged with the Company pursuant to a scheme of amalgamation and arrangement as approved by the honorable High Court in earlier years.

(vi) Assets related to thermal power plant and other DG sets at Rajasthan location are decapitalised and kept for final disposal refer note no 45 & 46.

Refer note 17 for information on inventories pledged as security by the company. *It includes Project Machinery in Transit of Rs,1266.39 Lacs (31st March 2018 : Nil).

# The Company through Qualified Institutions Placement (QIP) allotted 73,41,001 Equity Shares (fully paid up) to the eligible Qualified Institutional Buyers (QIB) at a price of Rs,695.80 per equity share of face value of Rs,10 each (inclusive of premium of Rs,685.80 per equity share) aggregating to Rs,51,078.68 lacs. The issue was made in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended. Pursuant to the allotment of equity shares in the QIP, the paid up equity share capital of the Company has increased from Rs,6,992.72 lacs comprising of 6,99,27,250 equity shares to Rs,7,726.83 lacs comprising of 7,72,68,251 equity shares. Share issue expenses are charged off against securities premium.

Debenture Redemption Reserve (DRR)

The Company has issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and Debentures) Rules, 2014 (as amended), require the Company to create DRR out of profits of the Company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of outstanding debentures.

General reserve

The Company appropriates a portion to general reserves out of the profits either as per the requirements of the Companies Act 2013 (‘Act’) or voluntarily to meet future contingencies. The said reserve is available for payment of dividend to the shareholders as per the provisions of the Act

Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

Other Comprehensive Income Remeasurement of defined benefit plans

“Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits:

(a) actuarial gains and losses

(b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and

(c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset).

Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents, excluding discontinued operations.

In order to achieve this overall objective, the company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2019 and 31 March 2018.

7. SEGMENT INFORMATION

Segment information is presented in respect of the company’s key operating segments. The operating segments are based on the company’s management and internal reporting structure.

Operating Segments

The Company’s Board of Directors have been identified as the Chief Operating Decision Maker (‘CODM’), since they are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget, planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any new facility.

Board of Directors reviews the operating results at company level, accordingly there is only one Reportable Segment for the Company which is “Cement”, hence no specific disclosures have been made.

B. Information about geographical areas

Non-current assets (Property, plant and equipment, Intangible assets and other non-current assets ) are in India

C. Information about major customers (from external customers)

The Company has not derived revenues from single customer during the year as well as during previous year which amount to 10 per cent or more of the entity’s revenues.

8. EMPLOYEE BENEFITS

The Company contributes to the following post-employment defined benefit plans in India.

(i) Defined Contribution Plans:

The Company makes contributions towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits.

(ii) Defined Benefit Plan:

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Group Gratuity Trust registered under Income Tax Act-1961.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2019. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

B. Movement in net defined benefit (asset) liability - Gratuity (Funded)

The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) liability and its components:

C. Plan assets

The plan assets are managed by the Gratuity Trust formed by the Company. The management of 100% of the funds is entrusted according to norms of Gratuity Trust, whose pattern of investment is available with the Company.

Assumptions regarding future mortality have been based on published statistics and mortality tables.

At 31 March 2019, the weighted-average duration of the defined benefit obligation was 6 years (as at 31 March 2018: 6 years).

E. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

F. Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level.

Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the scheme’s bond holdings.

Life expectancy: The pension obligations are to provide benefits for the life of the member, so increase in life expectancy will result in increase in plans liability. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.

The Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans. Within this framework, the group’s ALM objective is to match assets to the pension obligations under the employee benefit plan term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency. The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. A large portion of assets at reporting date consists of government and corporate bonds, although the group also invests in equities, cash and mutual funds.

The group believes that equities offer the best returns over the long term with an acceptable level of risk.

9. RELATED PARTIES

(1) (a) Parties where the control/significant influence exists:

i) Yadu International Ltd

(b) Key management Personnel & their Relatives:

i) Shri Yadupati Singhania Chairman & Managing Director

ii) Smt. Shushila Devi Singhania Relative of Chairman & Managing Director

iii) Shri Ajay Kumar Saraogi President (Corp.Affairs) & CFO

iv) Shri Shambhu Singh Company Secretary

v) Shri Achintya Karati Non Executive Independent Director

vi) Shri Jayant Narayan Godbole Non Executive Independent Director

vii) Dr. Krishna Behari Agarwal Non Executive Independent Director

viii) Shri K.N.Khandelwal Non Executive Non Independent Director

ix) Shri Raj Kumar Lohia Non Executive Independent Director

x) Shri Suparas Bhandari Non Executive Independent Director

xi) Mr. Paul Heinz Hugentobler Non Executive Non Independent Director

xii) Shri Shyam Lal Bansal(Till June 12,2018) Non Executive Independent Director

xiii) Smt. Deepa Gopalan Wadhwa(w.e.f. Nov 3,2018) Non Executive Independent Director

(c) Enterprises significantly influenced by Key Management Personnel or their Relatives.

i) Jaykay Enterprises Ltd

ii) J K Cotton Ltd.

iii) Jaykaycem (Eastern) Ltd

iv) J K Cement(Western) Ltd

(d) Subsidiary Companies

i) J K Cement (Fujairah) FZC (Holding Company of ( ii) below)

ii) J K Cement Works(Fujairah) FZC

iii) Jaykaycem(Central) Ltd

iv) J K White Cement(Africa) Ltd.

(e) Joint Venture

i) Bander Coal Company Pvt. Ltd. (for part of the year as liquidated during the year under the provisions of Companies Act, 2013)

b) Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees (except corporate guarantees) provided or received for any related party receivables or payables. For the year ended 31 March 2019, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2018: '' Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

10. OPERATING LEASE

The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.

B. Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are:

(a) recognized and measured at fair value and

(b) measured at amortized cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

There are no transfers between level 1 and level 2 during the year

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

(i) The carrying amounts of trade receivables, trade payables, Short Term Borrowings, cash and cash equivalents, other bank balances, other financial liabilities, and other financial assets are considered to be the same as their fair values, due to their short-term nature.

The fair values for security deposits are calculated based on cash flows discounted using a current lending rate.

(ii) The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

(iii) The fair value of the financial assets and liabilities is included at the amount at which the instrument is exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

II. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk

i. Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The committee reports regularly to the board of directors on its activities.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers including deposits with banks and financial institutions.

Trade and other receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Risk Management Committee has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the Risk Management Committee.

In monitoring customer credit risk, customers are Companies according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors. The Company holds bank guarantees/security deposits against trade receivables of Rs,6764.94 lacs (31 March 2018: Rs,5646.56 lacs) and as per the terms and condition of the agreements, the Company has the right to encash the bank guarantee or adjust the security deposits in case of defaults.

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables

Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

During the based on specific assessment, the Company recognized bad debts and advances of Rs,3.02 lacs (31 March 2018: Rs,9.85 lacs).

The yearend trade receivables do not include any amounts with such parties.

The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 9

Reconciliation of loss allowance provision -Trade Receivables

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2019 and 31 March 2018 is the carrying amounts as shown in Note 4,8,10,11 & 12. The Company has not recorded any further loss during the year in these financial instruments and cash deposits as these pertains to counter parties of good credit ratings/credit worthiness.

A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors.

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

Expected credit losses are a probability weighted estimate of credit losses.

Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.

Further the Company issued financial guarantee as disclosed in note 39 for which the possibility of payment is remote.

iv. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of interest rate risk and currency risk. Financial instruments affected by market risk primarily include trade and other receivables, trade and other payables and borrowings.

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency). The Company manages its foreign currency risk by taking foreign currency forward contracts, if required

Sensitivity analysis

A reasonably possible strengthening (weakening) of the INR against all other currencies at 31 March would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

Interest rate risk

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 31 March 2019 and 31 March 2018, the Company’s borrowings at variable rate were mainly denominated in INR.

The Company’s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

11. CORPORATE SOCIAL RESPONSIBILITY

a. Amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during the year was Rs,640.26 lacs i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act, 2013.

b. Corporate Social Responsibility (CSR) activities undertaken during the year is Rs,668.97 lacs. Further, no amount has been spent on construction/acquisition of an asset of the Company and entire amount is spent on cash basis.

12. ASSETS HELD FOR SALE

During previous year, the Company had entered into agreement to sell the thermal power plant and other DG sets at Rajasthan location as these were not in active use. Accordingly, these assets were classified as ''held for sale''. Sale of these assets are expected to be completed within next 12 months.

13. EXCEPTIONAL ITEMS

This represents the loss booked on accounts of sale of thermal power plant and other DG sets in previous year.

14. STANDARDS ISSUED BUT NOT YET EFFECTIVE

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

Ind AS 116 Leases

Ind AS 116 Leases was notified by MCA on 30 March 2019 and it replaces Ind AS 17 Leases, including appendices thereto.

Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees

- leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.

Less or accounting under Ind AS 116 is substantially unchanged from today’s accounting under Ind AS 17. Lessors will continue to classify all leases using the same classification principle as in Ind AS 17 and distinguish between two types of leases: operating and finance leases.

The Company intends to adopt these standards from 1 April 2019. The impact on adoption of Ind AS 116 on the financial statements is given below. Ind AS 116 also requires lessees and lessors to make more extensive disclosures than under Ind AS 17.

Transition to Ind AS 116

The Company is proposing to use the ‘Modified Retrospective Approach’ for transitioning to Ind AS 116, and take the cumulative adjustment to retained earnings, on the date of initial application (April 1, 2019). Accordingly, comparatives for the year ending or ended March 31, 2019 will not be retrospectively adjusted. The Company has elected certain available practical expedients on transition.

The company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated

Amendments to Ind AS 12: Income Taxes

The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognizes the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognized those past transactions or events.

An entity applies those amendments for annual reporting periods beginning on or after 1 April 2019. Since the Company’s current practice is in line with these amendments, the Company does not expect any effect on its financial statements.

Amendments to Ind AS 23: Borrowing Costs

The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete.

An entity applies those amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which the entity first applies those amendments. An entity applies those amendments for annual reporting periods beginning on or after 1 April 2019. Since the Company’s current practice is in line with these amendments, the Company does not expect any effect on its financial statements.


Mar 31, 2017

1. SEGMENT INFORMATION

Segment information is presented in respect of the company’s key operating segments. The operating segments are based on the company’s management and internal reporting structure.

Operating Segments

The Company’s Board of Directors have been identified as the Chief Operating Decision Maker (‘CODM’), since they are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget, planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any new facility.

Board of Directors reviews the operating results at company level, accordingly there is only one Reportable Segment for the Company which is “Cement”, hence no specific disclosures have been made.

Present values have been taken as per Companies Act and grouped into Cement.

B. Information about geographical areas

Non-current assets (Property, plant and equipment, Intangible assets and other non-current assets ) are in India

C. Information about major customers (from external customers)

The Company has not derives revenues from the customers which amount to 10 per cent or more of an entity’s revenues.

2. EMPLOYEE BENEFITS

The Company contributes to the following post-employment defined benefit plans in India.

(i) Defined Contribution Plans:

The Company makes contributions towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits.

(ii) Defined Benefit Plan:

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Group Gratuity cum Life Assurance Schemes administered by the LIC of India.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2017. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognized in the Company’s financial statements as at balance sheet date:

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

G. Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimize risk to an acceptable level.

Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the scheme’s bond holdings.

Life expectancy: The pension and medical plan obligations are to provide benefits for the life of the member, so increase in life expectancy will result in increase in plans liability. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.

The company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans. Within this framework, the group’s ALM objective is to match assets to the pension obligations under the employee benefit plan term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency. The company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The company has not changed the processes used to manage its risks from previous periods. The company uses derivatives to manage some of its risk. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. A large portion of assets in 2017 consists of government and corporate bonds, although the group also invests in equities, cash and mutual funds. The group believes that equities offer the best returns over the long term with an acceptable level of risk.

3. RELATED PARTIES

(1) (a) Parties where the control/significant influence exists.

i) Yadu International Ltd

(b) Key Management Personnel & their Relatives:

i) Shri Yadupati Singhania Chairman & Managing Director

ii) Smt. Shushila Devi Singhania Relative of Chairman & Managing Director

iii) Shri Ajay Kumar Saraogi President (Corp.Affairs) & CFO

iv) Shri Shambhu Singh Company Secretary

v) Shri Achintya Karati Non Executive Independent

vi) Shri Jayant Narayan Godbole Non Executive Independent

vii) Dr. Krishna Behari Agarwal Non Executive Independent

viii) Shri K.N.Khandelwal Non Executive Non Independent

ix) Shri Raj Kumar Lohia Non Executive Independent

x) Shri Suparas Bhandari Non Executive Independent

xi) Mr. Paul Heinz Hugentobler Non Executive Non Independent

xii) Shri Shyam Lal Bansal Non Executive Independent

(c) Enterprises significantly influenced by Key Management Personnel or their Relatives.

i) Jaykay Enterprises Ltd

ii) J.K. Cotton Ltd.

iii) Jaykaycem (Eastern) Ltd

iv) J.K.Cement(Western) Ltd

(d) Subsidiary Companies.

i) J.K. Cement (Fujairah) FZC (Holding Company of ( ii) below)

ii) J.K. Cement Works(Fujairah) FZC

iii) Jaykaycem(Central) Ltd

(e) Joint Venture

i) Bander Coal Company Pvt. Ltd

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

(2) a) Following are the transactions with related parties as defined under section 188 of Companies Act 2013.

b) Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees (except corporate bank guarantees) provided or received for any related party receivables or payables. For the year ended 31 March 2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: INR Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

4(A). CORPORATE SOCIAL RESPONSIBILITY

a. Amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during the year was ''308.58 lacs i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act,2013

b. Corporate Social Responsibility (CSR) activities undertaken during the year is '' 322.69 lacs. Further, no amount has been spent on construction/acquisition of an asset of the Company and entire amount is spent on cash basis.

40(B). OPERATING LEASE

The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.

5. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT

I. Fair value measurements

A. Financial instruments by category

B. Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are:

(a) recognized and measured at fair value and

(b) measured at amortized cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

There are no transfers between level 1 and level 2 during the year

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

All of the resulting fair value estimates are included in level 2 except for unlisted equity securities and preference shares, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.

Valuation process

The finance department of the Company performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the chief financial officer (CFO).

Discussions of valuation processes and results are held between the CFO and the finance team at least once every three months, in line with the Company’s quarterly reporting periods.

The main level 3 inputs for unlisted equity securities, unlisted preference shares used by the Company are derived and evaluated as follows:

- Risk adjusted discount rates are estimated based on expected cash inflows arising from the instrument and the entity’s knowledge of the business and how the current economic environment is likely to impact it.

Changes in level 2 and 3 fair values are analyzed at the end of each reporting period during the quarterly valuation discussion between the CFO and the finance team.

The carrying amounts of trade receivables, trade payables, capital creditors and cash and cash equivalents, other bank balances, other financial liabilities, other current financial liabilities and other current financial assets are considered to be the same as their fair values, due to their short -term nature.

The fair values for loans, security deposits and investment in preference shares were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

II. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk

i. Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The committee reports regularly to the board of directors on its activities.

The Company’s risk management policies are established to identify and analyses the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investments in debt securities.

The carrying amount of financial assets represents the maximum credit exposure.

Trade and other receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Risk Management Committee has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, and in some cases bank references.

Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the Risk Management Committee.

More than 85% of the Company’s customers have been transacting with the Company for over four years, and no impairment loss has been recognized against these customers. In monitoring customer credit risk, customers are Companied according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties.

A default on financial assets is when the counterparty fails to make contractual payments within 60 days of when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables

Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive).

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of trade receivables is INR 15552.54 lacs (31 March 2016 - INR17171.39 lacs, 1 April 2015 - INR 14506.86 lacs).

During the period, the Company has made no write-offs of trade receivables, it does not expect to receive future cash flows or recoveries from collection of cash flows previously written off.

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in the operating companies of the Company in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR and have an average maturity of 9.65years (as at 31 March 2016 - 8.36 years and as at 1 April 2015 - 8.47 years).

(b) Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.

The inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity.

The interest payments on variable interest rate loans and bond issues in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change.

iv. Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company uses derivatives to manage market risks.

All such transactions are carried out within the guidelines set by the Risk Management Committee. Generally, the Company seeks to apply hedge accounting to manage volatility in profit or loss.

Currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US$, EUR and GBP. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the company’s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimize the volatility of the INR cash flows of highly probable forecast transactions.

Currency risks related to the principal amounts of the Company’s foreign currency payables, have been partially hedged using forward contracts taken by the Company.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company’s policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the INR against all other currencies at 31 December would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

Interest rate risk

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 31 March 2017 and 31 March 2016, the Company’s borrowings at variable rate were mainly denominated in INR.

The Company’s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Currently the Company’s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

7. FIRST TIME ADOPTION OF IND AS

As stated in note 2, these are the Company’s first financial statements prepared in accordance with Ind AS. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31st March 2017, the comparative information presented in these financial statements for the year ended 31st March 2016 and in the preparation of an opening Ind AS statement of financial position at 1st April 2015 (the Company’s date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

Exemptions and exceptions availed:

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Ind AS optional exemptions

(i) Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

(ii) Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease.

In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.

B. Ind AS mandatory exceptions

(i) Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP"

D: Notes to first-time adoption:

1. Revenue

Under Ind AS, revenue from operations is presented as inclusive of excise duty as per Ind-AS 18. The excise duty paid is presented in cost of material consumed on the face of financial statements. This change has resulted in an increase in total revenue and total expenses for the year ended 31st March 2016 by INR 57,060.38 Lacs. Adjustment to revenue also includes the Impact of Government Grant received for modernization of Plant Gotan and Nimbahera plants is amortized over the life of depreciable assets. Deferral of revenue pertaining to free cost of goods has impacted in reduction of total revenue by INR 31.68 lacs.

2. Other Income

Other income consist of Exchange gain arising on reinstatement of investment in JK Fujairah (redeemable preference shares) which is INR 732 Lacs, Gain on fair valuation of current investment which is INR 13.07 Lacs.

3. Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31st, 2016 decreased by '' 159.30. There is no impact on the total equity as at 31 March 2016.

4. Finance cost

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, on account on long term borrowings, debentures and deferred sales tax loans, the profit for the year ended 31st March 2016 reduced by INR 115.6 Lacs as a result of the additional interest expense.

5. Depreciation and Amortization Expenses

This is due to the impact of amortizing Freehold mining land from inception till the date of transition which is based on extraction of minerals from the ore body. The profit for the year ended 31st March 2016 have been reduced by INR 57.43 Lacs as a result of the this adjustment.

Capital stores and spares have been reclassified to plant, property and equipment, due to this transaction profit for the year ended 31st March 2016 has been reduced to INR 726.06 lacs.

6. Other Expenses

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognized at fair value. Accordingly, the group has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognized as prepaid rent. Consequent to this change, the amount of security deposits decreased by INR 56.66 Lacs as at 1st April 2015. The prepaid rent increased by INR 56.66 Lacs as at 1st April 2015. The profit for the year and total equity as at 31st March 2016 decreased by INR 1.14 Lacs due to amortization of the prepaid rent of INR 15.15 Lacs which is partially off-set by the notional interest income of INR 13.74 Lacs recognized on security deposits.

7. Proposed Dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of '' 3,366.51 Lacs as at 31st March 2016 (1 April 2015 - '' 3,366.51 Lacs ) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

8. Deferred Tax

Deferred tax have been recognized on the adjustments made on transition to Ind AS.

9. Retained earnings

Retained earnings as at April 1, 2015 has been adjusted consequent to the above Ind AS transition adjustments on the date of transition.

10. Vehicle Loan

Impact of measuring the interest free vehicle loans to employees at fair value.

11. Classification of fixed deposits

Fixed deposit have been classified in between cash and cash equivalents and bank balances with others

12. Reclassification of MAT Credit Entitlement as per Ind AS -12 from short term loans and advances to deferred tax asset, and Deferred tax impact of Ind AS adjustments.


Mar 31, 2014

1. DISCLOSURE OF COMPANY''S INTEREST IN JOINTVENTURE.

The Ministry of Coal, Government of India, has allotted a Coal block in Maharashtra to the Company together with two other allottees for captive consumption. The allottees have formed a Joint Venture Company i.e. Bander Coal Company Private Ltd.(BCCPL) for the aforesaid purpose. In terms of Joint Venture agreement, the Company has been allotted 375000 Equity Shares of Rs. 10/- each aggregating 37.5% of the Paid-up Equity Share Capital of BCCPL. During the yean the ministry of coal, Govt, of India issued an order for de-allocation of the Coal Block.

2. Board of Directors have proposed dividend of Rs. 3 per equity share of face value of Rs. 10/- each.

3. The Company is engaged only in cementious materials and there are no separate reportable segments as per AS-17.

Rs./Lacs 31 -03-2014 31 -03-2013

4. CONTINGENT LIABILITIES AND COMMITMENTS.

I. A) Contingent Liabilities

i) In respect of claims not acknowledged as debts by the Company 10956.76 6653.00

ii) In respect of disputed demands for which Appeals are pending with Appellate Authorities/Courts - no provision has been considered necessary by the Management

a) Excise duty 1598.51 1452.55

b) Sales tax 4932.37 3834.79

c) Service tax 1085.42 890.17

5. The Ministry of Corporate Affairs, Government of India, vide General Circular no. 2 and 3 dated 8th February 2011 and 21st February 201 I respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to the fulfilment of conditions stipulated in the circular The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information’s relating to the subsidiaries has been included in the Consolidated Financial Statements.

6. Previous year figures have been regrouped and recasted wherever necessary to conform to the classification for the year


Mar 31, 2013

1.1 Government Of Rajasthan Has Issued An Entitlement Certificate By Which The Company Is Entitled For Interest Subsidy Under Rajasthan Investment Promotion Scheme,2003.Government Has Released Rs. 9473.41 Lacs As Interest Subsidy For The Period 1st December, 2004 To 31st March, 2013 Including Rs. 84.41 Lacs During The Year Which Has Been Accounted For As Capital Receipt Based On Expert Advice.

2.2 (I) Term Loans Related To Cement Plants At Rajasthan

A) From Banks : Rs. 19003.28 Lacs (Rs. 13522.62 Lacs)

Secured By First Pari-Passu Charge By Way Of Equitable Mortgage Of All The Immovable Assets And Hypothecation Of All The Movable Assets Of The Company Both Present And Future Save And Except Inventories , Book Debts, Cash And Bank Balances And All Assets Pertaining To J.K. Cement Works, Gotan, J.K. Cement Works, Muddapur, Karnataka And Properties Having Exclusive Charge Of Other Lenders.

B) From Canara Bank : Rs. 1566.47 Lacs (Rs. 2424.53 Lacs)

Secured By Equitable Mortgage Of Immovable Properties And Hypothecation Of Movable Assets Pertaining To Undertaking Of J.K. Cement Works, Gotan Except Current Assets And Vehicles.

(ii) Term Loans Related To Cement Plant At Karnataka

From Consortium Of Banks: : Rs. 34151.28 Lacs (Rs. 43042.20 Lacs)

Secured By First Pari-Passu Charge By Way Of Equitable Mortgage Of All The Immovable Assets And Hypothecation Of All Movable Assets , Present And Future (Save And Except Book Debts) Pertaining To J.K. Cement Works, Muddapur, Karnataka Subject To Prior Charges In Favour Of Working Capital Lenders On Inventories And Other Current Assets.

(iii) Term Loans Related To The Properties: Rs. 4194.74 Lacs (Rs. 5585.07 Lacs)

Secured By Exclusive Charge By Way Of Equitable Mortgage Over The Immovable Assets And Hypothecation Of Movable Assets Pertaining To The Specified Properties.

1.4 VAT Loan(Interest Free) From Govt. Of Karnataka: 2879.24 Lacs (Rs. 1491.21 Lacs)

Secured By Second Pari Passu Charge By Way Of Equitable Mortgage Of Land Building And Plant And Machinery Pertaining To J.K. Cement Works, Muddapur, Karnataka And Bank Guarantee. Second Charge On Assets Are Yet To Be Created.

Maturity Profile: Payable After September, 2021 Onwards.

1.5 Unsecured Loans: Rs. 5922.65 Lacs (Rs. 6800.23 Lacs)

8% Unsecured Loan Rs. 507.76 Lacs (Rs. 1839.06 Lacs) Granted By Government Of Rajasthan Payable In Equitable Monthly Instalments Upto July, 2013.

Rs. 396.03 Lacs (Rs. 520.63 Lacs) As At 31st March, 2013 Interest Free Deferred Sales Tax Liability Payable In Quarterly Equitable Instalment In Next 4 Years.

Rs. 489.32 Lacs (Rs.489.32 Lacs) Interest Free Deferred Sales Tax Liability Payable In Quarterly Equitable Instalment In 5 Years From July, 2013 Onwards. The Instalment Amount Is Rs. 24.47 Lacs.

Rs. 4529.54 Lacs (Rs. 3951.22 Lacs) Interest Free Deferred Sales-Tax Liability. The Availment Of Said Scheme Is Still Continued. The Payment After Accumulation Of Said Scheme Will Start W.E.F. July, 2014 Payable In Quarterly Equitable Instalment In Five Years.

2.1 Cash Credit Account: Rs. 18865.43 Lacs (Rs.8282.71 Lacs)

Cash Credit Accounts Are Secured By First Charge On Current Assets Of The Company Namely Inventories, Book Debts, Etc. And Second Charge On Fixed Assets Of The Company Except The Fixed Assets Pertaining To J.K. Cement Works, Gotan And The Assets Having Exclusive Charge Of Other Lenders.

3.1 Based On The Information Available With The Company Regarding The Status Of Suppliers As Defined Under MSMED Act,2006, There Was No Principal Amount Overdue And No Interest Was Payable To The Micro, Small And Medium Enterprises On 31st March, 2013 As Per The Terms Of Contract.

4. Disclosure OF COMPANY''S Interest In Joint VENTURE.

The Ministry Of Coal, Government Of India, Has Allotted A Coal Block In Maharashtra To The Company Together With Two Other Allottees For Captive Consumption. The Allottees Have Formed A Joint Venture Company I.E. Bander Coal Company Private Ltd. (BCCPL) For The Aforesaid Purpose. In Terms Of Joint Venture Agreement, The Company Has Been Allotted 375000 Equity Shares Of Rs. 10/- Each Aggregating 37.5% Of The Paid-Up Equity Share Capital Of BCCPL.

Details Of The Company''s Interest In Its Joint Venture, Having Joint Control, As Per The Requirement Of Accounting Standard(AS)-27 On ''Financial Reporting Of Interests In Joint Ventures'', Are As Under Based On Unaudited Annual Accounts For The Year Ended 31st March, 2013. However, There Would Not Be Material Changes As The Company Is In Process Of Getting Necessary Approvals.

5. Board Of Directors Have Proposed Dividend Of Rs. 6.50 Per Equity Share Of Face Value Of Rs. 10/- Each.

6. The Company Is Engaged Only In Cementious Materials And There Are No Separate Reportable Segments As Per AS-17.

7. The Ministry Of Corporate Affairs, Government Of India, Vide General Circular No. 2 And 3 Dated 8th February, 2011 And 21st February, 2011 Respectively Has Granted A General Exemption From Compliance With Section 212 Of The Companies Act, 1956, Subject To The Fulfilment Of Conditions Stipulated In The Circular. The Company Has Satisfied The Conditions Stipulated In The Circular And Hence Is Entitled To The Exemption. Necessary Informations Relating To The Subsidiaries Has Been Included In The Consolidated Financial Statements.

8. Previous Year Figures Have Been Regrouped And Recasted Wherever Necessary To Conform To The Classification For The Year.


Mar 31, 2012

1.1 Government of Rajasthan has issued an entitlement certificate by which the Company is entitled for interest subsidy under Rajasthan investment Promotion scheme,2003.Government has released Rs 9389.00 lacs as interest subsidy for the period 1st December, 2004 to 31st December, 2011 including Rs 593.88 lacs during the year which has been accounted for as capital Receipt based on expert advice.

2.1 Non Convertible Debentures(Ncds): Rs 40000.00 Lacs( Rs 40000.00 Lacs)

Secured by first mortgage on the Company's flat at Ahmedabad and also against first pari-passu charge on the assets specified below in 3.2(i)(a)

Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all the movable assets of the company both present and future save and except inventories , book debts, cash and bank balances and all assets pertaining to J.K. cement Works, Gotan,

2.2 VAT Loan(lnterest free) from Govt. of Karnataka: Rs 1491.21 Lacs (Rs Nil)

secured by second Pari Passu charge by way of equitable mortgage of land building and plant and machinery pertaining to J.K. cement Works, Muddapur, Karnataka and bank guarantee. second charge on assets is yet to be created.

Maturity profile: Payable after 2017 onwards.

2.3 Deffered Sales Tax Liability Rs 6800.23 lacs (Rs 7698.80 lacs) 8% Unsecured loan Rs 1839.06 lacs(Rs 3291.98 lacs) granted by Government of Rajasthan payable in equitable monthly instalments upto July,2013.

Rs 520.63 lacs(Rs 645.24 lacs) Interest free deferred sales tax liability payable in quarterly equitable installment in next 5 years.

Rs 489.32 lacs(Rs 489.32 lacs) Interest free deferred sales tax liability payable in quarterly equitable instalment in 5 years from July,2013 onwards. The instalment amount is Rs 24.47 lacs.

Rs 3951.22 lacs(Rs 3272.26 lacs): Interest free deferred sales-tax liability. The availment of said scheme is still continued. The payment after accumulation of said scheme will start w.e.f. July,2014 in quarterly equitable instalments in 5 years.

3.1 Cash Credit Account: Rs 8282.71 lacs (Rs 5990.46 lacs)

Cash credit accounts are secured by first charge on current assets of the Company namely inventories, book debts, etc. and second charge on fixed assets of the Company except the fixed assets pertaining to J.K. cement Works, Gotan and the assets having exclusive charge of other lenders.(second charge on immovable assets related to J.K. cement Works, Muddapur, Karnataka is yet to be created).

4.1 Based on the information available with the Company regarding the status of suppliers as defined under MsMED Act,2006, there was no principal amount overdue and no interest was payable to the Micro, small and Medium Enterprises on 31st March,2012 as per the terms of contract.

5.1 Some assets discarded during the year where value of the assets are not determined, the adjustment of sale proceeds is made from historical value directly.

5.2 Land, Buildings, Plant & Machinery, Railway Sidings and Rolling Stock had been revalued as on 4th November,2004 by the approved valuers on the basis of assessment about current value of the similar assets. Current values had been determined by cost approach method. Accretion on account of revaluation amounting to Rs 33601.86 Lacs had been credited to Revaluation Reserve. Depreciation on additional value is provided on the basis of life determined by the valuers. An amount of Rs 1229.34 Lacs equivalent to the depreciation for the year on such additional values has been withdrawn from Revaluation Reserve and credited to Profit & Loss Account.

6.1 Unamortised expenses on Mines Development/overburden removal shown as deferred revenue expenditure in earlier years has been charged in Profit and Loss Statement as exceptional item for Rs 781.90 lacs and Rs 5.64 lacs charged to raw material consumption during the year.

7.1 Pursuant to the implementation of sAP ERP system in Oct, 2011 in Gotan, Rajasthan Plant's Inventory valuation method has been changed from annual weighted average to daily moving weighted average for items procured and monthly moving weighted average in case of material in process and finished goods.

8.1 Fixed Deposits with banks includes:

(i) Rs 1451.66 lacs (Rs 3177.96 lacs) with maturity more than 12 months.

(ii) Rs 5857.51 lacs (Rs 7560.28 lacs) tied up against overdraft/other commitments.

b) Defined benefit plan

The Employees Gratuity Fund Scheme managed by a Trust is a defined benefit Plan.

The present value of obligation is determined based on actuarial valuation using the projected unit credit method. The obligation for leave encashment is recognised in the same manner as gratuity.

9 related parties disclosures

(1) (a) Parties where the control/significant influence exists

i) Juggilal Kamlapat Holding ltd

ii) Yadu international ltd

(b) Key Management Personnel & their Relatives

i) shri Yadupati singhania- Managing Director & c.E.O.

ii) Dr. Gaur Hari singhania (Relative)

(c) Enterprises significantly influenced by Key Management Personnel or their Relatives

i) Jaykay Enterprises ltd

ii) J.K. cotton spg. & Wvg. Mills co.ltd.

iii) Jaykaycem (Eastern) ltd

iv) Jaykaycem(central) ltd

(d) subsidiary Companies

i) J.K. cement (Fujairah) FZc ( Holding company of (ii) below)

ii) J.K. cement Works(Fujairah) FZc

(e) Joint Venture

i) Bander coal company (P) ltd

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

10 disclosure of company's interest in joint venture.

The Ministry of coal, Government of India, has allotted a coal block in Maharashtra to the company together with two other allottees for captive consumption. The allottees have formed a Joint Venture company i.e. Bander coal company Private Ltd.(BccPL) for the aforesaid purpose. In terms of Joint Venture agreement, the company has been allotted 375000 Equity shares of Rs 10/- each aggregating 37.5% of the Paid-up Equity share capital of BccPL

11 Board of Directors have proposed dividend of Rs 5 Per equity share of face value of Rs 10/- each.

12 The company is engaged only in cement business and there are no separate reportable segment as per As-17.

13 contingent liabilities and commitments.

RS/ lacs

1. (A) Contingent Liabilities As at As at 31-03-2012 31-03-2011

(i) in respect of claims excluding indeterminate claims 2737.45 3414.16 of employees against the company not acknowledged as debts

(ii) in respect of disputed demands for which Appeals are pending with Appellate Authorities/courts - no provision has been considered necessary by the Management

a) Excise duty 1334.95 1229.67

b) custom duty 176.28 176.28

c) sales tax 4153.10 2277.55

d) service tax 890.17 1085.42

e) income tax - 1679.70

(iii) in respect of interest on "cement Retention Price" 1129.16 1108.78 realised in earlier years

(iv) in respect of corporate Guarantee given in favour of 952.89 952.89 Joint Venture company & others

(B) Commitment

i) capital commitments

Estimated amount of contracts remaining to be 1580.00 695.32 executed on capital accounts and not provided for

ii) Other commitments

in respect of purchase of Raw Materials 347.00 _

14. The Ministry of corporate Affairs, Government of India, vide General circular no. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to the fulfilment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary informations relating to the subsidiaries has been included in the consolidated Financial statements.

15. Previous year figures have been regrouped and recasted wherever necessary to conform to the classification for the year.


Mar 31, 2011

As at 31st March, 2011 and Abridged Profit & Loss Account for the year ended on that date

Rs. Lacs

31.03.2011 31.03.2010

(1) (A) CONTINGENT LIABILITIES 3414.16 4328.45

(i) In respect of claims excluding indeterminate claims of employees 3414.16 4328.45 against the Company not acknowledged as debts

(ii) In respect of disputed demands for which Appeals are pending with Appellate Authorities/Courts - no provision has been considered necessary by the Management

a) Excise duty 1229.67 172.04

b) Custom duty 176.28 176.28

c) Sales Tax 2277.55 740,16

d) Service Tax 1085.42 1085.42

e) Income Tax 1679.70 -

(iii) In respect of interest on "Cement Retention Price" realised 1108.78 1088.40 in earlier years

(iv) In respect of Corporate Guarantee given in favour of Associate 952.89 - Companies & Others

(B) Estimated amount of contracts remaining to be executed on 695.32 4147.18 capital accounts and not provided for

2. (2) Share Capital includes 74,26,950 Equity Shares of Rs. 10/- each allotted without payment received in cash.

3. (4) Government of Rajasthan has issued an entitlement certificate by which the Company is entitled for interest subsidy under Rajasthan Investment Promotion Scheme, 2003. Government has released Rs. 8795.12 Lacs as interest subsidy for the period 1st December, 2004 to 30th September, 2010 includingRs. 997.53 Lacs during the year which has been accounted for as Capital Receipt based on expert advice.

4. (5) Land, Buildings, Plant & Machinery, Railway Sidings and Rolling Stock had been revalued as on 04.11.2004 by the approved valuers on the basis of assessment about current value of the similar assets. Current values had been determined by cost approach method. Accretion on account of revaluation amounting toRs. 33601.86 Lacs had been credited to Revaluation Reserve. Depreciation on additional value is provided on the basis of life determined by the valuers. An amount of Rs. 1239.75 Lacs equivalent to the depreciation for the year on such additional values has been withdrawn from Revaluation Reserve and credited to Profit & Loss Account.

5. (6) Pursuant to the implementation of SAP ERP system in March,2011 in Mudhol, Karnataka Plants Inventory valuation method has been changed from annual weighted average method to daily moving weighted average for items procured and monthly moving weighted average in case of material in process and finished goods.

6. (8) Disclosures pursuant to clause 32 of the Listing Agreement.

B) Investment by loanee in the shares of the Company : NIL

D) Disclosure of Companys Interest in Joint Venture.

The Ministry of Coal, Government of India, has allotted a Coal block in Maharashtra to the Company together with two other allottees for captive consumption. The allottees have formed a Joint Venture Company i.e. Bander Coal Company Private Ltd.(BCCPL) for the aforesaid purpose. In terms of Joint Venture agreement, the Company has been allotted 375000 Equity Shares of Rs. 10/- each aggregating 37.5% of the Paid-up Equity Share Capital of BCCPL. Details of the Companys interest in its Joint Venture, having Joint Control, as per the requirement of Accounting Standard(AS)-27 on "Financial Reporting of Interests in Joint Ventures", are as under based on Annual Accounts for the year ended 31.03.2010. Accounts for financial year 2010-11 have not yet been received, however, there would not be material changes as the Company is in process of getting necessary approvals.

E) The Company is engaged only in cement business and there are no separate reportable segments as per AS-17.

F) Employees Benefits:

Disclosure in term of AS-15 are as under:- a) Defined contribution plan

b) Defined benefit plan

The Employees Gratuity Fund Scheme managed by a Trust is a defined benefit Plan. The present value of obligation is determined based on actuarial valuation using the projected unit credit method. The obligation for leave encashment is recognised in the same manner as gratuity.

7. (10) Based on the information available with the Company regarding the status of suppliers as defined under MSMED Act,2006, there was no principal amount overdue and no interest was payable to the Micro, Small and Medium Enterprises on 31st March,2011 as per the terms of Contract.

8, Market value of quoted investment as on 31.03.2011 was nil. (As on 31.03.2010 was 15.19 Lacs).

9. (12) Important performance ratios

(i) Sales/Total Assets Ratio =0.89

(ii) Operating Profit/Capital Employed Ratio= 27.38%

(iii) Return on Networth =6% (iv) Net Profit/Sales Ratio= 3%

10. (15) Previous year figures have been regrouped and recasted wherever necessary to conform to the classification of the year.

11. Serial nos in brackets are serial nos of Notes on Account.


Mar 31, 2010

Rs./ lacs 31.03.2010 31.03.2009 1) (1) (A) Contingent Liabilities (i) In respect of claims excluding indeterminate claims of employees 4328.45 5319.04 against the Company not acknowledged as debts (ii) In respect of disputed demands for which Appeals are pending with Appellate Authorities/Courts - no provision has been considered necessary by the Management a) Excise duty 172.04 - b) Custom duty 176.28 - c) Sales-tax 740.16 1949.26 d) Service tax 1085.42 1024.96 (iii) In respect of interest on "Cement Retention Price" realised in earlieryears 1088.40 1068.02

(B) Estimated amount of contracts remaining to be executed on capital 4147.18 190.68 accounts and not provided for

2) (2) Share Capital includes 74,26,950 equity shares of Rs. 10/- each allotted without payment received in cash.

3) (4) Jaykaycem Ltd (the amalgamating Company) engaged in setting-up of Greenfield Grey Cement Plant and Captive Power Plant at Muddapur, District Bagalkot, in State of Karnataka, has been amalgamated with the Company. The Scheme of amalgamation (the Scheme) was sanctioned by the Honble High Court of Judicature at Allahabad vide its order dated 20th August,2009 which became effective on 24th August,2009.

In accordance with the said Scheme and as per the approval of the Hon’ble High Court:

a) The assets, liabilities, rights and obligations of erstwhile Jaykaycem Ltd. have been transferred to and vested with the Company with effect from Ist April, 2008 (Appointed date) and have been recorded during the current year at their respective book values as appearing in the books of amalgamating Company under the pooling of interest method of accounting for amalgamations (AS-14) issued by The Institute of Chartered Accountants of India.

b) The amalgamating Company was wholly owned subsidiary of the Company, therefore, no consideration was payable nor any Shares were issued. Reserves have been preserved as they appeared in the financial statements of amalgamating Company.

c) The amalgamating Company had not prepared Profit & Loss Account till effective date as their project was under construction.

4) (5) Government of Rajasthan has issued an entitlement certificate by which the Company is entitled for interest subsidy under Rajasthan Investment Promotion Scheme, 2003 for 7 years from 30th Nov, 2004. In terms of the scheme, Commercial Tax Department has determined Rs. 7797.59 lacs as interest subsidy for the period 1st Dec, 2004 to 31st Dec, 2009. The subsidy amounting to Rs. 7797.59 lacs has also been released by Government upto 31st March, 2010 (Rs. 1117.16 lacs during the year lunder the aforesaid scheme has been accounted for as Capital Receipt based on expert advice.

5) (6) Land, Buildings, Plant & Machinery, Railway Sidings and Rolling Stock had been revalued as on 04.11.2004 by the approved valuers on the basis of assessment about current value of the similar assets. Current values had been determined by cost approach method. Accretion on account of revaluation amounting to Rs. 33601.86 lacs had been credited to revaluation reserve. Depreciation on additional value is provided on the basis of life determined by the valuers. An amount of Rs. 1250.11 lacs equivalent to the depreciation for the year on such additional values has been withdrawn from Revaluation Reserve and credited to Profit & Loss Account.

6) (7) Pursuant to the implementation of SAP ERP system, during the year in some Grey Cement Plants and Power Plants,.therefore, inventory valuation method has been changed from annual weighted average method to daily moving weighted average for items procured and monthly moving weighted average in case of material in process and finished goods.

(C) Related Parties Disclosures

(1) (a) Parties where the control/significant influence exists i) Juggilal Kamlapat Holding Ltd i) Yadu International Ltd

(b) Key Management Personnel & their Relatives:

i) Shri Yadupati Singhania- Managing Director & C.E.O.

i) Dr. Gaur Hari Singhania (Relative]

(c) Enterprises significantly influenced by Key Management Personnel or their Relatives.

i) J.K. Synthetics Ltd

ii) J.K. Cotton Spg. & Wvg. Mills Co. Ltd.

(d) Wholly Owned Subsidiary Companies.

J.K. Cement (Fujairah) FZC

(e) Fellow Subsidiary

J.K. Cement Works (Fujairah) FZC

(f) Joint Venture

Bander Coal Company (P) Ltd

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

(2) Following are the transactions with related parties as defined under Accounting Standard-18 on Related party disclosures issued by the Institute of Chartered Accountants of India.

(E) The Company is engaged only in cement business and there are no separate reportable segments as per AS-17

(F) Employees Benefits

Disclosure in term of AS-15 are as under:-

a) Defined contribution plan

Contribution to defined contribution plan recognised as expenses for the year 2009-10 are as under:

b) Defined benefit plan

The Employees Gratuity Fund Scheme managed by a Trust is a defined benefit Plan. The present value of obligation is determined based on actuarial valuation using the projected unit credit method. The obligation for leave encashment is recognised in the same manner as gratuity.

Defined benefit plans/compensated absences-As per actuarial valuation:

9) (11) Based on the information available with the Company regarding the status of suppliers as defined under MSMED Act,2006, there was no principle amount overdue and no interest was payable to the Micro, Small and Medium Enterprises on 31st March, 2010 as per the terms of Contract.

10) Market value of quoted investment as on 31.03.2010 was Rs. 15.19 lacs (As on 31.03.2009 was nil).

11) Quantitative Information

12) Important performance ratios

(i) Sales/Total Assets Ratio = 0.68

(ii) Operating Profit/Capital Employed Ratio= 0.43

(iii) Return on Networth = 21%

(iv) Net Profit/Sales Ratio= 12.37%

13) (16) Previous year figures have been regrouped and recast wherever necessary to conform to the classification of the year. The figures for the current year includes figures of Jaykaycem Ltd which is amalgamated with the Company with effect from 1st April,2008 and are therefore, to that extent not comparable with those of previous year.

14) Serial nos in brackets are serial nos of Notes on Account.

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X