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Notes to Accounts of JK Cement Ltd.

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.

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