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Notes to Accounts of Kesoram Industries Ltd.

Mar 31, 2017

1. RESEARCH AND DEVELOPMENT EXPENDITURE

The Company has incurred Rs.7.60 crore (2015-16: Rs.5.56 crore) on account of Research and Development expenses which has been charged to Statement of Profit and Loss. Capital Expenditure relating to Research & Development amounting to Rs.3.72 crore (2015-16: Rs.8.96 crore) has been included in Fixed Assets.

2. LEASES

As a lessee:

Operating Lease

Rent expenditure (under Note 23) includes lease payments of Rs.2.03 crore (2015-16: Rs.2.13 crore) relating to non cancellable operating lease. The leasing arrangement is for three to nine years and is in respect of office premises. The significant leasing arrangement inter alia includes option for renewal.

3. The business of Cygnet Industries Ltd was operated by the Company for a period of two months from 1st April, 2016 to 31st May, 2016 on behalf of Cygnet Industries Ltd. Accordingly, the related revenue and expenses in respect of these two months have been excluded from the results of the Company. The related revenue and expenses of Cygnet Industries Ltd for the above period are summarized below.

4. The time frame of completion of expansion of 80 MT/day capacity of car radial project at Balasore is being extended to end of 2017-18.

5. The time frame for grinding facility of 2.5 million MT cement per annum to be situated at Sholapur in the state of Maharashtra is being extended beyond 2017-18.

6. RELATED PARTY DISCLOSURES (contd.)

** Became a subsidiary w.e.f 07.05.2016 @ Ceased to be related party w.e.f 01.04.2016 # Appointed as Whole Time Director w.e.f. 01.04.2016

I Enterprise where control exists due to Key Management Personnel

II Subsidiary

III Joint venture

IV Key Management Personnel

V Relative of Key Management Personnel

VI Enterprise over which person referred to in V above is able to exercise significant influence.

Disclosure pursuant to Section 186(4) of The Companies Act 2013, regarding loans given, Investment made and Guarantee given are mentioned in the respective notes of Non Current Investments (refer note 12), and Non Current Loans and Advances (refer note 13) and Guarantees (refer note 31(a) and 35).

Also refer note 32(b)(iii) relating to commitments as on 31.03.2017 in respect of Cygnet Industries Ltd amounting to H50 crore (Previous year : NIL) for borrowing / financing obligation.

7. The Company has consolidated the 2016-17 Financial Statements of Cygnet Industries Limited, its wholly owned subsidiary.

The Company has no associate company within the meaning of Section 2(6) of the Companies Act, 2013. Gondkhari Coal Mining Limited ("Gondkhari"), a joint venture has not been consolidated for reasons set out below :

Gondkhari, a Special Purpose Vehicle ("SPV") was set up as a joint venture with two other partners as per directions of the Central Government to develop and operate the Gondkhari Coal Block in Maharashtra allocated to the SPV. The allocation of all coal blocks having been cancelled by the Supreme Court vide judgment dated 25th August, 2014 read with Order dated 24th September, 2014, the substratum of the SPV has consequently ceased to exist. The Company is, therefore, in discussion with its venture partners as to the future course of action.

In view of the above and regard being had to the Accounting Standard 27, the Financial Statements of Gondkhari for the year ended 31st March, 2017 have not been consolidated with that of the Company.

8. The Loan to Subsidiary company was given to Cygnet Industries Ltd, a wholly owned subsidiary company after complying with the provisions of section 186(4) of the Companies Act, 2013. The loan was given in accordance with the terms & conditions between the parties to be used by the recipient in the normal course of business. The loan is repayable on demand. The Rate of Interest on the loan is 10.50% p.a.

9. Disclosures pursuant to the Regulation 34(3) read with paragraph A of Schedule V to SEBI Listing Regulations, 2015 (i) Loans and advances in the nature of loans to subsidiary

- Amount is below the rounding off norm adopted by the Company

- Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs no S.O.3407(E), dated the 8th November, 2016.

10. Previous Year''s figures have been regrouped or rearranged where considered necessary.


Mar 31, 2016

(b) Rights, preferences and restrictions attached to shares Equity Shares:

The company has equity shares having a par value per share. All equity shareholders are entitled to one vote per share.

The company declares and pays dividend in Indian rupees. The dividend proposed by the board of directors is subject to the approval of the shareholders in ensuing Annual General Meeting except in the case of interim dividend. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in the proportion to shareholdings.

Optionally Convertible Redeemable Preference Shares (OCRPS):

The company has during the year issued Optionally Convertible Redeemable Preference Shares (OCRPS) shares having a for value Rs, 100 per share.

OCRPS carry a cumulative dividend of Q00% per annum per OCRPS. Each OCRPS carry a right of conservation value of the company within a time frame not exceeding 18 months of allotment. In case, OCRPS are not converted into equity shares, the company willredeemtheOCRPStogetherwiththecumulativedividendandapplicableyieldwithinaperiod not exceeding 18 months or such extended time as may be legally permissible based upon such term and conditions and at such price as may be mutually agreed.

(a) Gratuity

The Company operates a gratuity plan through the “KICM Gratuity Fund”. Every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service. (Also refer Note 2.12)

The Company has charged 3.34 crore (204-205 : '' 8.55 crore) including discontinuing operations of 4.03 crore (204-205 : ''2.11 crore) towards gratuity during the year ended 31st March, 2016 in the Statement of Profit and Loss.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The expected estates on plan assets is based on the portfolio of assets held, investment strategy and market scenario. In order to protect the capital and option returns within acceptable risk parameters, the plan assets are reasonably diversified

(b) Provident Fund

Provident fund for certain eligible employees is managed by the Company through the B. K. Birla Group of Companies Provident Fund Institution” and “Birla Industries Provident Fund”, in line with the Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated there on are payable to employees at the time of their separation from the company or retirement, whichever is earlier. The benefits vest immediately on rendering of the services by the employee.

The Guidance on Implementing AS 15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving employers established provident funds, which require interest shortfalls to be compensated are to be considered as defined benefit plans. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The actuary has accordingly provided a valuation and there is no shortfall as at31st March, 2016.

The Company has contributed 24.56 crore (204-205 : Rs, 30.41 crore) including discontinuing operations of Rs, 7.29 crore (204-205 : Rs,7.03 crore)towardsprovidentfundduringtheyearended31st March,2016.

(i) The detail of fund and plan assets position are as follows.

Based upon general body approvals accorded under the relevant provisions of the Companies Act, 2013, the Company has, during the Financial Year ended 31st March, 2016, disposed and transferred two Undertakings viz. Spun Pipes & Foundries and Hindustan Heavy Chemicals to Camden Industries Limited, a domestic Indian Company, through the slump sale route. The agreed aggregate consideration off 400 crore has been received during the year and the difference amount .78 crore between the carrying cost in the Company’s books of the two Undertakings and the consideration received has been shown as Exceptional Income in these Financial Statements.

1. LEASES

As a lessee:

Operating Lease

Rent expenditure (under Note 23) includes lease paymentRs, crore (204-20B : Rs, 162 crore) relating to non cancellable operating lease. The leasing arrangement is for three to nine years and is in respect of office premises. The significant leasing arrangement inter alia includes option for renewal.

The Company has given one unit of building on operating lease to Lazarus Hospital for 5 years extendable up to 12 years on mutual consent

The above information regarding Micro and Small enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company

2. The Company had transferred its automotive Tyre manufacturing facility at Laksar, District Haridwar, Uttarakhand, as a going concern on slump sale basis, to Cavendish Industries Limited (Cavendish), a subsidiary whose more than 90% of the share capital was held by the Company.

Pursuant to the execution of a binding term sheet dated 12th September, 2015, between the Company, the subsidiary and the JK Tyre Group, it was agreed that the company would transfer its interest in such subsidiary to the JK Tyre Group at a consideration based on Enterprise Value (EV)2 W5/- crore and had credited an amount of Rs, 409.20 crore, being net consideration receivable over and above the carrying value of the Laksar undertaking, to ‘Exceptional Income in the Statement of Profit and Loss for the year ended 31st March, 2015. Subsequently, the Company had entered into a Share Purchase Agreement dated 28th October, 2015, with the subsidiary and the JK Tyre Group to transfer its interest in the said subsidiary to JK Group. The above mentioned transaction was concluded in April, 2016 and the net consideration received has been used to partially retire the Company’s portfolio of long term borrowings after adjusting Rs,25.15 crore which has since been written off on account of EV adjustment.

3. The time frame of completion of expansion of 80 MT/day capacity of car radial project at Balasore is being extended to end of 2016-17.

4. The time frame for grinding facility of 2.5 million MT cement per annum to be situated at Sholapur in the state of Maharashtra is being extended beyond 206-7.

* Amount is below the rounding off norm adopted by the Company

** Necessary application has been made to central Government for payment of remuneration in excess of the prescribed limits by Rs, 170 crore under section 97

read with Schedule V of the Companies Act, 2013to Mr. K. C. Jain, whole time director of the company for a period of one year with effect from 1st April, 2015to 31st March, 2016.

@ cease to be a related party as on 3 10B.20B at the close of business hours

# Investment in Mangalam Cement Ltd disposed off during the year $ Ceased to be related party w.e.f. 1st April, 2015

I Enterprise where control exists due to Key Management Personnel

II Subsidiary

III Joint venture

IV Key Management Personnel

V Relative of Key Management Personnel

VI Enterprise over which person referred toin V above is able to exercise significant influence.

Disclosure pursuant to Section 186(4) of The Companies Act 2013, regarding loans given, Investment made and Guarantee given are mentioned in the respective notes of Non Current Investments (refer note 12), and Non Current Loans and Advances (refer note 13) and Guarantees (refer note 31 and 35).

* no dividend declared in 2015-2016

50. The Company has chosen to publish standalone financial statements as the provisions of Section 129(3) of the Companies Act, 2013 are not applicable. The Company has no associate company within the meaning of Section 2(6) of the Companies Act, 2013. Gondkhari Coal Mining Limited (“Gondkhari”), a joint venture and Cavendish Industries Limited (“Cavendish”),a subsidiary, have not been consolidated for reasons set out below :

(a) Gondkhari, a Special Purpose Vehicle (“SPV”) was set up as a joint venture with two other partners as per directions of the Central Government to develop and operate the Gondkhari Coal Block in Maharashtra allocated to the SPV. The allocation of all coal blocks having been cancelled by the Supreme Court vide judgment dated 25th August, 2014 read with Order dated 24th September, 2014, the substratum of the SPV has consequently ceased to exist. The Company is, therefore, in discussion with its venture partners for dissolution/winding up of Gondkhari.

In view of the above and regard being had to Accounting Standard 27, the Financial Statements of Gondkhari for the year ended 31st March, 2016 have not been consolidated with that of the Company.

(b) the ownership of Cavendish having been transferred to the IK Tyre Group in the month of April, 2016, consolidation of the financial statements of subsidiaries specifically earmarked for disposal is not contemplated under Accounting Standard 21.

5. Discontinuing Operations

On 26th March, 2016, the Board of Directors of the Company had approved the plan of disposing the Company’s Rayon and Transparent Paper (“Rayon and TP”) business undertaking. The decision was intimated to the Stock Exchanges on the same day.

Rayon and TP business undertaking is a separate business segment as per AS-17 ‘Segment Reporting’. This disposal is consistent with Company’s long term business strategy of realigning and restructuring its existing business activities. Accordingly, a business transfer agreement was entered into between the Company and Cygnet Industries Limited (“Cygnet”), a domicile Indian Company to transfer the Company’s Rayon and TP business undertaking on a going concern basis through slump sale route effective close of the business 31st March, 2016 at a total consideration of Rs, 541.14 crore, which is shown as receivable from Cygnet Industries Ltd as at31st March, 2016 in these Financial Statements.

Pursuant to such business transfer agreement, Cygnet has, after close of the Financial Year, issued and allotted tcy‘ the Coi 3,00,00,000 Equity Shares of Rs,0 each at par amounting toRs, 30 crore without consideration being received in cash and out of the balance amount of Rs, 511.14 crore from Cygnet as at 31st March 2016, Rs, 480 crore has since been received by the Company. The transaction having been deemed to have concluded as on 31st March, 2016, the Company has, as per the provisions of Accounting Standard (“AS”) 4, shown the difference amounting to Rs, 381.41 crore between the carrying cost of the Kesoram Rayon Undertaking in the Company’s books as on 31st March, 2016 and the total consideration receivable as on this date as an Income from disposal of discontinuing operations in these Financial Statements.

In accordance with the principles enunciated in AS-4, the assets and liabilities of the Kesoram Rayon Undertaking stands transferred to Cygnet as at close of business 31st March, 2016 and the Company’s Financial Statements for the year ended as on this date has been drawn up accordingly.

The general body approvals under the relevant provisions of the Companies Act, 2013, inter alia, for transfer and disposal of the Kesoram Rayon Undertaking obtained through postal ballot were received on 30th April, 2016. Pursuant to subsequent acquisition of shares by the Company on such approval, Cygnet has become a wholly owned subsidiary of the Company after close of the Financial Year.

6. Previous Year’s figures have been regrouped or rearranged where considered necessary. However, in view of sell off of certain business units during the year, the assets and liabilities are not comparable with one another.


Mar 31, 2014

1 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE

a) Pursuant to the Announcement on Accounting for Derivatives issued by the Institute of Chartered Accountants of India in March, 2008, the Company has accounted for during the year net loss amounting to Rs. 1.15 crore (31st March, 2013 - Rs. 2.57 crore) in respect of outstanding derivative contracts at the Balance Sheet date by marking them to market as indicated in Note 2.9 above and the resultant excess gain of Rs. 1.44 crore net of realised loss (Net ) of Rs. 1.71 crore during the year arising from derivative contracts are provided for and included in Finance Cost ''under Note 23 to accounts.

2. LEASES As a lessee:

Operating Lease

Rent expenditure (under Note 22) includes lease payments of Rs. 0.97 crore (2012-13 - Rs. 1.64 crore) relating to non cancellable operating lease. The leasing arrangement is for three to nine years and is in respect of office premises. The significant leasing arrangement inter alia includes option for renewal.

3. Certain records/documents pertaining to production, raw materials, purchase records etc. of the Company''s Assam Cotton Mills Unit were seized by the Excise Authorities and are presently not available with the Company.

4. The time frame of completion of expansion of 80 MT/day capacity of car radial project at Balasore is being extended to end of 2014-15 and 85 MT/day capacity of truck radial tyre project at Uttrakhand are being extended beyond 2014-15.

5. The time frame for grinding facility of 2.5 million MT cement per annum to be situated at Solapur in the state of Maharashtra is being extended beyond 2014-15.

6. The Company''s Spun Pipes and Foundries Unit is under suspension of work effective 2nd May, 2008.

7. The Company intends to hive off its Hindusthan Heavy Chemicals unit (the Unit) as reflected in the Board Resolution of 31st January, 2006 and later on consented by the shareholders by postal ballot of 24th March, 2006. The Unit is not significant in terms of the Company''s total assets/ liabilities/ revenue/ expenses/ cash flows. Pending disposal of the Unit, the Unit is in operation and results thereof, have been reflected in these Accounts. The Company had to declare suspension of work at the unit effective 8th December,2010 in consequence of illegal strike/activities by workmen.

8. Previous Year''s figures have been regrouped or rearranged where considered necessary.


Mar 31, 2013

1. GENERAL INFORMATION

Kesoram Industries Limited (the Company) is a public company domiciled and incorporated under the provisions of the The Indian Companies Act,1913. The Company is flagship company of B. K. Birla group of companies. The Company is a multiproduct and multi location company. Cement and automobile tyre business are its core businesses and it also has interest in rayon and cellulose paper, cast iron spun pipes and caustic soda & allied chemicals. Its shares are listed on three stock exchanges in India ( Bombay Stock Exchange, National Stock Exchange and Calcutta Stock Exchange) and its Global Depositary Receipts (GDR) are listed on Luxembourg Stock Exchange. The Company markets its automobile tyres under the brand name "Birla Tyres" and cement is marketed under "Birla Shakti" brand.

2. CONTINGENT LIABILITIES 31st March, 2013 31st March, 2012

(a) Guarantees given -

(i) to excise authorities 0.12 0.12

(ii) by Banks on behalf of the Company 68.78 58.40 (excluding relating to joint venture referred to in note 33 below)

(b) Claims against the Company not acknowledged as debts :

(i) Rates, Taxes, Duties etc. demanded by various Authorities 230.75 213.95

(ii) Amount demanded by Provident Fund Authorities which is sub judice 0.87 0.87

(c) Rates, Taxes, Duties etc. 16.06 15.80

(d) Amount payable in connection with reorganisation of the Company in earlier year 3.37 3.49

3. Legal action initiated by the company against an erstwhile management official and others in respect of certain transactions in one of the unit of the Company continue to be sub judice. The Company has initiated the detailed follow up investigation in the matter which has since been completed indicating no requirement for any disclosures/ adjustment.

4. DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE

Pursuant to the Announcement on Accounting for Derivatives issued by the Institute of Chartered Accountants of India in March, 2008, the Company has accounted for during the year net loss amounting to Rs. 2.57 crore (31st March, 2012 - Rs. 4.09 crore) in respect of outstanding derivative contracts at the Balance sheet date by marking them to market as indicated in Note 2.9 above and the resultant excess liability of Rs. 1.52 crore net of realised loss (net) of Rs. 2.06 crore during the year arising from derivative contracts are provided for and included in Finance Cost ''under Note 23 to accounts. In 2011-12, the aforesaid mark to market loss along with realised loss (net) of Rs. 6.27 crore was included in ''Finance Cost'' under Note 23 to accounts.

5. LEASES As a lessee:

Operating Lease

Rent expenditure (under Note 22) includes lease payments of Rs. 1.64 crore (2011-12 - Rs. 1.26 crore) relating to non cancellable operating lease. The leasing arrangement is for three to nine years and is in respect of office premises. The significant leasing arrangement inter alia includes option for renewal.

6. Certain records/documents pertaining to production, raw materials, purchase records etc. of the Company''s Assam Cotton Mills Unit were seized by the Excise Authorities and are presently not available with the Company.

7. The time frame of completion of expansion of 80 MT/day capacity of car radial project at Balasore is being extended to end of 2013-14 and 85 MT/day capacity of truck radial tyre project at Uttrakhand are being extended beyond 2013-14

8. The time frame for grinding facility of 2.5 million MT cement per annum to be situated at Solapur in the state of Maharashtra is being extended beyond 2013-14


Mar 31, 2011

(1) Government Grants

Grants of Capital nature and related to specific Fixed Assets are deducted from gross value of assets. Other grants of Capital nature are credited to Capital Reserve. Grant related to revenue are recognised in the Profit and Loss Account on a systematic basis to match them with related costs.

2 (a) Radial car tyre project with 80 MT/day capacity at Balasore and further expansion of radial truck tyre by 85 MT/day at Uttarakhand taken up during the year 2009-10 are expected to commence commercial production by the end of 2011- 2012.

( b) The time frame for completion of expansion of Vasavadatta cement unit of the Company (clinker production capacity of 1.71 million MT/year together with captive power plant of 18 MW capacity at an estimated cost of Rs.925.00 crores and related grinding facility of 2.5 million MT cement per annum to be situated at Solapur in the state of Maharashtra at estimated cost of Rs. 200.00 crores) is being extended beyond 2012-13.

3 (a) The Company intends to hive off its Hindusthan Heavy Chemicals unit (the Unit) as reflected in the Board Resolution of 31st January, 2006 and later on consented by the shareholders by postal ballot of 24th March, 2006. The Unit is not significant in terms of the Companys total assets/liabilities/revenue/expenses/cash flows. Pending disposal of the Unit, the Unit is in operation and results thereof, have been reflected in these Accounts. The Company had to declare suspension of work at the unit effective 8th December, 2010 in consequence of illegal strike/activities by workmen.

(b) The Companys Spun Pipes and Foundries Unit is under suspension of work effective 2nd May, 2008.

31st March, 2011 31st March, 2010 Rs. Rs.

4 Contingent Liabilities:

(a) Guarantees given -

(i) to excise authorities 11,73,223 11,73,223

(ii) by Banks on behalf of the Company 64,62,00,803 70,38,54,755

(excluding relating to joint venture referred to in note 15 below)

(b) Claims against the Company not acknowledged as debts :

Rates, Taxes, Duties etc. demanded by various Authorities 1,37,76,47,666 1,20,94,00,083

Amount demanded by Provident Fund 86,86,000 86,86,000

Authorities which is sub judice

1,38,63,33,666 1,21,80,86,083

(c) Rates, Taxes, Duties etc. 30,29,87,802 8,14,89,255

(d) Amount payable in connection with reorganisation of the Company in earlier year 3,59,00,565 3,71,22,132

13 Miscellaneous expenses (Schedule 15) include Rs. 21,05,881 (Net) (2009-10 Rs. 10,91,48,160) excise duty related to the difference between the closing stock and opening stock.

14 A. In keeping with the Guidance on implementing Accounting Standard (AS) 15 on Employee Benefits issued by the Accounting

Standards Board of the Institute of Chartered Accountants of India (ASB Guidance), employer-established provident fund trusts are treated as Defined Benefit Plans since the Company is obligated to meet interest shortfall, if any, with respect to covered employees. According to the management, in consultation with Actuary, actuarial valuation cannot be applied to reliably measure provident fund liabilities in absence of guidance from Actuarial Society of India. Accordingly, the Company is currently not in a position to provide other related disclosures as required by the aforesaid AS 15 read with the ASB Guidance, however, having regard to the position of the Fund (for covered employees) and confirmation from the Trustees of such Fund there is no shortfall as at the year end.

14 B. In keeping with the Companys gratuity scheme (a defined benefit plan), eligible employees are entitled to gratuity benefit (at one half months eligible salary for each completed year of service) on retirement/death/incapacitation/termination. Also refer Note 1 (j) for accounting policy relating to gratuity. Following are the further particulars with respect to gratuity.

17.1 7.30% secured redeemable non-convertible debentures aggregating Rs. 1,00,00,00,000 (31.03.2010 Rs. - 1,00,00,00,000), privately placed (allotment date -17th November, 2009) have been redeemed at par during the year. On the aforesaid redemption, Rs. 25,00,00,000 being 25% of the aforesaid value of debentures in Debenture Redemption Reserve, has been transferred from Debenture Redemption Reserve to the Profit and Loss Account.

17.2 Short-term loans from others (Schedule 4) include :-

(a) Zero coupon unsecured redeemable non-convertible debentures aggregating Rs. 1,10,00,00,000 (31.03.2010 - Rs. 1,10,00,00,000), privately placed (allotment date 15th March, 2010) are due for redemption at par at the end of 396 days from the date of allotment.

(b) 7.75% unsecured redeemable non convertible debentures aggregating Rs. 50,00,00,000 (31.03.2010 - Rs. 50,00,00,000) privately placed (allotment date -19th March, 2010) are due for redemption at par on 5th April,2011

(c) 7 % unsecured redeemable non convertible debentures aggregating Rs. 1,00,00,00,000 privately placed (allotment date -17th May, 2010) are due for redemption at par at the end of 396 days from the date of allotment.

18 Pursuant to the Announcement on Accounting for Derivatives issued by the Institute of Chartered Accountants of India in March, 2008, the Company has accounted for during the year net loss amounting to Rs.5,10,63,967 (31.03.10 - Rs. 1,43,41,747) in respect of outstanding derivative contracts at the Balance Sheet date by marking them to market as indicated in Note 1 (g) above and the resultant short liability of Rs. 3,67,22,220 net of realised gain(net) of Rs. 53,28,800 during the year arising from derivative contracts are provided for and included in Miscellaneous Expenses under Schedule 15 to accounts. In 2009-10, the aforesaid mark to market loss along with realised Gain (net) of Rs. 15,05,46,781 was included in Miscellaneous Income under Schedule 13 to accounts.

19 a) Rent expenditure (Schedule 15) includes lease payments of Rs. 85,15,640 (2009-10 - Rs. 18,19,595) relating to non-cancellable operating lease. The leasing arrangement is for three to nine years and is in respect of office premises. The significant leasing arrangement inter alia includes option for renewal.

(i) not later than one year - Rs. 1,25,93,640 (2009-10 - Rs. 25,68,840)

(ii) later than one year but not later than five years - Rs. 4,14,16,105 (2009-10 - Rs. 33,18,085)

(iii) later than five years - Rs. 4,12,15,264 (2009-10 - Nil)

20 Information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 is given in Schedule 18, which forms an integral part of this Schedule.

25 Certain records/documents pertaining to production, raw materials, purchase records etc. of the Companys Assam Cotton Mills Unit were seized by the Excise Authorities and are presently not available with the Company.

26 Previous years figures have been regrouped or rearranged where considered necessary.


Mar 31, 2010

1 Amalgamation of Bulland Buildmart Private Limited, a wholly owned subsidiary Company (Transferor Company) with Kesoram Industries Limited (transferee Company)

1.1 Pursuant to a scheme of Amalgamation (the Scheme) sanctioned by the High Court at Calcutta in July 2009 under the provisions of the Companies Act, 1956, the Transferor Company has been amalgamated with Transferee Company in these accounts with retrospective effect from 1st October, 2008 (Appointed Date.). The Scheme has been accounted for using the Purchase Method set out in Accounting Standard 14 on Accounting for Amalgamation.

1.2 The Transferor Company was primarily engaged in the business of purchasing land for sale/ development and civil & constructional work relating to building, roads, bridges etc.

1.3 In accordance with the scheme, ail assets and liabilities of the Transferor Company immediately preceding the Appointed Date have been incorporated in the books of-account of Transferee Company at their respective book values on the basis of audited accounts of the Tranferor Company. The net assets as per the books of account of the Transferor Company after cancellation of investment of the Transferee Company in Tranferor Company as on 30th September, 2008 has been credited to Capital Reserve of the Transferee Company in 2009-10 and the results of the Tranferor Company for the period 1st October,2008 to 31st March,Transferee Company.

2(a) Expansion activities taken up in 2006-07 relating to fourth production line at Companys Vasavadatta Cement Unit for 1.65 million tons capacity increase of cement has commenced commercial production on 7th August, 2009. The related clinker plant commenced commercial production on 1st June, 2009

(b) Radial truck tyre (140 MT/day) and motor cycle tyre (95 MT/day) projects taken in 2008-09 at Uttarakhand commenced commercial production in March, 2010 and in phases from October, 2009 to March, 2010 respectively. Further expansion in bias tyre at Uttarakhand by 60 MT/day taken up in 2008-09 has been completed during the year.

(c) Radial car tyre project with 80 MT/day capacity at Balasore and further expansion of radial truck tyre by 85 MT/day at Uttarakhand taken up during the year are expected to commence commercial production by the end 2010-2011.

3 The Company intends to hive off its Hindusthan Heavy Chemicals unit (the Unit) as reflected in the Board Resolution of 31st January, 2006 and later on consented by the shareholders by postal ballot of 24th March, 2006. The Unit is not significant in terms of the Companys total assets/ liabilities/ revenue/ expenses/ cashflows. Pending disposal of the Unit, the Unit is in operation and results thereof, have been reflected in these Accounts.

The Companys Spun Pipes and Foundries Unit is under suspension of work effective 2nd May,2008.

31st March, 2010 31st March, 2009 Rs. Rs. 4A Contingent Liabilities:

(a) Guarantees given -

(i) to excise authorities 11,73,223 11,73,223 (ii) by Banks on behalf of the Company 70,38,54,755 45,96,01,210 (excluding relating to joint venture referred to in Note 16 below)

(b) Claims against the Company not acknowledged as debts:

Rates, Taxes, Duties etc. demanded by various Authorities 1,20.94,00.083 1,20,64,70,509

Amount demanded by Provident Fund and Employees State Insurance 86,86,000 1,24,00,913

Authorities which is subjudice 1,21,80,86,083 1,21,88,71,422

(c) Rates, Taxes, Duties etc. 8, 14,89.255 8,91,12,673

(d) Amount payable in connection with reorganisation of 3,71,22,132 3,79,65,159 the Company in earlier year

5 (a) Provision for Current Tax for the current year 2009-2010 is net of MAT credit of Rs.44,50,00,000 (2008-2009 - Rs.Nil) as the Company is confident to generate sufficient taxable income in the next few years available for set off of the aforesaid credit within the stipulated time.

(b) Provision for Current Tax for the year 2009-2010 is net of write back of Rs.Nil (2008-2009 - Rs.40,92,26,444) in respect of earlier years.

6 Miscellaneous expenses (Schedule 15) include Rs. 10,91,48,160 [2008-09 - net of Rs.3,80,73,336] excise duty related to the difference between the closing stock and opening stock

7 A. In keeping with the Guidance on implementing Accounting Standard (AS) 15 on Employee Benefits issued by the Accounting Standards Board of the Institute of Chartered Accountants of India (ASB Guidance), employer-established provident fund trusts are treated as Defined Benefit Plans since the Company is obligated to meet interest shortfall, if any, with respect to covered employees. According to the management, in consultation with Actuary, actuarial valuation cannot be applied to reliably measure provident fund liabilities in absence of guidance from Actuarial Society of India. Accordingly, the Company is currently not in a position to provide other related disclosures as required by the aforesaid AS 15 read with the ASB Guidance, however, having regard to the position of the Fund (for covered employees) and confirmation from the Trustees of such Fund there is no shortfall as at the year end.

B. In keeping with the Companys gratuity scheme (a defined benefit plan), eligible employees are entitled to gratuity benefit (at one half months eligible salary for each completed year of service) on retirement / death / incapacitation / termination. Also refer Note 1 (i) for accounting policy relating to gratuity. Following are the further particulars with respect to gratuity:-

8. 13% Secured redeemable non convertible debentures aggregating Rs. 1,00,00,00,000 (2008-09 - Rs.Nil), privately placed (allotment date -17th November,2008)| have been redeemed at par by exercising put option during the year. On the aforesaid redemption, Rs.25,00,00,000, being 25% of the aforesaid value of debentures in Debenture Redemption Reserve, has been tranferred from Debenture Redemption Reserve to the Profit and Loss Account.

8.1 7.3% secured redeemable non convertible debentures aggregating Rs,1,00,00,00,000-(31.03.2009 - Rs. Nil), privately placed (allotment date -17th November,2009) are due for redemption at par at the end of 13 months from the date of allotment. Debenture Redemption Reserve of Rs.25,00,00,000, being 25% of the aforesaid value of debentures, has been created out of the profits for the year.

9.1 Short term loans from banks (Schedule 4) include Commercial Paper of Rs.50,00,00,000 (31.03.09 - Rs.Nil). Short term loans from others (Schedule 4) comprise :- (a) Commercial Paper - Rs.2,40,00,00,000 (31.03.09 - Rs.Nil)

(b) 6.4% redeemable non convertible debentures aggregating Rs.50,00,00,000 (31.03.09 - Rs.Nil), privately placed (allotment date -17th March,2010) are due for redemption at par on 16th April, 2010.

(c) 6.2% redeemable non convertible debentures aggregating Rs.15,00,00,000 (31.03:09 - Rs.Nil), privately placed (allotment date -24th February,2010) are due for redemption at par on 24th May, 2010.

(d) 6% redeemable non convertible debentures aggregating Rs.25,00,00,000. (31.03:09 - Rs.Nil) and Rs.25,00,00,000 (31.03.09 - Rs.Nil), privately placed (allotment dates -15th February, 2010 & 17th February, 2010) are due for redemption at par on 14th May, 2010 and.17th May, 2010 respectively.

(e) 5.71 % redeemable non convertible debentures aggregating Rs.30,00,00,000 (31.03.09 - Rs.Nil), privately placed (allotment date -15th February,2010) are due for redemption at par on 12th May, 2010.

10. Other loans from banks {Schedule 4) include:-

(a) Zerocaupon unsecured redeemate placed (allotmentdate -15th March, 2010) are due for redemption at par at the end of 396 days from the date of allcrtment

(b) 7.75% unsecured redeemable non convertible debentures aggregating Rs 50,00,00,000 (31.03.2009 - Rs.Nil) privately placed (allotment date -19th March, 2010) are due for redemption at par on 5th April, 2011.

(c) 8.35 % unsecured redeemable non convertible debentures aggregating Rs 1,00,00,00,000 (31.03.2009 - Rs.Nil) privately placed (allotment date-22nd September, 2009) are due for redemptron at par at the end of 377 allotment.

10.1 Debenture redemption reserve of Rs 1,01,25,00,000, being 25% of the value debentures referred to in Notes 19.1 and 19.2 above has been created out the of profit of the Company.

11.Pursuant to the Announcement on Accounting for Derivatives issued by the Institute of Chartered Accountants of India in March,2008,the company has accounted for during the year net less amounting to Rs. 1,43,41,747 (31.03.09-Rs17,38,12,270) in respect of outstanding derivative contracts at the Balance sheet date by maring therm to market as indicacated in Note 1 (g) above and the resultant excess liability of Rs.15,92,70,523 net of realised loss (net) of Rs.87,23,742 during the year arising from derivative contracts is written back and included in Miscellaneous Income under Schedule 13 to accounts.in 2908-09, the aforesaid mark to market loss along with realised loss (net) of Rs.77,02,500 was included Miscellaneous Expenses under schedule 15 to accounts.

12 a) Rent expenditure (Schedule 15) includes tease payments of Rs.18,19,595,(2008^-Rs.Nil)relating to mm cancellable operating lease. This leasing arrangement is for three years and is in respect of office premises. The significant leasing arrangement interalia includes option for renewal.

The total of future minimum lease payments under this non cancellable operating lease:

(i) not later than one year - Rs.25,68,840 (200849 - Rs.Nil)

(ii) later than one year but not later than five years -Rs.33,18,085 (2008-09 - Rs.Nil)

(iii) later than five years - Rs.Nil (2008-09 - Rs.Nil)

b) The Company has given a unit of building on operating lease to Lazarus Hospital duririg me year for 5 years extendable up to 12 years on mutual consent

13 Information pursuant to the provisions of paragraph 3,4C and 4D of Part II of Schedule VI to the Companies Act 1956 in given in Schedule 18, which forms an integral part of this Schedule,

14 Shares of Jay Shree Tea & Industries Ltd. held by the Company at face value being bonus shares remaining unclaimed.

15 Certain records/ documents pertaining to production, rew materials, purchase records etc. of the Companys Assam Cotton Milts Unit were Seized by the Excise Authorities and are presently not available with the Company

16 Previous years figures have been regrouped or rearranged where considered necessary,

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